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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Nationwide Access Ltd & Anor v Customs & Excise [2000] EWHC Admin 290 (14 February 2000) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2000/290.html Cite as: [2000] EWHC Admin 290

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NATIONWIDE ACCESS LTD PTP AERIAL PLATFORMS LTD v. COMMISSIONERS OF CUSTOMS and EXCISE [2000] EWHC Admin 290 (14th February, 2000)

Case No : CO/1953/99
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
CROWN OFFICE LIST
Royal Courts of Justice
Strand, London WC2A 2LL
Monday, 14 February 2000

These are joined appeals from a decision of the VAT & Duties Tribunal, Chairman His Honour Stephen Oliver QC ("the Tribunal"), released on 29 March 1999 dismissing appeals under section 12A of the Finance Act 1994 against assessments to hydrocarbon duty. The short point of construction that lies at the heart of the appeals is: what is a "mobile crane" within the meaning of paragraph 9, Schedule 1 of the Hydrocarbon Oil Duties Act 1979 ("HODA")? The vehicles operated by the two appellants are known as the "Bronto Skylift" and "Simon Galaxy". Assessments to duty were made on the footing that the vehicles were not mobile cranes.
The facts
The Tribunal found the following facts. The vehicles comprise a lorry at the rear of whose deck is mounted a chassis on a rotatable base. This holds the main arm, known as the first boom, and houses the hydraulic machinery for raising the boom to an angle of 15 degrees short of vertical. The first boom contains three successive telescopic booms. Fully extended, the whole boom is 95 feet in height. Attached to the third boom is a droop arm, whose angle can be adjusted to the precise point at which work is to be carried out , or where a cage with any attachment is to be positioned.
The vehicles are purpose built for the express use of lifting tools, men and equipment such as TV cameras, satellite dishes and lighting equipment from ground level to a specific height by means of the lifting arm. The lifting arm forms an integrated, common non-removable unit within the chassis. When not in operation, the lifting arm rests flat on the chassis. The vehicles do not carry any equipment other than to enable them to operate the vehicles. Such equipment is limited to traffic cones, timber pads for outriggers and railway sleepers. Lifting eyes are permanent features, and are installed at different points on the booms, but not on the droop arms. A sling or line can be shackled to the lifting eye. Wires and slings can be attached at various points of the telescopic booms. The length of the wires and height of the slings cannot be altered by the operation of the winding machinery contained in the vehicle. The height can, however, be changed by altering the angle of the boom.
The uses to which the vehicles are in fact put include: for television and film productions; to hold satellite "uplinks", whereby dishes are boomed to the required position; equipment for X-raying wells and for testing cracks in petro-chemical plants; for the erection of signs; and widely on construction sites. At paragraph 16 of their decision, the Tribunal said this of use on construction sites:
"When steel structures are being assembled, the personnel and tolls are
taken up in the cage to the point where the steel fitments, which will
themselves have been lifted by rope and pulley-holding cranes, are to
be installed. The boom on the vehicles is used to take lighter materials,
such as window frames, cladding and purlings, to their positions on the
building".
They also stated (paragraph 13) that the specification leaflets and promotional materials for the vehicles reveal nothing that says in terms that they are mobile cranes, or that they have the design features of mobile cranes. And none of the leaflets or materials in any way stresses as particular attributes of the vehicles their capacity for lifting loads using a line or sling.
There was relevant and unchallenged evidence before the Tribunal which was not referred to in the decision. This included the fact that (a) the term "mobile crane" is common industrial usage to describe both of the vehicles which are the subject of these appeals, although it is equally true that the vehicles are also known by other terms such as "booms"; and (b) the vehicles are in competition with "rope and pulley" cranes.
The statutory provisions
It is unnecessary to set the provisions out in detail. A "road vehicle" is defined by section 27(1) of HODA as " a vehicle constructed or adapted for use on roads", but does not include an "excepted vehicle" within the meaning given by Schedule 1.
A person who uses oil for excepted vehicles is entitled to a rebate of excise duty. Excepted vehicles include "mobile cranes". Paragraph 9 of Schedule 1 provides:
"9.(1) A mobile crane is an excepted vehicle.
(2) In sub-paragraph (1) above " mobile crane" means a vehicle which
is designed and constructed as a mobile crane and which -

(a) is used on public roads only as a crane in connection with work
carried on at a site in the immediate vicinity or for the purpose
of proceeding to and from a place where it is to be or has been
used as a crane, and
(b) when so proceeding does not carry any load except such as is
necessary for its propulsion or equipment."
The Decision
The essential reasoning of the Tribunal is contained in paragraphs 29 and 30. They said:

"29. Not every vehicle that is capable of lifting and moving objects will,
in our view, be a crane. We can think of numerous mobile devices that lift
and move objects but which plainly are not cranes. Take forklift trucks,
mechanical grabs, or tower wagons as examples. The vehicle in question is
clearly not a crane when it is lifting and moving a load in its usual way,
eg by the normal operation of the forklift or in the course of its mechanical
grabbing operation. It does not become one when a sling or line has been
attached to the lifting arm and goods are lifted and are moved by that means.
30. The meaning of the word "crane" is, we think, firmly entrenched in the
English language. In its ordinary sense it conveys to us an item of plant with
a projecting boom or jib over which are braced lifting wires and pulleys. The
load is suspended and lifted through the operation of the wires and pulleys.
The expression "mobile crane" in paragraph 9 of Schedule 1 is concerned with
a road vehicle (within section 27(1)) which, if used on public roads, is used
only "as a crane" in connection with work carried on at a site in the vicinity.
There is, we recognise from looking into the New Oxford English Dictionary
(1998), a subsense in which the word crane is used. This is: "a moving
platform supporting a film or television camera". But that is a specialised
sense and does not help resolve the question of whether a particular road
vehicle has been "designed and constructed as a mobile crane" in the present
sense. To say of a mobile boom attached to a road vehicle, holding lamps
or satellite dishes that the vehicle has been designed and constructed as a
mobile crane would, we think, be an unnatural use of the expression. To say
the same of a mobile boom with a cage or platform for lifting men and tools
to work above or below ground level would be just as unreal. The vehicle
that we are here concerned with is essentially a telescopic boom designed
and constructed to raise or lower platforms or other fixtures to required
positions. The fact that the boom has lifting eyes installed at various points
to which can be shackled slings and lines does not alter the essential
characteristics of the present items of plant as mobile booms; it does not
recharacterize them as "mobile cranes". The eyes may have been installed
to enable the vehicle to do much the same thing as a crane (albeit without
the same lifting strength), but that is not the same thing as to say that it
is a mobile crane. It lifts by a quite different mechanical process."
Discussion
Put shortly, therefore, the Tribunal decided that the vehicles in question are not "mobile cranes" because the lifting operations that they undertake are effected by means of a hydraulic telescopic lifting arm, and not by a lifting mechanism that operates by ropes and pulleys. They are "essentially" telescopic booms designed to raise or lower platforms or other fixtures to required positions. Although they perform much the same functions as cranes (albeit without the same lifting strength), they are different from cranes, because they lift by a different mechanical process. The determining feature is not what the vehicles do, but how they do it.
Any decision of a tribunal chaired by His Honour Stephen Oliver QC naturally deserves the greatest respect. But in my judgment, the Tribunal reached the wrong conclusion. Their starting point was the "firmly entrenched" meaning of the word "crane" in the English language. The Shorter Oxford Dictionary includes the following definition:
"A machine for moving heavy weights, usually consisting of a vertical
post capable of rotation on its axis, a projecting arm or jib over which
passes the chain, rope etc, from which the load is suspended".(emphasis added)
But it is quite clear from this definition that the stated attributes are not invariably present, but only usually so. It is, therefore, consistent with the dictionary definition of the word that a crane may not have all these attributes. The dictionary does not attempt a description of the main features of all types of crane. I agree with Mr Ghosh that the essential feature of a crane is that it is a machine that lifts objects and moves them to a radius. It is the lifting to a radius that distinguishes a crane from, say, an ordinary lift, which goes up and down on its vertical axis. This essential feature is quite consistent with the dictionary definition to which I have referred.
It is also consistent with the definition found in the New Oxford English Dictionary which was said by the Tribunal to be a "subsense", viz: "a moving platform supporting a film or television camera". The Tribunal treated that meaning as a "specialised sense", and of no assistance in the instant case. I agree that it is a specialised use of the word, but in my view it sheds light on the essential features of a crane: it supports the view that it is not a prerequisite of a crane that it should operate by means of a rope and pulley.
The Tribunal said that it was an "unnatural" use of the expression to refer to a vehicle of the type in question in this case as a mobile crane. I confess that I do not understand why this should be so. It seems to me that the Tribunal treated as the essential and invariable features of a crane those which are said by the Shorter Oxford Dictionary to be present "usually". Moreover, they seem to have failed to take into account the undisputed evidence that the term "mobile crane" is in common industrial usage to describe the vehicles in this case. On the face of it, the classification of machines made by those who manufacture and deal in them is a good starting point for an inquiry into their true and proper classification. If those in the industry choose to call these vehicles "mobile cranes" (admittedly, as well as "booms" and "platforms"), then there needs to be some basis for saying that this is a misnomer. In my view, the Oxford Dictionary does not provide such a basis, since (a) its definition does not purport to make the existence of a rope and pulley an essential requirement, and (b) the so-called "subsense" positively suggests that a rope and pulley is not an invariable feature.
I do not find it in the least surprising that those in the industry call these vehicles "mobile cranes". They perform all the same functions as mobile cranes which are fitted with ropes and pulleys, as well as other functions besides. It is true that cranes fitted with ropes and pulleys can lift larger loads than these vehicles, but that cannot be a material difference. Some traditional cranes can carry bigger loads than others. No doubt, with technological advances, the appellants will develop more powerful machines, which are capable of lifting greater loads than they currently lift.
The question for the Tribunal was the true meaning of the expression "mobile cranes", where it appears in Schedule 1 to HODA. Mobile cranes were first brought into the favourable category for purposes of rebate of duty by section 8(2) of the Finance Act 1947. This was done at the request of the manufacturers and users of cranes. The definition of mobile cranes was almost the same as it is now. It is unclear when vehicles such as those which are the subject of this appeal were first used. It is clear from paragraph 34 of the decision that they were not in common use in 1947. The Tribunal said that if they had been, Parliament might well have recognised that they too should qualify for privileged red diesel treatment.
The categories of vehicles excepted by Schedule 1 are narrowly defined. They share the feature that they make use of public roads for limited purposes. They are vehicles which are designed for specific purposes, which do not include ordinary travel and the carrying of goods from point A to point B. Examples (apart from mobile cranes) are: tractors, mowing machines, snow clearing machines, gritters, digging machines, works trucks and road construction machines.
To qualify as a "mobile crane", a vehicle must (i) have been designed and constructed as a mobile crane, and (ii) either (a) be used on public roads only as a "crane" in connection with work carried on at a site in the immediate vicinity, or (b) be used on public roads only for the purpose of proceeding to and from a place where it is to be or had been used as a crane, provided that, when so proceeding, it does not carry any load, other than that which is necessary for its propulsion or equipment. Since they perform inter alia the same functions as a crane, it is difficult to conceive that, if Parliament had considered the matter, it would have intended that they should be treated differently from rope and pulley cranes. As I stated earlier, one of the undisputed facts before the Tribunal was that the vehicles were in competition with rope and pulley cranes. To treat these vehicles differently from mobile cranes would make no sense and would lead to unfairness. It was not suggested by the Tribunal or Mr McKay that there was any justification for their different treatment.
The question raised is ultimately a short point of construction. In my view, the Tribunal gave an unduly restrictive meaning to "mobile crane". The essence of a crane is that it is a machine that lifts objects and moves them to a radius. The traditional means by which this has been done is by means of a rope and pulley. But there have been technological advances since the rope and pulley crane was invented. In particular, there have been changes as to the means by which objects are raised and moved. Even if it was considered an essential feature of a crane in 1947 that it should operate by means of a rope and pulley, that is no longer the case.
If (contrary to my view) it is an essential feature of a crane, according to its ordinary meaning, that it lifts by means of a rope and pulley, I would nevertheless construe the expression "mobile crane" where it appears in paragraph 9 of Schedule 1 to HODA as including a "mobile boom". The nature of an ongoing Act requires the court to take account of changes in technology, and treat statutory language as modified accordingly when this is needed to implement the legislative intention: see Bennion, Statutory Interpretation, third edition page 696. There have been many examples of the application of this principle. Thus, in A-G v Edison Telephone Co of London Ltd [1880] 6 QBD, a telephone was held to be a "telegraph", and in Derby v Weldon (No 9) [1991] 1 WLR 652, the reference in RSC Ord 24 to a "document" was held to include a computer base. At the time when the respective instruments were drafted, telephones and computer bases had not been invented. But the principle has its limits. Thus, if changed technology produces something that is altogether beyond the scope of the original enactment, the court will not treat it as covered. An example of this is Kingston Wharves Ltd v Reynolds Jamaica Mines Ltd [1959] AC 187. In that case, the question was whether 18,000 lb powered tractors were "carriages" within the meaning of an 1895 law. It was held that the legislator could not have intended articles of the weight and complexity of these tractors to be included. I have no doubt that if mobile booms had been invented in 1947, the legislator would have intended that they be included in the category of "mobile cranes".
It follows that these appeals must be allowed. I should, however, refer briefly to the other submissions made by Mr Ghosh in support of his argument. He contended that section 13 of HODA is a penal provision, and that the provisions should, therefore, be construed in favour of the appellants. The Tribunal accepted at paragraph 33 that section 13 is penal in nature. They said that the expression "mobile crane" should be construed neither restrictively nor over-generously: it should be given its ordinary English meaning. Mr Ghosh did not criticise this approach before me. It seems to me that the fact that section 13 is penal in nature does not shed any light on the question of construction that I have to determine.
Mr Ghosh also submitted that the approach of the Tribunal involved a statutory interpretation which was not in conformity with Article 1 of Protocol No 1 to the European Convention on Human Rights, which provides that:
"Every natural or legal person is entitled to the peaceful enjoyment
of his possessions. No one shall be deprived of his possessions except
in the public interest and subject to the conditions provided for by
law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the
right of a State to enforce such laws as it deems necessary to control
the use of property in accordance with the general interest or to
secure the payment of taxes or other contributions or penalties."
Mr Ghosh contended that, if paragraph 9 of Schedule 1 of HODA is construed in such a way as to impose strict liabilities and penalties (including forfeiture) if a taxpayer simply makes a misjudgment as to what a "crane" might mean, then the means adopted to secure the levying and collection of Excise Duty are not proportionate to the interests of the community, and are not therefore in the public interest. Anyone who contravenes section 12(2) of the Act is automatically liable to a civil penalty under section 9 of the Finance Act 1994, and is liable to have both the oil itself and the vehicle forfeited. This is a strict liability. It is, however, mitigated by section 152 of the Customs and Excise Management Act 1979, which gives the Commissioners power "as they see fit" to mitigate penalties. If it had been necessary to decide this point, I would have rejected Mr Ghosh's argument. It seems to me that it is inherent in much fiscal legislation that there will be borderline cases where, in advance of a decision by the Commissioners and any appeal, the taxpayer is uncertain where he stands. The severity of the strict liability provisions is mitigated by section 152 of the 1979 Act. The power conferred by that provision must be exercised reasonably and fairly, and with the provisions of the Convention in mind. In my judgment, that is sufficient to avoid any breach of Article 1 of Protocol No 1.
Conclusion
For the reasons given earlier, these appeals are allowed. It was common ground that if I were to allow the appeals, I should simply quash the assessments, and declare that the two vehicles are mobile cranes within the meaning of paragraph 9 of Schedule 1 to HODA.

Monday, 14th February 2000

MR JUSTICE DYSON: For the reasons set out in the judgment which has been handed down, this appeal is allowed. I am grateful to whoever it was who pointed out the typing error on page 8, lines 4 and 5, it should be "computer database" and "datebases" and not base and basis. With that amendment, the judgment is as it was. Are there any applications?

MR GHOSH: May it please your Lordship, I apply for costs.

MR McKAY: My Lord, I cannot resist the application, but I do have a number of points of dispute.

MR JUSTICE DYSON: You have a number of points of dispute.

MR McKAY: Perhaps I could hand those to your Lordship.

MR JUSTICE DYSON: Has there been any attempt to discuss the figures?

MR McKAY: We have shared them with each other, but that is as far as it has gone.

MR JUSTICE DYSON: Is this going to take any length of time?

MR McKAY: I would hope not.

MR JUSTICE DYSON: Tell me what are the points in dispute?

MR McKAY: Simply this: the rates for those instructing my learned friend are thought to be excessive. We offer £135 rather than £150 an hour for the assistant solicitor and £225 rather than £250 for the partner. My learned friend's fees of----

MR JUSTICE DYSON: You say £135 as opposed to £150?

MR McKAY: £225 rather than £250, and the figure of £8,500 for counsel for the Appellants, we offer £4,500. The essential point being, this was a one day case, although there were certain sophisticated matters before your Lordship but, overall, the complexity of the case does not merit fees of that order. That is how I put it.

MR JUSTICE DAY: Thank you, Mr Ghosh, do you want to say anything?

MR GHOSH: Simply this: as your Lordship pointed out in his judgment, this was an appeal from His Honour Stephen Oliver QC which deserves the greatest of respect, so we had to make sure we had it right. The arguments advanced before your Lordship were required for detailed consideration.

One point I would make to your Lordship is this: a lot of the time spent, both by myself and Mr Vallat, was spent on the legislative history which was set out in the appendix to the tribunal's decision which had to be revisited to deal with an argument that was put before the tribunal by my learned friend and, again, advanced in his skeleton which was that these vehicles were tower wagons. The only point of that legislative history was to make the point, well, these vehicles were completely different, the legislative history was completely different, and they were entirely distinct for all purposes.

MR JUSTICE DYSON: Was that not a point which had been looked at for the purposes of the hearing before the tribunal?

MR GHOSH: It had to be revisited, as well as the updated construction and, in terms of the hours spent, was a substantial part of our work. It was not dropped until the morning of the day that the appeal was supposed to be heard.

MR JUSTICE DYSON: Yes.

MR GHOSH: As for the rest of it, this is an important case as your Lordship is aware with industry wide implications. I do not have anything further to say.

MR JUSTICE DYSON: It is always difficult for a judge, but we are becoming more and more used to this process. I do think that counsels' fees are too heavy for one case, particularly bearing in mind that many of the arguments had been prepared in great detail for the purposes of the hearing before the tribunal.

I propose to assess counsels' fees in the global sum of £5,000 and I propose to reduce the solicitors fees to rates of £135 and £225 per hour. I do not propose to do the calculations now, but they can no doubt be done.

MR McKAY: Yes, my Lord. Might I ask for permission to take this further. That is all I have to day, I am most grateful.

MR JUSTICE DYSON: Do you want to say anything about that?

MR GHOSH: Yes, my Lord. I resist that application for the following reasons: your decision is entirely clear and your Lordship was in no doubt as to the conclusion to be reached in this matter. In fact, your Lordship put to me that this was not even suitable for a remitter during the course of my submissions.

My learned friend can have no complaint about ignoring any relevant items of evidence which was my complaint about the tribunal's decision. All of the relevant items of evidence were considered. What is more, all of this evidence is uncontroversial and unchallenged. There is no inquiry about any of the relevant facts or characteristics at any stage.

So far as the approach to the statute is concerned, my learned friend conceded this voluntarily without argument, that the approach to the statute, as a matter of updated construction, was correct, so not only are the facts not in dispute, but the approach to the statute is not in dispute. Finally, my Lord, as your Lordship pointed out in his judgment, never once had it been suggested that there was a policy reason for distinguishing between the vehicles in this appeal and the rope and pulley cranes, not once either asserted by my learned friend, suggested by the tribunal or suggested by your Lordship. In the light of all that, my submission is that if Mr McKay wishes to take this matter further he should ask the Court of Appeal.

MR JUSTICE DYSON: It is right that this is a matter of some considerable significance in the industry. It is an important point.

MR GHOSH: My Lord, it is an important point which is why it was appealed from the tribunal, but that, my Lord, is not a sufficient reason for allowing permission to appeal in my submission, in the light of there being no doubt as to the relevant facts and no cross-examination as to the relevant facts, a voluntary concession as to the approach of the statute and the lack of any policy justification either asserted or found, at any stage, for there to be a difference in the treatment between these vehicle and rope and pulley cranes.

My learned friend does have to have some grounds of appeal on which to question your Lordship's judgment.

MR JUSTICE DYSON: Mr McKay, I did reach a very clear view about this rightly or wrongly, and I think if you want to take it further you will have to ask the Court of Appeal. I am very grateful to both of you for your assistance in this interesting case.