Humber Oil Terminals Trustee Limited v Associated British Ports [2012]

In the latest in a series of judgments in the litigation between Humber Oil Terminals Trustee Limited ("HOTT") and Associated British Ports ("APB"), the High Court decided the interim rent payable under the lease of property described as an oil jetty, which stretches about 1 kilometre into the Humber Estuary and comprises 7 berths for ships ("the Oil Jetty Lease").

Background

To set the interim rent judgment in context, this litigation concerned leases of properties forming part of the Immingham Oil Terminal in the Humber Estuary, the busiest port in the UK (by volume). Each year, about 20 million tonnes of oil and related products pass though Immingham to and from two local refineries, the Lindsay Oil Refinery and the Humber Oil Refinery ("the Refineries"), each owned and operated by a large oil company. The owners of the refineries together operate HOTT, a joint venture company.

The Immingham Oil Terminal facility was constructed in the late 1960s and the four leases of property which relate to the Immingham Oil Terminal were entered into for periods of forty years, the contractual terms of which all came to an end in 2010. The particular features of the property demised to HOTT under the leases are unusual, but the approach of the court in determining the interim rent provides valuable assistance to parties who are faced with interim rent valuations under section 24D of the Landlord and Tenant Act 1954.

Opposed Lease Renewal Proceedings

ABP served section 25 notices terminating the leases and indicating an intention to oppose any application by HOTT for the grant of new tenancies on the basis of section 30(1)(g) of the 1954 Act, i.e. the landlord's intention to occupy the premises for the purpose of carrying on its own business there.

ABP contended that the Immingham Oil Terminal was the most advantageously located facility for deepwater access for oil tankers, that HOTT's exclusive use of the terminal was the only such arrangement within the Port of Immingham, and that it was not operating the terminal efficiently. ABP's case was that it wished to occupy and manage the Immingham Oil Terminal itself to maintain supply to the refineries and to open the oil jetty, demised to HOTT under one of the leases, to third party users.

HOTT applied to the court for the grant of new tenancies under the 1954 Act. HOTT argued that ABP could not prove its required intention under section 30(1)(g) and pointed out that on termination of the leases, HOTT would be entitled to remove its complex system of pipes, equipment and infrastructure from the oil jetty, which would cost around £10 million. It would then cost at least £60 million and about two years to replace what had been removed.

The court found on the facts that ABP's intention was to occupy the Immingham Oil Terminal for the purposes, or partly for the purposes, of a business to be carried on by it at the Immingham Oil Terminal at the termination of the leases. The court took the view that the parties would be guided only by economics and commercial reality and that it was not only possible, but quite probable, that the tenant would come to a commercial arrangement with the landlord to continue to use the Immingham Oil Terminal.

The court was convinced by ABP's evidence that it was motivated by the need to obtain value for its port facilities, to expand competition in the port and to attract third party customers. It felt that it...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT