Salmon, L.J.: Some time prior to January of 1967, Stewart and Lloyds Ltd. decided that they wished to have erected at Greatham near Hartlepool, a completely automated plant for the manufacture of steel tubes of large diameter, and large rectangular hollow sections of steel. This plant was to consist in part of banks of machinery and individual machines all integrated into one complex. The plant itself was to occupy an area some 1,125 feet long divided into two bays, one 85 feet and the other 95 feet wide. I should say that the plant was to be a very sophisticated plant, controlled by electro-hydraulic power. Broadly speaking, at one end of the plant flat steel and coiled steel plate would be fed into it: the coiled steel plate would be automatically uncoiled and cut into the appropriate sizes and the flat plate would likewise be cut into the appropriate sizes. The steel would then pass through a series of machines and banks of machinery and emerge at the other end as large diameter tubes or hollow rectangular sections of steel without having been touched by hand in the interim.
Stewarts and Lloyds Ltd. employed the Mitchell Construction Company Ltd., building and civil engineering contractors (whom I will refer to as "Mitchells"), to design and construct the plant. The whole of the designing operation was carried out by Mitchells at their head office at Peterborough. The design provided for the exact position of each piece of machinery in relation to those pieces of machinery adjacent to it. Some of the machines were at floor level, some beneath floor level and some partly beneath and partly above it. It was an essential part of the design to fix the correct levels and indeed the exact position of the machines in relation to each other, otherwise the function of the automated plant would be frustrated.
Mitchells ordered some of the machinery and the rest of it was ordered by Stewart and Lloyds. Mitchells, as the plant engineering contractors, naturally consulted with the companies that were going to produce the necessary machinery as to the best way of installing it, and precisely what degree of strength would be necessary for the foundations of each particular machine.
All the preliminary work had been done by the beginning of 1967, so in January of that year Mitchells started work on the site. The design work to which I have referred had related principally to the highly complicated reinforced concrete foundations to the machinery into which each piece of machinery was to be built.
Now this machinery in order to function needed to be supplied not only with electric power but also with water and compressed air. The concrete foundations were honeycombed (if that is the appropriate word) with ducts - there were thousands of yards of ducts - so that the water, compressed air and electricity could be conveyed from the main supply to each individual machine. One can gain some idea as to the multiplicity and size of the ducts from the fact that those which carried the electric cables alone were carrying some forty miles of cable.
I should emphasise that unless these very specialised concrete foundations had been built carrying the ducts to which I have referred, and providing for the precise position of each piece of machinery, nothing could have happened by way of manufacture at those Greatham works; that is to say that the machinery by itself without being integrated into the plant by the foundations and supplied with motive power through the ducts in the foundations could have produced nothing. It is equally plain that the foundations (and the ducts) were quite useless except as part of the manufacturing complex, to use a neutral word, which was being erected at Greatham.
The question raised in this case is whether these reinforced concrete foundations, which I have endeavoured to describe, were part of what was undoubtedly a metal manufacturing plant at Greatham. The issue is of importance for this reason, that if the answer is "yes, the foundations were part of the plant," then Mitchells qualify to have the selective employment tax returned to them (together with bonuses) which they had paid out from January, 1967 until July, 1968, when the work was completed. The bonuses, I understand, were payable because this work was being done in a development area. Selective employment tax has partially disappeared already and is about to disappear altogether; it will be mourned by few, certainly not by these courts which have been faced sometimes with almost insuperable difficulties in trying to construe this not very happily drafted piece of legislation. This appeal, however, is of importance because it involves very large sums of tax for there are a number of other cases which may turn upon the outcome of this one.
At this stage I think I had better briefly refer to the relevant sections of the Selective Employment Payments Act, 1966. The material parts read as follows: Section 1(1):
"Where an employer has paid selective employment tax for any contribution week in respect of a person in an employment to which this section applies, then subject to the provisions of section 7 of this Act, the Minister of Labour shall make to the employer in respect of that person and that week a payment of an amount equal to the tax paid plus", and then the various bonuses are set out.
Subsection (2) reads:
"Subject to subsection (3) of this section, this section applies to any employment in, or carried out from, an establishment where -
"(a) the establishment is engaged by way of business wholly or partly
in -
"(i) activities falling under any of the minimum list headings shown in Orders III to XVI of the Standard Industrial Classification . . .
"(b) more than half of the employed persons employed in any employment in, or carried out from, that establishment -
"(i) are so employed wholly or mainly in connection with such activities . . ."
So the question is:
"Was the establishment which Mitchells were undoubtedly maintaining and carrying on at Greatham from January, 1967 to July, 1968, engaged in activities falling under the minimum list heading shown in Orders ID to XVI of the Standard Industrial Classification?".
It is conceded that if making the specialised concrete foundations to which I have referred does fall within these minimum list headings, then Mitchells coma within the provisions of section 1, to which I have referred, and are entitled to a return of tax and premiums.
There are two competing minimum list headings. The first for which Mitchells contend is numbered 341, and reads "Industrial Plant and Steelwork". I need read parargaph 2 only. That paragraph is headed "Other industrial plant and fabricated steelwork". It reads as follows :
"Making lime and cement kilns, gas and coke oven plant, sintering plant, metallurgical furnaces and other metal manufacturing plant (excluding rolling mills) ..."
Mitchells contend that at Greatham they were making metal manufacturing plant.
The other competing minimum list heading for which the Department contends is number 500, which appears under Order XVII. Therefore, if the work being carried out at Mitchells' establishment at Greatham came under that minimum list heading rather than minimum list heading 341(2), no selective employment tax would be recoverable nor, of course, would any bonuses be payable either. Heading number 500 is headed "Construction", and reads:
"Erecting and repairing buildings of all types [I am omitting irrelevant words] erecting steel and reinforced concrete structures; other civil engineering work such as laying sewers and gas mains, erecting overhead line supports and aerial masts, opencast coal mining, etc. . . ."
Then I think I ought to read these following words because Mr. Bingham relies upon them:
"Establishments specialising in demolition work or in sections of construction work such as asphalting, electrical wiring, flooring, glazing, installing heating and ventilating apparatus, painting, plastering, plumbing, roofing ..."
The question was referred to the industrial tribunal and the tribunal, with the chairman, Sir John Clayden, dissenting gave a decision in favour of the Department. Mitchells then appealed to the Divisional Court and the Divisional Court with the Lord Chief Justice dissenting, allowed the appeal. The Department now appeals to this court.
I ought, perhaps, to say first of all, how the courts must, in law, approach a problem of this kind. The meaning to be attributed to these minimum list headings is not necessarily what they would mean to a lawyer nor their dictionary meaning. The meaning is that v/hich would be attributed to the words by persons in the trade to which the words refer. (Central Press Photos Ltd. v. Department of Employment and Productivity[1]). Accordingly, when a question of this kind comes before the courts to decide, the courts should not look at the headings and try ab initio to construe them as if they were the words of a statute, or even the language of a judgment. The courts must start by looking at the meaning attributed to the words by the industrial tribunal which consists of members who are very experienced in industry, albeit, oddly enough, they are disqualified, so we have been told, from sitting if they have any connection with the industry concerned in the particular case before them. But since they are acquainted with industry in general to a greater extent, it is no doubt correctly presumed, than any member of the Bench could aspire to be, the courts would not be entitled to disturb a finding of the tribunal unless the courts were satisfied that the tribunal had reached a decision at which no reasonable men could have arrived, or unless the decision was vitiated by some manifest misdirection. (See C. Maurice & Co. Ltd. v. Minister of Labour[2] per Lord Wilberforce[3]).
Mr. Bingham in the course of his most attractive argument has contended that the majority of the Divisional Court went wrong because they failed to follow the principles which I have just restated, for although they may have disagreed with the construction which the majority of the tribunal put upon the relevant minimum list headings, nevertheless there were no sufficient grounds for interfering with the majority view.
It is perhaps interesting to note - I shall come back to this in a moment - that Lord Widgery, C.J., when he dissented from the majority in the Divisional Court, not did base his reason for dissenting on that ground.
The reasons of the tribunal appear to have been drafted by Sir John Clayden. He alone signed them. The greater part of this written document is extremely lucid and accurately sets out all the material facts. For my part I think that the reasons given by Sir John Clayden for this view are completely convincing. The only part of the document which seems to me to be obscure, and by no means convincing, is the part which states the reasons given in their own words by the other two members of the tribunal for their conclusions. Sir John Clayden in writing this document has put in inverted commas the reasons given by the other members of the tribunal. We have been told by Mr. Bingham that the usual practice is for the chairman to write out the document, circulate it to the other members and then for them to make any amendments they desire.
Before I go to the reasons of the majority, there are certain parts of this document which I ought to read. In referring to the work in question, Sir John Clayden says:
"Some of the work which is done is obviously 'construction' work [that is to say, obviously within minimum list heading 500] for instance the foundations of the administrative block. Some of the work which is done is obviously part of the making of the plant, for example the tanks for the coolant, part of the furnaces and the flue from them to the chimney. That work would go to show that the establishment was 'partly' engaged in a qualifying activity under heading number 341, but, unless the main activities could be regarded as that, the employees engaged on those parts would not be enough to satisfy the test of section l(2)(b)(i) [of the Act. Then he says:] To guide us there are the following. In the case of Shellabear Price Contractors Ltd.,[4] a tribunal decision of 11th July, 1968, the tribunal held that laying of concrete foundations for structures in a petrochemical plant, the casting in of holding down bolts, the construction of concrete ducts in the foundations, the fixing of steel work in the reinforcement, and the concreting of steel towers, although the bulk of the work was 'erecting steel reinforced concrete structures', was none the less an integral part of the manufacture of a chemical and a mineral oil refinery plant under heading number 341. In regard to power stations the Department has accepted that the concrete foundations for plant in power stations is work which is to be regarded as falling within heading number 341".
Mr. Dehn, of course, has very strongly relied on the decision in the Sheilabear case, and the Department's instructions stating that foundations in power stations are to be regarded as falling within heading 341. He says, to my mind with considerable force, that it is important to have uniformity and if the Shellabear case was rightly decided by the tribunal, and if the Department's view as is expressed in their instructions in relation to power stations is right, it is very difficult to see how the findings of the majority of the industrial tribunal can be justified. On the other hand, Mr. Bingham says that Shellabear may be wrong or distinguishable, and the Department may have been wrong in relation to the view it had taken about the foundation in power stations.
No doubt this is a possibility, but I think that in this connection it is worth referring to a certain passage in another decision of the tribunal, in the case of Taylor Woodrow Construction Ltd.,[5] which was given as recently as the 18th February, 1971. The facts of the case are not very important, but paragraph seven seems to me to be interesting and instructive. It reads as folows:
"In regard to power stations, after the tribunal decision in Shellabear Price Contractors Ltd. the Department gave certain rulings on which it would act. These of course are not binding on us, but they are indications as to how work is regarded in the industry [and I draw particular attention to those words. The paragraph continues: ] The Shellabear case dealt with intricate ducted foundations in a petro-chemical plant: [so does this case] The Department's circular reads: 'Foundations. 3. The making of the larger type of industrial plant normally involves the assembly and linkage of various items of equipment, machinery, plant, etc., usually located on an open site. The greater part of the foundations for such a plant are usually made of reinforced concrete, which is specially designed to support or anchor extremely heavy pieces of plant. In addition such foundations also contain ducts or channels for water, steam, air, fuel or internal, as opposed to mains, cabling (see para. 11) which are essential to the running of the plant. Such foundations are therefore an integral part of the plant and making them is an activity falling under minimum list heading 341' ".
I should have thought, as was pointed out by the tribunal in Taylor Woodrow Construction that the decision in the Shellabear case and the Department's instructions which I have read give a very clear indication as to how work of the kind in question in the present case is regarded in the industry; and that is the point to which the tribunal had to address its mind.
But the matter does not rest there. Although it was not before the tribunal, an affidavit by Mr. Sloane-Stanley was put in before the Divisional Court, without objection. The Department did not desire to cross-examine Mr. Sloane Stanley on that affidavit. It appears from the affidavit that he had had a good many years' experience as a consulting engineer, and that from 1954, after he ceased to be employed by consulting engineers he was employed by Mitchells as their project manager : indeed, he was the project manager at their establishment at Greatham in Hartlepool throughout the period of the construction of the plant in question. Mr. Sloane-Stanley says in paragraph 22 :
"My attention is now directed to minimum list heading 341(2) in Order VI of the Standard Industrial Classification. In my opinion and belief the work described [that is the work I have already referred to, the construction of the foundations] in paragraph 11 to 19 above would be described by engineers as 'being part of the making of a metal manufacturing plant'".
When you look at that affidavit in conjunction with the Department's own instructions, and the decision of this very tribunal in Shellabear, there is obviously a very strong case for saying that it would be impossible for any reasonable persons, providing that they were not misdirecting themselves, to reach any conclusion other than that these most elaborate concrete foundations were indeed part of the plant at Greatham.
I now turn to the way in which the majority of the tribunal managed to reach an opposite conclusion. Unless I should do them any injustice I think it right that I should read their own words. One of the members, Mr. Birkett's, reasons were:
"Although that part of the work connected with the conveyor skids for transverse movement could come within the heading 341, this was a minor part of the total work and does not alter my view overall, which is that work done on ducts and foundations was purely incidental to the installation, layout and siting of the various pieces of machinery (manufactured elsewhere). In my view the ducts are there for the purpose of acting as a roadway for the transport of electricity, water, compressed air, etc. These services are carried through the ducts (they could have been carried in many other ways) for purposes other than being actually part of the machinery, viz., servicing, maintenance, safety, etc. I consider that the massiveness and strength of the foundations have the same relationship to the machinery installed as has any other foundation constructed to carry a heavy floor load, viz., a concrete base laid to support a mini car or to support a Churchill tank. In the final event, therefore, my decision is that the work was the erection of a special purpose factory in which heavy machinery could be installed and therefore comes under the heading of 'construction'".
The other member of the tribunal, Mr. Douglas, says:
"It is my view that the application does not succeed for the following reasons: [and is conceded that paragraph (a) is wholly irrelevant. He goes on to say: ] There is no dispute that the size and type of machinery utilised in a modern automated steel tube factory requires exceptionally heavy foundations and that some of the latter incorporated ducts and channels for water, compressed air and electrical cables. To suggest however because a machine requires a heavy foundation to bear its weight when the machine is operating that the 'foundation' becomes an integral part of the machine is unacceptable to me. Neither do I accept that because a channel or duct is provided in the concrete foundation that this enables what is a civil engineering job to become an integral part of the machine. Overall I consider that the very large proportion of the concreting work performed by Mitchells is properly covered by heading 500 as civil engineering work".
Then he proceeds in the last paragraph to attempt to distinguish Shellabear and as it is conceded that he failed to do so, I will not read what he says about it.
If the language used by the majority of the tribunal in giving their reasons for deciding the case as they did means what it says, it is plain that they misdirected themselves. They did so in two ways. They seemed to be considering whether the foundations were an integral part of the machinery, that is to say, they started with the assumption that plant could consist of nothing but machinery and went on to ask themselves, "Are the foundations an integral part of the machinery?". This is the wrong approach. The question that they should have asked themselves is, "Are the foundations part of the plant?" and that they do not appear to have done, as is obvious from the language which they used.
Mr. Bingham very attractively said to us that we really must not look too closely at what they said because they could not have meant what they said. When they talked about machinery, they cannot really have meant machinery: it was a slip for plant He concedes that if they did mean machinery, it is obvious that they misdirected themselves. But in spite of the way in which this has been put by Mr. Bingham (which fills me with admiration) I think it does lead to a very odd result. It would mean in effect that the courts could never review a decision of the tribunal. If we start off on the assumption that the tribunal is right, as we must, unless it is apparent that they misdirected themselves, and then go on to take the next step which we are now invited to take and hold that even if it is apparent from what they have said that they have misdirected themselves, we must assume that they did not mean what they said, the decisions of these tribunals would be inviolate. But that, as I understand it, is not the law.
The reason advanced for suggesting that they must have made a mistake is that they clearly agreed with the earlier passage which had been drafted by Sir John Clayden: that is the passage where he said: "Some of the work which is done is obviously part of the making of the plant, for example the tank for the coolant, part of the furnaces and the flue from them to the chimney - " did come under heading 341. We know that the water in the tank for the coolant was used to cool not only the steel in the course of the process of manufacture but also the wheels which were carrying the steel and which were manifestly part of the plant. Similarly, the furnaces were used presumably for melting or reducing the steel to a condition in which it could be manufactured. On the assumption - and I hope it is not an unfair assumption - that the majority of the tribunal meant what they said, it is quite easy, to my mind, to reconcile what they said with the passage to which I have already referred, because they may well have regarded the coolant tank and the furnaces as integral parts of the machinery
Another valid criticism, one which appealed to the majority of the Divisional Court, was that in their reasons the tribunal never dealt with the main point made on behalf of Mitchells which was that these foundations were what integrated the whole complex; the foundations controlled the positions of the machinery which were critical, enabled the necessary water, electricity and compressed air to reach the machinery so as to enable it to work, and because it performed these functions was necessarily part of the plant. That important point was never dealt with at all by the tribunal. It is odd, to say the least, that we should find one of the members seeking to justify his conclusion by saying, in effect, that the concrete foundations were very like a factory floor built to accommodate a Mini car, and then, perhaps realising that there was some faint distinction between a Mini car and the sort of things we are dealing with here, added "or a Churchill tank".
It seems to me obvious that the ordinary concrete floor on which you stand a car or tank, or a machine, is not part of the plant in the ordinary sense of the word and is about as far away from the characteristics of the concrete foundations with which we are here concerned, as it is possible to imagine.
I entirely accept the findings of Sir John Clayden. He says:
"My own view is that what we have to consider is whether this work was part of the making of a 'metal manufacturing plant' or 'other plant'. A plant is a composite thing. The machines in it are part of it but are not the plant. The applicant was appointed to design the plant. The design work was mainly done away from the establishment to be considered. But I think what was done at the establishment was in the main the making of part of the plant. Making the machines, installing the machines, installing the wiring and water pipes etc., are all operations in the making of the plant. So too I think is the construction of such intricate concrete work, which seems to integrate the whole of the plant. This decision is I think consistent with the authorities referred to".
Before I leave that decision, there is only one other passage to which I wish to refer, and that is a passage which appears immediately before Sir John Clayden sets out the actual reasons for the decision, and says :
"Obviously, as in the Shellabear Price case, the main work in the making of the foundations, with their ducts, etc., can be said to be 'erecting . . . reinforced concrete structures'. The work may be that and also part of the making of a steel plant, and if it is both we have to consider which is the more apt heading under which to put the work".
Whether the majority did consider that it was both, that is to say, that it could fall under heading 341 as well as under heading 500, but considered that it fell more aptly under heading 500, or whether they thought that it could not come within heading 341 at all, is a secret which I am afraid is locked in the breast of the tribunal. We just do not know which view they formed on those topics.
An argument has been addressed to us by Mr. Dehn to the effect that if the work comes within heading 341(2) then even although it also comes within heading 500, Mitchells are entitled to succeed, even if heading 500 is more apt than heading 341(2). I do not agree. Mr. Dehn argues in the alternative that if you have a case which is so nicely balanced that it falls equally well under two of these minimum list sub-headings, then providing one of them would entitle the taxpayef to qualify for a return of tax, the taxpayer succeeds. I do not propose to express any view upon that argument. I would much rather leave that point to be decided if and when it is relevant to any case which may come before the courts for decision. I should think it highly unlikely that there ever will be such a case. The accepted test at present is that if the work being carried on in an establishment could come under two minimum list headings it is deemed to be governed by the minimum list heading which is the more apt. To my mind, if the operation in question is specifically referred to in one minimum list heading, that would be the more apt heading to apply than the minimum list heading which merely gives a general description into which the operation in question could be fitted. It is quite obvious that this Standard Industrial Classification was prepared for statistical purposes and that these various minimum list headings are intended to be mutually exclusive. I think, therefore, that the courts have to make a choice on the basis that the work in question is not intended to be governed by more than one minimum list heading.
For the reasons which I have sought to give, the construction of the highly complicated reinforced concrete foundations comes, in my view, fairly and squarely within heading 341(2). It is part of the metal manufacturing plant at Greatham. There is another point which has been argued by Mr. Bingham, and with which I ought to deal. He contends that minimum list heading 341(2) cannot apply because the heading of Order VI which is "Engineering and Electrical Goods" must mean engineering goods and electrical goods, and whatever the foundations may be they cannot be either engineering goods or electrical goods. On the other hand, Mr. Dehn argued that that heading should be read as "Engineering" - a verb - "and Electrical Goods". Whichever way you read it it is an inelegantly drafted heading. I am not deterred from accepting Mr. Dehn's construction by the fact that any ordinary draftsman in formulating the heading might be unlikely to use the word "engineering" as a verb and "electrical" as an adjective. One might expect that as he was clearly using "electrical" as an adjective he must have intended to use "engineering" as an adjective also. But the draftsman not infrequently did the unexpected, e.g. minimum list heading 481 comes under Order XV which is headed "Paper, Printing and Publishing". I do not for my part consider that any guidance is to be derived from the title or heading of Order VI.
As for minimum list heading 500, all the members of the tribunal seem to think that this work could come under heading 500 in the sense that it was erecting reinforced concrete structures. To talk about constructing highly complicated concrete foundations such as this, as "erecting a reinforced concrete structure" seems to be a very slipshod method of expression. But one should not, I think, be deterred by that when one is considering these minimum list headings because many of them are slipshod. I do not disagree with the view of the tribunal, that this work could come within the general language of heading 500. Nevertheless since, in my view, the work falls specifically and more aptly within heading 341(2) that is the heading by which it is governed. I agree with the view of the majority of the Divisional Court.
I ought, out of respect to say a word relating to the dissenting judgment of Lord Widgery, CJ. He dissented on the ground that: [6]
"The ordinary meaning of the word 'plant' is equipment, other than machinery, which the industrialist keeps and uses on his premises for the purpose of his business".
Then a little lower down, he said:
"I appreciate that in some contexts and for some purposes machines and their concrete supports may be described as plant, but 1 think that these are somewhat special cases".
With great respect, I am afraid that I cannot agree. Just as the majority of the tribunal went wrong in considering "were the foundations an integral part of the machinery?", which involved regarding plant as necessarily consisting of machinery and nothing else, so 1 think it is wrong to assume that machinery is not normally to be regarded as part of the plant. I am satisfied that the only view at which the tribunal could reasonably have arrived without misdirecting themselves was that in the trade these foundations would be regarded as part of the plant. There was ample material which I have sought to rehearse justifying the Divisional Court in concluding that the tribunal had misdirected itself, and I would accordingly dismiss the appeal.
Edmund Davies, L.J.: This appeal relates to the creation of a new plant for Stewarts and Lloyds Ltd. at Greatham, Hartlepool, for converting steel plate into large diameter steel tubes. For this, the Mitchell Construction Company Ltd. were appointed process plant engineering contractors. Their head office was at Peterborough, but we are concerned with the functions performed by their establishment at Greatham. The question is whether that establishment, for the purpose of fulfilling their contract with Stewart and Lloyds, is one to which section 1 of the Selective Employment Payments Act 1966 applies.
The simplicity of that question is more superficial than real, and one needs to examine a little closely what exactly it was that Mitchells did on the Greatham site. The object of that exercise is to determine whether they were "engaged by way of business wholly or partly" in "making metal manufacturing plant". Such is the effect of those parts of section l(2)(a)(i) of the 1966 Act as are said to be relevant to the circumstances of the present case.
Mitchells were responsible for the general design as well as the details of the new plant and for the selection and procurement of certain machinery. That work was done at Peterborough. At Greatham they were responsible for the construction of all civil engineering works. Not all of those works could be said to fall within the phrase "making metal manufacturing plant", but parts of them call for particular attention. In the Divisional Court, Cooke, J., conveniently called those parts "specialised civil engineering works" and I propose to adopt that phrase. It embraces three particular types of work; (1) the making of reinforced concrete foundations capable of supporting extremely heavy and vibrating machinery, (2) the making of a furnace and its flues, and (3) the making of ducts and channels within the concrete foundation for conveying the supplies of water, electricity and compressed air essential for the working of the machines needed for the various processes. This last-mentioned class was described by Cooke, J., in the following words, which I respectfully adopt:[7]
"... the planned lay-out of the various machines, which is of importance in the construction of an integrated manufacturing plant such as this was to be, was dependent upon the proper design, lay-out and construction of the specialised civil engineering works".
We are here concerned with minimum list headings 341(2) and 500 in the Standard Industrial Classification as revised in 1958. I understand it to be accepted that some of the specialised civil engineering works did involve making metal manufacturing plant within heading 341(2), but unless the whole of those specialised works fall within that provision the Greatham establishment is not covered by section 1(2) of the Act. For the Secretary of State it is contended that this latter requirement is not here compiled with and that all the civil engineering work done by Mitchells at Greatham was simply construction within heading 500.
In their letter of the 17th April, 1970, the Department said:
"In our view this is not the making of an industrial plant as specified in minimum list heading 341(2) but simply the building of a special purpose factory in which machinery will be installed".
That has remained their contention throughout. The contrary contention of Mitchells was that the Greatham Tube Mill is a metal manufacturing plant within minimum list heading 341(2) and that the work on the foundations required for the component elements of that mill should be treated in exactly the same was as the foundations for the component elements of a generating station which, as my Lord has already observed, the Department has hitherto treated as falling within that heading.
A question widely canvassed before us is whether the various headings are mutually exclusive, and such authorities on the point as exist were cited to us. If what is meant by the phrase is that an establishment cannot fall under more than one heading, I respectfully disagree. Nor do I think that section 10(5) of the Act contains anything leading to such a conclusion. I would respectfully adopt the words of Lord Cameron in the Minister of Labour v. Reliant Tool Company[8] when he said :[9]
"I do not express any opinion upon the proper construction to be placed upon the words of the sub-section beyond saying that in my opinion it does not exclude the possibility that one set of activities may properly come under more than one heading. If however, it comes within a qualifying head that is enough to entitle the employer to receive the premium".
The only qualification I would respectfully make upon that passage is that I think the last sentence is, in my judgment, too broadly phrased.
In my judgment, the proper test was propounded by the tribunal when, after referring to the Shellabear Price case, they said:
"The work may be [within heading 500] and also part of the making of a steel plant, and if it is both we have to consider which is the more apt heading under which to put the work".
It is in that manner that one must solve the problem posed by Lord Denning in the case of Prestcold (Central) Ltd. v. Minister of Labour[10] when he said, referring to the particular facts of that case.[11]
"Looking at this Standard Industrial Classification, there are two competing headings under one or other of which this establishment must be put. If it is apt for both, so that it can equally well be put under each of them, then you must decide willy-nilly to make a decision between them. It cannot be put under both. It must be under one only. You must choose between them."
The test propounded by the tribunal is in accordance with that advocated by Lord Diplock in the last mentioned case, where he said:[12]
"One therefore starts with a presumption that where a particular activity might seem at first sight to fall within the descriptions contained in more than one heading it was intended to be covered by one description only and should be allocated to the description which is the most specific or otherwise the most apt".
As far as the present case is concerned, the specialised civil engineering works appear to me to fall within heading 500, and the only issue is whether the more specific heading 341(2) is particularly apt to describe such works. In my judgment it is. At an early stage in the hearing of this Appeal I was inclined to the view that all we were here concerned with was a concrete floor with some holes or channels in it. But it emerged that it was far more than that. Mitchells were not simply laying down a concrete base or floor to support machinery; they were creating an elaborate entity consisting not simply of a slab of concrete but of a complex of ducts and cavities at different levels without which the machinery could not have been fed its necessary supply of power in a variety of forms. Conversely, these specialised engineering works would be useless save as a means of feeding the machinery whose needs they were designed to satisfy.
The approved design was one which involved the construction of an elaborate system of channels for the purpose of embedding the ducts in concrete in conformity with a carefully prepared predetermined layout. I find it impossible to accept the view of one of the lay members that:
"the massiveness and strength of the foundations have the same relationship to the machinery installed as has any other foundation constructed to carry a heavy floor load, viz. a concrete base laid to support a Mini car or to support a Churchill tank".
Nor do I find myself able to accept either of the view expressed in the following passage in the judgment of Lord Widgery, C.J.:[13]
"The ordinary meaning of the word 'plant' is equipment, other than machinery, which the industrialist keeps and uses on his premises for the purpose of his business. Concrete foundations for machines, however specialised, do not in my view come within the ordinary meaning of 'plant'".
For my part, I respectfully think (a) that save for exercises in book-keeping, "plant" is ordinarily regarded as embracing machinery, and (b) that what we are here concerned with is not simply (if at all) a mere foundation (however specialised) for machines, but a complex construction of concrete which is an integral part of the metal manufacturing plant itself.
It follows from this that I would have decided this appeal as did the majority of the Divisional Court. But what has naturally caused me to pause is whether this court is free to take that course in the light of the conclusion of the two lay members of the tribunal, the respect understandably accorded to it by all members of the Divisional Court and by this court, and the proper approach to their conclusion in the light of such reported cases as The Lord Advocate v. the Reliant Tool Company[14] in 1968, Maurice v. The Minister of Labour[15] in 1969, and Fisher-Bendix Ltd. v. Secretary of State for Employment and Productivity[16] in 1970. But all this is contingent upon the appellate court being satisfied that the tribunal members asked themselves the right question. That the learned chairman did so appears from more than one passage, and I cite only one as an example. He said:
"Making the machines, installing the machines, installing the wiring and water pipes etc., all are operations in the making of the plant. So too I think is the construction of such intricate concrete work, which seems to integrate the whole of the plant".
In my respectful view the lay members, on the other hand, did not ask themselves the right questions and they thereby misdirected themselves. The fatal flaw in their conclusion, as I see it, was pinpointed by Lyell, J., in brief terms in the Divisional Court. He rejected the test they applied by saying:[17]
"The essential question is not whether these specially designed foundations with ducts and channels in them form part of the machine or machinery, but whether they are part of metal manufacturing plant".
He concluded that the whole of the complex concrete structures play an integral part in the automated process of making the large diameter steel tubes. I think he was clearly right in so concluding. It follows therefore that in my judgment all the specialised civil engineering work performed by the respondents not only constituted construction within heading 500 but also came within the more specific and apt heading 341(2) and that the company are entitled to the relief they seek.
This conclusion is in conformity with a ruling of the Department to which I have already, in passing, referred in relation to power stations, following upon a tribunal decision in the Shellabear Price case. Mr. Bingham has naturally conceded that uniformity of approach is most desirable, and I have yet to hear of any reason why a different attitude was taken up by the Department in relation to the present case, or any indication that they have had second thoughts about the validity of their ruling in relation to power stations.
It is also in conformity with the affidavit of Mr. Sloane-Stanley, an engineer of great experience and now a director of Mitchells, that the specialised civil engineering work - and I quote - "would be described by engineers as being part of the making of a metal manufacturing plant". In fairness to the tribunal, it should be observed that that affidavit was produced only to the Divisional Court. Nevertheless it remains the only available evidence regarding the manner in which engineers would regard the works with which we are now concerned, it was challenged in the Divisional Court, and it carries great weight.
Upon all these grounds I concur with my Lord in holding that this appeal should be dismissed.
Stamp, L.J.: I agree, and I only add one thing. It is not clear to me that judges who have used the expression "mutually exclusive' in relation to the several minimum list headings have always used it in the same sense. I am content to apply the process approved by the Master of the Roll, Lord Denning, and Lord Diplock in the case cited by Edmund Davies, L.J., Prestcold (Central) Ltd. v. Minister of Labour[18] once you reach the conclusion that these concrete foundations were in truth part of the metal manufacturing plant which was made, they fall fairly and squarely within the description "metal manufacturing plant" in heading 341(2), which becomes an apt, clear, specific and precise description of them. Nothing in the descriptions in minimum list heading number 500 is, in my judgment, equally apt, clear, specific or precise.
I agree that the appeal should be dismissed.
Appeal dismissed with costs
Leave to appeal to the House of Lords refused
