Scottish Court of Session Decisions

The Greenock Port and Harbours Consolidation Act 1913 (3 and 4 Geo. V, cap. xlii), enacts—Section 109—“The Trustees may from time to time and at any time appropriate or grant the exclusive right to use any of the quays, wharfs, berths for ships, warehouses, sheds, quayage space, timber yards, and timber ponds, and any of their other works and conveniences, to any corporation, company, or person, on such terms and conditions as the Trustees think fit.” Section 111—“With respect to lands for the time being vested in the Trustees the following provisions shall have effect, that is to say, … (2) The Trustees may from time to time appropriate and adapt such parts as they think fit of any such lands for the purpose of shipbuilding yards or of warehouses, and generally for manufacturing, trading, or commercial purposes, and lease such lands or any parts thereof for such periods and upon such terms, and for such rent or other consideration as they think fit; or sell, feu, or dispose of such lands or any part thereof.” Section 193—“The regulations set forth in Schedule N to this Act annexed shall be enforced respecting the graving docks for the time being belonging to the Trustees, and the Trustees may enforce the same in the same manner and to the same effect as if the said regulations were bye-laws made by them under the Harbour, Docks, and Piers Clauses Act 1847 and this Act, or either or both of them, and were confirmed or allowed as therein required, but the Trustees may from time to time, if and as they think fit, revoke, amend, or add to those regulations, or any of them, such revocation, amendment, or addition before coming into force, to be allowed and confirmed as provided by the said Act of 1847.”

The Glebe Sugar Refining Company, Limited, and the Westburn Sugar Refineries, Limited, pursuers, brought an action against (1) the Trustees of the Port and Harbours of Greenock, and (2) James Lithgow and Henry Lithgow, both shipbuilders in Port-Glasgow, lessees of the Garvel Graving Dock, defenders, concluding for decree of declarator that the defenders first called had no power or right to appropriate or grant to the defenders second called, or any other manufacturer, trader, shipbuilder, or other individual member of the public, the exclusive right to use and to control and regulate the use of that portion of the undertaking of the Trustees known as the Garvel Graving Dock, and for reduction of a lease of the Garvel Graving Dock and its appurtenances for ten years from 15th August 1918 granted by the defenders first called to the defenders second called.

The lease of the Garvel Graving Dock between the defenders first and second called provided—“ First—In so far as they are empowered by their said Act to do so the lessors agree to let to the lessees, and the survivor of them, and the heirs of the survivor, but excluding assignees and subtenants, legal or conventional, without the consent in writing of the lessors, provided always that the lessors shall not unreasonably refuse their consent to an assignment of this lease to a limited liability company to be formed under the Companies Acts, if the memorandum and articles of association are in ordinary form, and provided the lessees remain liable for the obligations of the lease if so required by the lessors. In the event of difference of opinion the question shall be referred to arbitration as after provided, and the lessees agree to take from them on lease (First) the dock with the jetty and dolphins used in connection therewith, and the whole appurtenances thereof (including caissons, sluices, engine, boiler, machinery, plant, boiler and engine-house and chimney-stack); and (Second) the areas of ground adjoining the dock extending to 2000 square yards or thereby, all as delineated and coloured red on the plan annexed and signed as relative hereto, and that for the space of ten years from and after the 15th day of August 1918 (which is hereby declared to be the date of entry) subject to the provision for renewal hereinafter stipulated.… Fourth—The engineer and firemen required for the working of the engine, boilers, and machinery used in connection with the docks and the hydraulic system at the lessors' docks, shall be appointed by the lessors, and the lessors shall also supply the coal and stores for said engine, boilers, and machinery. The engineer and firemen though appointed by the lessors shall be under the control of the lessees for all work required by them in connection with the lease; and in the event of the engineer and firemen misconducting themselves, the lessees may require them to be changed, and the lessors shall give effect to this requirement. In the event of any difference of opinion as to the reasonableness of the requirements, the same shall be referred to arbitration as after provided. Fifth—During the currency of the lease the lessees shall be responsible for all running charges incident to the working of the dock, including the wages of engineer and firemen, and cost of coal and stores paid and supplied by

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the lessors as aforesaid. The sums due by the lessees under this article shall be paid half-yearly along with the rent. Sixth—The lessees shall allow the lessors such use of the said engine, boiler, machinery, and plant as shall be necessary in connection with the hydraulic system at their docks, and the lessors shall pay to the lessees a proportional part of the said running charges corresponding to the use so made by them as the same shall be fixed by the lessees and the lessors' general manager for the time being, or, failing agreement, by the arbiter hereinafter appointed. Seventh—Subject to the provisions of article eighth hereof, the lessees shall have full liberty to erect on the ground hereby let sheds and other buildings for the purpose of their business. Eighth—The lessees shall have power, but shall not be bound to do so, to widen the entrance to the dock, but always solely at their own expense and subject to the lessors' approval in writing by the hand of their secretary. Before any alterations are made to the dock at any time, or any buildings erected on the ground before referred to, the lessees shall submit to the lessors for their approval a plan of their proposed alterations or erections, which plan when approved shall be signed by the lessors' chairman or deputy chairman before such alteration or erections are commenced, and the whole alteration or erections shall be at the sight and to the satisfaction of the lessors or their engineer. Ninth—In the event of the lessees obtaining the sanction of the lessors to the widening of the entrance to the dock, and the same having been duly made to the satisfaction of the lessors, the lessees shall have the option of extending this lease for a further period of ten years at the same rent hereinbefore stipulated for, but so as not to extend the period of the lease beyond twenty years in all: Declaring however that the foresaid option shall not be exerciseable by the lessees unless intimated in writing to the lessors or the secretary at least twelve months before the expiry of this let.… Twelfth—As and when required by the lessors, the lessees hereby undertake to make the dock available for the repair of the lessors' caissons, and to undertake the repair thereof at such reasonable times as may be mutually agreed, and in the manner and to the extent to be specified by the lessors' engineer, at the rates and charges current at the time. The lessees further agree that they shall not unreasonably refuse the use of the dock to vessels using the port of Greenock. The docking and any repairing of such vessels shall be done by the lessees. Thirteenth—The subjects hereby let shall be used by the lessees for the purpose of carrying on their business of ship repairers and engineers and for the other ordinary purposes for which a dry dock is used and for no other purpose whatever.”

The pursuers pleaded, inter alia—“1. In respect that upon a sound construction of the Greenock Port and Harbours Consolidation Act 1913 the defenders the Trustees of the Port and Harbours of Greenock are vested with and are bound to exercise the control, regulation, and administration of the Garvel Graving Dock as part of their statutory undertaking, and in particular the use of said graving dock by vessels resorting thereto as regards time and order of admission, and that the grant to any private firm or individual of the exclusive use of said graving dock is inconsistent and incompatible with the statutory rights and duties of the Trustees on the one hand, and the public and in particular the pursuers on the other hand, the pursuers are entitled to decree in terms of the declaratory conclusions of the summons. 2. The lease between the Trustees of the Port and Harbours of Greenock and the defenders second called libelled in the summons being upon a sound construction of the said Greenock Port and Harbours Consolidation Act 1913 ultra vires of the Trustees, the pursuers are entitled to decree of reduction in terms of the recissory conclusion of the summons.”

The defenders pleaded, inter alia—“1. The pursuers having no title and no interest to sue, the action should be dismissed. 2. The averments of the pursuers being irrelevant and insufficient to support the conclusions of the summons, the action should be dismissed. 3. The transaction and in particular the lease complained of being intra vires of these defenders, they are entitled to absolvitor. 4. The said Garvel Graving Dock not being a part of their undertaking which the defenders are under statutory obligation to carry on, the defenders should be assoilzied.”

On 2nd July 1919 the Lord Ordinary ( Hunter) repelled the first plea-in-law for the defenders, sustained their second plea-in-law, and dismissed the action.

Opinion (from which the facts of the case appear).—“The pursuers in this action are the Glebe Sugar Refining Company, Limited, and the Westburn Sugar Refineries, Limited, both companies having their registered offices in Greenock. The defenders are (1) the Trustees of the Port and Harbours of Greenock, and (2) James Lithgow and Henry Lithgow, both shipbuilders there. The first conclusion of the action is for declarator that the first named of the defenders have no power or right to appropriate or grant to the defenders second called or any other manufacturer, trader, shipbuilder, or other individual member of the public, the exclusive right to use or to control and regulate the use of that portion of the undertaking of the Trustees of the Port and Harbours of Greenock known as the Garvel Graving Dock. Under the second conclusion of the summons the pursuers seek reduction of a lease dated 3rd and 5th September 1918 entered into by and between the defenders first called and the defenders second called, whereby the defenders first called have purported to lease to the defenders second called for a period of ten years from 15th August 1918, inter alia, the said Garvel Graving Dock with the jetty and dolphins used in connection therewith and the whole appurtenances thereof.

“The first plea taken by the defenders is

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that the pursuers have no title or interest to maintain the action.

On the record as it originally stood the pursuers merely averred that they were traders who resort to and use the harbours of Greenock; that their business is largely served by vessels delivering goods to them at the port of Greenock; that they are entitled to own or charter at any time for the purposes of their business vessels which will use the port, and that they require or may require to use the graving dock. I greatly doubt whether on the strength of such averments I should have felt justified in holding that they were entitled to prosecute the present action. In the course of the argument before me, however, the pursuers asked leave to amend the record by making a statement to the following effect:—‘The pursuers are in respect of rates on goods ratepayers within the meaning of sections 8, 10, 13, and 14 of the Greenock Port and Harbours Consolidation Act 1913, and as such have and exercise through their directors pursuant to section 17 of said Act the right of voting in the election of the five of defenders' trustees who under sections 10 and 13 of said Act fall to be elected by and from shipowners and ratepayers registered as electors.’ I understand the accuracy of this statement is admitted by the defenders. It appears to me, therefore, that the decision in the case of D. & J. Nicol v. Dundee Harbour Trustees, 1915 S.C. (H.L). 7, is an authority in favour of my sustaining the pursuers' title to maintain the action. In that case Lord Dunedin, after reviewing the Scots cases bearing upon the question of title to sue, said—‘When I find that the respondents in the capacity of harbour ratepayers are members of the constituency erected by the Act of Parliament to elect the trustees, and as such are also persons for whose benefit the harbour is kept up, I cannot doubt that they have a title to prevent an ultra vires act of the appellants, which ultra vires act directly affects the property under their care.’ These words appear to me to cover the case of the present pursuers as it is disclosed in the amendment made by them.

The question as to the powers and duties of the Greenock Harbour Trustees with reference to the property vested in them must be determined by the provisions of the Act of Parliament under which they act, i.e., the Greenock Port and Harbours Consolidation Act 1913. By section 8 of that Act it is provided—‘The port and harbours means and includes the port and harbours of Greenock together with all tidal harbours, docks, locks, works, yards, lands, property, houses, streets, roads, ways, jetties, wharves, piers, quays, warehouses, sheds, slipways, harbour rails, and premises whatsoever for the time being belonging to the existing Trustees and the Trustees and the whole harbour undertaking of the existing Trustees and the Trustees.’ The Trustees are the Trustees appointed under the Act and section 46 vests the whole port and harbours in them. [His Lordship quoted sections 109 and 111 (2), which are quoted supra.]

A graving dock or docks are no part of the necessary equipment of a harbour. From the terms of the Act, however, it was contemplated that the Greenock Harbour Trustees would or might hold such docks as part of the undertaking vested in them. Section 128 of the Act contains a provision as to the rates to be charged for vessels using the graving docks, and section 193 provides that the regulations set forth in Schedule N annexed to the Act should be enforced respecting the graving docks for the time being belonging to the trustees who may enforce them as bye-laws made under the the Harbours, Docks, and Piers Clauses Act 1847 and the Greenock Act, but the Trustees have power to revoke, amend, or add to those regulations.

The pursuers say that the statutory undertaking of the Greenock Harbour Trustees includes, inter alia, three graving docks. Two of these docks are alleged to be small and their equipment not modern or up-to-date in character. The third, known as the Garvel Graving Dock, is said to be comparatively modern and up-to-date in its equipment and also to be the only graving dock available for or capable of use by modern freight steamers. This averment is denied by the Trustees, who state that Garvel Graving Dock was built in 1871 and is not available for or capable of use by modern freight steamers because of the form of the entrance to the dock. According to their case the arrangements made by them for leasing this graving dock to the other defenders are aimed at remedying, pro tanto, the deficiency of the graving dock and repair accommodation at the port. For the purposes of the present argument I assume the accuracy of the pursuers' averment. It is to be noted, however, that the pursuers do not allege that the Trustees have acted in mala fide or contrary to what they honestly believe to be in the interests of the undertaking vested in them. Their case is that the grant to any private firm of the exclusive use of the graving dock for a lengthened period of time by lease is ultra vires of the Trustees.

Under the Act there is nothing to indicate that the Trustees are bound to maintain the graving docks in efficient condition in all time coming. These docks are works ancillary to the harbour, and under the Act the Trustees have powers conferred upon them under section 109 to grant the exclusive use thereof to any person on such terms as they think fit. This clause confers wide discretionary powers upon the Trustees, and appears to me to cover the granting of a lease for a period of years of a graving dock. The Trustees also found upon the provisions of section 111 (2), but that provision seems rather to contemplate the case where land is leased to an independent party or firm for the purpose of being used as a shipbuilding yard or other commercial purpose, which I think would include a graving dock. In my opinion the averments of the pursuers are irrelevant, and I shall therefore sustain the second plea-in-law for the defenders.”

The pursuers reclaimed, and argued—The lease in question was ultra vires. The trust

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being statutory the Trustees had no powers except those expressly given to them or necessarily implied under their statutes. Their duty was to place and keep at the disposal of the public certain things of which the graving dock was a part. That was part of the necessary equipment of a first class port. Further, as a result of the trust being statutory, equality of treatment was obligatory— Somerville v. Leith Dock Commissioners, 1908 S.C. 797, 45 S.L.R. 590; Pedrus Steamship Company v. Burntisland Harbour Commissioners, 1909 S.C. 1421, 46 S.L.R. 1004; Greenock Port and Harbours (Consolidation) Act 1913 (3 and 4 Geo. V, cap. xlii), sec. 128 and Schedule G; Dock and Piers Clauses Act 1847 (10 Vict. cap. 27), section 33. The lease took away the right of the public to the use of the dock and to equality of treatment. A private speculative firm had obtained a monopoly of the dock and the Trustees had surrendered one of the facilities it was their duty to provide, viz., a graving dock in their undertaking suitable for modern freight steamers. Section 109 of the Act of 1913 did not authorise such a grant of exclusive possession as the lease conferred: the dock had become part of the equipment of a private firm. Further, section 109 did not apply to graving docks, which were specially dealt with in section 193 and Schedules G and N. The regulations therein contained were imperative, and section 109 conferred no power to abrogate them. Section 111 only applied to property which had ceased to be part of the undertaking and could not apply to a necessary part of the proper equipment of the port. If section 109 applied it must be construed in harmony with the general purpose of the Act, i.e., for the public benefit, not to deprive them of the right to a facility which they would otherwise have had.

Argued for the defenders—There was no question of impropriety or inexpediency as regarded the action of the Trustees; the sole question was of ultra vires. The Trustees had not exceeded their powers. The general law—Brice on Ultra Vires, p. 158—was not in dispute, but here the Trustees had power to do what they had done under section 109 and section 111 of the Act of 1913. A graving dock was part of the port and harbours—section 8—and was a work in the sense of section 109. The work and conveniences referred to in that section were places to which the public were entitled to resort, yet those could be appropriated to individuals. Appropriate was a very strong word, approximating in meaning to dedicate. A lease was a form of appropriation. The regulations as to graving docks—section 193, Schedule N—only applied so long as the graving dock remained in the hands of the Trustees, and did not prevent appropriation. The provisions as to rates—section 128, Schedule G—gave the public a right to equality in rating, but were merely directory, and could be altered by the Trustees—section 193. Further, the Trustees' action was warranted by section 111, which overlapped section 109. A graving dock was land—section 3 of the Act of 1847—and section 111 authorised the leasing of land. The Trustees were not under obligation to maintain a graving dock. They might let it fall into decay—section 65. If so, it would clearly come under section 111. The monopoly was simply of docking and repairing, but the interests of the public were safeguarded by clauses 10, 12, and 13 of the lease. The general power of the harbourmaster was not affected. To lease the graving dock as had been done was for the benefit of the harbour in general.

At advising—