United Kingdom House of Lords Decisions

Subject_Provisional Order — Harbour — Dues, Rates, and Charges — Increase of Power to Charge — Provision in the Event of Undertaking being Acquired otherwise than by Agreement by Any Public Body — Sterilisation Clause. Headnote:

These three Orders were brought by the various promoters for the purpose of increasing the powers to charge conferred by their respective Acts of Parliament. A general question arose in connection with all three whether there should be inserted or not what was known as a sterilisation clause, i.e., a clause to the effect that in the event of the undertaking being acquired after the Order came into effect otherwise than by agreement by any public body no claim was to be open to the undertakers in respect of the powers conferred by the Order. This question had been much considered in applications of a similar character in England, of which there had been a very large number.

The Clyde Navigation Trustees sought power to increase their maximum rates by 80 per cent., arid that for a period of ten years. The Board of Trade had in June 1917 granted a temporary increase of 33 1 2 per cent., and had increased the amount in March 1918 to 50 per cent. and in September 1918 to 66 2 3 per cent. Opposition came from the ship-repairers, who sought to have the charge for the use of graving docks differentiated from the other charges of the Trustees on the ground that these were already higher than at other ports, and the increase allowed on them reduced, alternatively that the ten years should be much reduced. Opposition also came from coastal traders, who sought to be favoured because of the very frequent use made of the harbour by their ships and the present subsidised position of railway competition. It was suggested that the Trustees should have power after a ship had paid dues to a certain amount to allow it the remaining voyages of that year free of dues.

The Commissioners thought the Trustees had already power to differentiate the rates for traffic and they found the preamble proved, intimating that they felt bound by English authorities to insert a sterilisation clause, but if such clause went in the time limit would come out.

Clauses were adjusted.

The Greenock Harbour Authorities promoted their Order to obtain power to increase their rates and charges. Two temporary increases had been allowed by the Board of Trade giving together a 35 per cent. increase. They did not seek a percentage increase, but a general power to increase at the sight of the Board of Trade, and the duration of the power was limited to five years. Greenock Harbour was in a very peculiar position, having originally been a public trust, but having now become very much of the nature of a commercial undertaking, the B deferred debenture stockholders being entitled to the surplus earnings, if any. The Board had consented to perform the duty sought to be imposed upon it, and at the end of the inquiry the chairman

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intimated that it did not insist on the insertion of a sterilisation clause.

The Commissioners intimated considerable difficulty, but looking to the peculiar circumstances and the very limited duration of the power sought, found the preamble proved.

Clauses were adjusted.

Ardrossan Harbour Company sought an increase of 50 per cent. on their maximum rates, limited to fifteen years' duration. The schedule of rates here was recent, 1909, and it had not been found necessary to apply to the Board of Trade for any increase during the war owing to a large extent to the advent due to the war of exceptional traffic which had now disappeared. The harbour was purely a commercial undertaking. Opposition came from shipowners using the harbour based on the ground that the existing maximum dues on ships, as distinguished from the other rates and charges, had not been reached, and the company was able to pay a fair dividend. It was suggested the dues on ships should be excluded, or alternatively that the increase granted should be much smaller and for a much shorter duration. Something was also said as to differential treatment of coasting steamers, but it was admitted that the company had power to compound, provided always similar terms were given to all in a similar position, had been in the habit of exercising such power by agreements, and was likely to do so again in the future.

The Commissioners intimated that, following the precedent of the Manchester Ship Canal case in England, no sterilisation clause would be inserted here in dealing with a trading company. They found the preamble proved but limited the increase to 33 1 3 per cent.

Clauses were adjusted.