Yiu Lian Machinery Repairing Works Ltd and Others v. Commissioner of Rating and Valuationn

LDRA000002/1980

Rating - whether the statutory definition of "tenement" as the Hong Kong unit of assessment results in Hong Kong rating law being materially different to English rating law where "hereditament" is the unit of assessment - whether common law doctrine of chattels enjoyed with land and English rating concept of the unit of occupation apply in Hong Kong - meaning of "structure" and "machinery" - floating docks are not rateable property but non-rateable vessels - appeals allowed - Section 2, 8(b), 21, Rating Ordinance, Cap. 116; Section 2 Merchant Shipping Ordinance, Cap. 281; Shipping and Port Control Ordinance, Cap. 313; Merchant Shipping (Miscellaneous Craft) Regulations Cap. 281.

IN THE LANDS TRIBUNAL OF HONG KONG

(Appellate Jurisdiction)

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BETWEEN

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Coram: His Honour Judge Cruden sitting as President, Lands Tribunal.

Date: 10 March 1982

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JUDGMENT

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1. In these five consolidated appeals the appellants are the owners of the five floating dry docks at present moored in Hong Kong habour. Floating dry docks have been moored in Hong Kong for many years and used for ship repair purposes. They have always been registered as "vessels" by the Director of Marine. Section 2 of the Merchant Shipping Ordinance, Cap.281 defines a "vessel" as including "any floating dry dock ..." The floating dry docks are in fact registered under the Merchant Shipping (Miscellaneous Craft) Regulations which were first promulgated under the Merchant Shipping Ordinance but since 1978, pursuant to Section 35(1) of the Shipping and Port Control Ordinance Cap.313 have been deemed to have been made under Section 33 of the Shipping and Port Control Ordinance. The Regulations themselves have remained unaltered. Regulation 2, which deals with the classification and licensing of vessels, provides that the vessels which shall be classified under Class VII are:-

"Floating dry docks and floating workshops that tend to remain stationary in the waters of the Colony."

2. All five floating dry docks are duly licensed by the Director of Marine as Class VII vessels under those Regulations.

3. Until 1980 the Commissioner of Rating and Valuation had never attempted to rate these floating dry docks or to assert that they comprised rateable property. However, after preliminary discussions with the appellants the Commissioner in 1980 took the first step towards doing so when he issued a Notice of Interim Valuation on the 29th day of February, 1980 in respect of each of these five floating dry docks. After objections were made by the appellants the Commissioner on the 2nd day of April, 1980 issued Notices of Decision to each appellant informing them that his decision in each case was to uphold the earlier Notice of Interim Valuation.

4. From those Notices of Decision the appellants have appealed to this Tribunal pursuant to Section 42 of the Rating Ordinance. The grounds of each appeal are that the floating dry docks are not rateable and in the alternative that the rateable values set out in the Notices of Decision are above the proper rateable values.

5. While the issues on appeal generally are the same in respect of each appellant there are some factual differences which may be material. I will first particularise the floating dry docks involved in these proceedings and will then set out precisely which floating dry dock and other property is included by the Commissioner in each Notice of Decision as comprising the particular rateable tenement.

6. The five floating dry docks are:

7. The "Yiu Lian No.1" and "Yiu Lian No.2" were both moored in their present positions on or shortly after their arrival in Hong Kong.

8. The "Taikoo" on arrival in Hong Kong was first moored in Aldrich Bay moving to its present site off Tsing Yi Island on the 9th day of December, 1978. The "Whampoa" was also first moored at Aldrich Bay being moved to its present position on the 22nd day of February, 1978. The "Chung Shan" from 1971 to 1978 was moored off Nam Wan, Tsing Yi Island being moved to its present mooring on the 11th day of December, 1978.

9. In the case of some of the floating docks the owners are also lessees of the sea bed over which the floating docks are moored. In some cases too, the owners are also lessees of nearby shore leases of land. Again, some of the floating docks have access to the land by piers or a series of pontoons or bridges. Where he considered it appropriate the Commissioner has included those elsments as forming part of the "tenement" in each Notice of Interim Valuation and these descriptions have remained unaltered in each Notice of Decision. The Commissioner has described each tenement in the Notices of Interim Valuation dated the 20th day of February 1980 as follows:

10. As to sea bed leases it was undisputed that both the "Taikoo" and the "Whampoa" were moored in sea water which is above an area of sea bed which was within the defined boundaries of a lease of the sea bed being Lot 80 from the Crown to Hong Kong United Dockyards Ltd. granted on the 27th day of January, 1979 for the residue of a term of 99 years less the last 3 days thereof commencing from the 1st day of July, 1898. So the lease of the seabbed had already been granted by the date of the Notice of Interim Valuation. A similar sea bed lease was granted to "Yiu Lian No.1" namely on the 28th day of April, 1980 so after the date of the Notice of Interim Valuation. However, the Commissioner submits that prior to that date the owner of the "Yiu Lian No.1" was in possession of the sea bed as a result of correspondence between the parties which amounted to either an agreement to lease or a licence and that factual distinction is of no legal significance. I may have to return to this issue later. There is no sea bed lease in respect of "Yiu Lian No.2" The "Chung Shan" is moored in sea water which covers the area of sea bed leased to Euroasia Dockyard Enterprise and Development Ltd. on the 11th day of December, 1978. The evidence disclosed that the lessee of that portion of sea bed being Lot 77 is a subsidiary of Euroasia Dockyard and Construction Works Ltd. The evidence further disclosed that the "Chung Shan" was in fact owned by the parent Company and not by another subsidiary Euroasis Shipyard Co. Ltd. the present appellant. The evidence showed that the "Chung Shan" had been chartered by the parent Company to the appellant which had in turn, on the 18th day of July, 1980, sub-chartered the "Chung Shan" to Hong Kong United Dockyards Ltd. So the lessee of the sea bed lease and the owner of the floating dock were different persons. I may also later have to consider whether this difference has legal consequences.

11. As to the nearby land the owners of the "Yiu Lian No.1" have a lease from the Crown of the adjacent foreshore which was granted for the purpose of establishing a shore based shipbuilding and repair yard. There is no similar shore lease in relation to "Yiu Lian No.2" but under Short Term Tenancy 386 the owner has possession of land at Castle Peak Road, Tsuen Wan Bay, for the construction of a transformer house for the supply of electricity to "Yiu Lian No.2." The owners of the "Taikoo" and "Whampoa" have a lease from the Crown of the adjacent foreshore being Lot 71, for the purpose of establishing a shore based shipbuilding and repair yard. Euroasia Dockyard Enterprise and Development Ltd. have a similar shore lease of Lot 60.

12. Another factual matter which should be referred to at this stage, is the access the floating docks have to the adjacent foreshore. The "Yiu Lian No.2" and the "Chung Shan" are moored separately in the sea and have no temporary or permanent connection by pontoons or otherwise with the land. To travel from land to either of those floating docks it is necessary to do so by sea. Although the affidavits were silent on the issue, as a result of a view I took of all floating docks on the joint application of both parties, I am satisfied that a permanent pier now extends towards "Yiu Lian No.1". At the end of the pier a drawbridge, which can be moved up and down, may be lowered to the floating dock to provide direct access from the land. A series of pontoons connect the "Taikoo" to the shore. A permanent pier extends from the shore towards the "Whampoa". At the end of the pier a draw bridge can be lowered up and down to provide access to the "Whampoa".

13. All of the floating docks are moored in a similar manner. Beyond the floating docks, concrete blocks are placed on the sea bed. Chains are then connected from the floating docks to the concrete blocks. These blocks settle on the sea bed under their own weight although in some cases holes were dug in the sea bed to facilitate this process. In the case of the "Taikoo" alone a covering of earth and rubble was placed on top of the blocks to increase their holding power. In the case of the "Yiu Lian No.2" steal anchors, instead of concrete blocks, are used.

14. The appellants conceded that electricity and telephone services were supplied from land but water was brought by barge.

15. The "Taikoo" and "Whampoa" telephones were separately listed in the Hong Kong Telephone Company's Business Directory and it seemed that telephones on the other floating docks were extensions from land based telephones. I accept that although these land based services exist, none are essential to the floating docks use and operation but are enjoyed on grounds of convenience.

16. Turning to the law the short point is whether the property described in the Notices of Interim Valuation is rateable in Hong Kong under the Rating Ordinance. In Hong Kong the unit of property which is rateable is a "tenement" which is defined in Section 2 of the Ordinance in these terms:

' "Tenement" means any land (including land covered with water) or any building, structure, or part thereof which is held or occupied as a distinct or separate tenancy or holding or under any linence.'

17. The appellants concede that where there were sea bed leases granted at the date of the Notices of Interim Valuation those portions of the sea bed contained within those leases are rateable. Further that as the lessees are licensed thereunder to use parts of the sea bed beyond the leases for positioning the concrete mooring blocks, those portions of the sea bed on which the concrete blocks rest are also tenements under Section 2.

18. The hotly disputed issue is whether the floating docks themselves are rateable. The Commissioner asserts they are rateable. However, he recognises that it is not the whole of the docks which are physically rateable and concedes that a deduction must be made for the value of the machinery on the floating docks. The Commissioner has already in the Notices of Valuation before me, made an allowance pursuant to Section 8(b) for the value of the machinery on the floating docks "for the purpose of manufacturing operations or trade processes. " Because of difficulty in ascertaining the value of this machinery the Commissioner adopted a contractors basis of valuation of 20% of the effective capital value in respect of the "Chung Shan" and 25% in respect of the other floating dry docks.

19. So the nature and extent of the property in dispute has been narrowed down by these twofold concessions. The appellants concede that the sea-bed occupied under lease or licence is rateable. The Commissioner concedes that the value of machinery on the floating docks has first to be deducted before arriving at the rateable value of the floating docks themseives and further that he has already made such a deduction.

20. There is no Hong Kong decision on whether floating docks or similar vessels are rateable as "tenements". Nor, which is more surprising, have Counsel been able to find any English, Commonwealth or other decision where, whatever the rating laws of a particular country, the status of a floating dock is considered. However, a large number of authorities were cited to me from other jurisdictions and the extent to which they are relevant by way of analogy or otherwise depends in part on the meaning of "tenement" in our Section 2. In particular as the majority of the decisions cited to me were English it is necessary to to determine whether our statutory rating provisions are the same as in England or materially different. There seem to be at least three differences all of which are material. First, as to liability in England under the General Rate Act 1967, the general concept is that the occupier and not the owner is rateable - Ryde on Rating (13th Edn.) 20. English Courts are concerned with occupation not ownership. In Hong Kong the position is quite different. Both the occupier and the owner are liable for rates. In Hong Kong what in rating law is called the unit of assessment, is the "tenement". The tenement includes the property mentioned in Section 2 which is either "held" or "occupied". So the definition of "tenement" itself recognises dual liability for owner and occupier. Section 21 expressly provides that both owner and occupier are liable for payment of rates. It is true that the Section goes on to provide that, as to payment, the rates shall be deemed to be an occupier's rate and in the absence of any agreement to the contrary, shall be paid by the occupier. The effect of Section 21 seems to be twofold. First, it declares that both the owner and the occupier shall be liable for rates. Secondly, it provides that as between the owner and occupier the occupier shall be primarily liable for payment. The dual liability of both owner and occupier is common in many other Commonwealth jurisdictions but is a very different to the more limited concept which historically exists in England.

21. Secondly, in England the unit of assessment is the "hereditament" which has been defined as the unit of occupation which relates to the English basis of liability resting on the occupier. In Hong Kong the unit of assessment is the "tenement". Section 2 provides that the property therein defined must comprise a distinct or separate tenancy or holding or licence.

22. Thirdly, the subject matter to be rated is differently described. Under Section 2 the property falling within the definition of "tenement" is:

"... land (including land covered with water) or any building, structure or part thereof ..."

23. In England Section 16 of the General Rate Act 1967 being the modern successor to what was originally Section 1 of the Poor Relief Act 1601, 43 Eliz. 1, c.2, defines the subject matter of rating in England. For comparison with the Hong Kong position the two relevant elements of the English statutory definition are "lands" and "houses".

24. I accept Ryde on Rating explanation at page 148 that the reference to "houses" is misleading as it is already included within "lands". It seems that as houses were the most common form of Elizabethan rateable property, the original draftsman expressly included them, not as an additional class, but as an example ofthe property covered by the word "lands" on which they were necessarily a fixture. On this approach "houses" is not a separate class from "lands" but merely an example of property falling within the definition of "lands".

25. In that case in England the statutory rateable property to be contrasted with our "... land ... or any building structure or part thereof..." is simply "lands". No doubt in part because of that more limited express statutory definition there evolved in England the doctrine of chattels enjoyed with the land. The English law has now developed to the stage that if a chattel is enjoyed with the land, it forms part of the hereditament and must be included within the valuation of the hereditament for rating purposes. In England a large body of case law exists whereby the common law has extended the rateability of "lands" to include, in appropriate circumstances, certain chattels. It may be noted that Hong Kong's statutory definition of tenement is concerned solely with land and fixtures and that there is no??express reference to chattels. Whether the English doctrine of chattels enjoyed with the land applies in Hong Kong is a separate matter I shall have to consider shortly. These threefold material differences between Hong Kong and English rating law must be taken into account when considering the English cases.

26. Against that background I now turn to consider the statutory definition in Section 2 of the Hong Kong unit of assessment, namely "tenement". I accept the appellants submission that the definition consists of two limbs. The first concerns the subject matter to be rated namely land, buildings and structures. The second limb only makes even those three species of property rateable, if they are held or occupied as a distinct and separate tenancy, holding or licence. The appellants maintain that a vessel of the nature of a floating dock is neither land nor a building nor a structure but even if it were it is not held or occupied under a tenancy, holding or licence. For it is undisputed that the floating docks are owned by the appellants.

27. Certainly the Hong Kong section does not empower the Commissioner to rate an owner of the fee simple. In England the reference is to "lands" simpliciter and is not limited to leasehold or lesser interests. So in England lands are rateable whether freehold, leasehold or otherwise. Counsel for the appellant suggests that the explanation for the much more restrictive Hong Kong provision is that it simply reflects the historical fact that nearly all land in Hong Kong is leasehold. I may take judicial notice of the fact that subject to one notable and spiritual exception all land in Hong Kong is held from the Crown on either a leasehold or lesser tenure.

28. In considering the first limb two separate issues arise. The first is whether the use of the word "land" in our Section 2 enables the English doctrine of chattels enjoyed with the land to be invoked in Hong Kong. Secondly, whether or not the doctrine does apply are the floating docks "structures" and therefore caught by the Section quite independently of any extended meaning of the word "land".

29. As to the application of English common law generally I have been reminded by the Commissioner that Section 3 of the Application of English Law Ordinance, Cap. 88 provides that, subject to the qualifications expressed therein, the common law of England applies in Hong Kong. I also observe that one of the qualifications is where the common law is amended by legislation. So in considering common law principles I have to take into account that they be affected by different Hong Kong statutory provisions. In approaching the more extensive Hong Kong definition of the rateable unit of assessment, the appellants submit that this is a proper case to apply the maxim expressum unius exclusio alterius - Maxwell on Interpretation of Statutes (12th Edn.) 293.

30. It is submitted, as the Hong Kong definition is not concerned simply with "lands" but in addition expressly refers to "building" and "structure", other property such as "chattels", is therefore excluded. Accordingly the English common law doctrine of chattels enjoyed with the land can have no application in Hong Kong.

31. I do not consider the maxim assists the appellants. For it is clear that the words "building" and "structure" are used in relation to the world "land". They are both examples of fixtures. Neither is a chattel. The draftsman by limiting himself to three species of realty, namely land and two types of fixtures no doubt has excluded other species of realty, but he cannot be held to have also thereby excluded personalty. The class the Section is concerned with is not property but realty. Chattels are members of the class of personalty not realty. As to chattels Section 2 is silent. The Section does not therefore by itself exclude the application of the English doctrine of chattels enjoyed with land. The question whether that doctrine applies in Hong Kong therefore remains.

32. The very similarity of the words "lands" and "land" used in the corresponding sections at least enables it to be argued that the English doctrine does apply. I accept that the reason for the doctrine being developed was because of the very brevity of the English statutory definition. As a consequence "lands" has been interpreted in the widest sense. For example, to include not only the surface of the earth but in a classical judgment of Pollock C.B. everything under it and over it - Electric Telegraph Co. v. Salford Overseers (1855) 11 Ex. 181. The definition of rateable lands was also further extended by the development of the doctrine of chattels enjoyed with the land of which the House of Lords judgment in London County Council v. Wilkins (Valuation Officer) (1957) A.C. 362 is the most recent authoritative decision. Before that case the law was clear that the chattels had to be connected with the land with sufficient permanency and not merely transiently. In that case it was held that four builders huts placed on land for 18 to 23 months were connected with the land with sufficient permanence to be rateable. Lord Radcliffe referred to the fact that gas pipes, water pipes, drains, sewers, telegraph posts and wires placed in and over lands had for a long period themselves been rateable. To him the builders huts were by the application of that same principle rateable as hereditaments when placed on land even though the land was owned by a third person. The judgment is not surprising when the English rating criterion of occupation, as distinct from ownership, is taken into account. It is even less surprising when it is viewed as a simple extension of the already established principle of other chattels, when enjoyed with land, being rateable. Later in Ryan Industrial Fuels Ltd. v. Morgan (Valuation Officer) (1965) 3 All E.R. 465 C.A., Willmer L.J. explained that:

"The true view, as it seems to me, is that in order to be rateable a chattel (a) must be capable of being occupied, and (b) must be sufficiently connected with the land so that it can be truly said to be enjoyed with the land."

33. Salmond L.J. was content to state that the chattel must have some real connection with the land on which it rests as did the huts in London County Council v. Wilkins and the moorings in Cory v. Bristow (1877) 2 App. Case 262.

34. Cory v. Bristow, although of less relevance than it might first appear to have in relation to the present appeals, is an interesting case. The appellants were held to be in rateable occupation of part of the bed of the River Thames. Two coal derricks permanently moored in the Thames, were secured to the river bed by anchors, being placed in dredged out holes, thereafter covered with rocks and ballast. The Conservators of the Thames had the right to order the moorings to be removed on giving a week's notice. However, the only property which was in dispute as being rateable was the moorings not the derricks. There are a series of other cases where similar facts included the existence of vessels such as floating bar??es and houseboats, but in each the rateable issue was limited to whether the moorings - not the vessels - were rateable - R. v. Leith (1852) 1 E. & B. 121, Forrest v. Greenwich Overseers (1858) 8 E. & B. 890, Gooding v. Benfleet Urban District Council (1933) 49 T.L.R.298.

35. The first reported dase where a vessel was held to be rateable as a chattel enjoyed with the land was Thomas (Valuation Officer) v. Witney Acquatic Co. Ltd. (1972) 18 R.R.C. 348. The vessel comprised a floating clubhouse moored in a lake connected to the shore by two gangways. During the winter it was moved for security purposes to another anchorage. When at its summer mooring electricity, telephone and water were supplied from land.

36. The Trihunal first found that the waters of the lake itself constituted a hereditament. This was founded on the principle that land means not only the surface of the land but all strata above and below the surface including any water. Having made that finding thet Tribunal applied what in England are four commonly applied tests of rateability, which were first brought together by the Court of Appeal in John Laing & Son Ltd. v. Assessment Committee for Kingswood Assessment Area (1949) 1 K.B. 344 and since approved by the House of Lords in London County Council v. Wilkins. These 4 English tests of rateability may be summarised as follows:

1. There must be actual occupation;

2. The occupation must be exclusive for the particular purpose of the possessor;

3. The occupation must be of some value or benefit to the possessor;

4. The possession must not be for too transient a period.

37. It may be observed in passing, that those four criteria relate neatly to English rating concepts but can only be applied in Hong Kong subject to several important qualifications. For in England occupation per se gives rise to liability for rates. It matters not whether the land occupied is freehold or leasehold or whether the occupier is in occupation as owner, lessee, licencee or otherwise. In Hong Kong under our Section 2 actual occupation by itself is not enough. Before land or any building or structure can become rateable it must in addition be held or occupied as a distinct or separate tenancy or holding or under licence. So there must be either ownership or occupation under one of those three kinds of limited title. In England if the four tests are satisfied the occupation becomes rateable. But in Hong Kong the satisfaction of the four English tests would only give rise to liability for rates if, in addition, the land was occupied under one of the three limited forms of tenure set out in Section 2. In England the four tests are complete and decisive criteria whether liability for rates arises. In Hong Kong they are, at most, merely an indicator that there may be a liability for rates.

38. To return to Thomas (Valuation Officer) v. Witney Acquatic Co. Ltd., the Tribunal having found that the portion of the lake in which the clubhouse floated was within the definition of "lands" in the English Act and therefore comprised a rateable hereditament, went on to consider whether the vessel - which it was undisputed was a chattel and did not form part of the realty - was a chattel enjoyed with the land. Again there is a series of cases in England, many referred to by the Tribunal, which have held that chattels so enjoyed are rateable - London County Council v. Wilkins (contractors huts); Westminster City Council v. Southern Rail Co. (1936) A.C. 511 (bookstalls); Ryan Industrial Fuels Ltd. v. Morgan (spoil heap) Field Place Caravan Park Ltd. v. Harding (1966) 2 Q.B. 484 (caravans).

39. Except for the fact that in the winter the floating clubhouse was moved, the Tribunal would have found it difficult to draw any distinction between the floating clubhouse and the caravan in Field Place Caravan Park Ltd. v. Harding. I observe that the Tribunal referred to the fact that "the caravan constituted, with the land upon which it rested, a hereditament in the occupation of the caravan owner. " Those words are important in relation to the Tribunal's crucial step in finding that, subject to permanency, the floating clubhouse constituted, with the water of the lake in which it floated, a hereditament in the occupation of the clubhouse owners. The Tribunal then went on to find that there was sufficient permanency for the possession not to be too transient and therefore the fourth English rating test was satisfied. The Tribunal's decision was cited and applied by the Avon Local Valuation Court in Valuation Officer Bristol v. Courage (Western) Ltd. (1981) 260 Estates Gazette 823. This appeal was concerned with the rateability of two floating public houses and restaurants which were moored in the harbour under licences from the Bristol City Council. The Local Valuation Court cited the decision of the Liverpool City Sessions in Mersey Master Mariner's Club & Anor. v. West Derby Assessment Committee & Anor. (1951) 44 R. & I.T. 358 as reinforcing the decision in Thomas (Valuation Officer) v. Witney Acquatic Co. Ltd. While it does so in the restatement of settled general principles, it is important to note that the Mersey Master Mariner's Club Case was not concerned with whether the vessel was rateable, but merely whether the land covered by the water in which the vessel floated together with the moorings and other land forming the resting place for the gangway on the quay, were rateable. There are other recent cases in which moorings were held to be rateable on the apparent ground that they were fixtures and therefore formed part of the land and it was not necessary to invoke the doctrine of chattels enjoyed with the land of which Forth Yacht Marina Ltd. & Anor. v. Fife Assessor (1977) Rating and Valuation Reporter 11 is an example.

40. As against the two English decisions of Thomas (Valuation Officer) v. Witney Acquatic Co. Ltd. and Valuation Officer Bristol v. Courage (Western) Ltd. holding that the vessels in those cases were rateable, I was asked to consider the decision of the Lands Valuation Appeal Court of Scotland in Assessor for Glasgow v. R.N.V.R. Club (Scotland) (1974) S.L.R. 291 where a vessel, floating in the River Clyde moored to the quay and used as an officers club, was held not to be rateable. The law in Scotland is not identical to the law in England but fundamental rating principles seem to be the same. The Valuation Committee appealed from had held that the vessel was moveable property under Scots law which equates with a chattel under English law. The Valuation Committee further considered that neither the degree of attachment of the vessel to the quay nor the fact that the vessel had been moored in the same place for a long period, changed the nature of the vessel from moveable property to heritable property which is rateable.. Under Scots law property has to be "heritable" to be rateable as in English law it has to be a "hereditament". This Scots decision was referred to by the Local Valuation Court in Valuation Officer Bristol v. Courage (Western) Ltd. but quickly dismissed on the grounds that there were differences between Scots and English law and that the Scottish decision only cited other Scots cases. The latter is certainly true which may be unfortunate, for unlike the passing comment of the Local Valuation Committee the principles in both countries appear to me to be at least similar.

41. As to any differences I have referred to the "Oxford Companion to Law" p.1032 which is edited by a Regius Professor of Law at a Scots University who is as well an English Barrister of the Inner Temple. In dealing with rating he makes no distinction between England and Scotland as to the law. The only distinction made is in relation to the different appropriate hierarchy of Courts. Elsewhere he ??quates "chattels" with "moveables" and "hereditaments" with "heritages" or "heritable" property. I am prepared to hold that these niceties of nomenclature apart, the general principles of rating law in England and Scotland are sufficiently similar to make decisions of a Court in either country of potential persuasive value in Hong Kong on the issue I have to determine.

42. So there are three reported cases where the issue determined was whether the vessels themselves were rateable. The two English decisions decided that they were rateable. The single Scots decision decided the vessel was not rateable. None of these decisions is binding on this Tribunal. However, particularly in the absence of any Hong Kong decisions, they are at least interesting and are potentially persuasive. The facts are sufficiently similar and the law sufficiently common that their degree of persuasiveness, following the principle of stare decisis, should largely depend on the position of the courts or tribunals in their own country's hierarchy of courts. Subject to this the quality of their reasoning must also be important. In England in rating matters the Local Valuation Court, comprised of laymen and not lawyers, is the court of first instance; appeals may be made therefrom to the Lands Tribunal which may be presided over by a lawyer or other member who may be a chartered surveyor; on a point of law an appeal may be made from the Lands Tribunal to the English Court of Appeal. In Scotland rating valuation is done by county assessors from whom an appeal lies to a Local Valuation Committee with a final right of appeal to the Land Valuation Appeal Court - "Oxford Companion to Law" page 1032. So Thomas v. Witney Acquatic Co. Ltd. was decided by the Lands Tribunal constituted on that occasion by one person who was a non-lawyer. It was followed by the Avon Local Valuation Court in Valuation Officer Bristol v. Courage (Western) Ltd., a lay tribunal none of whom were lawyers. On the other hand, the judgments in both the English decisions clearly show that the Tribunal and the Local Valuation Court, while composed of laymen, included persons with considerable knowledge of valuation matters and with experience of the legal principles applicable to rating.

43. Both the English judicial bodies occupied inferior equivalent positions in the English judicial hierarchy to Scotland's Lands Valuation Appeal Court which equates with the English Court of Appeal in land valuation and rating matters. Scotland's Lands Valuation Appeal Court consists of three judges of the Court of Session, the Outer House of which, equates with the English High Court and the Inner House with the English Court of Appeal. Of the three judges who sat on this particular appeal, Lord Fraser became in 1975 a member of the House of Lords as a Lord of Appeal in Ordinary and Lord Keith became a Lord of Appeal in Ordinary in 1977. So Scotland's Lands Valuation Appeal Court was not only the equivalent of a superior court to the judicial bodies in the two English cases, but on matters of law in particular was obviously a very powerful Court. Accordingly, any statements of general principle on matters of law made by the Land Valuation Appeal Court warrant the utmost respect by this Tribunal.

44. There are no factual differences of substance, between the vessels moored as floating public houses and restaurants in Valuation Officer, Bristol v. Courage (Western) Ltd. and the vessel moored as an officers club in the Scots case. All three had earlier been sea going ships which were later moored and converted to their present static and social purposes. Nor do I find any material differences on the facts between them and the floating clubhouse in Thomas (Valuation Officer) v. Witney Acquatic Co. Ltd.. Although in that case there is the difference, in law, that the Tribunal found that the water on which the vessel rested was land. The Avon Local Valuation Court in the later English decision did not advert to this important finding in applying the Tribunal's decision. Instead, the Committee went on to use the analogy of movable caravans resting on land, as justification for holding the vessels to be rateable. No thought seems to have been given to the status of the water in which the vessels floated or whether instead the connections to the quay alone, were sufficient to invoke the doctrine of chattels enjoyed with the land. Under English law they would have been rateable on either basis.

45. In passing, it may be observed that an interesting comparison between these three cases is that the English decisions edge forward, proceeding from precedent to precedent, running the risk of giving undue weight to factual similarities which may disguise material legal distinctions. This danger is the greater where the judicial body extending a legal principle does not include a lawyer. On the other hand, the Scots decision, perhaps predictable under their civil system, is more concerned with matters of principle. The fundamental principle which dominated the judgments of Lords Fraser, Avonside and Keith was that the property sought to be rated, designed and constructed as a ship, continued to rest on water and not upon land. Scottish caravan decisions holding, as in England, that caravans occupying land with a sufficient degree of permanence were rateable were disposed of on the basis of this fundamental distinction. Lord Fraser, while recognising that the vessel had since mooring acquired very different characteristics to sea going ships, was nevertheless emphatic that:

"Above all it shares with other ships the essential characteristic that it habitually floats on water ... The caravans occupied sites on the land while this ship floats on water, and, in my opinion, it would only be in the most exceptional circumstances that a ship floating on its native element, could be heritable. ... I do not think that a floating ship, even if permanently moored in one place, could enter the roll as being lands or heritages, except perhaps if there was a high degree of mutual adaptation between the ship and the berth at which it is moored."

46. Thomas (Valuation Officer) v. Witney was able to dispose of that possible difficulty, even under English law, by holding that the water ofthe lake came within the definition of "lands" in Section 16 of the General Rate Act 1967. The floating club therefore, as a matter of law, rested on lands not on water. The analogy with the decisions where the caravans though not fixtures were chattels resting on and connected with the land was therefore complete.

47. In Hong Kong the definition of "land" in Section 2 prevents such a simple approach. For our statutory definition of "tenement" precludes the water itself forming part of the tenement. If the definition had been based on the English section and merely referred to land simpliciter it would be possible to follow the wider English meaning of lands. But by going on to include in addition to land also "land covered with water" the Legislature has clearly indicatedthat our definition of land, where it forms part of the sea bed, excludes the water above the surface of the sea bed.

48. Against this background I now hold that the reference to the three kinds of property as comprising a "tenement" in Section 2 neither expressly or under the maxim expressio unius exclusio alterius excludes chattels. I further satisfied that the English doctrine of chattels enjoyed with land does apply to land in Hong Kong. For the doctrine to apply to the floating docks I would have to find that they are a chattel so enjoyed with the land. I find that they are a chattel but a very special type of chattel, namely a vessel. Are these particular vessels sufficiently connected with the land to be enjoyed with the land? Their possible physical connection with the land appears to be threefold. First, where there are sea bed leases, they rest on that portion of the sea which is above the area of sea bed within the sea bed leases. Secondly, by the connection through chains between the floating docks and the concrete mooring blocks in the case of four of the floating docks and the anchors in the case of a fifth floating dock. Thirdly, by the connection to the shore leases of the telephone and electricity cables and in the case of three of the five floating docks, by the connecting pontoons, piers or drawbridges.

49. As to the portion of the sea over the sea bed leases, I am satisfied that the definition of tenement in Section 2 excludes the possibility of that sea water forming part of the tenement as it otherwise would on the English common law principle that a hereditament includes not only the surface of the land but all strata above and below the land including water. Our Ordinance for rating purposes, excludes that common law principle. As to the moorings, none of them has such a degree of permanence that while it may be possible it is improbable that they would be moved. In the case of the "Yiu Lian No. 2" the moorings are not even secured to the sea bed under any licence. Where three of the floating docks are connected to the foreshore by pontoons or piers, the link between the end of the piers and the pontoons is of a more moveable nature than the piers or pontoons themselves. The telephone and electricity line connexions I find have been made for reasons of convenience and are not essential. I would not find such lines by themselves sufficient to transform the vessels from chattels not enjoyed with the land, into chattels enjoyed with the land. However, when all these connections - including those lines, the moorings in all cases, and the piers or pontoons in the case of three of the floating docks - are taken together, is their cumulative effect sufficient to establish such a connection? I would hold that the proper test is the test applied in Assessor for Glasgow v. R.N.V.R. Club (Scotland). Is there such a high degree of mutual adaptation between the vessels and the berth at which they are moored, to result in these floating docks, or any of them, becoming chattels enjoyed with the land. In the case of the "Yiu Lian No.2" the connection is Minimal consisting only of the telephone and electricity lines. I am well satisfied that the connexion is insufficient in that case. In the case of the "Chung Shan" there is the additional connection with the mooring blocks resting on sea bed, held under licence. I am satisfied that that increased degree of connexion still falls far short of the high degree of mutual adaptation the test I am applying requires. The remaining three floating docks have the additional connecting element of the piers or pontoons and draw bridges. This certainly gives them a greater degree of connection to the foreshore than the other two floating docks. As against this in the Scottish case there was a similar connection to the shore but it was by three separate gangways. So there were three different points of access to the shore. In the case of the three floating docks I am considering there is only one point of access to the shore. On a strict factual comparison there is therefore less physical connection with the shore in the case of the three floating docks than in the case of the floating clubhouse moored in the Clyde.

50. Apart from the nature of the physical connection I have also paused to consider the possible legal connection of the floating docks to the leases. For this purpose I have persued the provisions of the sea bed and the shore leases. Clauses 5 and 6 of the Special Conditions of both kinds of lease contain the only covenants which could be approached as creating possible licences in relation to the floating docks. The sea bed leases expressly refer to floating docks. The shore leases do not. I am satisfied that the clauses in neither lease create any licence in relation to the floating docks. In both kinds of lease they are simply standard user covenants in relation to the nature of the use of the land. They are certainly positive user covenants but they fall short of being licences which legally connect the floating docks to the land in either lease whereby the contracting parties thereunder would have the status of licensor and licensee.

51. I appreciate that even in the absence of sufficient physical or legal connection between the vessels as chattels and the land to satisfy Hong Kong requirements the position in England might be different. For the English criterion of occupation and liability for rates flowing from the mere existence of a unit of occupation would be sufficient for floating docks together with the land - either sea bed or shore - to form one unit of occupation and so constitute a rateable hereditament.

52. However, I am satisfied that the unit of occupation has no place in Hong Kong rating law. The consequences flowing from the absence of such a principle, are very relevant in considering the possibility of the foreshore lease being in the names of different persons to the sea bed lease or the ownership of the floating dock. There are no mutual covenants between the two leases making each conditional upon the lessee of the other being the same person. If the shore lease were to a different lessee then there would be no land held or occupied to which the floating docks could relate in terms of Section 2. After taking all these factors into account I am well satisfied and so find as a fact, that the connexion with the land of the remaining three floating docks also falls short of the degree of mutual adaptation that would be required before their value could be added to the value of the remainder of the tenement. Even under English law, except under the unit of occupation principle, there would be insufficient connection to satisfy English requirements.

53. If the floating docks are not "land" or chattels enjoyed with the land there was no suggestion that they were "buildings" under Section 2. They clearly are not. Are they "structures?" The appellants submit that structure is here used in relation to land. It was argued it was as "structures" that pipes and telephone poles are rateable in Hong Kong whereas in the absence of an express reference to structures in the English Section 16, the Courts there had to develope the doctrine of chattels enjoyed with land to make property of that kind rateable. The Commissioner submits that, if that doctrine applies in Hong Kong, there is no necessity for him to prove that the floating docks are structures. This ignores the fact that it would still be necessary to determine whether the floating docks were not merely chattels, but chattels enjoyed with the land. However, his submissions continued that if the doctrine does not apply in Hong Kong, the floating docks may still be caught as structures. I have held that the doctrine applies in Hong Kong but that on the present facts the floating docks are not chattels of that kind. I will therefore have to go on and decide whether they are structures. First, I hold that the word "structure" in the definition of tenement does mean a structure which is related to land. The appellant submits that the floating docks, on the facts, do not satisfy the requirements of the definition. For they do not touch the sea bed; they are movable; they are not annexed to the shore; the moorings simply rest on the sea bed on their own weight; they are chattels removable at will by the tenant; if structures they would adhere to the land; they are licensed as vessels by the Director of Marine; they are analogous to floating balloons neither being supported by land: the balloon floats in the air: the floating docks float in the sea.

54. I was referred to the Court of Appeal decision of Cardiff Rating Authority & Anor. v. Guest Keen Baldwin's Iron and Steel Co. Ltd. (1949) 1 K.B. 385. This is one of many English cases dealing with structures. None, of course, do so in relation to the way in which "structure" appears in our Section 2. Some limit the word structure to property which is also necessarily a fixture. Others use it in a wider sense to include chattels. The position in England is further complicated by The Plant and Machinery (Rating) Order 1960 (S.I. 1960 No.122) which specifies the classes of machinery and plant which are now statutorily deemed - without any of the inconvenience or uncertainty for rating authorities of having to invoke the common law doctrine of chattels enjoyed with land - to be part of the hereditament and therefore rateable. The classes of plant and machinery listed in the Schedule thereto are generally required to be "in the nature" of a structure or building. The English cases are therefore primarily concerned with the very different issue whether property which is otherwise prima facie a chattel and even though not a structure, is nevertheless "in the nature of a structure". The English cases need to be considered on this special basis.

55. In England plant and machinery listed in the Order generally form part of the hereditament and are rateable if they are a structure or "in the nature of a structure". In Hong Kong it is not sufficient for the property to be merely "in the nature of a structure" it must actually qualify as a structure. For English rating purposes the Court of Appeal also considered what constituted a "structure" so the decision is still helpful. The property in dispute was tilting furnaces and mains. Denning L.J., as he then was, at page 396 stated:

"In this case the learned recorder seems to have thought that these were not structures or in the nature of structures because they were movable. In my opinion, that was a misdirection. A structure is something which is constructed, but not everything which is constructed is a structure. A ship, for instance, is constructed, but it is not a structure. A structure is something of substantial size which is built up from component parts and intended to remain permanently on a permanent fundation; but is still a structure even though some of its parts may be movable, as, for instance, about a pivot. Thus, windmill or a turntable is a structure. A thing which is not permanently in one place is not a structure, but it may be 'in the nature of a 'structure' if it has a permanent site and has all the qualities of a structure, save that it is on occasion moved on or from its site. Thus, a floating pontoon, which is permanently in position as a landing stage beside a pier, is 'in the nature 'of a structure,' even though it moves up and down with the tide and is occasionally removed for repairs or cleaning. It has, in substance, all the qualities of a landing stage built on piles. So, also, a transporter gantry is 'in the nature of 'a structure, even though it is moved along its site. It has the same qualities as a fixed gantry, save that it moves on its site. Applying this interpretation to the facts of this case, I think that a tilting furnace is 'in the nature of a structure.'

56. In the same decision Jenkins, J. declared at page 402.

"It would be undesirable to attempt, and, indeed, I think impossible to achieve, any exhaustive definition of what is meant by the words "is or is in the nature of a building "or structure". They do, however, indicate certain main characteristics. The general range of things in view cousists of things built or constructed. I think, in addition to coming within this general range, the things in question must, in relation to the hereditament, answer the description of buildings or structures, or, at all events, be in the nature of buildings or structures. That suggests built or constructed things of substantial size: I think of such size that they either have been in fact, or would normally be, built or constructed on the hereditament as opposed to being brought on to the hereditament ready made. It further suggests some degree of permanence in relation to the hercditament, i.e., things which once installed on the hereditament would normally remain in situ and only be removed by a process amounting to pulling down or taking to pieces. I do not, however, mean to suggest that size is necessarily a conclusive test in all cases, or that a thing is necessarily removed from the category of buildings or structures, because by some feat of engineering or navigation it is brought to the hereditament in one piece. For instance, floating docks or pontoons, items specifically mentioned in Class 4, would not, I think, be excluded merely on account of having been towed complete to the here-ditament instead of having been built or constructed there. The question whether a thing is or is not physically attached to the hereditament is, I think, certainly a relevant consideration, but I cannot regard the fact that it is not so attached as being in any way conclusive against its being a building or structure or in the nature of a building or structure. This is, I think, clearly down by some of the items specifically mentioned in Class 4; e.g. floating docks and pontoons would necessarily not be so attached. Nor can I regard the fact that a thing has a limited degree of motion in use, either in relation to the hereditament or as between different parts of itself, necessarily prevents it from being a structure or in the nature of a structure, if it otherwise possesses the characteristics of such. The list in Class 4 includes such things as elevators and hoists, transporter gantries, transversers and turntables, and weighbridges. It is true that things in Class 4 are rateable only "to such "extent" as they are buildings or structures or in the nature of buildings or structures; but I cannot regard this as necessarily excluding from rateability the movable parts of things which from their inclusion in the list are clearly regarded as capable of being in the nature of buildings or structures and from their very description must clearly possess some degree of mobility in relation to the hereditament or as between the different parts of themselves.

On the facts found by the learned recorder, it is, in my view, clear that, once the false criterion of movability or physical attachement to the hereditament is discarded, the tilting furnaces and mains, to which the second and third questions relate, are structures or in the nature of structures within the meaning of the order of 1927."

57. So no test even in England is conclusive. It is for the Tribunal to make a finding in each case after considering the characteristics of the disputed property in its totality. In England the Order of 1927 referred to by the Court of Appeal has been replaced by The Plant and Machinery (Rating) Order 1960 and under Class 4 thereof floating docks are deemed to be part of the hereditament subject, inter alia, to them beingbuildings or structures or in the nature of buildings or structures and to them or any part thereof not being moved or rotated by motive power as part of the process of manufacture.

58. So many potential areas of dispute in England have been removed by the provisions of the Order that floating docks are rateable as part of the hereditament if, although not structures, they are in the nature of structures. The unit of occupation concept and the chattels enjoyed with land doctrine would be other alternative heads of liability upon which a rating authority in England could place reliance. But floating docks in England remain not necessarily rateable. The English Lands Tribunal in Vickers-Armstrong (Shipbuilders Ltd. v. Thornton (Valuation Officer) (1965) 11 R.R.C. 66 held that a floating dock regularly moved to different positions within a dock basin was not a structure or in the nature of a structure so as to form part of a rateable hereditament because it had no permanent site and no degree of permanence in relation to its hereditament. Hong Kong has no similar Order so neither the Order nor the cases relating to floating docks thereunder, such as the one cited, are relevant to the matters I have to decide. I mention them only in passing.

59. There were also cited to me a number of English cases on whether property was a fixture or a chattel which are of some help in deciding whether the floating docks could be called structures related to the land. These included Holland & Anor. v. Hodgson & Anor. (1872) 7 L.R.C.P. 328, and Hulme v. Brigham (1943) K.B. 152. The principle they establish is that articles not attached to the land other than by their own weight are not fixtures. Annexation is a normal but not an essential element. The appellant argues that the structure mentioned in Section 2 is a species of fixture and that the floating docks are not so attached to any lands nor are their concrete mooring blocks sufficiently attached to bring them within the category of structures. The Cross-Harbour Tunnel Co. Ltd. v. Commissioner of Rating & Valuation (1980) H.K.L.T.L.R. 144, 159, 160 was cited as an example where water mains embedded into the wall of Hong Kong's Cross-Harbour Tunnel were held to form part of the structure of the tunnel and were rateable as part of a tenement under Section 2.

60. The Commissioner submits that the floating docks in Hong Kong satisfy the test of both Denning L.J. and Jenkins J., in the Cardiff Rating Case. It is submitted that annexation is not essential. It is conceded that whether they are structures is a question of fact. I am satisfied having consisered those judgments that the floating docks are not structures. I find as a fact that the floating docks are not structures in terms of Section 2.

61. The appellants went on to argue that, even if the floating docks were structures, they were not held or occupied in terms of Section 2 as distinct or separate tenancies or holdings or under licence. Under this limb the appellants concede that the sea bed - where there are sea bed leases - is clearly held under a "distinct and separate tenancy". In the case of the sea bed leases the appellants equally concede that the land on which the concrete mooring blocks rest which are outside and beyond the defined boundaries of the sea bed leases, is in terms of those leases held on "licence". Therefore both those pieces of land satisfy the second statutory requirement under Section 2. On the other hand, the floating docks are clearly the property of the appellants. The lessor of the sea bed and the licensor of the mooring block land have no estate or interest in the floating docks.

62. The appellants argue that even if the floating docks are structures they do not fall within that limited category of structures which are caught by Section 2 for they are owned absolutely by the appellants. The appellants do not hold the floating docks on lease or licence. As to the English caravan and other cases where the structure or chattel enjoyed with the land is also owned absolutely by the ratepayer, the appellants submit that those cases are distinguishable on the following grounds. First, that they rely on the separate doctrine of chattels enjoyed with the land. Secondly, taken together with the land on which they rest they form one "unit of occupation" under English rating law and the fact that there is different ownership of the land and the chattel is therefore in England not relevant. I have already accepted that the English unit of occupation based on their definition of hereditament does not exist in Hong Kong. For completeness I would add that I accept that the use of the word "holding" in our Section 2 also relates to land. Examples of such a holding which would not constitute either a lease or a licence would be agreements to lease or memoranda of appropriation under Section 4 of the Crown Land Ordinance, Cap. 28. Certainly as a lease implies a lessor and a lessee and a licence a licensor and a licensee a holding requires a holder and a holdee. Holding is not wide enough to encompass mere occupation of an area by the owner of the structure which is in occupation.

63. As to whether Section 2 requires the land to be held under a lease, licence or holding as distinct from mere occupation the Commissioner referred me to Ho Ying v. Commissioner of Rating & Valuation (1980) H.K.L.T.R. 273 where it was held that mere occupation of Crown Land renders an occupier liable to rates. However, the only authority cited was the English decision R. v. Bell (1798) 7 T.R. 601 which I recognise accurately accords with the English rating principle that rating is based on occupation. The possible distinction between English and Hong Kong was clearly not considered in that case by our Lands Tribunal and I note that the appellant appeared in person. I would not therefore look upon that decision as being decisive of the issue that has now arisen. To the extent that it may have held that in Hong Kong mere occupation gives rise to rateability it is, with respect, wrong.

64. The Commissioner in asserting that the floating docks are structures, argues that the outside shell of each floating dock forms a structure within the meaning of Section 2. In other words, the whole of the floating dock, less the machinery for which the Commissioner has already made an allowance of 20% to 25% in his valuations. Further the Commissioner submits that if that structure satisfles the 4 tests of rateability approved in London County Council v. Wilkins then it is rateable. I have already held that in Hong Kong those 4 tests are not conclusive, In fact they may, because of the substantial differences in our rating law, be quite misleading.

65. I was also referred to the English Court of Appeal decision of Manchester Marine Ltd. v. Duckworth (Valuation Officer) (1973) 1 W.L.R. 1431 where rating of a dry dock or graving dock was in dispute. There the issue was rather different. As the dry dock was on land the Court did not have to consider the status of a floating dock even generally. The issue was whether the dry dock was wholly plant and machinery or whether the walls and floor of the dry dock were part of the rateable hereditament. The Court of Appeal deseribed the walls and floor as constituting a structure which formed part of the hareditament. They were built more firmly in relation to the land than any house is built in relation to its land. This decision was no different to the earlier dry dock decision of Smith's Dock Co. Ltd. v. Tynemouth Corporation (1907) 1 K.B. 315 where Channell J. expressly referred to the different issue raised by the dry dock cases in these words:-

"In my opinion this case is not analogous to those where a floating vessel has been anchored or moored in the stream of a river. In that class of case it has been held that where a vessel is moored by permanent moorings there is an occupation of so much of the bed of the river as is occupied by those permanent moorings."

66. I am of the view and so hold, that the structures referred to in Section 2 are structures which are fixtures and not chattels. I am satisfied that a floating dock is not a fixture so does not fall within the description of structure in Section 2.

67. The appellants finally submitted that even if the floating docks formed part of a tenement under Section 2 they were, pursuant to Section 8(b), exempt from being included in the valuation of the tenement for rating purposes, as they were "machinery". In both the English and Hong Kong legislation the value of "machinery" is clearly excluded from a valuation for rating purposes. Here the appellants submit that the floating docks are simply floating hoists; they wholly comprise machinery; that their size should not be held against them in assessing their true character. It is submitted that they are different not merely in degree, but in kind from a dry dock and no real distinction can be made between the structure of the floating dock and the attached plant. It is recognised that such a distinction is possible in the case of a dry dock where the walls and floor rest and are affixed to the land out of which the dry dock has been carved and like that land are immoveable. Further, the floating dock is not merely a floating platform on which machinery is fixed. For the floating dock is not simply moored in a static position. Instead, each time a ship is repaired, the floating dock itself has to sink down to allow the ship to enter and is then raised to allow the ship to be repaired. On completion the dock again has to be lowered to allow the ship to leave. Accordingly the plant and machinery which the Commissioner has deducted are, it is submitted, an integral part and no different in kind to the balance of the floating dock which is sought to be rated. They form one integral whole which in total falls within the definition of machinery. I am prepared to recognise that a floating dock is different to a dry dock, not simply because it moves up and down with the tide, but because its structure itself moves in a particular and power controlled manner both to allow a ship to enter and to depart. For that purpose the hull of the floating dock sinks and rises in the water as part of a controlled mechanical process. The floating dock is a very different object to the comparison sought to be made for the Commissioner that if it were beached on to the shore, it would then be very similar to a dry dock. In my view it would then not only be useless but quite different in nature. In the absence of other definitions of "machinery" I was referred to the New Zeland Court of Appeal decision of Auckland City Corporation v. Auckland Gas Co. Ltd. (1919) N.Z.L.R. 561 which considered the meaning of "machinery" in the New Zealand Rating Act 1908 and held that gas mains and pipes were rateable but that gasometers and governors as machinery were non-rateable. In holding that the gasementer was "machinery" Chapman J., observed:

... I feel myself unable to say that such fixed things as the mains laid and used for supplying gas are parts of a machine or are properly included under the term "machinery".

To arrive at a definite conclusion we have to examine the various appliances referred to and consider the functions of each. Taking first the gasholder - or, as it has been called, the gasometer - it seems to me that it does actually and actively perform mechanical functions. I do not rely solely on the force its movable parts exorcise in delivering a certain amount of gas near its site. It might be found that this was a so small in quantity as to oblige us to say that it was too small to be treated as more than an incidental attribute. I do not overlook this, but I attach importance to the aid it gives us as a moving appliance in the compression of the gas so as to render it marketable. The commodity is not saleable until it is in this manner rendered fit for delivery, and this I regard as part of or closely connected with the manufacturing process. It would not retain its condition of compression in a rigid chamber, but the mobility of the container causes it to act not merely as a store but as a machine used for controlling the force of expansion by acting against the force liberated by successive withdrawals of gas.

The governors appear to me to stand on a different footing. They are appliances for modifying a force in the shape of high compression existing in the gas in the mains. It would not be safe to conduct the gas in that condition to the customers' burners, and it undergoes alteration at the governor before delivery. I do not think that any distinction can be drawn between the main leading to the governor and the reticulation beyond it. The main is not a machine actively contributing to the state of compression of the gas as the gasometer is. It is a tank or rigid chamber. If water were pumped into a reservoir in order that it might by gravitation descend to customers' pipes we should say in popular language, "This reservoir is filled by means of "pumping machinery". It cannot be called a machine it does nothing itself; its contribution of force is not that of a machine - it is purely static.

68. If a floating dock were the same as a dry dock then clearly the only part of it that would be machinery is that for which the respondent has made an allowance. As to differences I appreciate that the major difference is that the floating dock itself mechanically rises and lowers during the docking process. So it is far more than a floating platform. The raising and lowering process itself requires considerable skill to maintain trim and adjust the keel blocks. These are different skills to those required to operate a dry dock.

69. But it seems to me that they are closer to those discharged by the captain of a vessel than by the operator of a hoist or similar machinery. In its ordinary meaning, a vessel or ship is not referred to as "machinery". Although affixed to most vessels are various kinds of machinery including hoists, lifts, and cranes. The floating docks have similar, if more sophiscated and complicated, lifting machinery. The fact that the floating platform on which they are affixed is also raised and lowered as an essential element in the trade process of repairing ships, does not, in my view, change the fundamental nature of a floating dock as a vessel into machinery. I therefore find that the floating docks are not machinery and that the allowance the respondent has already made is adequate to cover the value of such machinery as is affixed or used in connection with the floating docks.

70. In the result, I therefore hold as a matter of law that the word "land" as used in the context of the definition of "tenement" in Section 2, does not exclude the English common law doctrine of chattels enjoyed with the land applying in Hong Kong. The doctrine does apply. However, I find as a fact, that the floating docks in Hong Kong are not sufficiently connected with the land for them to be enjoyed with the land and therefore rateable in terms of that doctrine. I further find that the floating docks are not "structures" within Section 2. However, nor if they were otherwise rateable, would I hold that they are excluded as being "machinery". For they are clearly not machinery.

71. As the floating docks are chattels not so enjoyed with the land and are not otherwise caught by the definition of "tenement" in Section 2, it follows that they are not rateable. Judgment is therefore given for the appellants. I will hear the parties as to costs and any other consequential matters for which leave to apply is hereby reserved.

DATED this 10th day of March, 1982.

Representation:

Mr. D. Widdicombe, Q.C. with Miss M. Yuen inst'd by Deacons for the appellants.

Mr. N. Kaplan with Mr. N. Strawbridge and Miss J. Lewis for the respondent.