MELLUISH (INSPECTOR OF TAXES) Vs. B M I (NO 3) LTD MELLUISH (INSPECTOR OF TAXES) V B M I (NO 6) LTD MELLUISH (INSPECTOR OF TAXES) V B M I (NO 9) LTD MELLUISH (INSPECTOR OF TAXES) V FITZROY FINANCE LTD MELLUISH (INSPECTOR OF TAXES) V BARCLAYS MERCANTILE BUSINESS FINANCE LTD

JUDGEMENT

(1.) These proceedings involve five taxpayer companies, B. M. I (No. 3) Ltd. B. M. I (No. 6) Ltd. B. M. I (No. 9) Ltd. Barclays Mercantile Business Finance Ltd. and Fitzroy Finance Ltd. They are members of a group of which the parent is Mercantile Group Plc., a company associated with Barclays Bank Plc. In relation to each of the five companies there is an appeal and a cross-appeal against a decision of Vinelott J. given on 27 January 1994 [1994] 2 W. L. R. 795. He had before him appeals by the Crown from decisions of the special commissioners in respect of each of the five companies. For the purposes of this judgment it is unnecessary to draw any distinction between an of the five companies; the issues are the same. It is also immaterial that in the cases of four of the companies the appeals to this court are by the Crown and the cross-appeals are by the companies, while in the case of the fifth company the appeal is by the company and the cross-appeal is by the Crown.

(2.) The essential facts lie in a very small compass. Each of the five companies carries on the trade of acquiring and hiring out plant and machinery to user. In all the cases with which we are concerned, the users have been local authorities who are freeholders of the premises in question. In all the cases with which were are concerned, the nature of the plant and machinery concerned is such that it had to be fixed to the structure of the building in which it is installed, and such that, on being so fixed, it would, on ordinary principles of the general law, be regarded as a fixture. The types of plant and machinery are various, e.g., lifts installed in council cart parks, boilers installed in council officer, cremators installed in a council crematorium, plant and equipment installed in a council swimming pool and central heating installed in council flats or council houses and entry phone or alarm system installed in blocks of council flats. The only difference between these various types of plant and machinery which has any relevance to the issues in these proceedings is that, in the case of central heating systems installed in council flats or council houses and entry phone or alarm systems installed in blocks of council flats, the flats or houses will, either at the time of the installation or shortly afterwards, have been let to council tenants on weekly tenancies; in all other cases the building in which the plant and machinery has been installed have at all time remained in the occupation of the local authority concerned.

(3.) I should stress that we are not concerned with the leasing by the taxpayers companies to local authorities, or to any one else, of items of plant and machinery, being chattels for sue in the local authorities premises - e.g. valuable office equipment - which are never fixed to the buildings in which they are used and so never lose their chattel status.