‘The Weekly Law Reports, October 2, 1970 488 Buckley LJ. Reg. v. Registrar General, Ex p. Segerdal [1970] service which indicates any act which I think could be properly described as worship. ‘Now it is true that Mr. Segerdal in his affidavit indicates that the form of service adopted in the chapel at Saint Hill Manor is not confined to what T have so far referred to, for in his description of the service he says that one of the creeds of the Scientologists would be read by the minister and that the congregation would read the creed silently in concert with the minister, and he says, also, that after the sermon there would be a moment’s silence for contemplation or prayer. According to the evidence, there are two creeds, one of which has already been mentioned by Lord Denning M.R. and one which is rather fuller in its terms and which does in fact contain more references to God than the creed which is set out in the book of ceremonies; but when one comes to read those creeds, they are not, in my judgment, documents which can in themselves be regarded as constituting acts of worship; they are affirmations of faith, but they do not, I think, partake of the character of worship. The fact that in other faiths the recital of a creed may very probably take place in the course of a religious service which is undoubtedly an act of worship does not mean that any creed used on any occasion will itself constitute an act of worship. In my judgment the evidence indicates that the sort of ceremony which takes place on a Sunday afternoon in this chapel at Saint Hill Manor is a ceremony of instruction in the tenets of this particular body, but it is not a ceremony which can be properly described as constituting worship, and ‘consequently I agree that it has not been established that this chapel is a place of meeting for religious worship; and so, in my judgment, this appeal should be dismissed upon the ground that the chapel is in truth not a place to which the section has any application. Appeals dismissed with costs. Leave to appeal refused. Solicitors: Lawrence Alkin & Co.; Social Security. jolicitor, Department of Health and M. M. H. [House oF LorDs] BRITISH OXYGEN CO. LTD. APPELLANTS AND MINISTER OF TECHNOLOGY . . . . RESPONDENT [oN APPEAL FROM BRITISH OXYGEN CO. LTD. V. BOARD OF TRADE] 1970 May 6, 7, 11, 12; Lord Reid, Lord Morris of Borth-y-Gest, July 15 Viscount Dilhorne, Lord Wilberforce and Lord Diplock Industrial Development—Grant—" Vehicle”—Vacuum tank and pumping equipment—Permanently mounted on trailer—Hydro- gen trailer—Parts of mobile transporters used for delivering gas to customers—Whether “ machinery or plant ”—Small gas cylinders—Whether used for process ancillary to the making of gas—" Storage” —" Packing""—Meaning of—Industrial Deve- lopment Act, 1966—Whether eligible for grants—Discretion‘The Weekly Law Reports, October 2, 1970 3 WLR. B.O.C. Ltd. v. Board of Trade (H.L(E)) A Of the Board of Trade—Industrial Development Act, 1966 (c. 34), ss.1 (1) 2) @), 13 (1). By section 1 of the Industrial Development Act, 1966: “ (1) Subject to the provisions of this section, the Board of Trade... may make to any person carrying on a business in Great Britain a grant towards approved capital expenditure incurred by that person in providing new B machinery or plant . . . (a) for carrying on a qualifying industrial process in the course of that business .. . 2) For the purposes of this section a qualifying industrial process is a process for or incidental to any of the following purposes, that is to say—(a) the making of any article . .« (3) For the purposes of this section—(a) the repair or main- tenance in the course of a business of an article which is used in the course of that business for carrying on a c process for or incidental to any of the purposes mentioned in subsection (2) of this section; (6) the storage in the course of a business of anything which is to be used in the course of that business for carrying on any such process or which is to be or has been subjected to, or has resulted from, any such process carried on in’ the course of that business; and (¢) the packing in the course of a business of anything which is to be or has been D subjected to, or has resulted from, any such process carried on in the course of that business, shall each be treated as a process incidental to that purpose, but, save as aforesaid . . . storage or packing shall not be treated as a process incidental to any of the purposes mentioned in subsection (2) of this section.’ By section 13 (1): EB “In this Part of this Act—. . . ‘machinery or plant’ includes part of any machinery ‘or plant but does not include . ... any vehicle except—(a) a vehicle constructed or adapted for the conveyance of a machine incorporated in or permanently attached to it and of no other load except articles used for the purposes of the machine . . .” ‘The plaintiff company’s main activity was the manufacture, sale and distribution of industrial and medical gases in gaseous F and liquid forms. The company used three kinds of trans- porter and metal cylinders of various sizes to effect the sale and delivery of the gases, which had to be maintained at pressure or at low temperatures. The equipment used was (1) a small road tanker assembly comprising a four-wheeled lorry chassis, Mounted on the chassis behind the driver's cab was a vacuum insulated tank to carry and maintain the gas at low pressure and pumping equip- G ment. The tank and pumping equipment were not detachable from’ the chassis. (2) A large articulated tanker assembly comprising a four-whecled tractor with a driver’s cab and a half-trailer supported on four rear wheels on which were mounted a similar tank and pumping unit and_ various controls. The trailer was detachable from the tractor but for the purpose of transport and delivery both units were always united. (3) A hydrogen trailer assembly comprising a tractor H and half-trailer, the latter being supported by two rear wheels, and on which was mounted a bank of nine steel cylinders into which hydrogen was inserted under pressure. The cylinders were set between two bulkheads and there were various con- trols and meters. ‘The half-trailer was frequently detached from the tractor and left at a customer's premises while the contents were used. In all three assemblies the cost of the motive and chassis parts was a relatively small proportion of the cost of the whole. (4) Metal cylinders of various sizes,‘The Weekly Law Reports, October 2, 1970 490 B.O.C. Ltd. v. Board of Trade (H.L(B.)) 1970] costing on an average just under £20 each, in which pres- surised gases were kept at the company's premises for delivery to customers. After delivery the customers retained the cylinders until they were exhausted, when they were returned to the company whose property they’ remained. ‘The company’s claim that capital expenditure on that equipment was eligible for grant under the Industrial Develop- ment Act, 1966, was disputed by the Board of Trade on the grounds that the tankers were “vehicles” and as such would be ineligible for grant; that the function of the hydrogen trailers and the cylinders was essentially that of storage and distribution and these were thus also ineligible; and that even if expenditure thereon were authorised by the Act, since the equipment served a primarily distributive function and the cylinders cost less than £25 each, it would be inconsistent with government policy to make grants in respect thereof and the board would exercise its discretion not to do so. The court by summons was asked to determine whether the equipment was “machinery or plant” within the meaning of the Act, its eligibility for grant and the extent of the board’s discretion :— ‘Held, that the tankers and the hydrogen trailer assembly were not eligible for grants, not being “ machinery or plant” within section 1 (1) of the Act. The tanks and the hydrogen cylinders were parts of the respective vehicles and could not notionally be separated from them. ‘The single gas cylinders were plant and if they were partly used for storage and partly for delivery of the gas and storing it on the customer's premises the Minister might approve such part of the capital expenditure as might be held appropriate for the eligible purpose of storage within section 1 (3). Per Lord Reid. The Minister has a discretion and is not bound to pay a grant to every person who is eligible to receive one. He may formulate a policy or make a limiting rule as to the future exercise of his discretion, if he thinks that good administration requires it, provided ‘that he listens to any applicant who has something new to say, Dictum of Bankes LJ, in Rex v. Port of London Authority, Ex parte Kynoch Lid. {1919} 1 KB. 176, 184, C.A. explained. Decision of the Court of Appeal [1969] 2 Ch. 174; [1969] 2 WLR. 877; [1969] 2 All ER. 18, C.A, affirmed but order varied. The following cases were referred to in their Lordships’ opinions: Padfield v. Minister of Agriculture, Fisheries and Food [1968] A.C. 997; [1968] 2 W.L.R. 924; [1968] 1 All E.R. 694, HL(E.). Rex v. Port of London Authority, Ex parte Kynoch Ltd. [1919] 1 K.B. 176, C.A. The following additional cases were cited in argument: Cherry v. International Alloys Ltd. [1961] 1 Q.B. 136; [1960] 3 W.LR. 563; [1960] 3 All E.R. 264, C.A Liptrot v. British Railways Board [1969] 1 A. 770; [1967] 2 All E.R. 1072, H.L(E.). Schmidt v. Secretary of State for Home Affairs [1969] 2 Ch. 149; [1969] 2 WLR. 337; [1969] 1 AILE.R. 904, C.A. 136; [1967] 3 W.LR. Appear from the Court of Appeal (Harman, Russell and Karminski LJJ) This was an appeal from an order of the Court of Appeal dated February 14, 1969, discharging an order of the Chancery Division of the High Court of Justice (Buckley J.) dated June 5, 1968, made on an‘The Weekly Law Reports, October 2, 1970 491 3 WLR. B.O.C. Ltd. v. Board of Trade (H.L(E,)) originating summons issued by the appellants, British Oxygen Co. Ltd., concerning the true construction of sections 1 and 13 of the Industrial Development Act, 1966. Part 1 of the Act provided for the payment of a financial grant by the original respondents, the Board of Trade, to a person carrying on business in Great Britain in’ respect of his capital expenditure in providing new machinery or plant for use in his business for carrying on a “ qualifying industrial process.” The present respondent, the Minister of Technology, was now empowered to make such grants, ‘The facts are stated in their Lordships’ opinions. J. A. Brightman Q.C., P. R. Oliver O.C. and P. E, Whitworth for the appellants. M. Finer Q.C. and J. P. Warner for the respondents. ‘Their Lordships took time for consideration. July 15, Lorb Rew. My Lords, the appellants seek declarations that certain items of their industrial plant are eligible for grants under the Industrial Development Act, 1966. Until that year taxpayers could claim investment allowances as of right. But that system was replaced by the provisions of the Act of 1966 which empowered the Board of Trade, and now the Minister of Technology, to make grants if the conditions laid down in the Act apply. ‘The appellants produce in saleable form the atmospheric gases oxygen, nitrogen and argon and also other substances including hydrogen. The atmospheric gases are delivered to customers in liquid form at very low temperatures and under little more than atmospheric pressure. The hydrogen is delivered at ordinary temperature but under very high pressure. ‘The plant with which this case is concerned is used to effect such delivery. It includes two types of tanker and two types of cylinder for containing gas under pressure, ‘The large tanker consists of a Foden four-wheeled tractor which supports the front end of a long tank of some 400,000 cubic feet capacity, the other end being attached to a double bogie, The smaller tanker consists of a tank about half that size mounted on an ordinary four-wheel lorry chassis. These transport the liquid gases in vacuum insulated containers and have elaborate and expensive components: the tanks alone cost over £15,000 and £11,000 respectively. Outwardly they look much the same as tankers seen daily on the public roads transporting liquids sucli as petrol, oil or milk. The first type of cylinder is used for delivery of hydrogen at very high pressure. Batteries of nine cylinders with various controls are mounted on trailers, The cylinders can readily be detached and they could be used separately. But in practice they never are used separately and they are only detached from the trailers very seldom for maintenance and inspection. ‘When hydrogen is delivered to customers in these cylinders sometimes it is at once transferred to the customers’ storage plant but sometimes the trailer is left with the customer for a time and he draws hydrogen from the cylinders as he needs it, The appellants use very large numbers of the second type of cylinder, cach of which is a separate unit. It is delivered full of oxygen or some other gas. The customer uses the contents as required and the cylinder is then collected by the appellants and refilled. It is really a type of returnable container.‘The Weekly Law Reports, October 2, 1970 492 Lord Reid B.O.C. Ltd. v. Board of Trade (H.L(E.)) [1970] ‘I must now set out the relevant parts of the Act of 1966: “ 1.41) Subject to the provisions of this section, the Board of Trade (hereafter in this Act referred to as ‘the Board’) may make to any person carrying on a business in Great Britain a grant towards approved capital expenditure incurred by that person in providing new machinery or plant for use in Great Britain—(a) for carrying on a qualifying industrial process in the course of that business; or (2) For the purposes of this section a qualifying industrial process is a process for or incidental to any of the following purposes, that is to say—{a) the making of any article; . . . (3) For the purposes of this section—{a) the repair or maintenance in the course of a business of an article which is used in the course of that business for carrying on a process for or incidental to any of the purposes mentioned in subsection (2) of this section; (b) the storage in the course of a business of anything which is to be used in the course of that business for carrying on any such process or which is to be or has been subjected to, or has resulted from, any such process carried on in the course of that business; and (c) the packing in the course of a business of anything which is to be or has been subjected to, or has resulted from, any such process carried on in the course of that business, shall each be treated as a process incidental to that purpose, but, save as aforesaid, repair, maintenance, storage or packing shall not be treated as a process incidental to any of the purposes mentioned in subsection (2) of this section . . . (6) Subject to any order under section 7 of this Act, the amount of any grant under this section shall be twenty per cent, of the expenditure in respect of which it is made, except that it shall be forty per cent. of the said expenditure so far as it qualifies as development area expenditure in accordance with Schedule 1 to this Act.” “ Machinery or plant” is defined in section 13 (1): “machinery or plant’ includes part of any machinery or plant but does not include a computer, ship or aircraft or any vehicle except— @ a vehicle constructed or adapted for the conveyance of a machine incorporated in or permanently attached to it and of no other load except articles used for the purposes of the machine; (8) a vehicle constructed or adapted for the conveyance or haulage of loads in or about private premises, including the site of building or civil engineering ‘operations; . . .” The respondent maintains that the tanks and hydrogen cylinders are parts of the vehicles to which they are attached and are therefore excluded from eligibility for grant by section 13. The appellants maintain that they ought to be regarded as separate items of plant and they rely in particular on the first exception from the exclusion of vehicles. That exception broadly applies to machines on wheels: it does not apply to plant on wheels. But the appellants rely in particular on the words “and no other load.” They argue that these words show that “vehicle” is intended to have a narrow meaning and to apply only to a chassis. If a machine is incorporated in or permanently attached to a chassis, the chassis and machine together would normally be regarded as being a vehicle: to call such a machine a “load” requires the notional separation of the two. If “vehicle” has this narrow meaning, then the chassis and plant per- manently attached to it must also be notionally severable. Logically this‘The Weekly Law Reports, October 2, 1970 493 3 WLR B.O.C. Ltd. v. Board of Trade (H.L(E.)) Lord Reid argument may be attractive but I think it puts much too much weight on the draftsman’s use of the word “load.” This provision does not differen- tiate between parts of the vehicle: the whole vehicle including the machine is made eligible for grant. So the provision read as a whole affords no support for the appellants’ contention that the tank can be notionally separated from the chassis where in fact the two are clearly part of a single unit. The whole tanker is a vehicle: it is designed for use as such and is in fact used as a single unit for transporting liquefied gases. But the hydrogen cylinders are in a somewhat different position. Two arguments are open to the appellants which would not apply to the tankers. In the first place it could be said that the whole unit is not a vehicle. For some purposes anything on wheels isa vehicle. But the word could have a narrower meaning of something used to carry goods (or people) from one place to another. So a storage tank built on wheels for con- venience might not be regarded as a vehicle if its real purpose was storage rather than transportation, But the primary purpose of the hydrogen cylinders with the trailer appears to be for delivery and not for storage of the hydrogen, The second possible argument is that in fact the cylinders are not part of the vehicle but are a load carried by the vehicle: it is true that they are readily detachable and if they were in fact detached in the course of use they might be regarded as a load. But they are in fact never detached in use. The line between what is a load and what is a part of the vehicle may sometimes be difficult to draw, but here on the facts I think that the cylinders must be regarded as parts of the vehicle, and therefore as excluded from eligibility for grant. The single gas cylinders raise different and more far-reaching issues. They cost about £20 cach and in the three years after the Act of 1966 came into force the appellants purchased a very large number of them at a cost of over £4,000,000. ‘The appellants complain that the respondent has made a rule not to pay grant on any item of plant costing less than £25, at least unless it is used in conjunction with other items. So it is necessary to consider what is the duty of the respondent in administering the Act and what rights, if any, the Act confers on those eligible for grants. Section 1 of the Act provides that the Board of Trade “ may” make grants. It was not argued that “ may” in this context means “ shall,” and it seems to me clear that the Board were intended to have a discretion. But how were the Board intended to operate that discretion? Does the Act read as a whole indicate any policy which the Board is to follow or even give any guidance to the Board? If it does then the Board must exercise its discretion in accordance with such policy or guidance (Padfield v. Minister of Agriculture, Fisheries and Food [1968] A.C. 997). One generally expects to find that Parliament has- given some indication as to how public money is to be distributed. In this Act Parliament has clearly laid down the conditions for eligibility for grants and it has clearly given to the Board a discretion so that the Board is not bound to pay to every person who is eligible to receive a grant, But I can find nothing to guide the Board as to the circumstances in which they should pay or the cireum- stances in which they should not pay grants to such persons, The relevant part of the long title is: “An Act to provide for the making of grants out of moneys provided by Parliament towards expendi- ture on the provision of new business assets.” There is no guidance there, Then section 1 (6) deals with eligibility and provides that the amount any grant shall be 20 per cent. of the expenditure in respect of which it isThe Weekly Law Reports, October 2, 1970 494 Lord Reid B.O.C. Ltd. v. Board of Trade (H.L(E.)) 11970} made, Sections 2 to 6 deal with special cases. Section 7 is a general power to vary the rate of grant by order. None of these throws any light on this matier, nor does section 8 which deals with conditions to be imposed in making grants, Sections 11 and 12 are perhaps more relevant. Section 11 provides for the appointment of committees to advise the Board on the administration of the Act and it could be taken as an indication that otherwise the Board’s discretion is unlimited, Section 12 provides for an annual report to Parliament so that Parliament can ex post facto consider the way in which this discretion has been exercised. Section 13 is a definition section. “ Approved capital expenditure” is to mean “expenditure appearing to the Board to be of a capital nature and approved by them for the purposes of the grant.” This again gives no guidance as to reasons for which approval can be given or withheld. T cannot find that these provisions give any right to any person to get a grant. It was argued that the object of the Act is to promote the modernisation of machinery and plant and that the Board were bound to pay grants to all who are eligible unless, in their view, particular eligible expenditure would not promote that object. That might be good advice for an advisory committee to give but I find nothing in the Act to require the Board to act in that way. If the Minister who now administers the Act, acting on behalf of the Government, should decide not to give grants in respect of certain kinds of expenditure, I can find nothing to prevent him, There are two general grounds on which the exercise of an unqualified discretion cam be attacked. It must not be exercised in bad faith, and it must not be so unreasonably exercised as to show that there cannot have been any real or genuine exercise of the discretion. But, apart from that, if the Minister thinks that policy or good administration requires the operation of some limiting rule, I find nothing to stop him. It was argued on the authority of Rex v. Port of London Authority, Ex parte Kynoch Ltd. {1919] 1 K.B. 176 that the Minister is not entitled to make a rule for himself as to how he will in future exercise his discretion. In that case Kynoch owned land adjoining the Thames and wished to construct a deep water wharf. For this they had to get the permission of the authority. Permission was refused on the ground that Parliament had charged the authority with the duty of providing such facilities. It appeared that before reaching their decision the authority had fully considered the case on its merits and in relation to the public interest. So their decision was upheld. Bankes LJ. said, at p. 184: “There are on the one hand cases where a tribunal in the honest exercise of its discretion has adopted a policy, and, without refusing to hear an applicant, intimates to him what its policy is, and that after hearing him it will in accordance with its policy decide against him, unless there is something exceptional in his case. I think counsel for the applicants would admit that, if the policy has been adopted for reasons which the tribunal may legitimately entertain, no objection could be taken to such a course. On the other hand there are cases where a tribunal has passed a rule, or come to a determination, not to hear any application of a particular character by whomsoever made. There is a wide distinction to be drawn between these two classes.” I see nothing wrong with that. But the circumstances in which dis- cretions are exercised vary enormously and that passage cannot be applied‘The Weekly Law Reports, October 2, 1970 495, 3 WLR. B.O.C, Ltd. v. Board of Trade (H.L(E)) Lord Reid literally in every case. ‘The general rule is that anyone who has to exercise a statutory discretion must not “ shut his ears to an application” (to adapt from Bankes L.J. on p. 183). I do not think there is any great difference between a policy anda rule, There may be cases where an officer or authority ought to listen to a substantial argument reasonably presented urging a change of policy. What the authority must not do is to refuse to listen at all. But a Ministry or large authority may have had to deal already with a multitude of similar applications and then they will almost, certainly have evolved a policy so precise that it could well be called a ule, There cam be no objection to that, provided the authority is always willing to listen to anyone with something new to say—of course I do not imean to say that there need be an oral hearing. In the present case the respondent’s officers have carefully considered all that the appellants have had to say and I have no doubt that they will continue to do so. The respondent might at any time change his mind and therefore I think that the appellants are entitled to have a decision whether these cylinders are eligible for grant. ‘They appear to involve capital expenditure—though that is for the respondent to decide—and they are new plant for use in Great Britain, It is not suggested that the production of these gases is not the making of an article and they cannot be produced in saleable form unless they are immediately enclosed in a suitable container. So in so far as these cylinders are used to receive the gases when ‘* made ” they are, in my view, used in a process incidental to the ‘ making ” of the gases. If the gases are only pumped into them at a later stage, then they may be used for storage within the meaning of section 1 (3), and that is deemed to be a process incidental to the making. But I would hold that storage means keeping in store and the gases are no longer kept in store when they are sent out in the cylinders for delivery to customers. I do not think it necessary to consider the meaning of packing because, in my view, it will add nothing on the facts of this case, If the cylinders are used partly for storage and partly for delivery of the gas and storing it on the customers’ premises, then it is necessary to consider the position of plant which has a dual purpose. It was suggested in argument, and I do not think that it was denied, that in such a case it is competent for the respondent to approve such part of the capital expen- diture as may be held to be appropriate for the eligible purpose. I do not find it possible, on the facts which we have, to make any definite finding which could be incorporated in a declaration, but this does mean that to a small extent the appellants are successful. I would dismiss the appeal with a slight variation of the order of the Court of Appeal and award to the respondent three-quarters of his costs in this House. Lorb Morais of BortH-y-Grst. My Lords, I have had the advantage of reading in advance the speech of my noble and learned friend, Lord Reid, and I agree with it and with the order proposed. ‘Viscounr DintorNe. My Lords, the Industrial Development Act, 1966, came into force on August 12 of that year. By that Act, the Board of Trade, now the Minister of Technology, was given power to make grants towards approved capital expenditure incurred in providing new machinery or plant for use in Great Britain for carrying on a qualifying industrial process in the course of that business: section 1 (1). ‘A White Paper, “Investment Incentives” (Crmnd. 2874), was published‘The Weekly Law Reports, October 2, 1970 496 Viscount Dithorne B.0.C. Ltd. v. Board of Trade (H.L(E.)) f1970] on January 17, 1966, and by virtue of section 13 (5) of the Act, a grant may be made in respect of expenditure incurred after that date. On May 9, 1966, the appellants wrote to the Board of Trade sending the Board some notes “of certain categories of plant assets in use within our organisation which do not appear immediately to come within the definition of manufacturing assets and therefore entitled to enjoy the new cash grants.” They contended that all these assets constituted part of the manufacturing activity and qualified for cash grants. The Board of Trade replied at length on July 20, 1966, In the course of that letter in relation to stand-by equipment they made the following statement to which in the course of this litigation great importance has been attached: ‘In this case, as in all others, the £25 lower limit of cost for single items eligible for grants would apply.” On August 11, the day before the Act came into force, the appellants wrote to the Board with regard to three classes of equipment, tankers, “hydrogen trailers” and cylinders. Section 13 (1) of the Act, inter alia, states that “* machinery or plant” includes part of any machinery or plant but does not include a computer, ship or aircraft or any vehicle except— (@) a vehicle constructed or adapted for the conveyance of a machine incorporated in or permanently attached to it and of no other Toad except articles used for the purposes of the machine; On September 23, the Board replied saying that in their view tankers taken as a whole are vehicles and ineligible for grants; that the essential function of the cylinders was one of distribution and that ‘no grants are payable under the Act on containers in any form”; and that the purpose of the hydrogen trailers appeared to be similar to that of containers, namely, distribution and storage. On July 7, 1967, the appellants issued an orginating summons seeking the determination of the court of the questions raised in this correspondence. On October 24, 1967, the Board wrote to the appellants saying: “Tt has occurred to the Board’s legal advisers that you may not appre- ciate the significance of the Government policy underlying the invest- ment grants scheme. The Board take the view that it would be inconsistent with such policy to make grants in the case of any equipment such as that in dispute, which the Board regard as serving primarily a distributive function, even if, which is not admitted, the payment of those grants would be authorised by the Act. For this eason, even if your clients were successful in obtaining declarations favourable to them on the questions raised in the summons, the Board would nevertheless, in the exercise of their discretion, feel bound to refuse to make a grant.” In consequence of this letter the appellants amended the summons to claim the following declarations: “4, A declaration that (a) the tank and pump portions of the said gas tankers (6) the said hydrogen gas trailer and (c) the metal cylinder . . . are capable of being approved capital expenditure within the meaning of sections 1 (1) and: 13 of the Act notwithstanding that each (1) is a form of container or (2) serves a distributive function.‘The Weekly Law Reports, October 2, 1970 : 497 3 WLR B.O.C. Ltd. v. Board of Trade (H.L(E.)) Viscount Dilhorne “5, A declaration that the Board of Trade is not entitled to decline to make a grant towards bulk capital expenditure on the said metal cylinders on the sole ground that each cylinder costs less than £25. “6, If any of the said items are approved capital expenditure as aforesaid a declaration that section 1 (1) of the Act imposes on the Board of Trade a duty to make a grant towards the same.” Photographs of the tankers in question were produced at the hearing. They are of two types, a large tanker in which liquid oxygen, argon and nitrogen are conveyed and a smaller tanker also used for the carrying of liquefied gas. ‘The tank part is welded to the chassis. ‘Mr. Brightman for the appellants contended that the tank part and the pumping equipment attached thereto did not become part of a vehicle by that attachment; that in section 13 (1) a distinction was drawn between a vehicle and its load and that in construing ‘a vehicle’ one should have regard to the scope and object of the Act. The scope of the Act clearly excludes vehicles other than those which come within the paragraphs (a) and (6) of the definition of machinery or plant, T see no reason for saying that it was not one object of the Act to exclude them. Even if the inference can be drawn from the wording of paragraph (a) that the machine incorporated in or permanently attached to a vehicle is a load, it does not follow that a tanker, whether it be for the carrying of liquid or gas, can be regarded as anything other than a vehicle. But I read the words of this paragraph not as meaning that a machine incorporated in or permanently attached to a vehicle is a load but as providing that on such a vehicle only articles used for the purposes of the machine may be carried as a load. In my opinion, the photographs produced are really conclusive on this question. They show the tankers to be similar to many other tankers which travel on our roads and it would, in my opinion, be wrong to treat the tank part as not forming part of the vehicle. ‘The “hydrogen trailers” consist of a number of cylinders fixed on a trailer. When detached from its motive part, the trailer has one axle at the rear, When the motive part is attached, the front end of the trailer rests on the rear end of the motive part. The trailer is thus similar to many other trailers in use on the highways and, whether or not attached to the motive part, cannot, in my opinion, be properly described otherwise than asa vehicle. The question here is whether the cylinders on the trailer do or do not form part of the vehicle. They are filled with gas on the appellants’ premises and then taken to the premises of one of the appellants? consumers. The trailer may be left there until the gas is used. It is then brought back to the appellants’ premises and the cylinders are refilled, The cylinders are fixed on the trailer and are only taken off it at intervals for the purpose of testing the cylinders. ‘The “ hydrogen trailer” is, in my opinion, a vehicle adapted for the conveyance of hydrogen gas. The cylinders contain the gas just as the tanks of the tankers contain the liquid. I cannot draw any distinction between them. They are, in my opinion, all vehicles excluded by section 13 from the scope of the Act. A grant can only be made towards approved capital expenditure incurred in providing new machinery or plant “‘(q) for carrying on a qualifying industrial process in the course of that business; or (6). ..”: section 1 (1). ““A qualifying industrial process” is defined in section 1 (2) as a process for or incidental to any of five specified purposes, the first of‘The Weekly Law Reports, October 2, 1970 498, ‘Viscount Dithorne B.0.C. Ltd. v, Board of Trade (H.L(E.)) (1970) which is “the making of any article” and that is the only purpose with which we are concerned in this case. Putting liquefied gas into tankers and hydrogen gas into cylinders on the trailers for distribution to the appellants’ customers cannot, in my opinion, be regarded as a process either incidental to the liquefaction of gas or to the making of hydrogen gas. If the tankers and hydrogen trailers are not vehicles and come within the definition of new machinery or plant, they are not, in my opinion, for use in a process for or incidental to the making of the liquefied gas or of the hydrogen. On this ground too, in my opinion, the appellants’ claim in relation to this equipment fails. The metal cylinders, which vary in size, are also used to contain gases. Those filled with hydrogen are filled directly from the process plant. When filled, they are kept on the appellants’ premises until the gas is required to fulfil an order. Oxygen, nitrogen and argon are produced initially in liquid form, the liquid being stored in bulk storage tanks. The liquid is converted into gas which is fed directly into the cylinders. Nitrous oxide, dissolved acetylene and other gases are also put into cylinders. They are kept on the appellants’ premises until the gas is required by customers. Section 1 (3) of the Act, so far as material, reads as follows: “For the purposes of this section—. . . (6) the storage in the course of a business of anything which is to be used in the course of that business for carrying on any such process or which is to be or has been subjected to, or has resulted from, any such process carried on in the course of that business; and (c) the packing in the course of a business of anything which is to be or has been subjected to, or has resulted from, any such process carried on in the course of that business, shall each be treated as a process incidental to that purpose, but, save as aforesaid, repair, maintenance, storage or packing shall not be treated as a process incidental to any of the purposes mentioned in subsection (2) of this section.” So new machinery and plant for use for storage or packing is not to be treated as used for carrying on a qualifying industrial process unless the storage comes within paragraph (b) and the packing within paragraph (c). If machinery or plant is used for storage or packing in the course of the appellants’ business of anything which has resulted from a process for or incidental to the making of liquefied gas or gas, then that machinery or plant is eligible for a grant. The Act nowhere says that no grant is payable on containers in any form. ‘The cylinders are clearly plant. ‘They form no part of the end product of the processes applied in the appellants’ works. . They contain those products. They are not plant used for packing those products, but are they not and can they not be used for storing them? If used for storage of the end products, then the storage is to be treated as a process incidental to the making of the liquid gas and the gases put in them and the cylinders are eligible for grant. On the facts so far as they are known to us, it appears that these cylinders serve a dual purpose, for containing the gases and liquids when gas is being delivered to a customer and for storage on the company’s premises until the gas is required by a customer. The tanks in which liquid oxygen, nitrogen and argon aré stored in bulk are clearly eligiblé for grant. If instead of being put into tanks, the liquid is put into cylinders which are kept on the premises until the gas is wanted, the cylinders are‘The Weekly Law Reports, October 2, 1970 499 3 WLR B.O.C. Ltd. v. Board of Trade (H.L(E.)) Viscount Dilhorne used as storage and are, in my opinion, eligible for grant, Cylinders filled from these tanks and those filled directly from the process plant and kept on the premises are also used for storage. The storage ends when delivery to a customer begins. The Act does not say that only plant used solely for storage can qualify. In my opinion cylinders used for storage are not disqualified if they are also used for delivery. ‘A grant may be made towards “approved capital expenditure” in- curred “in providing new machinery or plant.” “Approved capital expenditure” is expenditure which appears to the Board to be of a capital nature and which is approved by them for the purposes of the grant: section 13 (1). Section 1 (1) says, not that the Board shall make a grant if the necessary conditions are fulfilled, but that the Board may make one. No duty is imposed on the Board to make a grant. The Act gives it power to do so if it thinks fit. Some argument was directed to the question whether the Act gives the Board two discretions, first, to decide whether the expenditure is capital and whether to approve it for a grant and, secondly, to decide whether to make a grant. Iam not sure that discretion is the right word to use, As I read the Act, Parliament has given the Board power to make a grant if it chooses towards capital expenditure it has approved incurred on plant or machinery which qualifies under the Act. If the Board has approved capital expenditure for the purposes of a grant, it is most unlikely that the Board will not exercise its power to make one. However, circumstances might arise after approval of the expenditure which would render the making of a grant inadvisable, for example, a manufacturer going bankrupt or a business closing. I sce nothing in the Act which prohibits the Board from deciding not to make a grant towards expenditure which it has approved. ‘The first declaration sought by the appellants is a declaration that the pieces of equipment therein mentioned are capable of being approved capital expenditure. In my opinion, only expenditure on the cylinders is capable of being approved. The third declaration sought is that if any of the items are approved capital expenditure, the Act imposes a duty on the Board to make a grant. In my opinion the Act imposes no such duty on the Board. The Board has not approved of any of the expenditure on the items in question, The appellants also contend that the Board is not entitled to decline to make a grant towards “bulk capital expenditure” on the cylinders “on the sole ground that each cylinder costs less than £25.” ‘The contention appears to be that because the appellants buy large quantities of cylinders, a grant should not be excluded because each cylinder costs less than £25. If this contention was well founded, it would follow that grants might be obtainable for purchases in bulk but not obtainable by those who purchased the same articles in smaller quantities, Parliament cannot have intended any such distinction, The appellants also contended that the Board was not entitled to make ita rule not to make a grant in respect of an item costing less than £25. ‘They found support for this contention in a passage in the judgment of Bankes LJ. in Rex v. Port of London Authority, Ex parte Kynoch Lid. [1919] 1 KB. 176, 184. He said: “There are on the one hand cases where a tribunal in the honest exercise of its discretion has adopted a policy, and, without refusing‘The Weekly Law Reports, October 2, 1970 500 Viscount Dithorne B.0.C. Ltd. v. Board of Trade (H.L(E.)) 11970} to hear an applicant, intimates to him what its policy is, and that after hearing him it will in accordance with its policy decide against him, unless there is something exceptional in his case. I think counsel for the applicants would admit that, if the policy has been adopted for reasons which the authority may legitimately entertain, no objection could be taken to such a course. On the other hand there are cases where a tribunal has passed a rule, or come to a determination, not to hear any application of a particular character by whomsoever made. There is a wide distinction to be drawn between these two classes.” Bankes L.J. clearly meant that in the Jatter case there is a refusal to exercise the discretion entrusted to the authority or tribunal but the dis- tinction between a policy decision and a rule may not be easy to draw. In this case it was not challenged that it was within the power of the Board to adopt a policy not to make a grant in respect of such am item. That policy might equally well be described as a rule. It was both reasonable and right that the Board should make known to those interested the policy it was going to follow. By doing so fruitless applications involving expense and expenditure of time might be avoided. The Board says that it has not refused to consider any application. It considered the appellants’. In these circumstances it is not necessary to decide in this case whether, if it had refused to consider an application on the ground that it related to an item costing less than £25, it would have acted wrongly. I must confess that I feel some doubt whether the words used by Bankes LJ. im the passage cited above are really applicable to a case of this kind. It seems somewhat pointless and a waste of time that the Board should have to consider applications which are bound as a result of its policy decision to fail. Representations could of course be made that the policy should be changed. I cannot see any ground on which it could be said that it was ultra vires of the Boatd to decide not to make grants on items costing less than £25 nor upon which it could be said to be ultra vires to decide not to make a grant in respect of plant used for a dual purpose, one of which qualifies, if in its opinion the main purpose of the plant was for making delivery to customers, The Act gives no guidance to the Board and nor to the Minister as to the policy to be pursued in deciding whether or not to make a grant. It is left to the Board to decide how to exercise the power given to it. No doubt that exercise will be in accordance with the policy of the Govern- ment of the day. An annual report has to be made to Parliament (section 12) and that will, no doubt, reveal the manner in which the power has been used, In my opinion, this appeal should be dismissed. Lorp Witperrorce. My Lords, I have had the benefit of reading in advance the opinion of my noble and learned friend, Lord Reid. I agree with it and find it unnecessary to add any observations of my own. Lorp Dietock. My Lords, I think that this is a plain and simple case. There is nothing I can usefully add to the speech of my noble and learned friend, Lord Reid. I agree with it and with the order that he proposes. Appeal dismissed. Solicitors: Stafford Clark & Co.; Solicitor to the Board of Trade. EC