18163
Supply:  movement of persons by chairlift and tows for the purpose of skiing, whether zero rated supply – No – VATA 1994 Sch 5 Group 10 Item 4.

EDINBURGH TRIBUNAL CENTRE

	LECHT SKI COMPANY LTD	Appellants

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	       Respondents

			Tribunal:	 (Chairman)   T Gordon Coutts, QC
					 (Member)      Mrs Helen M Dunn, LL.B.

Sitting in Edinburgh on Wednesday 14 May 2003

for the Appellants		Nigel Gibbon

for the Respondents	Gillian Carty, Shepherd & Wedderburn, WS

© CROWN COPYRIGHT 2003.

DECISION

Introductory
The Tribunal heard evidence from Mr du Pon, the Managing Director and Mr McIntosh, Operations Manager of the Appellants.  These gentlemen gave crystal clear evidence of the formation and operation of the Appellant company.  It was set up in 1977 and in lieu of a bleak and infrequently used stretch of countryside between Cockbridge and Tomintoul the company now provides car parking space for 800 cars and can accommodate 2,500 skiers per day.  There is a café and snack bar.  There is no charge for the car park or entrance to the café building, the toilets in which were frequently used, it was ruefully stated, by bus parties who purchased nothing. The company itself did not provide although there were present on site facilities for ski-hire and tuition.  A ski patrol was provided throughout the area and its services were available to persons on the slopes whether or not they had paid any ticket fee for use of the facilities after mentioned.

In order to assist people to achieve a sufficient height to ski the company provides various forms of transport.  The principal lift is a Poma Delta machine which is a 3 seater chairlift.  It comprises a 3 seat chair fixed to a cable with a fixed clamp.  The entire apparatus can take 90 people at one time.  The steel cable is continuous and runs continuously.

There are also placed at various locations on the slopes other Poma devices for hoisting skiers to the top of runs.  There are fixed line lifts which consists of a telescopic tube attached similarly to a continuously running cable.  There is a device, suitable for more expert skiers consisting of detachable tow hangers and there are also devices which are simply attached to the cable to which people can grip and be towed that way.

Apart from the chairlift all the persons being moved are towed along the ground.

Each of these devices has one or more employees of the company at the motor end to monitor and to allocate places.  The motors are electric with subsidiary diesel engines and are stationary.  

The Appellants provide a substantial source of employment and local income in what used to be a wholly desolate area and contribute substantially to the local economy.

The Issue
The disputed decision is dated 12 April 2002 and is that all ski lift facilities provided by the Appellant to members of the public are to be standard rated for VAT and are not entitled to zero rating pursuant to Item 4(a) of Group 8 of Schedule 8 VATA 1994.

The applicable legislation is:
Annex H of EC Council Directive 77/388 (“The Sixth Directive”) lists supplies of goods and services which may be subject to reduced rates of VAT.

Category 5 of Annex H thereof specifies:  “Transport of passengers and their accompanying luggage”.

In the UK Section 30 and Schedule 8 VATA 1994 provide for zero rating.  Item 4(a) of Group 8 of Schedule 8 of VAT Act 1994 specifies:

	“4	Transport of passengers –
(a)	in any vehicle, ship or aircraft designed or adapted to carry not less than 10 passengers”.

Note 4A to Schedule 8 excludes certain types of transport from the ambit of zero rating thus:

“(4A)	Item 4 does not include the transport of passengers-
(a)	in any vehicle to, from or within –
(i)	a place of entertainment, recreation or amusement; or
(ii)	a place of cultural, scientific, historical or similar interest, by the person, or a person connected with him, who supplies a right of admission to, or a right to use facilities at, such a place”.

The Appellants Argument
The words in item 4 have not been given any special meaning and should be given their everyday meanings.

Definitions from the Concise Oxford Dictionary:
“Vehicle”	any conveyance for transporting people, goods, etc esp. on land

	(We note the Shorter Oxford defines the word as:  Conveyance for transporting passengers or goods on land or in space)

“Conveyance”	1. the act or process of carrying; 2. a means of transport; a vehicle

“Means”	that by which a result is brought about

“Transport”	1. take or carry from one place to another; 2. a system or conveying people, goods etc from place to place.

A vehicle, therefore, is a means of transport which takes people or goods from place to place.

The various ski-lifts operated by the Appellant fall within the definition of “vehicle” and the issue is whether or not they are designed to carry more than 10 persons.

The contention was that the “means of transport” (the vehicle) which takes skiers from the base of a hill to the top is the motorised cable to which the various seats or hangers are attached.  The cable, together with the seats and hangers, is designed for the mass transport of people (ie more than 10 people at a time).

Without the motorised cable the seats and hangers are incapable of movement and cannot transport people from place to place.  They are as incapable of being vehicles in the true sense of the word as are the seats attached to the chassis of a train or a bus.

There is competition from the funicular railway operated at Cairngorm by the Cairngorm Chairlift Company – see Decision 17679 Cairngorm Mountain, 20 May 2002 which operates on similar principles to the lifts in issue ie that both use a motorised cable as the means of transport.  Accordingly the transport services provided by the Appellant are provided by the motorised cable which is designed to carry more than 10 people.

Argued for the Commissioners
A cable car transporting system is not a vehicle in terms of the legislation.  Reference was made to Llandudno Cabin Lift Company [1973] VATTR 1; Needles Chairlift Company Limited  LON/73/168 and Heights of Abraham (Matlock Bath Limited) Decision 1914, 26 July 1985.  Each of these concerned cable car transport and were found not to be zero rated vehicles.

Another dictionary definition of vehicle can be found in the shorter Oxford Dictionary “a means of conveyance provided with wheels or runners and used for the carriage of persons or goods; a carriage, cart, wagon, sledge etc”.

The Commissioners conceded that note 4A did not apply to the present circumstances and that the issue for the Tribunal was simply whether the device with which the Tribunal was concerned provided transport “in a vehicle” designed to carry not less than 10 passengers.  The matter, apart from dictionary definition, was one of the ordinary use of English language a matter of fact not law.

Findings
The Tribunal hold that they are unable to consider the system here operated whether it be the cable and its attachments or the cable itself as a vehicle in which passengers can be transported.  The first important part of the statutory definition provides that persons have to be transported in a vehicle.  Persons who are being towed up by means of detachable bars and the like can under no stretch of the imagination be considered to be in a vehicle.  The persons who are in the chairs can be considered to be in a chair but that chair is designed for only 3 persons and therefore does not meet the terms of the statute.  The Appellants argument that the entire system is the means of transport depends, as the Appellants argument did in the Matlock Bath case on an artificial stretching of dictionary definitions to an unrealistic extent.  To take the extreme position, a ski tow does not look like a vehicle and does not behave like a vehicle and therefore in the view of this Tribunal who consider themselves to be the “ordinary sensible” persons alluded to in the Needles case, cannot be considered to be a vehicle.  So far as the chair lift itself is concerned had these been devices which could hold 10 people at a time then they could qualify but they would qualify because of the characteristics of the objects in which the passengers were, not because they were hooked on to a moving cable.

The Appellants sought to distinguish the previous Tribunal decisions on the basis that the matter of the system and means of transport had not been properly considered therein.  We disagree. The reasoning in both the Needles case and the Matlock Bath case is sound and compelling.  We draw particular attention to the passage in the Matlock Bath case when the Tribunal discusses the law about the use to which dictionary definitions may be put as a source of evidence.  The meaning of an ordinary word of the language is not a question of law but if the word is used in an unusual sense the Court will determine using other words what that unusual sense is.  There is here however no question of the word being used in any unusual sense.  It is intended to have its ordinary meaning.  It is for the Tribunal which decides the case to consider not as law but as fact whether in the whole circumstances the words of the statute do or do not as a matter of ordinary English usage cover or apply to the facts which have been proved – see Brutus v Cozens [1973] AC 834.  In that case Lord Reid emphasised the circularity of dictionary definitions and pointed to the danger of substituting a synonymous word for that used in the statute and then of interpreting such synonymous word to the exclusion of the word used in the statute.

That is what we feel has been attempted here.  It is apparent from the commencement of the Appellants argument above quoted that  that is what is being attempted.

Decision
The appeal fails.  The system of transporting people at the Lecht in any of its forms or manifestations is not in a vehicle.  On no view, in particular, can a person being towed along the ground by holding onto a bar be considered to be in a vehicle.  The Tribunal follow the two previous Tribunal decisions which set the matter out fully.  In particular they follow the approach which is outlined in the Matlock Bath case following Brutus v Cozens where Lord Reid said the meaning of an ordinary word of the English language is not a question of law.  The word “vehicle” is not used in any unusual sense and we consider not as law but as fact that in the whole circumstances the word in the statute does not as a matter of ordinary usage cover or apply to the facts which have been proved.  The Appellants argument is in the instant case the adoption of dictionary definitions and their extrapolation or their being used as a building block for further dictionary definitions.  That is not appropriate.  To the ordinary person what is done here is not done in a vehicle.  Transport in the chairs could possibly be described as transport in a vehicle but since they are only designed to carry 3 persons that has no relevance.

We accordingly follow and endorse the previous Tribunal decisions where they held that a system of moving people by various means in, on or by various devices cannot be said to be a vehicle but in any event since the statute contains the word “in” instead of the word “by” it appears to us that the Appellants argument is insupportable.

Expenses
It was agreed that the matter of expenses be reserved.  Failing agreement application can be made to the Tribunal to pronounce an award.

T GORDON COUTTS, QC

CHAIRMAN

RELEASE:  27 MAY 2003 

EDN/02/162