Fixture or chattel?

Degree of Annexation

start with how the chattel is or is not attached to the ground (which 2 ways are there and the presumption which arises and the onus)

If chattel is attached to the land (even slightly) - Presumption it is a fixture (Holland v Hodgson as cited in Lockwood Buildings Ltd v Trust Bank Canterbury), Onus is on the person claiming it is a chattel to prove it is a chattel

If chattel is not attached to the land

Presumption it is a chattel (Holland v Hodgson) Onus is on the person claiming it is a fixture to prove it is a fixture

Factors pointing towards it being a chattel

• An object in and of itself (London Borough of Tower Hamlets v LB of Bromley, Potton Developments, Queenstown Central v March)

• Can be moved without any damage or destruction (LB of Tower Hamlets v LB of Bromley)

• Freely Moveable only resting on its own weight or minorly attached to the land. (Potton Developments)

• Rests solely on its own weight (LB of Tower Hamlets v LB of Bromley)

• Not an integral part of the land it is placed on/serve it a purpose (LB of TH v LB of Bromley, Queenstown Central v March)

Note: when you are figuring out if something is a chattel or fixture you want to go through and compare it like Lockwood or Potton for x reasons.  

Point towards it being a fixture

• Brought to the land in parts and assembled on the land (Lockwood Homes v Trust Bank Canterbury, Elitestone v Morris)

• Cannot be moved without taking it apart/destruction (Lockwood Homes v Trust Bank Canterbury, Elitestone v Morris)

• Holds purpose/value in the land it is placed on (LB of Tower Hamlets v LB of Bromley) 

object of annexation

Holland v Hodgson Test:   Importance of the method and degree of annexation may vary (Elitestone v Morris) Purpose of the chattel being on the land:  Objective standard; Whether a third party would consider the object is fixed to the land (Holland v Hodgson, Elitestone v Morris, Melluish v BMI) KNOWING all the facts the person had when it was annexed (Queenstown Central v March) - subjective-objective test

Examples of intention for fixture

• Lease out dwellings for permanent residence (Elitestone v Morris)

• Plant and Machinery equipment installed in properties leased to tenants (Melluish v BMI)

• Someone could buy house for permanent residence (Lockwood Homes)

Examples of intention for chattel

Lease of temporary use (Potton Developments v Thompson) Storage not permanent (Queenstown Central v March)

Elitestone Ltd v Morris

Elitestone had leased out plots to tenants, but wanted to take the land back and redevelop.  Tenants were able to put dwellings on their plots, but only if they rested by their own weight on concrete piles.  If these dwellings became part of the land they would become subject to the lease, and the tenants would be protected from eviction. If not, the tenants would have to leave.

Applied Holland v Hodgsons test Degree of annexation Objective intention of annexation.  The absence of any physical attachment to the land was irrelevant.  The bungalow was a fixture, despite merely resting on its own weight.  Where it was constructed in such a way as to be removable, whether as a unit or in sections, it might remain a chattel, even though it was connected temporarily to mains services such as water and electricity. If a structure could only be enjoyed in its original place, and could not be removed to another site without destruction, there was a strong inference that the purpose of placing the structure on the original site was that it should form part of the realty at that site, and should therefore cease to be a chattel.

Melluish v BMI (UK)

BMI hired out equipment. The equipment was installed into the ground and let to tenants. The lease contained a term stating that the equipment remained the property of the appellant even if affixed to the local authorities’ land. Issue: Whether the leased equipment was a fixture?

The machinery was attached to the land What parties intended in the contract is irrelevant.  To all outward appearances, it formed part of the land

London Borough of Tower Hamlets v London Borough of Bromley

London council had been abolished and two authorities had been created, which contested ownership of a statue. The statue had occasionally been removed to loan overseas. Issue: Was it a chattel?

Held: it was a chattel, not a fixture Degree of annexation Purpose is generally more important Sculpture rested on the ground by its own weight Purpose Sculpture could be removed without damage or diminishing its inherent beauty.  It was important that the sculptures beauty was not dependant on the location it was placed

Lockwood Buildings Limited v Trust Bank Canterbury

Lockwood supplied kit homes to a franchise builder which was built on land that was subject to a mortgage owned by Trust Bank.  The franchise owner also had a security over the showhome as personal property.  Showhome was nailed to foundations, electricity and water were connected and sewerage was ready for simple connection.  Builder and bank thought it was subject to the mortgage Bank consented to the removal of an earlier showhome Attachment was to intended in the ordinary course of events to be temporary Issue: Who had the rights to the showhome?

Held: it was a fixture (finely balanced) Overall, the onus was on Lockwood Homes, and they did not do enough to discharge the onus that it was not a fixture and part of the land.  Degree of Attachment Showhome was affixed to the land ‘much more than slightly’ Nailed to foundations Connections to water and electricity supplies Sewerage was ready for connection Purpose of annexation Considered subjective intentions of the bank and builder Although attachment was to intended in the ordinary course of events to be temporary (min of 12 months) and intention was to promote sale of home Sale was possible, although not evident.

Potton Developments Ltd v Thompson

Potton manufactures large prefabricated units that are fully furnished which are hired or sold to the public.  Manufactured almost entirely in a factory, and delivered by lorry and installed by a crane Issue: Were the units fixtures?

Held: The units were chattels, not fixtures Degree:  They were nailed in and the exterior was ‘touched up’ Purpose:  The units were prefabricated, and designed for easy delivery and removal as a whole.   The touch ups were purely cosmetic, and although they appeared permanent, they were clearly not.

Queenstown Central Ltd v March Construction Ltd

A mound of earth was left in storage on some land. It was carefully and evenly placed, covered in topsoil and grass which made it appear that the earth was part of the land.  Resource consent stated that it was to be ‘stored’ for a term of 5 years. However, this was extended to be stored indefinitely.  Issue: Was ‘the fill’ part of the land?

A visual test is not in itself usually sufficient to ascertain whether something is a fixture or good. Must have a common sense approach, taking all that is relevant into account.  Appeared to be part of the land, however, considering the resource consent for ‘storage’, it was clearly intended to be a chattel.  (considered subjective intention)?