Law of Property Act 1925's - Research Paper Example

Holland V. Hodgson (1872) LR 7 CP 328 Blackburn J Introduction Law of Property Act 1925, s. 205(1)(ix) gives the statutory definition of land. Land does not simply mean something physical. The word 'hereditament' implies the nature of the right involved in the ownership of land. Land law is not all about the land but the rights that people may have in land. The difficulty with the distinction between fixtures and chattels is that it rests on a factual basis and, although basic principles have been established and can be applied, there are numerous cases which have been decided on their own individual facts. There are also some Latin maxims on the loose here despite attempts to modernise the law. 1. ‘Cuius est solum eius est usque ad coelum et ad inferos’ means the owner of the land owns everything up to the sky and down to the centre of the earth and 2. ‘quicquid plantatur solo, solo cedit’ means whatever is attached to the land becomes part of the land. Land is defined in the Law of Property Act 1925, s. 205(1)(ix) as including 'the surface, buildings or parts of buildings' and whatever is attached to the land becomes part of the land.. This raises, in practice, an important problem relating to ownership of those items which, but for the fact that they are attached to the land, would constitute chattels. The distinction needs to be drawn between those items which are fixtures, and therefore part of the realty, and those which are not, and therefore remain personally. One of the very established presumptions of UK Land Law is that whatever is attached to the land is part of the land as a fixture. Thus, if land is sold, items which can be classed as fixtures pass to the buyer as part of the realty. There is no need for separate mention of these items in the contract as would be the case for chattels. An object which is brought onto land may be classified under one of three broad heads. (a) a chattel; (b) a fixture; (c) part and parcel of the land itself. Objects in categories (b) and (c) are treated as being part of the land. Fixtures In general, a thing fixed to or in relationship with the land is a fixture, and is legally treated as party of the land itself. The doctrine therefore transforms personal property into real property. The doctrine of fixtures can have dramatic consequences. In Brand Vs Chris Building Society Pty Ltd a house built on the wrong block of land became part of that land, rendering it the property of the owner of the land. It can be difficult to distinguish between chattels and fixtures. The general rule is that when something is annexed to the land it becomes part of the land. It is, however, very difficult to say with precision what constitutes sufficient annexation. Should first look at extrinsic clues, most notably any contract between the parties. There are two tests for determining whether an object is a fixture or a chattel. These tests are not mutually exclusive, and are often both applied. 1. The degree of annexation 2. The object of annexation The degree of annexation The test is set out in Holland v Hodgson (1872) LR 7 CP 328 which set out two key presumptions. If an item is annexed to the ground there is a presumption that it is a fixture. The greater the degree of annexation, the stronger the presumption. This presumption will be rebutted if the circumstances show that it was objectively intended to be a chattel. If an item is not annexed to the ground there is a presumption that it is not a fixture. This presumption will be rebutted if the circumstances show that it was objectively intended to be a fixture.The party wishing to rebut the presumption bears the onus of proof. The object of annexation In Belgrave Nominees Pty Ltd v. Barlin-Scott Airconditioning Pty Ltd [1984] VR 947 the court stated that "whether the intention of the party fixing the chattel was to make it a permanent accession to the freehold is to be inferred from the matters and circumstances including the following: the nature of the chattel; the relation and situation of the party making the annexation vis a vis the owner of the freehold or the person in possession; the mode of annexation; and the purpose for which the chattel was fixed". This is to be assessed objectively: Holland v Hodgson (1872) LR 7 CP 328. Primary concern is generally whether the purpose of annexation was the better enjoyment of the land, or for the better enjoyment of the thing as a chattel. Examples 1. Belgrave Nominees Pty Ltd V. Barlin-Scott Airconditioning Pty Ltd [1984] VR 947 Item: Air-conditioning plants installed by Barlin-Scott on the roofs of Belgrave's buildings. The chillers rested under their own weight on platforms installed by Barlin-Scott. Each chiller was connected to the water system but not the electricity. Decision: The air-conditioners were fixtures. They were attached to the water system and therefore a presumption was raised that they were fixtures. The presumption was not rebuted as formed an essential part of the building. Further, the fact that Barlin-Scott were in the business of supplying air-conditioners suggested that he only a transitory interest in them.. 2. Leigh V. Taylor [1902] AC 157 Item: Large and expensive tapestries affixed to the walls of a house by the life tenant. The tapestries were stretched over wooden planks, and affixed to the wall with mouldings. Decision: The tapestries were not fixtures. Because of the value it would need to be a high degree of annexation. Here the degree was slight. Moreover, the purpose of the annexation was for the better enjoyment of the tapestries. 3. Metal Manufactures Ltd V. Commissioner of Taxation [1999] FCA 1712 Item: Heavy equipment in a factory on land owned by Metal Manufactures. Each component was bolted into concrete footings. Metal Manufactures sold the equipment to the bank and leased it back, claiming the rent as a tax deduction. The sale agreement provided that the equipment was not to be treated as a fixture. Decision: Despite the agreement between the parties, it was held that the equipment was a fixture. There was a significant degree of annexation to the land, and removal would cause damage. The equipment was intended to be placed indefinitely, so that the land could be put to better use as a factory. The object of annexation now appears to be of great significance that the degree of annexation. That said, it is difficult to reconcile the cases as most fixture cases now turn on their own peculiar facts. There is greater reliance on all of the circumstances, rather than the tests. You should, however, apply both tests to a fixtures problem, and then comment on this trend and reach a conclusion keeping the trend in mind. In some circumstances it may be of vital importance to be able to determine whether an item on the land is a fixture or not. It would be necessary to characterize machinery in the sale of commercial property for the same reason; the same would apply in the case of the sale of rural property. Thus, in land transactions the question: chattel or fixture? can be of importance and attention will now be given to the tests which help in the distinction between the two. Another matter of importance is the change in direction of the traditional law regarding the ability of the owner of land to sell fixtures separately from the land. The traditional view that ownership of fixtures could be separated from the ownership of land as held in cases such as Standard Portland Cement Co Ltd v Good (1982) 57 ALJR 151 and Re Cosslett (Contractors) Ltd [1998] 2 WLR 131, has received some change in direction in more recent times. Thus, as Peter Butt calls them in his note on p. 130 of 74 ALJ "driven by tax or stamp duty considerations", these cases have held that at common law fixtures which have not been severed from the land cannot be treated separately from the land to which they are affixed. Conclusion The true rule is that articles not otherwise attached to the land than by their own weight are not to be considered as part of the land unless the circumstances are such as to show that they were intended to be part of the land, the onus of showing that they are so intended lying on those who assert that they have ceased to be chattels; and that, on the contrary, an article which is affixed to the land, even slightly, is to be considered as part of the land, unless the circumstances are such as to show that it was intended all along to continue a chattel, the onus lying on those who contend that it is a chattel" - Holland v Hodgson (1872) LR 7 CP 328. References “Definition of land.” Oup.com. retrieved on 03 Nov 2006. [http://www.oup.com/uk/orc/bin/qanda/books/11land/land_ch02.pdf] “Judgments.” Number7.demon.co.uk. Retrieved on 03 Nov 2006. [http://www.number7.demon.co.uk/hol/reports/00/08.htm] Kelkar R.V. UK Land Law. Eastern Book Company. Lucknow. 2003. pp-87-122 “The Concept of Property.” lss.unimelb.edu.au. Retrived on 05 December 2006 [http://www.lss.unimelb.edu.au/docs/tutorials/2005/property/Property%20T ute%201.doc] Read More