Analysis of Property Law - Case Study Example

Intriguingly, the Grays seem to be suggesting the polar opposite of the law in this area. There is no evidence in the case law to support the view that intention has ever seriously taken precedence over the degree of physical annexation in the determination whether a chattel affixed to land remains a chattel or becomes a fixture. Au contraire, the degree of physical annexation has always taken precedence in conventional jurisprudence in this area of law. The Historical Position It is commonly assumed that chattels affixed to land belong to the person fixing them. This is the underlying assumption of the assertion in the Grays' statement. It certainly is true that the legal owner has the sole right to dispose of any fixtures to another party. Nonetheless this is not the same thing as meaning that the 'purchaser' of kitchen cupboards obtained under a subsisting hire purchase agreement would also have the same rights, since whilst s/he might romantically think of the chattel as 'belonging to' him/her upon receipt of it, under English law, legal title does not pass until the final repayment is received by the finance company. However, the chattel may not belong outright to the person in possession, particularly where the possessor has only a limited right to the land; for example the widow of a man who died intestate may be allowed to live in the property but not to dispose of contents left in a statutory trust for her children under 18. What is the situation if an ex-tenant of a shop has to leave parquet flooring she had installed at her own cost Would the landlord instantly be able to claim that it was a fixture, and therefore s/he was entitled to keep it, in the same manner a mortgagee of land has a better right to fixtures than the owner or other creditors The older cases in this area suggest that the courts know that in certain circumstances it would be grossly unfair for a landlord to benefit in this manner, not least because it would discourage tenants from improving and maintaining the property.1 For example, seventeenth century law recognised that trade and ornamental fixtures could be removed during or at the end of the tenancy.2 However, one must keep such decisions in context - the world was a very different place then, and there was not welfare state to lift one from penury in the event of bankruptcy. Contrary to the Grays' viewpoint it is herein submitted that this has never been the conventional jurisprudential view. It was - and remains - an exception to the general rule. The burden of proof remains on the original person in possession to prove that the chattel was not a fixture. Defining a Fixture The determination of whether a chattel was a fixture was generally understood to turn on the 'intention' at the time the chattel was affixed to the land. The rationale for this reading of the case law is that the only purpose the tenant had at the time of affixing the chattel to the land was the intention to use and enjoy the chattel. This view makes good sense - particularly in the burgeoning sectors of commercial leasing or renting of realty, where often the fixture itself is owned by someone else (such as shop-fittings, satellite dishes or a fitted bedroom under a hire purchase agreement). However, the earliest cases considered the degree or extent of physical annexation to be more significant. Blackburn J in Holland v Hodgson (1872) gives a sound definition of the 'objective test' of a fixture under English law at the time: "Perhaps 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 said as to shew that they were intended to be part of the landon the contrary, an article which is fixed to the land even slightly is to be considered as part of the land, unless the circumstances are such as to shew that it was intended all along to continue a chattel."3 The Court gave examples of fixtures which would not be considered to be attached to the land, such as anchor - which was being used to moor a yacht4. Objects resting on their own weight without any fixing to the land have been by the court as being prima facie chattels.5 Other examples seem to suggest that the intention of the fixture must be temporary in nature, in order to effect some purpose other than to become a fixture. Unfortunately in the case under discussion the Court found that machinery nailed to the floor did constitute a fixture and could be claimed as such by the mortgagee. This implacability by the Court is observable in other cases concerning trade machinery. Even though the fixing is done in order that the machinery may be used correctly under health and safety and warranty issues, and can be easily removed for maintenance or replacement, the court gives more weight to the physical connection than to the purpose. 6 More recently the decision of the Court of Appeal in Botham v TSB Bank plc (1996)7 has made it clear that under the objective test defined by Blackburn J, fitted bathrooms are more likely to be considered to be fixtures, whilst white goods (cookers, refrigerators, washing machines) despite being placed in fitted units are better assessed as chattels, since they can be easily removed. An increasing certainty was given in this area. The following will almost always be ascertained to be chattels: carpets, curtains, light fittings (most) and gas fires (unless they are 'embedded' into the structure of the property). Cases which involve ornamental fixtures tend to receive a less rigid application of Blackburn J's definition of a fixture. Tapestries appear quite often in the litigation and the general rule seems to be that if they were fixed in order to be a permanent part of the property (as in many ancestral or showpiece homes8) then they will be deemed to be fixtures; a notable exception seems to be those put up by the current occupiers as they are more likely to be for personal enjoyment, especially given the modern trend for home renovation, whether owned or not.9 Throughout the case law a clear pattern emerges that if the object can be removed without substantial damage then this is a strong pointer that it has remained a chattel.10 The D'Eyncourt v Gregory (1866) case remains somewhat controversial and tends to be distinguished by later cases. In that case the categories to which an object was defined as a fixture, rather than a chattel, was extended to include carved figures, marble vases, stone lions and garden seats. However, the later Ellitestone Ltd v Morris [1997] case confirmed this view. Is 'Intention' Significant Berkley v Poullett [1977] seems to be an early move by the Court of Appeal toward stressing intention in direct contrast to Blackburn J's emphasis on physical annexation. In that case a majority of the Court of Appeal agreed that the vendor of the fee simple could remove pictures which were firmly screwed into paneled recesses of Hinton House, accepting the argument that the pictures were there for personal enjoyment. However, it could be argued that the pictures were just as well fixed to the land as the machinery was in Holland. Such a decision would have been more consistent with the 1872 definition of a fixture if it could have been shown that the pictures had been moved frequently. With regard to cases examining chattels belonging to third-parties under hire or hire purchase agreements HL indicated in a series of mid 1990s decisions11 that the intention for a chattel to be a temporary fixture is insufficient alone to rebut the presumption that a fixture is part of the land. From a commercial point of view this appears to be a most curious stance. Under a hire agreement there is a clear agreement to return the chattel in good condition and after an agreed period of time (eg a diesel lawn mower or a car hire). Under a hire purchase agreement ownership does not pass until all the payments have been made (such as car finance agreements). Decisions made in the 19th Century seemed to recognize the importance of balancing the rights of innocent bystanders.12 However, these cases may also have turned on the low level of fixing, rather than purely the intention that the fixing was temporary in nature, and therefore allow the Courts to declare that the item should remain defined as a chattel. It is submitted that following Blackburn J's 1872 pronouncements, it should be apparent that conventional jurisprudence considers all items attached to the land to be prima facie fixtures, regardless of the so called 'degree of physical annexation' to the land. This is the viewpoint endorsed in the 1997 House of Lords (HL) decision Elitestone Ltd v Morris (1997).13 The judgment seems to suggest that there is a presumption that trade and ornamental fixtures remain part of the land; although in certain circumstances the tenant may have a rebuttable right to remove them. The Current Position As explained above, any attempt to supercede the subjective 'intention' test with Blackburn J's objective test is destined to fail at some point, leading to an even more inequitable solution. Surely the Court is more likely to first determine the degree of physical annexation (objective test) There does not appear to be any consideration of whether the possessor thought the item was a chattel or a fixture, and this seems to be consistent with reality since the average person has no clue with regard to the legal difference between the two terms. Instead, on those cases where an exception to the general rule of law as expounded by Blackburn J has been found, the Court has focused on the purpose of the fixing, from which one may infer the legal definition of 'intention' in this context. Where it can be established that the fixing was in order for the temporary enjoyment of the object as a chattel. This may explain the extraordinary exclusion of machinery, since the enjoyment there is not of the chattel, but of the use or enjoyment of the land itself; ie it enhances the value of the land to the possessor of the chattel. Again one could attempt to distinguish the decided conflicting cases on the basis that there may be an inference that the enjoyment of a chattel must be purely personal from an ornamental/leisure point of view, rather than something which creates profit and has no personal value. Conclusion The Grays' assertions are most peculiar given the tenor of the law in this area and its apparent certainty and clarity. Having said that they may be in possession of materials not currently at my disposal. However, based on the above analysis it is demonstrably untrue to claim 'that the physical circumstances of a particular installation point only to a prima facie classification as a fixture or chattel which is rebuttable by evidence of some contrary purpose or scheme underlying the installation'. Bibliography Textbook Smith, R.J. (2006) Property Law. 5th Edition. Edingburgh Gate: Pearson Education Limited. Cases cited Berkley v Poullett [1977] 1 EGLR 86 Botham v TSB Bank plc (1996) 73 P&CR D1 Bradshaw v Davey (1952) 1 All ER 350 Crossley Brothers Ltd v Lee [1908] 1 KB 86 D'Eyncourt v Gregory (1866) LR 3 Eq 382 Elitestone Ltd v Morris (1997) 1 WLR 687. Hobson v Gorringe [1897] 1 Ch 182 Holland v Hodgson (1872) LR 7 CP 328 at p.355 Hulme v Brigham [1943] KB 152 - a heavy printing machine Leigh v Taylor [1902] AC 157 Leigh v Taylor [1902] AC 157 Mellish v BMI (No 3) Ltd [1996] AC 454 at p 473; Elitestone Ltd v Morris [1997] 1 WLR 687 Penton v Robart (1801) 102 ER 302 Lord Kenyon at p.303 Poole's Case (1703) 91 ER 320 Reynolds v Ashby & Son [1904] AC 466 Read More