Landlord and tenant — Rent Acts — Structure — Whether tenancy of bungalow — Whether bungalow fixture or chattel
The plaintiffs were the owners of a site,
divided into 27 lots, which they acquired in 1989 for development. The first
defendant, who had occupied a chalet or bungalow on one of the lots since 1971,
when he paid £250 for it, was required to obtain an annual ‘licence’ the fee
for which rose steadily until the plaintiffs demanded £1,000 in 1990. In
proceedings by the plaintiffs seeking possession of the lots, the defendants
claimed yearly tenancies protected by the Rent Act 1977. At trial the assistant
recorder held that the first defendant’s claim to a protected tenancy depended
upon whether the bungalow formed part of the realty; he decided that it did.
The first defendant appealed the decision of the Court of Appeal which had held
that the bungalow was not a fixture and part of the realty, and was owned by
the first defendant.
photographs not before the Court of Appeal showed that the bungalow was not
like a Portakabin or mobile home. The nature of the structure was that it could
not be taken down and re-erected elsewhere. When the bungalow was being
constructed the object of bringing the individual bits of wood on to the site
seems clear, they all became part of the structure, which was itself part and
parcel of the land and realty. The absence of any attachment to the soil (save
by gravity) becomes an irrelevance. The subjective intention of the parties
cannot affect the question whether a chattel has become part of the freehold.
The following cases are referred to in this
report.
Barclay, ex parte (1855) 5 De GMG 403
Bain v Brand (1876) 1 App Cas 762
Billing v Pill [1954] 1 QB 70; [1953] 3
WLR 758; [1953] 2 All ER 1061
Boswell v Crucible Steel Co [1925] 1 KB
119
Boyd v Shorrock (1867) LR 5 Eq 72
City of Glasgow (Assessor for) v Gilmartin 1920 SC
488, Ct of Sess
D’Eyncourt v Gregory (1866) LR 3 Eq 382
De Falbe; Ward v Taylor, Re [1901] 1
Ch 523
Deen v Andrews (1986) 52 P&CR 17;
[1986] 1 EGLR 262
Dibble (HE) Ltd v Moore [1970] 2 QB
181; [1969] 3 WLR 748; [1969] 3 All ER 1465, CA
Dixon v Fisher (1843) 5 D 775, Ct of
Sess
Dunbarton (Assessor for) v LK McKenzie &
Partners 1968 SLT 82
Goff v O’Connor (1855) 16 Ill 421
Hellawell v Eastwood (1851) 6 Ex 295; 20 LJ
Ex 154; 86 RR 296
Hobson v Gorringe [1897] 1 Ch 182;
[1895–99] All ER Rep 1231, 66 LJ Ch 114; 75 LT 610; 45 WR 356; 13 TLR 139, CA
Holland v Hodgson (1872) LR 7 CP 328;
[1861–73] All ER Rep 237
Leigh v Taylor [1902] AC 157; 18 TLR
293, HL
Melluish (Inspector of Taxes) v BMI (No 3) Ltd
[1996] 1 AC 454; [1995] 3 WLR 630; [1995] 4 All ER 453, HL
Menzies (John) & Co Ltd v Assessor for Edinburgh
1937 SC 784, Ct Sess
Niven v Pitcairn (1823) 2 S 270, Ct
Sess
R v Otley (Inhabitants) (1830) 1
B&Ad 161, 109 ER 747
Redgates Caravan Parks Ltd v Assessor for Ayrshire
1973 SLT 52, LV App Ct
Reid v Smith (1905) 3 CLR 656
Renfrewshire (Assessor for) v Mitchell 1966 SLT
53, LV App Ct
Reynolds v Ashby & Son [1904] AC 466;
[1904–7] All ER Rep 401, HL
Snedeker v Warring (1854) 12 NY 170; 2
Kernan 178
Street v Mountford [1985] AC 809; [1985]
2 WLR 877; [1985] 2 All ER 289; [1985] 1 EGLR 128; (1985) 274 EG 821, HL;
reversing (1984) 49 P&CR 324; [1984] 2 EGLR 119; 271 EG 1153, CA
Wansbrough v Maton (1836) 4 Ad&E 884;
111 ER 1016
Webb v Frank Bevis Ltd [1940] 1 All ER
247, CA
Wiltshear v Cottrell (1853) 1 E&B 674;
118 ER 589
This was an appeal by the defendants,
David Owen Morris and Judith Mary Sked, from a decision of the Court of Appeal
which had allowed an appeal by the plaintiffs, Elitestone Ltd, from Mr
Assistant Recorder Bidder in Swansea County Court in possession proceedings
brought by the plaintiffs.
Paul Morgan QC and Stephen Cottle
(instructed by Smith Llewelyn Partnership, of Swansea) appeared for the
appellants; James Thom (instructed by TG Jones & Associates, of Swansea)
represented the respondents.
Giving his opinion, LORD LLOYD OF
BERWICK said: The plaintiffs, Elitestone Ltd, are the freehold owners of
land known as Holt’s Field, Murton, Near Swansea. The land is divided into 27
lots. The defendant, Mr Morris, is the occupier of a chalet or bungalow on lot
no 6. It is not known for certain when the chalet was built. But it seems
likely that it was before 1945. Mr Morris has lived there since 1971.
The plaintiffs acquired the freehold in
1989 with a view to redevelopment. On April 30 1991 they issued proceedings in
Swansea County Court claiming possession against all 27 occupiers. Five lead
actions were selected, including that in which Mr Morris was defendant.
They came on for trial before Mr Assistant Recorder Bidder in November 1994.
The assistant recorder had a number of issues to decide. He dealt with them in
a most impressive manner. So far as Mr Morris is concerned, his defence was
that he is a tenant from year to year, that he occupies the premises as his
residence, and is therefore entitled to the protection of the Rent Act 1977. He
claims a declaration to that effect.
The assistant recorder held, correctly,
at the end of what was necessarily a very lengthy judgment, that the question
in Mr Morris’s case turned on whether or not the bungalow formed part of the
realty. If it did, then Mr Morris was entitled to his declaration.
Having visited the site, the assistant
recorder had this to say:
While the house rested on the concrete
pillars which were themselves attached to the ground, it seems to me clear that
at least by 1985 and probably before, it would have been clear to anybody that
this was a structure that was not meant to be enjoyed as a chattel to be picked
up and moved in due course but that it should be a long-term feature of the
realty albeit that, because of its construction, it would plainly need more
regular maintenance.
The Court of Appeal disagreed, unreported
July 28 1995, Court of Appeal (Civil Division) transcript no 1025 of 1995.
Aldous LJ, who
was resting by its own weight on concrete pillars, without any attachment. He
was also influenced by the uncertainty of Mr Morris’ tenure. Although Mr Morris
had been in occupation since 1971, he was required to obtain an annual
‘licence’. At first the licence fee was £3 a year. It rose to £10 in 1984, then
to £52 in 1985, and finally to £85 in 1989. In 1990 the plaintiffs required a
licence fee of £1,000: but Mr Morris, and the other occupiers declined to pay.
On these facts Aldous LJ inferred that it
was the common intention of the parties that the occupiers should acquire the
ownership of their bungalows, but the ownership of the sites should remain in
the freeholders. On that footing Mr Morris’ bungalow was to be regarded as a
chattel. It was never annexed to the soil, so it never became part of the
realty. It followed that the tenancy did not include the bungalow, and Mr
Morris was not a protected tenant.
Unlike the judge, the Court of Appeal did
not have the advantage of having seen the bungalow. Nor were they shown any of
the photographs, some of which were put before your lordships. These
photographs were taken only very recently. Like all photographs they can be
deceptive. But if the Court of Appeal had seen the photographs, it is at least
possible that they would have taken a different view. For the photographs show
very clearly what the bungalow is, and especially what it is not. It is not
like a Portakabin, or mobile home. The nature of the structure is such that it
could not be taken down and re-erected elsewhere. It could only be removed by a
process of demolition. This, as will appear later, is a factor of great
importance in the present case. If a structure can only be enjoyed in situ, and
is such that it cannot be removed in whole or in sections to another site,
there is at least 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 therefore cease to be a chattel. There were a number of other issues in the
Court of Appeal. I need only mention one. This was an argument by the
plaintiffs that Mr Morris was estopped by convention from denying that the
bungalow was a chattel. There was, so it was said, a common assumption that the
chalets were owned separately from the land, since each occupier purchased his
own chalet from the previous occupier (Mr Morris paid £250 for no 6 in 1971),
and each occupier paid an annual licence fee to the freeholders. Since the
Court of Appeal held that the bungalow was a chattel, they did not find it
necessary to deal with the estoppel argument. The plaintiffs might have renewed
the argument before your lordships. But in the meantime the House had given
judgment in Melluish (Inspector of Taxes) v BMI (No 3) Ltd [1996]
1 AC 454. In that case Lord Browne-Wilkinson said, at p473:
The terms expressly or implicitly agreed
between the fixer of the chattel and the owner of the land cannot affect the
determination of the question whether, in law, the chattel has become a fixture
and therefore in law belongs to the owner of the soil: … The terms of such
agreement will regulate the contractual rights to sever the chattel from the
land as between the parties to that contract and, where an equitable right is
conferred by the contract, as against certain third parties. But such agreement
cannot prevent the chattel, once fixed, becoming in law part of the land and as
such owned by the owner of the land so long as it remains fixed.
If an express agreement cannot prevent a
chattel from becoming part of the land, so long as it is fixed to the land, it
is obvious that a common assumption cannot have that effect. It is not
surprising, therefore, that Mr James Thom abandoned his estoppel argument. Thus
the sole remaining issue for your lordships is whether Mr Morris’ bungalow did
indeed become part of the land, or whether it has remained a chattel ever since
it was first constructed before 1945.
It will be noticed that in framing the
issue for decision I have avoided the use of the word ‘fixture’. There are two
reasons for this. The first is that ‘fixture’, though a hallowed term in this
branch of the law, does not always bear the same meaning in law as it does in
everyday life. In ordinary language one thinks of a fixture as being something
fixed to a building. One would not ordinarily think of the building itself as a
fixture. Thus in Boswell v Crucible Steel Co [1925] 1 KB 119 the
question was whether plate glass windows which formed part of the wall of a
warehouse were landlord’s fixtures within the meaning of a repairing covenant.
Atkin LJ said, at p123:
… I am quite satisfied that they are not
landlord’s fixtures, and for the simple reason that they are not fixtures at all
in the sense in which that term is generally understood. A fixture, as that
term is used in connection with the house, means something which has been
affixed to the freehold as accessory to the house. It does not include things
which were made part of the house itself in the course of its construction.
Yet in Billing v Pill
[1954] 1 QB 70, at p75 Lord Goddard CJ said:
What is a fixture? The commonest fixture
is a house which is built into the land, so that in law it is regarded as part
of the land. The house and the land are one thing.
There is another reason. The term fixture
is apt to be a source of misunderstanding owing to the existence of the
category of so called ‘tenants’ fixtures’, (a term used to cover both trade
fixtures and ornamental fixtures) which are fixtures in the full sense of the
word (and therefore part of the realty) but which may nevertheless be removed
by the tenant in the course of or at the end of his tenancy. Such fixtures are
sometimes confused with chattels which have never become fixtures at all.
Indeed the confusion arose in this very case. In the course of his judgment
Aldous LJ quoted at length from the judgment of Scott LJ in Webb v Frank
Bevis Ltd [1940] 1 All ER 247. The case concerned a shed which was 135 ft
long and 50 ft wide. The shed was built on a concrete floor to which it was
attached by iron straps. Having referred to Webb v Frank Bevis Ltd
and a decision of Hirst J in Deen v Andrews [1986] 1 EGLR 262
Aldous LJ continued:
In the present case we are concerned with
a chalet which rests on concrete pillars and I believe falls to be considered
as a unit which is not annexed to the land. It was no more annexed to the land
than the greenhouse in Deen v Andrews or the large shed in Webb
v Frank Bevis Ltd. Prima facie, the chalet is a chattel and not a
fixture.
A little later he said:
Unit 6 was just as much a chattel as the
very large shed was in the Webb case and the greenhouse in Deen v
Andrews.
But when one looks at Scott LJ’s judgment
in Webb v Frank Bevis Ltd it is clear that the shed in question
was not a chattel. It was annexed to the land, and was held to form part of the
realty. But it could be severed from the land and removed by the tenant at the
end of his tenancy because it was in the nature of a tenant’s fixture, having
been erected by the tenant for use in his trade. It follows that Webb v Frank
Bevis Ltd affords no parallel to the present case, as indeed Mr Thom
conceded.
For my part, I find it better in the
present case to avoid the traditional two-fold distinction between chattels and
fixtures, and to adopt the three-fold classification set out in Woodfall
Landlord and Tenant, Release 36 (1994), vol 1, pp13/83, para 13.131:
An object which is brought onto land may
be classified under one of three broad heads. It may be (a) a chattel; (b) a
fixture; or (c) part and parcel of the land itself. Objects in categories (b)
and (c) are treated as being part of the land.
So the question in the present appeal is
whether, when the bungalow was built, it became part and parcel of the land
itself. The materials out of which the bungalow was constructed, that is to
say, the timber frame walls, the feather boarding, the suspended timber floors,
the chip-board ceilings, and so on, were all, of course, chattels when they
were brought onto the site. Did they cease to be chattels when they were built
into the composite structure? The answer to the question, as Blackburn J
pointed out in Holland v Hodgson (1872) LR 7 CP 328, depends on
the circumstances of each case, but mainly on two factors, the degree of
annexation to the land, and the object of the annexation.
Degree of annexation
The importance of the degree of
annexation will vary from object to object. In the case of a large object, such
as a house, the question does
authority on the point, and I do not get much help from the early cases in
which wooden structures have been held not to form part of the realty, such as
the wooden mill in R v Otley (Inhabitants) (1830) 1 B&Ad 161,
the wooden barn in Wansbrough v Maton (1836) 4 Ad&E 884 and
the granary in Wiltshear v Cottrell (1853) 1 E&B 674. But
there is a more recent decision of the High Court of Australia which is of
greater assistance. In Reid v Smith (1905) 3 CLR 656, at p659
Griffiths CJ stated the question as follows:
The short point raised in this case is
whether an ordinary dwelling-house, erected upon an ordinary town allotment in
a large town, but not fastened to the soil, remains a chattel or becomes part
of the freehold.
The Supreme Court of Queensland had held
that the house remained a chattel. But the High Court reversed this decision,
treating the answer as being almost a matter of commonsense. The house in that
case was made of wood, and rested by its own weight on brick piers. The house
was not attached to the brick piers in any way. It was separated by iron plates
placed on top of the piers, in order to prevent an invasion of white ants.
There was an extensive citation of English and American authorities. It was
held that the absence of any attachment did not prevent the house forming part
of the realty. Two quotations, at p667, from the American authorities may
suffice. In Snedeker v Warring (1854) 2 Kernan 178 Parker J said:
A thing may be as firmly fixed to the
land by gravitation as by clamps or cement. Its character may depend upon the
object of its erection.
In Goff v O’Conner (1855)
16 Ill 421, the court said:
Houses in common intendment of the law
are not fixtures, but part of the land… . This does not depend, in the case of
houses, so much upon the particular mode of attaching, or fixing and connecting
them with the land, upon which they stand or rest, as upon the uses and
purposes for which they are erected and designed.
Purpose of annexation
Many different tests have been suggested,
such as whether the object which has been fixed to the property has been so
fixed for the better enjoyment of the object as a chattel, or whether it has
been fixed with a view to effecting a permanent improvement of the freehold.
This and similar tests are useful when one is considering an object such as a
tapestry, which may or may not be fixed to a house so as to become part of the
freehold: see Leigh v Taylor [1902] AC 157. These tests are less
useful when one is considering the house itself. In the case of the house the
answer is as much a matter of commonsense as precise analysis. A house which is
constructed in such a way so as to be removable, whether as a unit, or in sections,
may well remain a chattel, even though it is connected temporarily to mains
services such as water and electricity. But a house which is constructed in
such a way that it cannot be removed at all, save by destruction, cannot have
been intended to remain as a chattel. It must have been intended to form part
of the realty. I know of no better analogy than the example given by Blackburn
J in Holland v Hodgson (1872) LR 7 CP 328, at p335:
Thus blocks of stone placed one on the
top of another without any mortar or cement for the purpose of forming a dry
stone wall would become part of the land, though the same stones, if deposited
in a builder’s yard and for convenience sake stacked on the top of each other
in the form of a wall, would remain chattels.
Applying that analogy to the present
case, I do not doubt that when Mr Morris’ bungalow was built, and as each of
the timber frame walls were placed in position, they all became part of the
structure, which was itself part and parcel of the land. The object of bringing
the individual bits of wood on to the site seems to be so clear that the
absence of any attachment to the soil (save by gravity) becomes an irrelevance.
Finally I return to the judgment of the Court of Appeal. I need say no more
about the absence of attachment, which was the first of the reasons given by
the Court of Appeal for reversing the assistant recorder. The second reason was
the intention which the court inferred from the previous course of dealing
between the parties, and in particular the uncertainty of Mr Morris’ tenure.
The third reason was the analogy with the shed in Webb v Frank Bevis
Ltd [1940] 1 All ER 247, and the greenhouse in Deen v Andrews
[1986] 1 EGLR 262. As to the second reason the Court of Appeal may have been
misled by Blackburn J’s use of the word ‘intention’ in Holland v Hodgson
(1872) LR 7 CP 328. But as the subsequent decision of the Court of Appeal in Hobson
v Gorringe [1897] 1 Ch 182 made clear, and as the decision of the House
in Melluish (Inspector of Taxes) v BMI (No 3) Ltd [1996] 1 AC 454
put beyond question, the intention of the parties is only relevant to the
extent that it can be derived from the degree and object of the annexation. The
subjective intention of the parties cannot affect the question whether the chattel
has, in law, become part of the freehold, any more than the subjective
intention of the parties can prevent what they have called a licence from
taking effect as a tenancy, if that is what in law it is: see Street v Mountford
[1985] AC 809*.
*Editor’s note: Also reported at [1985] 1
EGLR 128
As for the third of the reasons, I have
already pointed out that Webb v Frank Bevis Ltd does not support
the Court of Appeal’s conclusion, because the shed in that case was held to be
a fixture, albeit a fixture which the tenant was entitled to remove. In Deen
v Andrews the question was whether a greenhouse was a building so as to
pass to the purchaser under a contract for the sale of land ‘together with the
farmhouses and other buildings’. Hirst J held that it was not. He followed an
earlier decision in HE Dibble Ltd v Moore [1970] 2 QB 181 in
which the Court of Appeal, reversing the trial judge, held that a greenhouse
was not an ‘erection’ within section 62(1) of the Law of Property Act 1925. I
note that in the latter case Megaw LJ, at p187G, drew attention to some
evidence
that it was customary to move such
greenhouses every few years to a fresh site.
It is obvious that a greenhouse which can
be moved from site to site is a long way removed from a two-bedroom bungalow
which cannot be moved at all without being demolished.
For the above reasons I would allow this
appeal and restore the order of the assistant recorder.
Agreeing, LORD CLYDE said: It is not now disputed that Mr
Morris, the first appellant, is the tenant of lot no 6 in the area of land
known as Holt’s Field, which is owned by the plaintiffs. He and the second
appellant have been living in the bungalow on that site which was erected more
than half a century ago. The problem then arises whether the bungalow is part
of the land so as to be included in his tenancy. An issue arose whether an
estoppel by convention had arisen preventing the contention that the bungalow
was part of the realty. It has been held that no such estoppel has arisen and
that issue is not now argued. The only question left in the case is whether the
bungalow is or is not a chattel. The assistant recorder held that it had become
annexed to and part of the realty. The Court of Appeal held that it was a
chattel and so was not included in the tenancy of lot no 6. It is necessary at
the outset to define what the bungalow comprises. It seems from the facts in
the present case as if some form of actual attachment of the bungalow to realty
might exist, in the connection with the main electric supply cable and certain
drain pipes. But these matters have not been explored in the facts and we are
required to proceed on the basis that the bungalow is not physically attached
to the land. The next consideration is whether the foundations form part of the
bungalow. These are sunk into the ground and if they were to be treated as part
of the bungalow would clearly be an element of physical connection with the
ground. But it does not appear that there is any particular adaptation of the
foundations to the structure above nor any adaptation of the structure to suit
the foundations. The main structural elements of the bungalow simply rest on
the concrete blocks. The bungalow and the foundations are severable from each
other and it is not appropriate to treat the whole as a unum quid so as
to conclude that the bungalow is built into
That was the view on which the Court of Appeal proceeded and on the facts
available in this case I consider it correct to proceed on that basis.
The question posed by the parties in
their agreed statement of facts and issues is: ‘Whether the bungalow erected at
Unit 6, Holt’s Field was a chattel or a fixture’. I entirely share the unease
which has been expressed by my noble and learned friend, Lord Lloyd of Berwick
on the use of the word fixture. The ambiguity is illustrated by a passage in
the judgment of Rigby LJ in Re De Falbe; Ward v Taylor [1901] 1
Ch 523, at p530 where having referred to an originally unbending rule that
everything affixed to the freehold was held to go with the freehold his
lordship stated:
But in modern times there have come to be
important exceptions to this rule, one being in favour of trade fixtures and
entitling a person who has put up what are now called ‘fixtures’ (which means
removable fixed things) for the purposes of trade to remove them.
Later in his judgment he stated, at p533:
But the question is, whether they were
not made ‘fixtures,’ meaning thereby objects fixed to the wall which might be
removed at the will of the person who had fixed them.
In Boyd v Shorrock (1867)
LR 5 Eq 72 Sir W Page Wood V-C regarded as conclusive of the case before him a
definition given in Ex parte Barclay (1855) 5 De GMG 403, at p410:
By ‘fixtures’ we understand such things
as are ordinarily affixed to the freehold for the convenience of the occupier,
and which may be removed without material injury to the freehold, such will be
machinery, using a generic term; and in houses, grates, cupboards, and other
like things.
As the law has developed it has become
easy to neglect the original principle from which the consequences of
attachment of a chattel to realty derive. That is the principle of accession,
from which the more particular example has been formulated, inaedificatum
solo solo cedit. A clear distinction has to be drawn between the principle
of accession and the rules of removability. My lords, the distinction between
these two matters was pointed out long ago by Lord Cairns LC in Bain v Brand
(1876) 1 App Cas 762. In that case it was declared that the law as to fixtures
is the same in Scotland as in England. His lordship stated, at p767, that there
were two general rules under the comprehensive term of fixtures:
One of these rules is the general
well-known rule that whatever is fixed to the freehold of land becomes part of
the freehold or inheritance. The other is quite a different and separate rule;
— whatever once becomes part of the inheritance cannot be severed by a limited
owner, whether he be owner for life or for years, without the commission of
that which, in the law of England, is called waste, and which, according to the
law of both England and Scotland is undoubtedly an offence which can be
restrained. Those, my Lords, are two rules, not one by way of exception to the
other, but two rules standing consistently together. My Lords, an exception
indeed, and a very important exception, has been made, not to the first of
these rules, but to the second. To the first rule which I have stated to your
Lordships there is, so far as I am aware, no exception whatever. That which is
fixed to the inheritance becomes a part of the inheritance at the present day
as much as it did in the earliest times. But to the second rule, namely, the
irremovability of things fixed to the inheritance, there is undoubtedly ground
for a very important exception. That exception has been established in favour
of fixtures which have been attached to the inheritance for the purposes of
trade, and perhaps in a minor degree for the purpose of agriculture. Under that
exception a tenant who has fixed to the inheritance things for the purpose of
trade has a certain power of severance and removal during the tenancy …
It would be right to add that the
exception has been developed so as to extend beyond the purposes of trade. By
the end of the 19th century it was clearly established that the exception
included objects which had been affixed to the freehold by way of ornament: Re
De Falbe; Ward v Taylor [1901] 1 Ch 523, at p539. This reflected not
a change in the law but, as Lord Macnaghten put it in Leigh v Taylor
[1902] AC 157, at p162, a change ‘in our habits and mode of life’. No doubt the
category of exceptions may continue to change. The present case, however, is
concerned with the first of the two rules and not the second. But it is not
altogether clear that the distinction between the two rules was clearly put before
the Court of Appeal in the present case. If the distinction is not noticed
there is a danger that the true issue may become confused by questions truly
relating to removability. The Court of Appeal found assistance in the decision
in Webb v Frank Bevis Ltd [1940] 1 All ER 247, regarding the
bungalow as no more annexed to the land and just as much a chattel as the large
shed in that case. But the court in the Webb case held that the large
shed was a fixture but was removable by the tenant. I should add that the
second rule may involve particular consideration of the various relationships
between the interested parties which may play a part in the matter of
removability, such as landlord and tenant, or mortgagor and mortgagee. But
those differences play only a subordinate role in relation to the first rule.
The answer to that question is to be found by a consideration of the particular
facts and circumstances. In the generality there are a number of considerations
to which resort may be had to solve the problem. But each case in this matter
has to turn on its own facts. Comparable cases are useful for guidance in
respect of the considerations employed but can only rarely provide conclusive
answers. It has not been suggested that if the bungalow is real property it can
be regarded as distinct from the site so as to be excluded from the property
let to Mr Morris. The question then can be simply asked whether the bungalow is
a chattel or realty. On that wider approach a useful starting point can be
found in the words of the old commentator Heineccius (Elementa Iuris Civilis
secundum ordinem Pandectarum, Lib I Tit VIII Sec199) where, in classifying
things as moveable or immoveable he describes the latter as being things ‘quae
vel salvae moveri nequeunt, ut fundus, aedes, ager … vel usus perpetui causa
iunguntur immobilibus, aut horum usui destinantur‘. The first of these
factors may serve both to identify an item as being real property in its own
right and to indicate a case of accession. But account has also to be taken of
the degree of physical attachment and the possibility or impossibility of
restoring the article from its constituent parts after dissolution. In one
early Scottish case large leaden vessels which were not fastened to the
building in any way but simply rested by their own weight were held to be
heritable since they had had to be taken to pieces in order to be removed and
had then been sold as old lead: Niven v Pitcairn (1823) 2 S 270.
In Hellawell v Eastwood (1851) 6 Ex 295, at p312, Parke B, in considering
the mode and extent of annexation of the articles in that case, referred to the
consideration whether the object in question ‘can easily be removed, integre,
salve, et commode, or not, without injury to itself or the fabric of the
building’. It is agreed in the present case that as matter of fact that ‘the
bungalow is not removable in one piece; nor is it demountable for re-erection
elsewhere’. That agreed finding is, in my view, one powerful indication that it
is not of the nature of a chattel. In many cases the problem of accession
arises in relation to some article or articles which have been placed in or
affixed to a building. An unusual, although by no means unique, feature of the
present case is that the alleged chattel is the building itself. This invites
the approach of simply asking whether it is real property in its own right.
Apart from the considerations which I already mentioned it seems to me that it
is proper to have regard to the genus of the alleged chattel. That approach was
adopted in the Australian case, Reid v Smith (1905) 3 CLR 656. At
p668 Griffith CJ said under reference to the decision in the lower court:
I differ from the learned judge in
thinking that it is not sufficient to show that the thing in question is a
dwelling-house — an ordinary dwelling-house, on a town allotment, in an
inhabited town. In the case of a similar building in another part of the
country, erected under entirely different circumstances, a different conclusion
might be drawn.
O’Connor J put the point more strongly,
at p679:
It would I think be stretching the rules
of the common law to a point at which they cease to be rules of common sense,
if it were to be laid down as a general
own weight on land, could ever be regarded as mere chattels, removable at the
will of the owner of the timber of which they are built.
In several cases before the Lands
Valuation Appeal Court in Scotland where the issue has arisen whether
particular subjects are heritable or moveable for the purposes of valuation for
local taxation the test has been applied by asking the question whether the
particular subjects belong to a genus which is prima facie of a
heritable character and, if they are, whether there are any special facts to
deprive them of that character. This approach was recognised in Assessor for
City of Glasgow v Gilmartin 1920 SC 488 and in John Menzies &
Co Ltd v Assessor for Edinburgh 1937 SC 784. It was later applied to
such subjects as residential chalets: Assessor for Renfrewshire v Mitchell
1966 SLT 53, contractors’ huts: Assessor for Dunbarton v LK McKenzie
& Partners 1968 SLT 82 and static caravans: Redgates Caravan Parks
Ltd v Assessor for Ayrshire 1973 SLT 52. Beyond question Mr Morris’
bungalow is of the genus ‘dwelling-house’ and dwelling-houses are generally of
the nature of real property. While it is situated in a rural setting it
evidently forms part of a development of a number of other houses whose
positions are even noted on the ordnance survey map. I find no factors which
would justify taking it out of the category of dwelling-houses. On the contrary
there are powerful indications that it and its constituent parts do not possess
the character of a chattel. It seems to me to be real property. If the problem
is approached as one of accession it has to be noted that in the present case
the bungalow is not attached or secured to any realty. It is not joined by any
physical link which would require to be severed for it to be detached. But
accession can operate even where there is only a juxtaposition without any
physical bond between the article and the freehold. Thus the sculptures in D’Eyncourt
v Gregory (1866) LR 3 Eq 382 which simply rested by their own weight
were held to form part of the architectural design for the hall in which they
were placed and so fell to be treated as part of the freehold. The reasoning in
such a case where there is no physical attachment was identified by Blackburn J
in Holland v Hodgson (1872) LR 7 CP 328, at p335:
But even in such a case, if the intention
is apparent to make the articles part of the land, they do become part of the
land.
He continued with the following
instructive observations:
Thus blocks of stone placed one on the
top of another without any mortar or cement for the purpose of forming a dry
stone wall would become part of the land, though the same stones, if deposited
in a builder’s yard and for convenience sake stacked on the top of each other
in the form of a wall, would remain chattels. On the other hand, an article may
be very firmly fixed to the land, and yet the circumstances may be such as to
show that it was never intended to be part of the land, and then it does not
become part of the land. The anchor of a large ship must be very firmly fixed
in the ground in order to bear the strain of the cable, yet no one could
suppose that it became part of the land, even though it should chance that
shipowner was also the owner of the fee of the spot where the anchor was
dropped. An anchor similarly fixed in the soil for the purpose of bearing the
strain of the chain of a suspension bridge would be part of the land. 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 such as to shew that they were intended to be part of the
land, the onus of shewing that they were 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 shew that it was intended all
along to continue a chattel, the onus lying on those who contend that it is a
chattel.
It is important to observe that intention
in this context is to be assessed objectively and not subjectively. Indeed it
may be that the use of the word intention is misleading. It is the purpose
which the object is serving which has to be regarded, not the purpose of the
person who put it there. The question is whether the object is designed for the
use or enjoyment of the land or for the more complete or convenient use or
enjoyment of the thing itself. As the foregoing passage from the judgment of
Blackburn J makes clear, the intention has to be shown from the circumstances.
That point was taken up by AL Smith LJ in Hobson v Gorringe
[1897] 1 Ch 182, at p193, a decision approved by this House in Reynolds
v Ashby & Son [1904] AC 466, where he observes that Blackburn J:
was contemplating and referring to
circumstances which shewed the degree of annexation and the object of such
annexation which were patent for all to see, and not to the circumstances of a
chance agreement that might or might not exist between the owner of a chattel
and a hirer thereof.
Regard may not be paid to the actual
intention of the person who has caused the annexation to be made. In Re De
Falbe [1901] 1 Ch 523, at p535, Vaughan Williams LJ said that there was not
to be an inquiry into the motive of the person who annexed the articles, ‘but a
consideration of the object and purpose of the annexation as it is to be
inferred from the circumstances of the case’. As Lord Cockburn put it in Dixon
v Fisher (1843) 5 D 775, at p793 ‘no man can make his property real or
personal by merely thinking it so’. The matter has to be viewed objectively. If
one considers the object or purpose which the structure serves by being placed
where it is, it was clearly placed there to enable the amenity of Holt’s Field
to be enjoyed through the establishment of a residence. The bungalow was built
there in order that people could live in what is represented as being an
idyllic rural environment. The Court of Appeal, however, had regard to the
belief of Mr Morris that he owned the bungalow as evidence of his intention.
But his belief cannot control the operation of the law in relation to accession
and the matter of intention has to be judged objectively.
Indeed the fact that the freeholders may
have believed and reminded the occupants that their rights to remain could be
terminated, which was also a factor on which the Court of Appeal relied, cannot
affect the operation of the law.
Accession also involves a degree of
permanence, as opposed to some merely temporary provision. This is not simply a
matter of counting the years for which the structure has stood where it is, but
again of appraising the whole circumstances. The bungalow has been standing on
its site for about half a century and has been used for many years as the residence
of Mr Morris and his family. That the bungalow was constructed where it is for
the purpose of a residence and that it cannot be removed and re-erected
elsewhere point, in my view, to the conclusion that it is intended to serve a
permanent purpose. If it was designed and constructed in a way that would
enable it to be taken down and rebuilt elsewhere, that might well point to the
possibility that it still retained its character of a chattel. That the
integrity of this chalet depends upon it remaining where it is provides that
element of permanence which points to its having acceded to the ground. The
Court of Appeal took the view that the bungalow was no more annexed to the land
and just as much a chattel as the greenhouse in Deen v Andrews
[1986] 1 EGLR 262 (or, as I have already mentioned, the large shed in Webb
v Frank Bevis Ltd). But there is a critical distinction between Deen
v Andrews and the present case in the fact that the greenhouse was
demountable while the bungalow is not. I prefer the conclusion reached by the
learned assistant recorder after hearing the evidence and visiting the site to
form his own impression of the situation. As he observed towards the end of his
judgment, a judgment which deserves commendation for the detail and care which has
gone into it:
… it seems to me clear that at least by
1985 and probably before, it would have been clear to anybody that this was a
structure which was not meant to be enjoyed as a chattel to be picked up and
moved in due course but that it should be a long-term feature of the realty
albeit that, because of its construction, it would plainly need more regular
maintenance.
In my view, the conclusion reached on
this matter by the assistant recorder was correct. The appeal should be allowed
and the order made by him relating to Unit 6 should be restored.
LORD NOLAN and LORD NICHOLLS OF
BERWICK agreed and did not add anything.
Appeal allowed.
