Plaintiff supplying motel with transportable factory-built bedroom units – Dispute on title as between plaintiff and subsequent owner of motel – Whether units fixtures or chattels – What intention to be inferred from design and means of attachment
The plaintiff manufactured preassembled bedroom and en suite bathroom units, which they hired out to motels and similar establishments as and when additional accommodation was required. It was the customer’s responsibility to prepare a concrete slab, housing a metal fixture at the precise location indicated by the plaintiff. After loading by means of a fork-lift truck, the units were transported by lorry from which they were winched on to the slab where each was secured by passing a total 12 nails through six brackets. An appearance of continuity was created by the application of roof tiles and by tying each unit to a low brick wall. On May 28 1987 the plaintiff agreed to supply and install nine units at an inn in Market Drayton, then owned and operated by B Ltd. The agreement was for a seven-year term at a monthly rent (before VAT) of £225 per unit plus a maintenance charge. It was expressly declared that the plaintiff would retain title to the units which were not to be considered as fixtures. Following installation, B Ltd soon encountered financial difficulties and conveyed the inn to its two directors who charged the inn in favour of a bank. Towards the end of 1990 the plaintiff obtained judgment against B Ltd for £31,105 arrears of rent. On February 5 1991 the plaintiffs terminated the agreement with B Ltd. B Ltd went into liquidation in June 1991 and in December 1991 the bank sold and conveyed the inn to the defendants who, after abortive negotiations with the plaintiff, declared that the plaintiff had no right to remove the units. The plaintiff brought proceedings seeking return of the units and damages for conversion. The defendants contended that the units had become part of the land. It was common ground that the plaintiff could not, as against the defendants, assert its contractual right of removal.
Held Judgment was given for the plaintiff.
1. It was plain from the more recent authorities that the paramount consideration was the purpose of annexation, the degree and means of annexation affording material from which such purpose might be inferred; the greater the degree of annexation, the heavier the burden placed on the party contending that the object was a chattel.
2. Although the declaration in the agreement had to give way to the reality of the transaction (see by parity of reasoning Street v Mountford [1985] 1 EGLR 128) it was clear on the evidence before the court that the units were so designed that they could not only be secured to the slab but could also be removed and relocated without being dismantled. The plaintiff had accordingly discharged the burden of showing that the installation was not intended to be permanent: see generally Elitestone v Morris [1997] 2 EGLR 115. Accordingly little importance could be attached to those features solely intended to give the appearance of permanence. Strong persuasive authority in the plaintiff’s favour could be found in Billing v Pill [1954] 1 QB 70 where a nissen hut was held to be capable of being stolen for the purposes of the Larceny Act 1916.
Martin Gibson (instructed by Laytons) appeared for the plaintiff; Jeffrey Littman (instructed by Max Engel & Co, of Northampton) appeared for the defendants.