Intro + Land, Fixture and Chattels
Intro + Land, Fixture and Chattels
Intro + Land, Fixture and Chattels
Basic Law
o Article 6, 7, 29, 105 and 120
Statutory Law
o Most important: Statutory Regime
Conveyancing and Property Ordinance (Cap 219)
o Other Important: Statutes, eg.
Land Registration Ordinance
New Territories Ordinance
Limitation Ordinance
Common Law
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WHAT IS PROPERTY
No one definition
Is Classified
o s3 of Interpretation and General Clause Ordinance (Cap 1), states property
includes:
(a) money, goods, choses in action and land; and
(b) obligations, easements, and every description of estate, interest and
profit, present or future, vested or contingent, arising out of or incident to
property defined in (a)
Types
Personal property (moveable)
o Chose in action (tangible property)
o Chose in possession (intangible property)
Real property (immoveable/land)
Rights
Personal Rights
o Rights in Personam
Right against one person, A v B
Right against THAT person for THAT thing
Property Rights
o Rights in Rem
Right against everybody, A v B, C, D
Property rights bind everyone
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If you have property, there may be rights that are associated with the ownership of
that property.
A property right is not a single, monolithic right
Property allows the person who holds it to exercise a number of rights in respect of
the object of property, e.g.:
o Use and enjoy the object
o Alienate it
o Create other rights or interests on it (e.g., easement, mortgage)
o Make it the object of a trust
Ownership of property -> Rights arise from that ownership (Property Right)
National Provincial Bank Ltd v Ainsworth [1965] AC 1176 at 1247-1248
A man, his wife and children were occupants of a piece of property, though the defendant
was the sole registered proprietor. The property was later used to secure an overdraft for
the his company, and the bank which granted the overdraft registered a charge against the
house accordingly. However, prior to arrangement with the bank, the man had abandoned
the property, along with his family, and the wife was permitted to continue living there rent
free as part of the separation agreement. The bank sought possession of the property,
which the wife resisted.
certain interests are ‘overriding’, meaning that even if they are not registered they
can be asserted against those with registered interests in the property. One of these
overriding interests is any interest belonging to a person in actual occupation of the
property (para. 2).
The issue in this case was whether the bank could claim possession of the house
despite the continued occupation there of the defendant’s family. In particular, the
court was asked to determine what sort of interest needed to be coupled with the
actual occupation.
The House of Lords held the wife had no overriding interest, and so the bank could take
possession of the property.
The House of Lords held that the necessary interest had to be proprietary. They held that
the separation agreement permitting the wife to remain in the house was a mere license,
and licenses are a personal, non-proprietary right. As the wife did not have a proprietary
interest in the house, she had no interest which could amount to an overriding interest. She
could not, therefore, resist possession.
(Lord Wilberforce)
“Before a right or an interest can be admitted into the category of property, or of a right
affecting property, it must be definable, identifiable by third parties, capable in its nature of
assumption by third parties, and have some degree of permanence or stability.”
Definable
Identifiable
Assumption by third parties
Permanence and stability
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Core problems of property?
o Recognition (rules on formalities)
o Enforceability (rules on priority)
WHAT IS LAND
Common Law Definition
‘cuius est solum est usque ad coelum et ad inferos’
(property holders have rights not only to the plot of land itself, but also the air above and the
ground below)
Subject to:
1) minerals: s 3, Mining Ordinance; or
2) treasure trove: s 10, Antiquities and Monuments Ordinance
“He who owns the land owns everything reaching up to the very heavens and down to the
depths of the earth.”
Maxim is of medieval origins.
Demonstrates the three-dimensional quality of land ownership or the key of space.
But it is today heavily qualified and certainly cannot be understood literally,
especially in respect of airspace.
o Even if criticised, it may “encapsulat[e], in simple language, a proposition of
law which has commanded general acceptance.”: Bocardo SA v Star Energy
UK Onshore Ltd [2011] 1 AC 380.
Statutory Definition**
Section 2 of the Conveyancing and Property Ordinance:
Land includes -
a) land covered by water;
b) any estate, right, interest or easement in or over land;
c) the whole or part of an undivided share in land and any estate, right, interest or
easement in or over the whole or part of an undivided share in land; and
d) things attached to land ie fixtures.
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FIXTURES AND CHATTELS
As the definition makes clear, things attached to land or permanently fastened to anything
attached to land are regarded as part of land
In Elitestone Ltd v Morris [1997] 1 WLR 687, the House of Lords had to consider the
question of whether a wooden bungalow resting on concrete pillars attached to
land had merged with the land for purposes of a Rent Act 1977 dispute.
A threefold classification was adopted for objects brought onto land.
a) a chattel
i. anything you can take away, eg. Laptops, dogs, not part of land
b) a fixture
i. affixed to land, test to determine whether things are affixed
c) art and parcel of the land itself
i. for purpose
For most intents and purposes, the substantive results of (b) or (c) are identical.
THE TEST
The classic case setting out the test for whether an object on land is a fixture or a chattel is
Holland v. Hodgson (1872) LR 7 CP 328
The owner of a mill acquired some looms for use in the mill and attached them to
the floor by way of nails. The mill (i.e. the land) was then mortgaged and when he
failed to keep up with repayments, repossessed by the mortgagee.
The court held that, by virtue of this attachment and despite the fact that they could
be easily removed, the looms had become fixtures and therefore passed with the
land to the mortgagee.
Blackburn J laid down two factors to be taken into account in determining whether an
object was a fixture or remained a chattel, namely:
i. the degree of annexation; and
ii. the object of the annexation.
DEGREE OF ANNEXATION
→ PURPOSE OF ANNEXATION
→ CHATTEL VS FIXTURE OR PART & PARCEL TO THE LAND
Practical Significance:
The fixture/chattel test is of great significance in a number of different situations:
i. determining that an object is a fixture effects an expropriation of the title held by
the owner of the object;
ii. determining whether a particular object is part of the subject-matter of a
sale/mortgage of land where there is no specific indication one way or another;
iii. where property was passed upon death by way of either realty or personalty,
determining who inherited the particular object;
iv. determining whether an offence of theft was possible (fixtures can only be the
subject of theft upon severance);
v. determining the applicability of formalities for transactions relating to the object
(because land transactions are subject to many more formalities than transactions
for chattels);
vi. establishing the extent of tax liability (which is increasingly the most important
situation in which the fixture/chattels distinction is significant).
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DEGREE OF ANNEXATION
The test of the degree of annexation is the older of the two tests but today is regarded as
merely a prima facie test.
If “the article in question is no further attached to the land than by its own weight it is
generally considered to be a mere chattel”: Holland v Hodgson (1872) LR 7 CP 328 per
Blackburn J.
Conversely, “an article which is affixed to the land even slightly is to be considered
as part of the land”: Holland v Hodgson (1872) LR 7 CP 328 per Blackburn J.
But “[a] thing may be as firmly affixed to the land by gravitation as by clamps or cement.”:
Snedeker v. Warring (1854) 12 NY 170 per Parker J, approved in Elitestone Ltd v Morris
Thus, in Elitestone Ltd v Morris [1997] 1 WLR 687, a house resting on its own weight
was nevertheless regarded as part of the land (technically not a fixture) simply by
way of attachment by gravity.
The bungalow could not be removed either as an entire unit or in sections without
being destroyed. Whether a structure becomes part of the land itself depends on
the degree of annexation, and a house which cannot be moved without being
destroyed cannot have been intended to be a chattel but must have been intended
to form part of the land
One of the problems though, with the degree of annexation test, is that what historically
might have been difficult to remove without damaging the land is today not necessarily the
case (or at least it is possible to effect repairs).
Also, contrast the result in Elitestone Ltd v Morris [1997] 1 WLR 687 with that in Kiah
Bte Hanapiah v Som bte Hanapiah [1953] MLJ 82, which concerned a wooden Malay
house resting on stilts in Penang. It is arguable that the result in that case owed
much to local custom.
PURPOSE OF ANNEXATION
● As the degree of annexation test merely provides a prima facie classification, the
purpose of annexation test is “of first importance”: Hamp v Bygrave
Hamp v Bygrave
Dispute arose between vendors and purchasers of freehold property
Purchasers claimed that a number of items, garden ornaments, passed as fixtures
and were wrongfully removed by vendors – and alternatively, if not fixtures, were by
express agreement included in purchase price (stone urns, stone statute and lead
through)
Vendors argued all, except patio lights, were chattels and denied express agreement
Boreham J
First, what was the degree of annexation – there is no doubt none of the items
were fixed or attached to the land or any structure. Each rested by its own weight
Second, what was the purpose of annexation?
(a) Items which are firmly fixed to the land may remain chattels if:
o The purpose of the annexation was to enjoy them as chattels
o The degree of annexation was no more than was necessary for that purpose
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(b) articles which are intended to improve, in the sense of being a feature of, the
land through their annexation is by no more than their own weight may be regarded
as fixtures
In this case, Ds suggested that one way of reducing the purchase price would be to exclude
those items or some of them – could only be because they were regarded as otherwise part
of the property to be sold -> fixtures
- Were mentioned in the agent’s particulars (marketing material)
- During negotiations, the seller offered to exclude them and reduce the price –
showed that seller thought they were part of the property
- Seller authorised solicitors to state ‘garden furniture’ was included in the sale and
the items were still on the land at the time -> even if not fixtured, seller would have
been estopped from denying they are part of the property
Prima facie, however, an object resting on the ground by its own weight alone is not a
fixture; see Megarry and Wade, p 716. Conversely, an object affixed to realty but capable of
being removed without much difficulty may yet be a fixture, if, for example, the purpose of
its affixing be that ‘of creating a beautiful room as a whole’ (Neville J in Re Whaley [1908] 1
Ch 615 at 619). And in the famous instance of Lord Chesterfield's Settled Estates [1911] 1 Ch
237 Grinling Gibbons carvings, which had been affixed to a suite of rooms 200 years
earlier, were held to be fixtures.
Elaborating on the test of object of annexation, the court in Hellawell v Eastwood (1851) 6
Ex. 295 remarked: “whether it was for the permanent and substantial improvement of the
dwelling ... or merely for a temporary purpose, or the more complete enjoyment and use of
it as a chattel.”
● Held that some cotton-spinning machines which had been screwed to the floor to
render them steadier and more capable of convenient use as chattels and which
were capable of removal without the least injury to the fabric of the building or to
themselves were not fixtures.
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Two contrasting examples in Holland v Hodgson (1872) LR 7 CP 328 by Blackburn J are
instructive.
● 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
contend that it is a chattel.
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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.”
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. 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.
Reid v Smith (Australian case) It was held that the absence of any attachment did not
prevent the house forming part of the realty. In Snedeker v Warring, Parker J said: A thing
may be as firmly affixed to the land by gravitation as by clamps or cement. Its character
may depend much upon the object of its erection.
Lord Lloyd of Berwick: 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
Applying that analogy to the present case, I do not doubt that when Mr Morris’s
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 onto the site seems to be so clear
that the absence of any attachment to the soil (save by gravity) becomes an
irrelevance.
Leigh v Taylor
Madame De Falbe was a life tenant of a stately home, in which she had hung valuable
tapestries belonging to her. The canvasses were nailed over strips of wood which were
themselves nailed to the wall, and the tapestries were stretched over the canvas and
fastened to it by tacks. Mouldings, which were also fastened to the surface of the wall, were
placed round each piece of tapestry.
The House of Lords found in favour of the estate of Madame de Falbe; the tapestries
were chattels
Considered closely the degree of annexation, which was as slight as the nature of the
tapestries would permit, and the intent of the life tenant in hanging the tapestries,
which were “put up for ornamentation and for the enjoyment of the person while
occupying the house”. In the circumstances, therefore, the chattels remained the
personal property of Madame de Falbe.
The court held that a four-ton statue was sufficiently affixed merely by its weight
Snedeker v. Warring
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.”
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A number of tests have been use to differentiate between fixtures and chattels, but a matter
of precise analysis have to used as a determinant. Blackburn J. in Holland v. Hodgson, L.R.7
C.P.P. 328, 335, sums it up as; “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.”
AIR-CONDITIONERS
Irene Loong v Pun Tsun-hang[1959] DCLR 192, “window type” air-conditioners were held to
be fixtures even if removable (they provided air to a ballroom)
“I do not think it has been shown in the case before me that the air-conditioners were
installed for a temporary purpose. No doubt it was anticipated (or at least hoped) that the
dancing-hall would flourish and that the business would continue for the duration of the
distrainor’s lease.”
There is no reason to think that if that had happened the air- conditioners would not
have remained until the end of the tenancy and that is sufficiently ‘permanent’ for
them to become part of the realty. In that respect the case is similar to Vaudeville
Electric Cinema, Ltd v Muriset (1923) 2 Ch 74 where the property in question was a
number of plush tip-up seats which belonged to the freeholders and which had
been secured to the floor of the cinema. It was held first that as the seats were
affixed to the land the onus lay on those who said they were not fixtures
An air-conditioner cannot be enjoyed separately from a room or building. Clearly
the purpose of installing these particular machines was to improve the premises by
rendering the atmosphere inside them more conducive to the practice and
enjoyment of the art of dancing and not for the better enjoyment of the machines as
chattels.
BUT Penta Continental Land Investment Co Ltd v Chung Kwok Restaurant Ltd [1967] DCLR
22, an air conditioner bolted to a frame with pipes that could easily be disconnected by
cutting pipes rebutted the presumption of fixture
air-conditioners bolted onto frames which rested on their own weight on a roof adjacent
to the premises were held not to be fixtures even though the ducts feeding the machine
were held to be fixtures. (rested by their own weight on the floor of the garage adjacent to
the restaurant
Placed greater weight on degree of annexation than purpose
Difference between Penta and Irene:
The particular machines he had to deal with were of the window type, bolted and screwed
to frames which themselves formed part of the building. In the present case I am basically
concerned with three machines bolted or screwed to frames, but which frames are not
themselves attached to the building, but merely rest by their own weight, or probably the
weight of the machines upon them – and connected to them are power wires which supply
electricity & ducts: The pipes have been welded to the three machines and to remove the
latter if it would necessary to cut the pipes with a welding torch, but this is by no means a
difficult operation and sometimes perhaps easier than removing bolts or screws which
have rusted solid with the passage of time. Northern Press etc v Shepherd (1908) which
was followed in the similar case of Hulme v Brigham [1943] 1 KB 152 is good authority for
the fact that the mere connection of the machine to the realty for the purpose of providing
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motive power is not by itself sufficient to alter the character of the machine and the
question is now whether the converse is true, whether the pipes which carry away the
product of the machines can be treated as an unimportant connecting link in like manner
as the wires that carry in the electricity. It is a fine point perhaps but after some debate
within itself I have come to the conclusion that this is the correct approach. The machines
are complete in themselves as machines, and though they would be of little use if not
connected to the ducts throughout the building, they would be of equally little use if not
connected to the electricity supply which drives them. Their position is analogous to that of
the batteries in Jordan v May [1947] KB 427, and for this reason I hold that they are not
fixtures but removable property within section 15 of the [Distress for Rent] Ordinance.
Orient Leasing (Hong Kong) Ltd v N P Etches [1985] HKLR 292, parts of a central air-
conditioning system installed by a developer were held to be fixtures even though the
degree of attachment of some parts was slight, and thus subject to the mortgage granted
over the land by the developer.
They are so attached to the system that they are part of the system and not, as in
Penta, a machine entire of itself which could function very well on its own, but
which just happened to be attached to some trunking – not self-functioning
machines just stuck on the end of some ducking – in this case, they are connected by
pipes that take water in to be processed within it, and take water out
“I have looked most carefully at the way in which they are connected. It is not like a
washing machine; it is not like a battery where you just plug it in… not trade fixtures
like a shop fitting, or refrigeration case…. They are machines which, although entire
in themselves, cannot function on their own as the Penta air-conditioning could.
Equally, the chillers: One only has to see them to realise that they are not attached
for the purpose of motive power; they are not self-functioning machines just stuck
on the end of some ducting, as in Penta; they are connected by pipes that take
water in to be processed within it, and take water out.
These cooling towers cannot cool anything, unless they are connected to something
to cool, whereas the air-conditioners in the Penta case could cool by natural means.
So for all those various reasons, first of all, the attachment; second, the degree of
attachment; third, the what I may call secondary attachment; fourth, the purpose; fifth, the
integral part of the system; sixth, the documentation concerning their installation, have led
me to the conclusion that every single one of these, in law, is a fixture.
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Applying these tests, I have no doubt that the air- conditioning unit in question, a
window type air-conditioner, was not a fixture. Its attachment to the wall was only
temporary. It could have been removed without much damage to the wall. Such an
air-conditioner was no different in nature from a ceiling fan or wall-lamp. All of these
items are, in my view, chattels rather than fixtures
Finally, in Sunbeam Investment Ltd v Incorporated Owners of Villa Veneto [2010] HKEC 1048,
the Lands Tribunal appears to suggest that apart from mobile air-conditioners, all other air-
conditioners would be fixtures.
In recent years, the courts in England have adopted a common sense approach in applying
the twofold test. In Chelsea Yacht and Boat Co Ltd v Pope, for instance, in deciding whether
a houseboat moored astern to a pontoon by rope mooring lines had become part of the
land, the English Court of Appeal not only considered the degree and purpose of
annexation, but also sought to support the conclusion on grounds of common sense.
Having concluded that the attachments could be undone without injury to the houseboat or
the land, and that the attachments were to prevent the houseboat from being carried by
the tide or the weather up or downstream and to provide services to it, Tuckey LJ added
that it was common sense that a boat on a river was not part of the land.
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