Chattels, Fixtures and 300 Years of Case Law

February 15, 2018

By Andrew Williams

Many property litigators are used to receiving urgent instructions from a commercial tenant whose lease has just been forfeited. It may be that their instructions are for you to apply for relief from forfeiture. But I’m going to consider an alternative scenario. What about the tenant who doesn’t mind that her lease has come to an end, but who wants to retrieve her possessions? If she is relocating her business she may need them urgently and be looking to you to issue an application for an injunction on her behalf.

When a tenant leaves chattels behind, the landlord or even the subsequent tenant, may become liable in conversion. However a court would be likely to find that he is an involuntary bailee and so he would have a defence if he can prove that he had acted reasonably. For instance he may have had reasonable grounds for believing that the tenant had abandoned the items and that belief may  have justified any decision he may have made to, say, put the objects up for sale at auction.

Therefore it is in the interests of the former tenant to notify the landlord as soon as possible of her claim for the chattel to be returned. And if the lease provides that ownership of any items left behind shall revert to the landlord unless the tenant claims them within a particular time period, the tenant must make sure that her request is given to the correct person at the right address in accordance with the lease.

In short, then, a tenant is usually in a good position proving her entitlement to the return of chattels.

But what if the items in question are fixtures as opposed to chattels? Then the position is very different.

A fixture will pass with the land on the termination of the tenancy. If it is a landlord’s fixture, you’d hardly expect the position to be any different. Yet, crucially, even though a tenant may generally remove a tenant’s fixtures during the tenancy, she may not do so once the tenancy has come to an end, whether by forfeiture or in any other way. (There are slight qualifications to this rule, in particular concerning the rights of a third party.)

So it will be clear from what I have said that a tenant whose lease has been forfeited will want to argue that as many of her possessions as possible were chattels rather than fixtures. Yet the law governing the classification of chattels and (tenants’) fixtures is hardly clear-cut. The case-law spans over 300 years. During that time there have been so many judgments that those with an eagle eye can spot plenty of inconsistent decisions and approaches.

The early law placed most importance on the degree to which the object in question was annexed to the land. Yet this often created injustices. It is easy to see why. Imagine a dry stonewall (which, you’ll recall, has no cement). Surely no-one would consider that this should be thought of as a chattel.  Yet if the same stones were placed in a heap on the ground – especially in a builder’s yard –  it’s unlikely that we’d think of them as amounting to a fixture. This was the observation made in Holland v Hodgson [1872] L 7CP 328, 335, a case that nevertheless went on to reach the unremarkable decision that a shop counter affixed to the floor was a tenant’s fixture.

With that in mind, we should move on to consider the second main test which nowadays is the predominant one. In particular, one is to consider the purpose of the annexation. In particular, was the article affixed for the improvement of the property or for the temporary purpose of improving the enjoyment of the object as a chattel? It isn’t the intention of the parties at the time the object was brought into place that matters. Rather, the test is an objective one:  what object and purpose of the annexation could be inferred from the circumstances of the case? (Elitestone v Morris [1997] 2 All ER 513)

Another test is whether the removal of the object damages the building or land, and indeed whether it damages the object itself.

Given the numerous factors for the court’s consideration, small nuances can make a big difference. For instance, fluorescent light fittings were found to be chattels in one case (Young v Dalgety [1987] 1 EGLR 116) but recess light fittings were held to be fixtures in another (TSB Bank plc v Botham [1996] EGCS 149).

It’s just as well that the parties are entitled to agree between themselves in the lease whether articles should be classified as chattels or fixtures. Whether the tenant who comes to your office – out of breath and desperate for an immediate result – has such a conveniently-drafted lease, though, is another matter.

Andrew is a member of the property team at Exchange Chambers. He is recognised as a leading individual in Legal 500 2017.