The doctrine of fixtures and boundaries (wk 6) PDF

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contracts - fixtures and boundaries...

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THE DOCTRINE OF FIXTURES AND BOUNDARIES FIXTURES It isn’t always clear whether a thing is chattel or realty, so we need a process to resolve disputes. Fixtures are goods that have become annexed to the land. Two tests: (1) The degree of annexation; and (2) The object of annexation.

DEGREE OF ANNEXATION Attachment creates a presumption of fixture: Belgrave Nominees Pty Ltd v Barlin-Scott Airconditioning (Aust) Pty Ltd [1984] VR 947 -

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even a slight fixing Belgrave was the owner of two buildings and subcontracted with another for fitting and installation of air conditioner. There was a chiller placed on each building however it was not screwed in. The air conditioner was attached to water by bolts. Barlin wasn’t getting paid by subcontractor so went to get the air cooler back. Belgrave argued that it was a fixture. The question was whether something sitting on its own weight was annexed

BOP: If the item is attached then the BOP lies with the party claiming the item is a chattel. If the item is unattached then the BOP lies with the party claiming the item is a fixture. BUT just because an item is unattached does not mean that it can not be considered a fixture: D’Eyncourt v Gregory (1866) LR 3 Eq 382 -

Life tenant builds himself a manor house and brings many things eg marble pillars, tapestries, statues, paintings. He died and left his belongings and house separately. Argument was that they weren’t fixtures. Just because the items were affixed did not rule out the second test.

Elitestone Ltd v Morris [1997] 1 WLR 687: -

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Could wooden bungalows resting on concrete pillars become part of the realty even though they had no degree of annexation? P was the freehold owner of the land which was divided into 27 lots. D occupied a bungalow under one lot which rested on a concrete foundation. P wanted possession of the land and contended the bungalow was not a fixture. Lord Lloyd: a house which is constructed in away such that it cannot be removed except by destroying it must have been intended to form part of the realty.

OBJECT OF ANNEXATION The primary question under this test is whether the chattel was joined to the land for its better use as a chattel OR for the improvement of the land?

The intention of the parties is only relevant to the extent that it can be derived from the degree and object of annexation (subjective intention irrelevant): Elitestone v Morris [1997] 1 WLR 687 HOWEVER, the common intention between parties allows subjective intention to be relevant in some cases (provided it does not prejudice the interests of any third parties: National Australia Bank v Blacker (2000) 179 ALR 197 [12] -

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Mortgage wasn’t being paid and there was an argument as to whether the banks could come and get all of the equipment on land. When Blacker left they took all of the irrigation equipment and the applicant complained that th equipment was a fixture. It was bolted to the land but was this for better use of chattel or improvement of the land? Here, there was no evidence of intention to make the system part of the land. All valves/hoses etc were easily removable and the cost of doing so was much less than their value. All equipment was chattel

Will be a MATTER OF FACT; the same item used in different ways might be a fixture or chattel: Holland v Hodgson (1872) LR 7 CP 328 For example: In Leigh v Taylor [1902] AC 157, valuable tapestries stretched out on a canvas and nailed to boards and hung on wall were chattel. It was for the better viewing of the tapestries and was the only way you could hang it. In Re Whaley [1908] 1 Ch 615, Tapestries were hung in an Elizabethan style house and were fiited specially to the rooms. The court said that they were for better use of the property; enhancing the Elizabethan Factors to consider on determining the purpose of annexation: -

whether the attachment was for the better enjoyment of the property generally or for the better enjoyment of the land and/or buildings attached the nature of the property the subject of affixation whether the item was to be in the position either permanently or temporarily the function to be served by the annexation of the item

CHATTELS ANNEXED WITHOUT PERMISSION Generally, an item annexed to another’s land without permission cannot be recovered: Brand v Chris Building Society Pty Ltd [1957] VR 625 -

A building company employed by P built a house on the wrong piece of land and could not retrieve the house.

TENANT’S FIXTURES AND REMOVAL At common law tenants’ fixtures may be removed by the tenant provided they were installed for domestic, trade or ornamental purposes. If removal will result in substantial damage to the freehold, then they cannot be removed: Spyer v Phillipson [1931] 2 Ch 183

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If they do remove fixtures, they are liable in waste Tenant put up antique panelling and when he died the executors claimed right to all antiques in the house. Could keep them if they could be removed without damaging

RESIDENTIAL TENANCIES ACT 1995 (SA) s 70 ALTERATION OF PREMISES (1) A tenant must ask permission before altering premises; (a) a landlord must not unreasonably withhold consent to an alteration that is necessary for provision of infrastructure or a service (2) A tenant may remove a fixture unless its removal would cause damage (3) If removal causes damage the tenant must notify the landlord and at the option of the landlord compensate them for the damage or repair of the premises

Under a fixed term tenancy fixtures must be removed before the tenancy expires: Geita Sebea v Territory of Papua (1941) 67 CLR 544 If not fixed term, the tenant has a reasonable time to remove fixtures: D’Arcy v Burrelli Investments Pty Ltd (1987) 8 NSWLR 317 Agricultural fixtures cannot be removed by a tenant: Elwes v Maw (1802) 102 ER 510 BOUNDARIES Traditionally it was held that cujus est solum ejus est usque ad coelum et ad infernos (one owns the land from heaven down until hell) but this is ill suited to the modern world.

AIRSPACE Property in airspace was recognised by the common law and was real property: Re Lehrer and the Real Property Act (1960) 61 SR (NSW) 365 Kelsen v Imperial Tobacco Co (of Great Britain and Ireland) Ltd [1957] 2 QB 334: -

There was a sign protruding over adjacent shop which constituted trespass to airspace.

Gifford v Dent [1926] WN 336 -

a sign protruding four feet eight inches held to be a trespass.

Wandsworth Board of Works v United Telephone Co (1884) 13 QBD 904 -

private telephone wires at a height of 30 feet held to be a trespass

Trespass is actionable per se; no actual harm is required. The interference only needs to pass through the height necessary for the reasonable use and enjoyment of land: Davies v Bennison (1927) 22 Tas LR 52 -

shotgun fired over land was trespass

Even if use of airspace would be of no inconvenience to landowner, there is no entitlement for others to use that airspace without permission: LJP Investments Pty Ltd v Howard Chia Investment Pty Ltd (1989) 24 NSWLR 490

What is the limit? Rights in airspace restricted to such height as is necessary for the ordinary use and enjoyment of land and the structures on it: Baron Bernstein of Leigh v Skyviews and General Ltd [1978] 1 QB 479 -

Aerial photography of land via phone The interference was hundreds of feet above ground and therefore above the height necessary for the reasonable use and enjoyment of land

SUBSOIL The common law can recognise a proprietary interest in minerals which can be conveyed with or severed from the land: Chirnside v Registrar of Titles [1921] VLR 406 BUT gold and silver vest in the Crown: Case of Mines (1568) 75 ER 472 Along with all minerals: Mining Act 1971 (SA) s 16 and Petroleum and Geothermal Energy Act 2000 (SA). Estate holder still maintains control over the soil to a ‘considerable depth’: Di Napoli v New Beach Apartments Pty Ltd [2004] NSWC 52 [18] -

Used anchors that went under Di Napoli’s land and that was trespass

LAND BOUNDARIES Can be natural or artificial Artificial (or fixed) boundaries are defined by either survey marks or survey pegs, Error in title through incorrect description in register, may be corrected or indefeasibility may apply. Error in contract for transfer allows rescission if fundamental. Natural boundaries are those defined by some natural feature eg shoreline. This can be problematic as natural features change over time. Land adjoining tidal water governed by mean high water mark unless contrary is shown Non-tidal water: adjoining owner owns land that is above tidal reach. Boundary taken to be the middle

ACCRETION AND EROSION An increase is size of the estate through addition to the size is called accretion. the removal of land from the shore is erosion. Where accretion occurs, the title passes to the adjacent owner or the Crown: Hill v Lyne (1893) 14 LR (NSW) 449. Southern Centre of Theosophy Inc v South Australia [1982] AC 706 PC: 20 acres of new land formed through accretion. Alterations by wind as well as by water. Held: the additional 20 acres could be added to the 500 acre estate.

For the doctrines of erosion or accretion to apply the following must be satisfied: (1) Must be identified in terms of shoreline (2) Must be so slight as to be imperceptible: Gifford v Lord Yarborough (3) change cannot be brought about intentionally Imperceptibility means imperceptible to the naked eye not imperceptible after a long period of time. Southern Centre of Theosophy Inc v South Australia [1982] AC 706 PC at 720.

ENCROACHMENT A permanent intrusion upon another’s land by a building At common law, you lose the building: Brand v Chris Building Society Pty Ltd [1957] VR 625 Equity will intervene where the encroached upon owner knew of the error but did nothing to rectify it: Ramsden v Dyson (1)1866 LR 1 HL 129 The Encroachment Act 1944 (SA) operates to ameliorate some of the harshness and allows the court to make orders of compensation. However, it has been held that this legislation only applies where a building straddles a boundary not where the building is located entirely on the wrong land: Carlin v Mladenovic (2002) 84 SASR 155 -

Carlin owned two houses and put up wall and sold to new person nowing their place was encroaching on another. Adjoining owners said if the whole house is encroaching bad luck the get to keep it

THE ENCROACHMENT ACT 1944 (SA) Section 2: "adjacent owner" means the owner of land over which an encroachment extends; "encroaching owner" means the owner of the land contiguous to the boundary beyond which an encroachment extends; "encroachment" means encroachment by a building, and includes encroachment by overhang of any part as well as encroachment by intrusion of any part in or upon the soil; "owner" means any person entitled to an estate of freehold in possession— (a)

whether in fee simple or for life or otherwise;

(b)

whether at law or in equity;

(c)

whether absolutely or by way of mortgage;

Either the adjacent owner of the encroaching owner may apply for relief under s 4(1) s 4(2) grants a broad discretion to the court to ‘make such orders as it deems just’ eg

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removal of encroachment payment of compensation to the adjacent owner conveyance of the land to the encroaching owner

When determining what compensation should be paid to the adjacent owner the court must award at a minimum the unimproved capital value of the land (s 5(1)). If the encroachment was intentional or negligent then the minimum amount of compensation is three times the unimproved capital value of the land (s 5(1)). Any order for compensation to the adjacent owner may be registered with the Land Titles Office as an encumbrance on the encroaching owner’s land (s 6).

THE FENCES ACT 1975 (SA) An Act which provides a means of determining fencing disputes. (1) Where any difference or dispute arises in relation to fencing work, or any liability arising under this Act, any person affected by the difference or dispute may by application to the court seek a determination of the matter. (2) Upon the hearing of an application under subsection (1) of this section the court may determine the matter in such manner as it considers just and may— (a) make any finding, determination or order in relation to the erection of a fence, the nature of the fence to be erected, the line of fence to be adopted and the amount of compensation (if any) to be paid for loss of occupation of land as a result of the erection of a fence otherwise than upon the boundary of contiguous land; Must serve notice of intention to perform work – s 5 Other owner can dispute by serving a cross notice – s 6 Failure to reply within 30 days will be tacit consent to the proposal – s 7 After 30 days work may be commenced - s 8 Normally liable for 50% of the cost (unless the fence is an expensive model)...