Chattels that are affixed to land may form part of the land, despite the parties’ expressed or implied intentions.

Objects brought on to land fall into one of three categories. They may be chattels, or fixtures, which, in law, belong with the land, or they may form part of the land itself. The tests used to classify objects were applied last year in Peel Land and Property (Ports No 3) Ltd v TS Sheerness Steel Ltd [2013] EWHC 1658 (Ch). The case concerned the ownership of plant and machinery in a steel mill and dealt with the position as between a landlord and tenant during the term of a lease. More recently, in Lictor Anstalt v Mir Steel UK Ltd [2014] EWHC 3316 (Ch), the battle for ownership of a steel mill was triggered by a sale of the land on which it stood, which made it impossible for a third party, who claimed to own the mill, to dismantle and remove it from the land. The claimant company had supplied the parts needed to construct the steel mill. The owner of the site assembled the parts and began using the mill pursuant to an agreement that stated that the equipment belonged to the company and that the company was entitled to dismantle and remove it at any time after giving reasonable notice of its intentions. The site owner promised not to sell or mortgage the mill, but went into administration. The administrator sold the business subject to the company’s claim to the equipment. The company argued that the steel mill was a chattel, or comprised a collection of chattels, to which it retained title. The buyer argued that the mill had become part of the land. Which of them was correct? The mill was independent of the building that housed it. It was more than 300 metres long and weighed approximately 4,000 tonnes. It was attached to the foundations and concrete floor slabs by large steel bolts and was served by water and electricity. It had a life expectancy of 40 or 50 years – and the experts agreed that the equipment would be so difficult, time consuming and expensive to remove that this would occur only in exceptional circumstances. The company pointed to the provisions of its agreement with the site owner. However, the court ruled that terms agreed between the fixer of an object and the owner of the land do not affect the status of the object. The terms of an agreement may enable a party to sever objects from land as between the parties to the contract (and, where an equitable right is conferred by the contract, as against some third parties). However, this will not prevent chattels, once fixed, from becoming part of the land and from belonging to the owner of the land for so long as the objects remain fixed. The question was whether the objects were designed for the use and enjoyment of the land or of the objects themselves. In this case, the equipment was annexed to the land as a permanent or semi-permanent structure, and it belonged to and passed with the land. However, this did not necessarily excuse the buyer from liability in tort for procuring a breach of the contract between the original site owner and the company that supplied the mill. The legal implications flowing from the judge’s conclusions on this point will be covered in a separate Practice Point to be published shortly. Allyson Colby is a property law consultant