7.1   Introduction

The law relating to fixtures is concerned with categorisation: it examines when an independent chattel is to be regarded as having become a part of the land. Basically, a fixture refers to a personal chattel which has become so annexed to land that it loses its independent status and is subsequently regarded as constituting a part of the land itself. As noted by Sir Frederick Jordan in Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700:

A fixture is a thing, once a chattel, which has become, in law, land through having been fixed to land. The question whether a chattel has become a fixture depends upon whether it has been fixed to the land and, if so, for what purpose.

Land will automatically include certain objects which are naturally affixed to it, such as trees, plants and streams, and it is not necessary to prove that these natural objects comply with the fixture tests. Where, however, a separate chattel is attached or annexed to the land in some way, it is necessary to consider whether or not the attachment is such that it changes the character of the item and effectively transforms the object into a part of the land. Where this occurs, the chattel will be categorised as a fixture. Such categorisation will depend upon proof that the established fixture tests have been satisfied. Where a chattel has become a fixture, it will constitute real property from that point onwards. Alternatively, if the fixture tests are not satisfied, the object will continue to be categorised as a chattel.

7.2   The relevance of fixtures

There are many general instances where the question of whether a chattel has become a fixture will be of significance. However, there are a number of transactions where this issue has a particular relevance. The question has notable importance in circumstances where the land is being sold, mortgaged or leased. The reason for this is that, in such cases, questions often arise concerning the exact character and content of the land. For example, where land is being sold pursuant to a contract of sale, upon settlement, the purchaser will receive not only the actual land, but also all chattels which have become fixtures. There will be no need to actually specify the fixtures within the terms of the contract because they will automatically pass with the transfer of the land. If the chattel has not become a fixture, it cannot pass to a purchaser of the land unless it has been expressly included within the contract of sale. Hence, if a purchaser wishes to acquire a chattel which is attached to the land, unless it is clear that the chattel has become a fixture, it should be listed as a part of the property being sold under the contract.

Where the land is subject to a mortgage, it will also be important to determine whether or not a chattel which is attached to the land has become a fixture. A mortgagee will only be able to enforce security rights against the land which is the subject of the mortgage: the mortgaged land will include all fixtures, but not chattels which have not satisfied the fixture tests. Hence, if a chattel is attached to the land but is proven not to have become a fixture, the security rights held by the mortgagee will be unenforceable against the chattel.

Finally, and perhaps most importantly, fixtures are important in the context of leases. Where a tenant takes out a lease, he or she will often attach chattels to the land; the annexation may be effected for a number of different domestic, commercial or industrial purposes. Once the lease expires, it will be necessary to determine whether the annexed chattels have become fixtures, so that when possession of the land revests in the landlord, the landlord acquires full title to the fixtures and the tenant retains independent ownership of the chattels. Given the propensity for tenants to attach chattels to leased land, special rules have developed under the common law and statute; these rules will be considered later in the chapter.

7.3   Current fixture tests

Traditionally, the common law approach to determining whether a chattel had been transformed into a fixture forming a part of the land was an assessment of the degree to which the chattel had been annexed to the land. As a general rule, if the chattel had been substantially affixed, courts felt that it would constitute a fixture, whereas if the affixation was very slight, and the chattel could be removed without damaging the land, it remained a chattel.1

This rule has, however, been modified and expanded over time. In modern times, the preferred test for determining whether a fixture has become a chattel is a determination of the intention for which the particular item has been affixed. Broadly, the test can be summarised as follows: if it can be proven that the chattel was attached to the land in order to enhance the character, quality, enjoyment or status of the land, then it is likely that a court will find that the chattel has become a fixture, whereas if the chattel was attached to the land with the intention of increasing the use or enjoyment of the chattel as an independent object, then it is unlikely that a court would find that the chattel has become a fixture.2

The degree of annexation remains a relevant factor in the assessment of intention. However, it is no longer the sole criterion. Each case must be assessed according to its individual circumstances.3 Two primary factors will generally be used to establish intention in any given circumstance:

(a) the degree of annexation; and

(b) the object of annexation.

The ‘relevant intention’ is the intention of the person actually attaching the chattels to the land. In assessing this intention, the court will only take into account objective evidence. Subjective factors, including any oral or written agreements or statements which may be submitted by the person who has attached the chattel to the land, will be disregarded by the court.4 In some circumstances, however, recent cases have held that subjective intention may be taken into account by the courts; for example, a court may take subjective factors into account when determining factors relating to the nature and duration of the annexation.5

Apart from the above two general tests, the purpose for which a chattel has been attached to the land may be ascertained in individual cases through a consideration of such factors as the nature of the chattel involved; the method and circumstances by which it has been annexed to the land; whether or not the person who has attached the chattel to the land actually owns the land and, if not, the relationship that person has with the true owner; the way in which the annexed chattel has been used; and the consequences for both the land and the owner if the chattel were removed.6

Furthermore, two general presumptions have arisen with respect to the degree of annexation:

(a)   where a chattel is attached to the land other than by its own weight, it is presumed to be a fixture, and the burden of proof rests with the party claiming that it is not a fixture; and

(b)   where a chattel merely rests upon its own weight, it is presumed to remain a chattel and not to have become a part of the land.

Naturally, because these principles operate as general presumptions only, it will be possible to rebut them where the individual circumstances prove that they do not sufficiently reflect the intention of the person who attached the chattels. For example, it has been held that chairs which were firmly attached to a floor in a leased premises were not fixtures because they were only affixed for a temporary purpose and secure annexation was necessary for safety reasons (Lyon & Co v London City & Midland Bank [1903] 2 KB 135). In such circumstances, the cogency of the presumptions are overwhelmed by the presentation of clear evidence of a contrary objective and the presumption is rebutted—further highlighting the importance of an overall assessment of intention within each particular case.

Generally, however, the greater the degree of annexation, the stronger the operation of the presumption. If a chattel has been loosely connected to the land, a court is likely to conclude that there was no real intention to bind that chattel to the land, and the presumption, where raised, will be rebutted. For example, a loosely fixed wall hanging or picture will be unlikely to be held to be a fixture. There are two reasons why this is generally so. First, courts may simply hold that the annexation is so slight or inconsequential that it does not truly amount to an attachment and there is no need to rebut the presumption. This argument is not often raised, because courts have consistently held that the presumption may operate to an attachment, even where that attachment is very slight.7 Secondly, courts may hold that, in erecting a picture or a hanging, there was no intention to benefit the wall but, rather, to improve the use and enjoyment of the hanging by enabling it to be properly viewed. The latter argument has been raised in a number of cases and produced a diversity of results.

For example, in Leigh v Taylor [1902] AC 157, a life estate holder of a property attached some very valuable tapestries to the wall of the drawing room in the house. The tapestries were tacked onto pieces of canvas, wooden supports were placed on each end of the canvas, and the canvas was stretched out. The wooden supports were then nailed to the wall. In determining whether or not the tapestries were fixtures, the court held that the most important issue was to determine the intention of the life estate holder when attaching the tapestries. The Earl of Halsbury concluded that, despite annexation, albeit slight, to the walls, and the presumption that the tapestries were fixtures, it was clear on the facts that the only way in which ornamental tapestries could be properly viewed and enjoyed was through such affixation; in attaching the tapestries in such a way, the life estate holder only intended to improve the enjoyment of the tapestries and not the overall land.

The decision in Leigh v Taylor can be directly contrasted with the decision in Re Whaley [1908] 1 Ch 615. On the facts of this case, a painting of Elizabeth I, as well as a tapestry depicting a similar portrait, were affixed by screws and nails to one of the rooms in a mansion. The room was known as the ‘Elizabethan room’ and the pictures and hangings were placed there specifically to enhance the feel of the room. The court concluded that the affixation, despite being slight and similar to the facts of Leigh v Taylor, did result in the picture and tapestry becoming a fixture, because the intention of the affixation was for the beautification of the room as a whole rather than the enjoyment of the hangings as individual portraits.

Importantly, the object of annexation will always overwhelm the degree of annexation, because the focus of the court is upon the intention of the person attaching the chattel. If it is clear from the circumstances that the purpose of annexation is only temporary, without intending the chattel to become a part of the land, the fact that the chattel has been ‘affixed’ will be irrelevant. Alternatively, if it can be established that the chattel has been attached to the land permanently or for an indefinite period of time, and the removal of the chattel cannot be achieved without causing substantial damage to the land, both the degree of annexation and the object of annexation tests will strongly favour a determination that the chattel has become a fixture. The position has been well summarised by Jordan CJ in Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700, pp 712–13:

The test of whether a chattel which has been, to some extent, fixed to land is a fixture is whether it has been fixed with the intention that it shall remain in position permanently, or for an indefinite or substantial period, or whether it has been fixed with the intent that it shall remain in position only for some temporary purpose. In the former case, it is a fixture, whether it has been fixed for the better enjoyment of the land or building, or fixed merely to steady the thing itself, for the better use or enjoyment of the thing fixed… If it is proved to have been fixed merely for a temporary purpose, it is not a fixture. The intention of the person fixing it must be gathered from the purpose for which, and the time during which, use in the fixed position is contemplated. If a thing has been securely fixed, and, in particular, if it has been so fixed that it cannot be detached without substantial injury to the thing itself or to that to which it is attached, this supplies strong but not necessarily conclusive evidence that a permanent fixing was intended. On the other hand, the fact that the fixing is very slight helps to support an inference that it was not intended to be permanent. But each case depends on its own facts.