PROPERTY A LAW2112 FIXTURES V CHATTELS Define fixture: Chattels ‘so attached to the land’ it becomes a part of the land.’ Fixtures automatically pass with the conveyance of the land. o S18 Property Law Act (1958): land includes “…corporeal hereditaments...” i.e. fixtures o S38 Interpretation of Legislation Act (1984) – includes buildings and other structures permanently affixed to land. Define chattel: Personal property that can be moved, not affixed to the land. Chattels can become fixtures by a third party if they are the actual rights holder of the property. i.e. furniture, household appliances. Ø Doctrine of Fixtures Test 1. Identify who is arguing fixture, and who is arguing chattel. 2. Role of presumptions: “Whatever is affixed to the soil becomes part of the soil”. – NAB V Blacker (2000) If object is fixed to the land other than by its own weight, presumption it’s a fixture. (Belgrave) If object rests on its own weight, presumption it’s a chattel (Belgrave) i. If attachment, onus of evidence is on person who wants it to be a chattel (NAB) ii. If no attachment, onus is on person who wants it to be a fixture (NAB) 3. Consider: Was there already a contract in place detailing with the nature of the object in question? – If not, apply common law tests (BelgraVe; NAB). a. Degree of annexation test – Extent the chattel has been affixed to the land. i. Mode and structure of annexation: Degree to which it is annexed to the land. For example in Leigh v Taylor – tapestries were fastened to canvas by tracKs. The court held that tapestries’ retained their character as chattels and formed part of the personal estate, even though they were affixed to the wall, this was the only way they could be enjoyed. ii. Effect of removal à Easily removed = Chattel à Difficult to remove, incurs damage = Fixture iii. Cost If cost of removal would exceed value of the attached property = fixture b. Object of annexation (Objective test) An object becomes a fixture if it has been placed or attached on the land as an improvement to the land. According to Conti J, the object of annexation can be identified by: i. For what purpose was it attached? a. Better use of the land à Fixture b. For the object itself à Chattel i.e. Leigh v Taylor ii. Was it intended to be there temporarily or permanently? “If it cannot be detached without substantial injury to the object or to what it is attached – this is evidence that it is a permanent fixture” iii. Nature of the chattel i.e. is it an essential part of the premises? Some items have an inherent nature which make them a chattel or a fixture. In Belgrave an air conditioner necessitated an essential part of the premises. iv. Function of annexation: Purpose of annexing the object. Need to looK at the objective intention. Ø RemoVal of Fixtures 1. Common Law o Tenant can install fixtures without contract. o REMOVAL of fixtures: a tenant can remove a fixture installed by them during the term that it is a ‘trade’, ‘domestic’ or ‘ornamental’ fixture. o NOTE: Statutes generally override CL rules* 2. S154A Property Law Act àOnly applies to commercial leases, farms etc. (1) A tenant who at his or her own cost or expense has installed fixtures on, or renovated, altered or added to, a rented premises owns those fixtures, renovations, alterations or additions and may remove them before the relevant agreement terminates or during any extended period of possession of the premises, but not afterwards. (2) A tenant who removes any fixtures, renovations, alterations or additions under subsection (1) must— (a) restore the premises to the condition they were in immediately before the installation, renovation, alteration or addition, fair wear and tear excepted; or (b) pay the landlord an amount equal to the reasonable cost of restoring the premises to that condition. (3) This section does not apply to the extent that— (a) the lease otherwise provides; or (b) the landlord and the tenant otherwise agree. 3. S64 Residential Tenancy Act à Applies to leases, residential tenancies of any kind. (1) A tenant must not, without the landlord's consent (a) install any fixtures on the rented premises; or (b) make any alteration, renovation or addition to the rented premises. (2) Before a tenancy agreement terminates, a tenant who has installed fixtures on or renovated, altered or added to the rented premises (whether or not with the landlord's written consent) must— (a) restore the premises to the condition they were in immediately before the installation, renovation or addition, fair wear and tear excepted; or (b) pay the landlord an amount equal to the reasonable cost of restoring the premises to that condition. (3) Subsection (2) does not apply if— (a) the tenancy agreement otherwise provides; or (b) the landlord and the tenant otherwise agree 4. Sale of land situation o AFTER a contract is entered into: fixture may not be removed from the land. A chattel may be removed from the land at anytime by the owner of the chattel subject to any terms of the contract between the parties. o BEFORE a contract of sale is entered into: owners of the land who attach fixtures to their own land may remove them at any time before entering into a contract to sell the land is entered to. DOCTRINE OF WASTE Define: Owners of limited interest are limited in their use of the land, for the sake of protecting the land and future interests in it. o “In order to prove waste you must prove an injury to the inheritance” – Jessel MR Ø Voluntary Waste Positive acts causing harm to the land. • Liability will be presumed (S132A(1) unless an instrument specifically exempts liability S132(2) PLA. • Per S1321(3), damages to be given to remainderman or reversioner. o S132A(1) PLA - Subject to subsection (2), a tenant for life or lives term of years at will or otherwise shall not commit voluntary waste. o S132(2) PLA Nothing in subsection (1) shall apply to any estate or tenancy without impeachment of waste, or affect any licence or other right to commit waste. o S132A(3) PLA A tenant who infringes subsection (1) shall be liable in damages to his remainderman or reversioner but this section imposes no criminal liability. o S132A(4) PLA This section does not affect the operation of any event which may determine a tenancy at will. Ø Equitable Waste Intentional and serious harm is done to the property. • Even if instrument exempts liability, liability is still found in equity because it is so ‘gross’ and ‘recKless’ that it is ‘wanton vandalism’. i.e. stripping a building of glass, doors, boords, removing trees providing shelter. o Exception: If instrument makes it extremely clear that there is a clear intention to contract out of liability (S133PLA) An estate for life without impeachment of waste shall not confer upon the tenant for life any right to commit waste of the description Known as equitable waste, unless an intention to confer such right expressly appears by the instrument creating such estate. Ø Permissable Waste Omission/allowing of harm to take place. i.e. failure to repair. • Presumption that there is no liability unless the instrument specifically creates liability (S132A(5) o S132A(5) No tenant shall be liable in damages for permissive waste for which he would not have been liable if this section had not been enacted. Ø Ameliorating Waste Alteration to the land which constitutes an improvement to the land. o Unclear law – most liKely no liability, or nominal damages o Consider (1) severity of changes, (2) costs of rectification and (3) reasonableness of improvement. EASEMENTS Define: A right/type of servitude interest to make a particular use or carry a certain activity on another person’s property, or restrict the use of the land by the person who owns it without giving right of possession (hence an incorporeal hereditament), but is a property right which can be enforced against a third party. • Right in rem which runs with the land when it is sold/transferred (S42(2)(d) TLA) Notwithstanding anything in the foregoing the land which is included in any folio of the Register or registered instrument shall be subject to – any easements howsoever acquired subsisting over or upon or affecting the land. • Easements “howsoever acquired” are exceptions to indefeasibility under the Torrens System in Victoria. This means that they run with the burdened land whether they are registered or not. Key terms: • Easement ‘in gross’: Easements not particular attached to land, but created by statute • Easement ‘appurtenant’: Something attached to land, that particular piece of land that they need to use. CHARACTERISTICS/IS THERE AN EASEMENT? (Ellenborough, affirmed in Riley) 1. Dominant tenement (DT)/ Servient Tenement (ST) • State whose land is ‘burdened’ and whose land is benefited. • Note: An instrument creating the easement need not expressly identify the DT although it must be capable of being identified by the surrounding circumstances. o PLA s197: Certain rights of road made appurtenant Where easement granted, it attaches to the property not the particular individual/person/entity (aka. Not a right in gross) Whenever in any conveyance of land or in any deed of grant a right to use any road or way has been granted to the purchaser or to the grantee his heirs and assigns, such right, although it be not granted into out of and from the land conveyed to the purchaser or described in the deed as owned by the grantee, shall nevertheless be deemed to be a right appurtenant to the land conveyed or owned as the case may be and every part thereof and not a right in gross .