Potton Developments v Thompson

Potton Developments Ltd v Thompson [1998] NPC 49, ChD

Whether large box construction units placed on land but lightly affixed are fixtures or chattels

Facts

The claimants acted as distributors for a company which produced individual box units. The units were designed to be used by public houses or hotels that wished to expand their letting facilities and contained a bedroom with an en suite bathroom. The units were extremely strong because they were transported intact and therefore were required to be rigid. The units were placed on large concrete bases and were affixed by a relatively small bracket. The user then simply had to attach electricity and plumbing to the box. The issues that arose in this context related to the lease of several boxes to a public house in Shropshire. Ultimately lease payments for the boxes were not made. When the claimant attempted to recover these losses, it became aware that the public house was being placed for sale with the boxes included in the sale. The claimant sought to assert that the boxes were chattels and could not form part of the sale.

Issues

The issues in this circumstance were whether the boxes, not being firmly affixed to the land, but appearing to be largely permanent were fixtures or chattels.

Decision/Outcome

It was held that the usual approach used for considering whether an item was a fixture or a chattel should be applied in these circumstances. The lack of firm affixation suggested that the boxes were chattels. However, the fact that they were in place for the benefit of the land meant that they could also be considered fixtures. The deciding factors on this point were firstly, that the units could be removed without suffering any damage and secondly, that it was never intended, despite the outside appearance of the boxes, that they should be permanent. The effect was that the boxes were considered chattels and would not pass with the sale of the public house.