Is a chattel really a chattel?

When a tenancy, licence or life interest in property comes to an end, there are a multitude of disputes that can arise. Often disputes will arise about how the property in question should be left but disputes also arise about what can/cannot be removed. One such dispute was considered in the case of The Royal Parks Ltd and another v Bluebird Boats Ltd [2021] EWHC 2278 (TCC).

In this case, the High Court was asked to consider whether a boathouse erected on the edge of the Serpentine Lake at Hyde Park (forming part of the Royal Parks) by the operator of a boating facilities was a chattel or formed part of the land.

The operator was granted a concession to operate a boating service on the Serpentine Lake in 1998. The terms of the contract permitted the operator to use the existing boat house and jetties on the property. In 2004, the boating service was re-tendered, and the operator was successful in securing the concession contract for a further 15 years. In 2007/8, the operator agreed with the Royal Parks that it would replace the boathouse and subsequently these were replaced at the operator’s cost in lieu of a 10-year concession.

When the concession contract (which included a licence to occupy the relevant land/structures) expired in 2019, the operator argued that it was entitled to remove the boathouse. However, the Royal Parks denied that the operator had rights to remove the boathouse, arguing that it was not a chattel and instead formed part of the land/property. The Royal Parks issued legal proceedings to seek to prevent the operator from removing the boathouse and to protect its property.

Accordingly, the Court had to consider what constituted a chattel. Then to determine whether the boathouse was a chattel, the Court needed to look closely at the construction of the boathouse. The Boathouse is a single-story building consisting of a structural steel frame supporting factory-made timber wall panels and a roof comprising deck panels on plywood covered by a membrane. The frame is fixed into a concrete floor slab supported in piles. The Court ultimately determined that the boathouse comprised a superstructure and substructure with a concrete slab and foundations providing necessary support. As the concrete slab and foundations could only be removed by demolition and the superstructure was bolted into the slab, creating a permanent connection, (meaning theywere designed as an integral permanent structure), O’Farrell J concluded that the extent of the annexation of the boathouse to the property and the purpose of its design and construction could only mean that it was intended as a permanent enhancement to the land. Expert evidence was crucial to this point as it demonstrated that the removal of the boathouse would effectively be salvaging the materials for parts to be used in new construction projects due to the nature of its design.

To reach a final conclusion about whether the boathouse could be removed, the Court had to use its conclusions about its structure to consider whether it was a chattel, fixture or part and parcel of the land itself. There is an objective test for the Court to use to determine the answer to this question. For a structure to be treated as a chattel it must sit on the land but will otherwise be unattached to that land. For a structure to be treated as part of the land upon which is it situated there must be a degree of annexation and permanent fixings so that it can only be removed by a process of demolition. There is an exception to this, where objective evidence can be adduced that it was intended to form part of the land, i.e. if a structure is annexed to the land but potentially removeable, it will still be treated as part of that land if the purpose for which it was annexed was the permanent and substantial improvement of the land. Applying those principlesto the facts of the case, O’Farrell J held that the Boathouse was a fixture and hence part of the land. Accordingly, the operator was not permitted to dismantle/remove the boathouse from the Property. 

It should be noted that had the relationship between the parties been that of landlord and tenant then the conclusion that the Court reached may have been entirely different as in those circumstances, the Court will consider the contractual terms between the parties and often leases will list what are to be considered Landlord’s fixtures and Tenants fixtures.