Although the facts related to a commercial dispute, the Technology and Construction Court’s recent approach to determining if something is a fixture or fitting applies across a range of legal areas, write Clive Adams, Stathis Kosteletos and Elena-Lucia Singleton.
In Royal Parks Ltd v Bluebird Boats Ltd  EWHC 2278 (TCC) the High Court was asked to determine whether a “boathouse” was a fixture (which belongs to the landlord on lease expiry) or a fitting (which the tenant can remove).
The tenant in the case was an operator of a concession to run boats at Hyde Park and had been doing so under this agreement since December 2004. The tenant had built the boathouse as a condition of being granted a 15-year concession to run boats. The concession agreement stated that the boathouse was not to be removed but the operator sought to remove the boathouse and jetties when the concession expired.
Ultimately and unsurprisingly, given the intention of the parties from the outset and the degree of annexation of the boathouse, the court found that the boathouse was a fixture of the land.
In coming to this conclusion the court considered the fixture/fitting divide from two key angles. Firstly, the degree of annexation of the item to the land itself; in this case the boathouse could have been removed from the site although it would have taken some three to four weeks to remove it, save for the foundations which would need to be destroyed if they were to be moved.
Secondly, the purpose of the annexation at the time it was made; this involves an objective test. It was suggested in the judgment that intention is perhaps misleading and that a better way of considering it would be the purpose the object is serving on the land not the purpose of the person who put it there. The judgment was clear that subjective intention will not be determinative and agreements as to ownership will not impact whether an item is a fixture of the land. In this case, it was held that the boathouse was intended to be a permanent and substantial improvement to the landholding, this was evidenced within the application for planning permission made by the operator.
The court has not provided any more depth or detail to the well-worn fixture/fitting division but the case does raise a few ideas that are worth focusing on. Firstly, the test applied is a useful yardstick to have in mind when these issues arise. Obviously, it is a question of degree but if the item in dispute is hard to remove because of technical complexity or it requires demolition it is more likely to be a fixture.
Secondly, with the judgment making clear the test is objective, it is vital when considering these disputes to approach the facts in the correct way and consider what is the purpose of the item itself on the land, not the purpose you are using it for. That change of focus is crucial and being objective from the outset could save future parties substantial time and money.
Thirdly, but not crucially in the present case, is the underlying consideration that it is always imperative to read and understand the agreement from the outset. As a general rule, courts will not go behind agreements and if you are not happy with the language from outset the court will not come to the rescue.