Fixtures in land law

Fixtures in land law

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  Define the conceptof fixtures in the Malaysian context. Discuss the principles governing fixtures as detailed by the judges in the case of Goh Chong Hin. Definition of land under Section 5 NLC Land includes: a) The surface of the earth and all substances forming that surface. b) The earth below the surface and all substances therein. c) All vegetation and other natural products, whether or not requiring the periodical application of labour to their production, and whether on or below the surface. d) All things attached to the earth or permanently fastened to any thing attached to the earth, whether on or below the surface e) Land covered by water. Definition of land under Section 2 of Registration of Titles Enactment interpret land to include : Things attached to the earth or permanently fastened to anything attached to the earth) The first issue in this is whether the English law of fixtures was applicable in Malaysia. Based on the definition of land under the statutes, fixture is anything attached to the earth, immovable and being part of the land itself. However, in the Malaysian context, since our Land Code merely looks at the physical aspect of the annexation and doesn’t determine whether an article is a fixture or a chattel. Sproule J: “… the legislature of these States has already, if not explicitly … declared as its policy the adoption of the English on this point.” (page 95, para 2) “I have no doubt that we are to apply in this country the ordinary English law of fixtures.” (page 98, para 3)Thus, English law of fixtures applies. The second issue is whether the machinery was a fixture, making it part of the land. Two tests were derived in Holland v Houdgson, namely the degree of annexation and the purpose of annexation. Degree of annexation includes object either be strongly or lightly attached or even resting by its own weight to the land. One more thing to be taken into consideration is to what extent an injury will be caused upon the removal of the object. Thus, the stronger an object is attached to the land, the more likely the item is considered as fixture, and the more damage or injury is caused upon its removal, the more likely it is considered to be part of the land. For the purpose of annexation, it must be taken into consideration as to whether the object was for the permanent and substantial improvement of the dwelling or merely for
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  a temporary purposeand the more complete enjoyment and use of it as a chattel. If an object has been attached no matter the degree of which it was affixed, the intent for that object to be permanently affixed to enhance the use and enjoyment of land is fair to be called fixture. On the other hand, an article may be very firmly fixed to the land, and yet the circumstances may be such as to show that it was never intended to be part of the land, and then it does not become part of the land. In Holland v Hodgson,it was held that the looms were fixtures. They had been brought onto the land to improve its usefulness for business purposes. Mather v Fraser “… where an article is affixed by the owner of the fee, though only affixed by bolts and screws, it is to be considered part of the land, at all events when the object of setting up the articles is to enhance the value of the premises to which it is annexed for the purpose to which those premises are applied.” Goh Chong Hin v The Consolidated Malay Rubber Estates Limited. In this case, on 26th April 1921 – Goh Chong Hin executed a charge in favour of S.R.M.S. Lechmanan Chetty (Chargee) which includes his building and factory . 25 June 1921, Goh Chong Hin executed a bil of sale over the machinery in the factory to the Consolidated Malay Rubber Estates Ltd. 25 Oct 1923, Lechman Chetty by the consent of Goh Chong Hin took possession of the land and the factory. 31 Dec 1923, The Consolidated Malay Rubber Estates Ltd applied for order to seize and sell the machinery by virtue of the Bill of Sale. At first, the trial judge decided in the favour of the Consolidated Malay Rubber Estates, however the judgement was then reversed and the appeal was then allowed. It was held that machinery affixed to the earth by bolts and nuts becomes fixture and part of the land. Furthermore, the fact that the machinery was set up with the object of enhancing the value of land and purpose for which it existed. In Socfin Co Ltd v Chairman, Klang Town Council, a bulks storage tanks connected to pipe lines by bolts and nuts was used to allow railway wagons to empty their palm oil into the tanks. The court held that it can be no doubt that the tanks sited on the holding to improve the land for its better use and enjoyment thus becomes part of the land. One of the concepts of fixtures found in this case is that a charge premises will pass the fixtures upon premises. Fixtures attached to the property after the date of the charge will also be covered by the charge.
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  The general principleis that all fixtures attached to the land will be passed to the purchaser. In Goh Chong Hin’s case, a charge of premise will pass the fixtures to the chargee as part of the land as well as the fixture attached after the date of the charge unless it is otherwise provided. This principle was upheld in the case of Wiggins Teape Sdn Bhd, when the charger default in the payment, the printing machine affixed then become part of the land and to be transferred. The general principle that all fixtures attached to the land form part of the land does not aply in the case of tenants fixtures. A tenant has the right to remove tenant’s fixtures affixed to the land so long as he is in possession as a tenant. Where he does not remove them within reasonable time after the expiration of his tenancy, the landlord’s title to the fixtures becomes absolute. The rationale behind this is because the intention to affix the chattels to the land only temporarily. The fixtures however can be removed if it is authorized in the agreement. In Gebrueder Buehler AG v Peter Chi, it is however clear that if the mortagee can be presumed to have authorized the removal of trade fixtures by the mortgagor, the owner will be entitled to server and removed them whilst the mortgagor is still in possession but no after the mortgagee has taken possession. It can be concluded that fixture is Articles not otherwise attached to the land than by their own weight are not to be considered as part of the land, unless the circumstances are such as to show that they were intended to be part of the land, the onus of showing that they were so intended lying on those who assert that they have ceased to be chattels. Chattel On the contrary, an article which is affixed to the land even slightly is to be considered as part of the land, unless the circumstances are such as to show that it was intended all along to continue a chattel, the onus lying on those who contend that it is a chattel. For instance, in The Shell Co Of The Federation Of Malaya Ltd V Commissioner Of The Federal Capital Of Kuala Lumpur, the fact stated that "To remove the tanks, the turf, concrete or tarmacadam is taken up, the earth excavated, the concrete manhole boxes removed, all pipe connections unbolted and the tank, with its concrete sinker weights can then be raised with blocks and tackle." Thus, the court held that The tanks were intended to remain in situ for as long as the petrol stations continue in operation. Their attachment to the earth is as permanent as the buildings erected on the petrol
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  stations. Their removability,when severance reconverts them into chattels or movable property, doesn’t alter the fact of their integration with the land upon attachment thereto. In Kiah bte Hanapiah v Som bte Hanapiah, it was held that houses of the malay type resting on stilts not buried into house are movable property. The judge further said that there is a settled custom in this country that houses of this type are regarded as personalty in which ownership may be separated from ownership of the soil. It should be excluded from the English law of fixtures.