Mobile Homes and Annexation to Land

It is not uncommon for mobile homes, particularly higher end ones often sold as holiday homes, to be sited on plots in respect of which leases are granted and the question can then arise whether the mobile home is, itself, subject to the lease and the answer to that will depend upon whether the mobile home has become annexed to the land or whether it has remained a chattel. This is not the only way in which the question can arise, but the distinction between a mobile home which is still a chattel and one which has become annexed to the land on which it stands can be of some importance because, although the Mobile Homes Act 2013 brought in a raft of protections in relation to mobile homes occupied as residences – protections which are in some respects more streamlined and better than those afforded to leaseholders under the Landlord & Tenant Act 1985 (“the 1985 Act“) – those occupied as holiday homes remain relatively unprotected.

A mobile home which has become annexed to the land and which qualifies as a “dwelling” will enjoy protection under ss.18 to 39 of the  1985 Act.

The cases of  Elitestone Ltd v Morris [1997] 1 W.L.R. 687 and Nutt v Read (2000) 32 H.L.R. 761 illustrate how blurred the distinction between mobile homes and fixtures can be. The latter case is a sad one because it proved to be a Pyrrhic victory for the the alleged pitch holders who succeeded in proving themselves to be tenants because the Court of Appeal allowed the pitch licences, which the tenants had proved to be leases, to be rescinded in equity for mistake, so, having established themselves as leaseholders, the tenants lost their chalets. Such a result would not happen today as, only two years after Nutt v Read was decided, the availability of rescission in equity was conclusively rejected as a remedy in Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, [2003] Q.B. 679.

Dwellings and Buildings

It is important to remember that for a mobile home to come within ss.18 to 39 of the 1985 Act, it is necessary to establish both that it has become annexed to the land and that it is a “dwelling” with the meaning of s.38(1) of the 1985 Act, namely that it is:
…a building or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, outhouses and appurtenances belonging to it or usually enjoyed with it.

In Caddick v Whitsand Bay Holiday Park Ltd [2015] UKUT 63 (LC) Judge Mole QC decided that the lodge in question was not a building, observing, undoubtedly rightly, that the question was a matter of fact and degree but he did so without considering the question of annexation, which, he commented (at 66) was not relevant to whether the lodge was a building. He went on to say that at para 77 that the most persuasive test of the difference between a mobile home and a building was “that of Lord Lloyd in Elitestone ; namely whether the structure has become something that can only be enjoyed where it is and cannot be removed elsewhere without a process of demolition“.

Those two observations would almost certainly have lead to an appeal had the appellant not also lost on a procedural ground (whether the Appellant was bound by an earlier decision of the LVT), which was rather less open to challenge. Firstly annexation is arguably relevant to whether a structure is a building; in  Cheshire County Council v Wooodward [1962] 1 All ER 517 at 519, Lord Parker CJ, with whom Ashworth J and Mackenna J concurred, said the following:

…it seems to me that when the Act defines a building as including ‘any structure or erection and any part of a building so defined’, the Act is referring to any structure or erection which can be said to form part of the realty, and to change the physical character of the land.

In other words, whether a structure forms a part of the reality is material to whether or not it is a building. Secondly, as will become apparent when I turn to the question of annexation, Lord Lloyd’s comments were misapplied and taken out of context.

Strangely HHJ Mole QC reached his conclusion while broadly accepting (at 76)  what was said in Smith v Customs and Excise Commissioners (1990) VAT Decision 5579:

Most people can easily recognise a ‘building’ when they see one; and most people can recognise a ‘caravan’ or ‘mobile home’ when they see it. And if the conclusion is analysed it will be apparent that physical characteristics and user will form significant if not decisive, features in reaching he conclusion….It is perfectly possible for a structure which started its life as, say, a holiday caravan intended to be towed behind a car, to become a building, albeit a temporary building, by having its mobility features such as wheels and tow-bar removed and being jacked up on bricks or concrete blocks on its own enclosed site and converted into a dwelling home. It will then be a building even though a temporary building.

It should be noted that there is nothing to suggest that the removal of wheels and tow-bar should be permanent.

As to the meaning of dwelling for the purposes of the 1985 Act see Phillips v Francis [2010] 24 E.G. 118 and the cases cited therein.

Fixtures and the Law Relating to Objects on Land

Since Elitestone v Morris there has been no real difficulty about the annexation of objects to land where they have become irremoveable (that is incapable of being removed without substantial destruction) but mobile homes, even when bogey wheels and towbars have been taken off, will remain capable of being removed from where they are sited without any real difficulty and historically removability at the end of a term has often, but wrongly, been seen as a bar to annexation. In its way Caddick v Whitsand Bay is a continuation of the heresy (although in saying that I should, perhaps declare an interest because I was Counsel for the unsuccessful appellants).

Ease of removability is not and has never been a bar to annexation, something that is perhaps best illustrated by consideration of the law relating to tenant’s fixtures.

In Peel Land and Property (Ports No.3) Ltd v TS Sheerness Steel Ltd [2014] EWCA Civ 100 at paragraph 11, Rimer LJ said:
There is no dispute as to the substantive law relating to fixtures so far as relevant. An object brought on to land, and fixed to it so as to become what in law is recognised as a “fixture”, becomes part of the land and remains part of it for so long as it remains fixed to it: quicquid solo plantatur, solo cedit . The original rule was that a fixture was irremovable by anyone with only a limited interest in the land. But that rule was then modified by exceptions of particular importance between landlords and tenants. Fixtures became sub-categorised as “tenant’s fixtures”, which a tenant is entitled to remove, and as “landlord’s fixtures”, which he is not.

It is important to note that for the purposes of understanding how the concept of tenant’s fixtures came about that they are a sub-category of fixtures developed, in effect, to mitigate the severity of the general rule that what was affixed to land became irremoveable by anyone with a limited interest in land. That the extent of the exception to the general rule has progressively widened has “…reflected”, as Lord Clyde observed in Elitestone Ltd v Morris  “not a change in the law but, as Lord Macnaghten put it in Leigh v. Taylor [1902] A.C. 157, 162, a change ‘in our habits and mode of life.’

I return to this fragment and put it in its fuller context below but first I need to set out the three-part classification, taken from Woodfall on Landlord & Tenant, para 13.131, which was adopted in Elitestone Ltd v Morris:
An object brought on to land may be:
(a) a chattel;
(b) a fixture; or
(c) part and parcel of the land itself.
Objects in categories (b) and (c) are treated as being part of the land.”

The three classifications are referred to hereafter as categories “A” “B” and “C”. Those objects which fall in categories B and C are treated as being part and parcel of the land, while category A, chattels, are not.

The difference between categories B and C is that fixtures, category B, are physically capable of being severed from the land without damage and, at the end of the term, once removed, revert to being chattels – see Webb v Frank Bevis Ltd. [1940] 1 All ER 247 (CA) – while objects falling within category C are not capable of being severed without an element of damage or destruction, either to the object itself or to a greater object of which it is an integral part. The latter gloss is necessary because, for example, a window, may be capable of being removed without damage to itself but because it is an integral part of the building it still falls within category C – Boswell v. Crucible Steel Co. [1925] 1 K.B. 119, @123.

The structures considered in Elitestone v Morris were chalets that fell within category C because they had become irremovable from the land on which they stood without substantial damage or destruction. The Court of Appeal had erroneously held that the chalets were chattels (i.e. of category A). Elements of the speeches of both Lord Lloyd and Lord Clyde are context specific in that they deal with the distinction between categories A and C and not with that between categories A and B. This is where HHJ Mole QC fell doubly into error; not only did he apply a test adumbrated in relation to category C to a fixture which could still have fallen into category B, he also used a test formulated in relation to annexation to help him determine whether the chalet in question was a “building”.

Ex hypothesi there is no requirement for an object in Category B to suffer any risk of damage on removal in order to become annexed; in fact, if such a risk existed it would by definition fall within Category C.

Although I have used tenant’s fixtures to illustrate that removability is no bar to annexation, it was recognised in Elitestone that the fact that a tenant’s fixture reverts to being a chattel once removed can be a source of confusion when seeking to apply the three-part classification. In explaining how the Court of Appeal had fallen into error Lord Lloyd observed @691BC that:
The term fixture is apt to be a source of misunderstanding owing to the existence of the category of so called “tenants’ fixtures” (a term used to cover both trade fixtures and ornamental fixtures), which are fixtures in the full sense of the word (and therefore part of the realty) [emphasis added] but which may nevertheless be removed by the tenant in the course of or at the end of his tenancy. Such fixtures are sometimes confused with chattels which have never become fixtures at all.

He then, @691D, in the course of disapproving it, quoted the following passage from the judgment of Aldous LJ in the Court of Appeal:
In the present case we are concerned with a chalet which rests on concrete pillars and I believe falls to be considered as a unit which is not annexed to the land. It was no more annexed to the land than the greenhouse in Deen v. Andrews or the large shed in Webb v. Frank Bevis Ltd. Prima facie, the chalet is a chattel and not a fixture.

Lord Lloyd’s disapproval, @691F, was put in the following way:
But when one looks at Scott L.J.’s. judgment in Webb v. Frank Bevis Ltd. it is clear that the shed in question was not a chattel. It was annexed to the land, and was held to form part of the realty. But it could be severed from the land and removed by the tenant at the end of his tenancy because it was in the nature of a tenant’s fixture, having been erected by the tenant for use in his trade…

Tenant’s fixtures are fixtures (within category B) that form part of the reality during the currency of the term but, up to the end of the term, and, indeed up to the point of giving up possession – New Zealand Government Property Corporation v HM & S Ltd (The New York Star) [1982] 2 W.L.R. 837 – they are fixtures which can be removed by the tenant. It is only upon removal that they cease to be fixtures and revert to being chattels.

During the currency of the term, however, tenant’s fixtures remain part of the realty unless and until severed and may be irremovable, for example if the realty is mortgaged, even if in practical terms they are very easily removed. This is something well illustrated by Holland v Hodgson (1871-72) LR 7 CP 328, in which it was held that an action in trover could be maintained by a mortgagee against a trustee in bankruptcy who had removed looms from a worsted mill. The looms had been fixed to the floor by a single nail through each of their four feet and were held to be a tenant’s fixture even though to remove them, the nails needed only to be drawn which “could be done easily and without serious damage to the flooring”. Accordingly they were part of the mill and subject to the mortgage.

In Elitestone v Morris Lord Clyde, citing Lord Cairns L.C. in Bain v. Brand (1876) 1 App.Cas. 762, stressed that in relation to such fixtures there were two separate rules in operation:
Lord Cairns … declared that the law as to fixtures is the same in Scotland as in England. His Lordship stated, at p. 767, that there were two general rules under the comprehensive term of fixtures:
” …one of these rules is the general well-known rule that whatever is fixed to the freehold of land becomes part of the freehold or inheritance. The other is quite a different and separate rule;— whatever once becomes part of the inheritance cannot be severed by a limited owner, whether he be owner for life or for years, without the commission of that which, in the law of England, is called waste, and which, according to the law of both England and Scotland, is undoubtedly an offence which can be restrained. Those, my Lords, are two rules, not one by way of exception to the other, but two rules standing consistently together. My Lords, an exception indeed, and a very important exception, has been made, not to the first of these rules, but to the second. To the first rule which I have stated to your Lordships there is, so far as I am aware, no exception whatever. That which is fixed to the inheritance becomes a part of the inheritance at the present day as much as it did in the earliest times. But to the second rule, namely, the irremovability of things fixed to the inheritance, there is undoubtedly ground for a very important exception. That exception has been established in favour of fixtures which have been attached to the inheritance for the purposes of trade, and perhaps in a minor degree for the purpose of agriculture. Under that exception a tenant who has fixed to the inheritance things for the purpose of trade has a certain power of severance and removal during the tenancy.

It would be right to add that the exception has been developed so as to extend beyond the purposes of trade. By the end of the 19th century it was clearly established that the exception included objects which had been affixed to the freehold by way of ornament: In re De Falbe; Ward v Taylor [1901] 1 Ch. 523, 539. This reflected not a change in the law but, as Lord Macnaghten put it in Leigh v. Taylor [1902] A.C. 157, 162, a change “in our habits and mode of life.” No doubt the category of exceptions may continue to change.

A tenant’s fixture is thus any fixture that can be removed by the tenant at the end of the term.

The importance of there being two separate rules governing annexation and removal is that the intention of the parties and the terms of what has been agreed between them is relevant to the operation of the second rule rather than to the operation of the first – see per Lord Lloyd in Elitestone v Morris 693E
as the … decision of the Court of Appeal in Hobson v. Gorringe [1897] 1 h. 182 made clear, and as the decision of the House in Melluish v. B.M.I. (No. 3) Ltd. [1996] A.C. 454 put beyond question, the intention of the parties is only relevant to the extent that it can be derived from the degree and object of the annexation. The subjective intention of the parties cannot affect the question whether the chattel has, in law, become part of the freehold, any more than the subjective intention of the parties can prevent what they have called a licence from taking effect as a tenancy, if that is what in law it is: see Street v. Mountford [1985] A.C. 809.

and per Lord Browne-Wilkinson in Melluish v. B.M.I. (No. 3) Ltd. [1996] A.C. 454 @ 473:
The terms expressly or implicitly agreed between the fixer of the chattel and the owner of the land cannot affect the determination of the question whether, in law, the chattel has become a fixture and therefore in law belongs to the owner of the soil [emphasis added]: . . . The terms of such agreement will regulate the contractual rights to sever the chattel from the land as between the parties to that contract and, where an equitable right is conferred by the contract, as against certain third parties. But such agreement cannot prevent the chattel, once fixed, becoming in law part of the land and as such owned by the owner of the land so long as it remains fixed.

A house can be a fixture – Billing v. Pill [1954] 1 Q.B. 70, @75 – and the potential for a building to be a tenant’s fixture removable at the end of the term, expressly recognized in Webb v Frank Bevis, was re-stated in the first instance judgment of Morgan J in Peel Land and Property (Ports No.3) Ltd v TS Sheerness Steel Ltd [2013] EWHC 1658 (Ch)@ para 67 (it is not something affected by the Court of Appeal’s reversal of Morgan J’s actual decision.

It is thus entirely possible for a mobile home to be a tenant’s fixture, removable at the end of a term but a part of the land during its currency.

 

How “Caravans” Muddy the Waters

Something which can be apt to cause confusion when arguments arise about whether a structure is a mobile home or a building is s.13 of the Caravan Sites Act 1968. The section appears to, but does not, give an extended definition of “caravan” but rather provides that a thing “shall not be treated as not being” a caravan if two conditions are satisfied:
(1) under s.13(1)(a) that it “is composed of not more than two sections separately constructed and designed to be assembled on a site by means of bolts, clamps or other devices;” and
(2) under s.13(b) that “when assembled, [they are] physically capable of being moved by road from one place to another (whether by being towed, or by being transported on a motor vehicle or trailer)
There is additionally a dimensional requirement.

It should be noted that the section is drafted with a double negative; it does not say that something is a caravan and not a building if the conditions are satisfied, merely that if the conditions are satisfied it is not not a caravan merely because it came in two sections. It does not touch upon and does not purport to address either the question of annexation or the question of whether a “caravan” falls, on the facts of a particular case, to be considered a building.

 

Issues of Construction

While not necessarily irrelevant, how a structure was originally constructed is not necessarily determinative of the question of annexation; the chalets in Elitestone had been constructed in about 1945 as moveable structures and had only been rendered immovable without damage or destruction so as to become annexed under Category C by later changes.

This is reflected in a passage from the judgment at first instance which was cited and implicitly approved by Lord Lloyd at 698E where the Recorder had said:
While the house rested on the concrete pillars which were themselves attached to the ground, it seems to me clear that at least by 1985 and probably before [emphasis added] it would have been clear to anybody that this was a structure that was not meant to be enjoyed as a chattel to be picked up and moved in due course but that it should be a long-term feature of the realty albeit that, because of its construction, it would plainly need more regular maintenance.

and thus it was that Lord Lloyd, at 690G, went on to describe the question for decision in Elitestone in the following way:
Thus the sole remaining issue for your Lordships is whether Mr. Morris’s bungalow did indeed become part of the land, or whether it has remained a chattel ever since it was first constructed before 1945.” (emphasis added)

The decision of the Court of Appeal in Mew v Tristmire Ltd [2011] EWCA Civ 912 would appear to be to contrary effect but it needs to be treated with some caution because it was conceded that annexation had to be decided by reference to the status of the object at the time of its original construction and a decision based on a concession does not create any binding precedent (see, R (on the application of Kadhim) v Brent LBC Housing Benefit Review Board [2001] Q.B. 955 at 33 and R. (on the application of SA (A Child)) v A Local Authority [2011] EWCA Civ 1303; [2012] P.T.S.R. 912 at 4.

 

Copyright 2015 Rawdon Crozier

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s