Lictor Anstalt v Mir Steel UK Ltd & Anor

An object fixed to land becomes part of the land according to the objective circumstances, principally the degree and purpose of annexation. The parties’ subjective intention or contractual description cannot alter that legal status. An agreement may nevertheless create contractual or equitable rights to sever and remove the object as between the parties and, in appropriate circumstances, third parties.

Where a purchaser knowingly causes a company to breach such an agreement, the purchaser may be liable for procuring breach of contract. A statutory power or land-registration regime does not automatically justify the conduct. The purchaser’s failure to register a notice does not necessarily break causation where the induced breach remains a cause of loss.

The claimant asserted ownership of a hot strip mill installed at land formerly owned by Alphasteel Limited. Alphasteel had signed an agreement stating that the equipment remained the claimant’s property and giving the claimant rights to enter the site and remove it.

After Alphasteel entered administration, its administrators transferred the business and assets, including the mill, to a hive-down company acquired by the first defendant. The claimant alleged breach of contract, procurement of breach of contract and unlawful means conspiracy. The court determined whether the mill was a chattel or part of the land, whether the agreement was valid and enforceable, and whether the first defendant had defences based on administration or land registration.

1. Annexation. The hot strip mill formed part of the land. The court applied the objective test stated in Holland v Hodgson [1872] LRCP 328 and Elitestone v Morris [1997] 1 WLR 687 (HL). The relevant considerations were the degree and purpose of annexation. The mill stood on substantial foundations, was fixed by heavy-duty bolts, connected to substantial services, was intended to remain in place for a very long period and formed an integrated steel-producing facility. Its removability did not prevent accession.
2. The April Agreement and the 1997 Letter could not determine the legal status of the mill. They did, however, create contractual and equitable rights concerning severance and removal. The transfer of the site therefore breached the agreement and the implied terms necessary to preserve the claimant’s removal rights.
3. The agreement was not void for common mistake. Although it described the equipment as a chattel, provisions concerning entry, severance and removal remained capable of performance. Nor was there a total failure of consideration: the dealings from delivery through installation and agreement constituted one transaction. The alleged sham defence failed because the parties intended the agreement to create the rights and obligations it expressed.
4. Procurement. Through the administrators, the first defendant knew that the transfer would breach the agreement and intentionally caused Alphasteel to take the contractual steps necessary to complete the acquisition. This was intentional causative participation, not mere facilitation. The tort was established without deciding the alternative issue of knowing or reckless indifference.
5. The defence of justification was unavailable to the purchaser. Even if it could assist administrators acting properly in the statutory interests of creditors, it did not protect a purchaser who knew of the claimant’s rights, intended to defeat them and obtained the asset at a discount reflecting the risk. The Land Registration Act 2002 did not postpone personal economic-tort claims, since section 29 concerned interests affecting title rather than personal claims against a purchaser.
6. Unlawful means conspiracy failed because the evidence did not establish the necessary intention to cause loss. The causation defence also failed: the claimant’s failure to register a notice or seek an injunction did not deprive the induced breach of its causative effect.
7. The late application to rely on the additional witness statement was refused under the three-stage approach in Denton v TH White Ltd [2014] EWCA Civ 906. Relief was granted for the certified Articles of Association under section 9 of the Civil Evidence Act 1995.

Judgment was therefore given for the claimant on the procurement claim and the claim for unlawful means conspiracy was dismissed.

The judgment records earlier interlocutory decisions in the same proceedings. High Court (Chancery Division): David Richards J dismissed the first defendant’s applications for joinder and summary judgment, [2011] EWHC 3310 (Ch). Court of Appeal: the appeal concerning joinder was dismissed, [2012] EWCA Civ 1397. The present judgment determined liability at trial.