Spielplatz Ltd v Pearson & Anor

For the law of fixtures and accession, whether a building becomes part of the land depends principally on the degree and object of annexation. A structure designed for residence and incapable of removal except by dismantling or destruction will ordinarily form part of the realty. The parties’ subjective beliefs cannot alter that consequence. Once the building has acceded to the land, it is included in a tenancy of the plot unless the agreement clearly provides otherwise; the court will not invent a separate licence to avoid statutory consequences. A tenancy of a separate dwelling is not a holiday letting merely because the resort has recreational features where the tenant is entitled to occupy it habitually and throughout the year.

Spielplatz owned a naturist resort and granted the respondents a yearly tenancy of a plot in 1992. The respondents separately acquired a chalet standing on the plot. After serving a notice to quit, Spielplatz brought possession proceedings, arguing that the chalet was a chattel and that the tenancy was not an assured tenancy under the Housing Act 1988.

The county court held that the chalet had acceded to the land, so the tenancy was an assured tenancy of a separate dwelling. It dismissed the possession claim. The appeal challenged that conclusion, alternatively argued that the tenancy covered only the soil with a gratuitous licence to occupy the chalet, and relied on the holiday-letting exclusion. The central issues were whether the chalet formed part of the land and whether the tenancy was excluded from the assured-tenancy regime.

The appeal was dismissed. Sir Colin Rimer gave the judgment, with which Lord Justice Burnett and Lord Justice Laws agreed.

1. The question whether the chalet had become part of the land was governed by the degree and object of annexation, following the guidance in Elitestone Ltd v Morris and Another [1997] 1 WLR 687. The original chalet was constructed as a permanent residential building and could not be removed except by dismantling it into its constituent parts. The evidence therefore supported, and in practical terms required, the conclusion that it had acceded to the land.
2. The judge was entitled to consider the chalet as it existed when the tenancy was granted in 1992. Later refurbishment did not undermine her conclusion. The purpose of placing the chalet on the plot was objectively connected with residential occupation and enjoyment of the resort’s amenities. The parties’ belief that the respondents owned the chalet was merely subjective and could not determine its legal status.
3. Once the chalet had become part of the land, it was automatically included in the letting of Plot 44A. There was no evidential basis for treating the soil as demised while the chalet was occupied under a separate gratuitous licence. The court would not create such an artificial contractual scheme to avoid statutory consequences.
4. The holiday-letting exclusion under section 1(2) and paragraph 9 of Part 1 of Schedule 1 to the Housing Act 1988 did not apply. The respondents were entitled to occupy the chalet throughout the year, the agreement referred to habitual use, and the tenancy was yearly. The notice to quit was not given under the Act, so the possession claim failed.

• Court of Appeal (Civil Division): On 28 July 2015, the appeal from the county court’s decision was dismissed.
• Luton County Court: Her Honour Judge Lindsay Davies held that the respondents had an assured tenancy which had not been determined under the Housing Act 1988 and dismissed the possession claim by order dated 7 May 2014.