Define the concept of 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
a temporary purpose and 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.
The general principle is 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
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.