England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM WEST LONDON COUNTY COURT
(HIS HONOUR JUDGE COTRAN)

		Royal Courts of Justice Strand London WC2 Thursday, 6th April 2000
		6 April 2000

Thursday, 6th April 2000

1. LORD JUSTICE TUCKEY: Is the letting of a houseboat, the tenancy of a dwelling house for the purpose of Part One of the Housing Act 1988?
2. This question arises on appeal from His Honour Judge Cotran in the West London County Court who decided that the agreement under which the respondent, Mr Pope, occupies a houseboat on the Thames was such a tenancy.
3. The appellants, Chelsea Yacht & Boat Company Limited, now own the houseboat. They also run the boatyard and own the moorings where it is moored on the north side of the river upstream of Battersea Bridge in London. The boatyard has various facilities for house-boats on the embankment and on floating barges.
4. The bed of the river is owned by the Port of London Authority who, for an annual licence fee, permit the appellants to maintain among other things mooring piles, mooring pontoons and gangways to accommodate residential craft in the river. The licence authorises them to grant mooring licences and charge fees for the use of the moorings. The mooring pontoons rise and fall with the tide and run in a line parallel with the embankment wall in Cheyne Walk. The house-boats are moored in a line either side of and stern or bow to the pontoons. They lie across the stream held by anchors. On the pontoons the appellants provide services for the house-boats in the shape of water, gas, electricity, telephone and vacuum drainage. These services are easily connected to the house-boats by plug-in or snap-on connections.
5. The "Dinty Moore" occupied by Mr Pope is a converted wooden D Day Landing craft fitted inside a steel Thames barge built by the appellants in about 1967. It is 46' long and 11' wide and is moored stern to the pontoon and the adjoining house-boats by a number of rope mooring lines. Lines from the bow go to an anchor in the river bed at the foot of the embankment wall and to rings in the wall itself. It is connected to the services provided by the appellants. The houseboat takes the ground at about half tide. In other words it is afloat for about six hours or so and then aground for the following six hours. The conversion involved removal of the engine and the creation of permanent living accommodation below, the layout and detail of which do not matter.
6. In 1993 the houseboat was owned by Mrs Crafter and was moored in the position I have described (mooring 21) under the terms of a mooring licence from the appellants. Mrs Crafter let it and its contents to Mr Pope on the terms of a written agreement dated 31st August 1993 ("The Agreement"). The Agreement is in a form largely appropriate for the letting of a dwelling house. That is not surprising since it closely follows the form in the Encyclopedia of Forms and Precedents, Fifth Edition Volume 24 which is preceded by a note which says:

"A houseboat is a chattel, and although the hiring of a chattel cannot strictly be termed a leasing, an agreement for the hiring of a houseboat which will remain at the same mooring place may well follow the general form of an agreement for the tenancy of real property."

7. The Agreement describes the parties as landlord and tenant and the houseboat as a single-storey vessel. The letting was for a term of six months from 1st September 1993 at an annual rent of £3,380 per annum payable monthly. Mr Pope agreed to carry out certain repairs to the houseboat straightaway, including painting its hull, and to keep it and the mooring in good and tenantable repair. He was not to allow it to obstruct the waterway or use it other than as a single private dwelling. It was not to be removed from the mooring without Mrs Crafter's permission other than to enable Mr Pope to comply with his obligations under the Agreement.
8. Mr Pope has made his home in the houseboat since 1993. The Agreement was extended at six monthly intervals by Mrs Crafter until about 1996 when the appellants bought the houseboat from her. They extended The Agreement until 30th April 1997 but then sought possession for failure to pay the rent and other breaches of The Agreement. Proceedings were started in March 1998 and the question which gives rise to this appeal, "was the Agreement governed by the Housing Act 1988?" was decided as a preliminary issue. Both the district judge and Judge Cotran, as I have said, decided that it was.
9. So far as is relevant to this case the Housing Act 1988 applies to "A tenancy under which a dwelling house is let." The appellants contended firstly that the houseboat is a chattel and so is incapable of being the subject of a tenancy and secondly, that in any event a houseboat is not a dwelling house.
10. It is not clear from the judge's judgment whether he appreciated that these were separate points. He appears to have accepted that the houseboat had become part of the land by annexation. He did not think such a conclusion would create difficulties, saying:

"The houseboat has been there for many years. It was bought by the Plaintiff. It can be sold to somebody else. I do not see any problem relating to the ownership of the land on which it lies."

11. At the end of his judgment he said correctly that there was no decided case dealing with a houseboat. And added:

"It makes not the slightest difference, as far as I am concerned, whether a houseboat lies on the land after removal from water or is attached to the river bed and/or float for part of the day, so long as it is permanently immobile and let as such."

12. On the second point he appears to have agreed with the district judge who said:

"I can see no reason, why in circumstances such as these, a houseboat cannot be both a dwelling house and a boat. That is, after all, what the word 'houseboat' implies."

13. On this appeal we have only heard argument on the first point, since it is accepted on behalf of Mr Pope that if the appellants are right on this point the appeal must succeed.
14. It is common ground that the Housing Act 1988 only applies to the letting of land and that the houseboat is a chattel unless it has become part of the land by annexure.
15. The principles by which to test whether a chattel has become part of the land have recently been considered by the House of Lords in Elitestone Limited v Morris [1997] 1 WLR 687. In that case the question was whether a chalet resting only by its own weight on concrete pillars set into the ground had become part of the land. The chalet was connected to the usual services. It could not be taken down and reerected elsewhere; it could only be removed by demolition. The House restored the assistant recorder's conclusion that it was part of the land. The head note says:

"The answer to the question whether a structure became part and parcel of the land itself depended on the degree and the object of annexation to the land; that, assessed objectively, a house built in such a way that it could not be removed except by destruction could not have been intended to remain a chattel and must have been intended to form part of the realty."

16. Various passages in the speeches in this case are relied on by both sides. However, the broad questions which the Court has to consider are accurately summarised in the head note.
17. In considering the degree of annexation, it is obviously of importance that the chattel can be removed without injury to itself or to the land. There must also be a degree of permanence. Purpose is also important as the illustration given by Blackburn J in Holland v Hodgson [1872] LR 7 CP 328 at 335 cited with approval in Elitestone shows. He said:

"Blocks of stone placed one on top of another without any mortar or cement for the purpose of forming a dry stone wall would become part of the land, though the same stones, if deposited in a builder's yard and for convenience sake stacked on the top of each other in the form of a wall, would remain chattels. 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. The anchor of a large ship must be very firmly fixed in the ground in order to bear the strain of the cable, yet no one could suppose that it became part of the land, even though it should chance that the shipowner was also the owner of the fee at the spot where the anchor was dropped. An anchor similarly fixed in the soil for the purpose of bearing the strain of the chain of a suspension bridge would be part of the land."

18. Miss Easty in her clear and spirited submissions to us on behalf of Mr Pope referred to a number of other cases under different legislation. First, she referred to rating cases where the Court had to consider whether the occupiers of a hulk Cory v Bristow [1877] 2 AC 262; a landing stage, Forrest v Overseers of Greenwich [1858] XXI Victoria 890; and the Hispaniola Westminister City Council v Woodbury [1991] EGLR 173, all in the Thames were in rateable occupation of land. But these cases only illustrate the circumstances in which under the intricacies of rating law a chattel becomes rateable if it occupies land or is enjoyed with land. They shed no light on the circumstances in which a chattel becomes part of the land and therefore I do not find them of assistance in this case. The same applies to the poll tax case of Stubbs v Hartnell [1997] 74 P&CR D36 which concerned a houseboat in the Thames.
19. Miss Easty also referred us to Makins v Elson (Inspector of Taxes) [1977] 1 WLR where the Court had to consider whether the tax-payer was liable to capital gains tax upon the disposal of his mobile caravan under the terms of section 29 of the Finance Act 1965. That Act distinguished between a dwelling house and land. The question whether the caravan became part of the land did not therefore arise and again I do not think that this decision helps to resolve the instant case.
20. Finally, Miss Easty relied on the decision of Farquharson J in R v Rent Officer of Nottinghamshire Registration Area ex parte Allen [1985] 2 EGLR 153 who quashed the decision of a rent officer who had registered a fair rent for a caravan on the basis that its letting fell within the Rent Act. In the course of his judgment Farquharson J said that it was not possible to say that just because the subject matter of the letting was a caravan it would not fall within the Rent Act. However, it is clear from the judgment that the only point the judge considered was whether the caravan was a house. That is the second point in this case upon which we have not heard argument. I do not think the decision casts any real light on the first point which we have to decide.
21. Elitestone is binding upon us and we have to apply the principles laid down in that case. How should they be applied to the facts of this case?
22. Miss Easty firstly argued that both the district judge and the judge had found the facts against the appellants in a way which did not enable this Court to interfere.
23. I do not accept this submission. The district judge decided the case on the basis that Elitestone was of no assistance. He does not appear to have addressed the question of whether the houseboat became part of the land at all. As I have already said, it is not clear whether the judge really did so either. If he did, he appears to have based his decision on the fact that the houseboat was: "Permanently immobile and let as such." But it was not permanently immobile and it is common ground that the terms of the agreement could not of themselves have created the necessary annexure. For these reasons I do not think we are in any way bound by the findings below.
24. Turning firstly to the degree of annexure it is important to bear in mind that what is required is sufficient attachment to the land so that the chattel becomes part of the land itself. Here the houseboat rested periodically on the river bed below it and was secured by ropes and perhaps to an extent the services to other structures. It is difficult to see how attachments in this way to the pontoons, the anchor in the riverbed and the rings in the embankment wall could possibly make the houseboat part of the land. One is bound to ask "which land?" There is in my judgment no satisfactory answer to this question. More importantly, however, all these attachments could simply be undone. The houseboat could be moved quite easily without injury to itself or the land. The Agreement contemplates that it will be moved, and, in practical terms, required Mr Pope to dry dock it if he was to fulfil his obligation to paint the hull. The fact that it cannot move under its own power is not the point. Whilst the houseboat was obviously intended to be moored where it was for the term of the Agreement at least, the fact that it could and would have to be moved greatly undermines the argument based on permanence.
25. Turning then to the object or purpose of annexure, Miss Easty strongly submits that the attachment of the houseboat was to provide a permanent home for its occupant. I do not agree. It is not necessary to annex the houseboat to the land to enable it to be used as a home. The attachments were, like the ship's anchor referred to by Blackburn J, to prevent the houseboat from being carried by the tide or the weather up or down stream and to provide the services to it.
26. For these reasons I conclude that the houseboat has not become part of the land. I support this conclusion on the grounds of common sense. It is common sense that a house built on land is part of the land. (See Lord Lloyd in Elitestone at page 692 H). So too it is common sense that a boat on a river is not part of the land. A boat, albeit one used as a home, is not of the same genus as real property.
27. For these reasons I would allow this appeal and answer no to the question, "Was the agreement governed by the Housing Act 1988."
28. LORD JUSTICE WALLER: I agree that, for the reasons given by my Lord and those about to be given by my Lord, Morritt LJ, which I have had the advantage of reading in draft, this appeal should be allowed.
29. LORD JUSTICE MORRITT: The circumstances in which this appeal arises have been fully described by Tuckey LJ. I gratefully adopt his account of them. It is common ground that the Housing Act 1988 applies to lease or tenancies of land but not of equivalent agreements in relation to chattels. It is equally plain that originally both the landing craft and the barge in which it now rests were chattels. It seems to me, therefore that there are two questions only (1) Has the combined barge/landing-craft become part of the land? (2) If it has is it a dwelling-house?
30. We heard argument on the first point only. Accordingly the views I express are directed to that point alone even if some of them might be capable of being addressed to both of them.
31. We are, of course, bound by the decision of the House of Lords in Elitestone v Morris [1997] 1 WLR 687. In that case the House of Lords pointed out that the question was whether the chattel had become part and parcel of the land, not whether it was a fixture. (See page 691G- H). The House of Lords also approved the test formulated by Blackburn J in Holland v Hodgson [1872] LR 7 CP 328 that the answer to the question depends on two factors, the degree and object of annexation. Lord Lloyd of Berwick pointed out that the intention of the parties was only relevant to the extent to which it could be derived from the degree and object of annexation. Illustrative of those principles in relation to a tapestry is the decision in Leigh v Taylor [1902] AC 157 to which we were referred.
32. In addition to these three cases we were referred to a number of other cases by way of illustration. I commend Miss Easty for her diligence, but I find them of no assistance.
33. The three rating cases, Cory v Bristow [1877] 2 AC 262, Forrest v Overseers of Greenwich [1858] XXI Victoria 890 and Westminister City Council v Woodbury (VO) And Another [1991] EGLR 173 CA were all concerned with whether there was rateable occupation of the river bed by means of a derrick hulk, a vessel permanently moored and the landing stage. In none of them was the Court concerned with the question whether the chattel in question had itself become a part of the land.
34. In Makins & Elson [1977] 1 WLR 21 the Court was concerned with the exemption from Capital Gains Tax afforded to the tax payer's residence by section 29 of the relevant Finance Act. The definition of residence for present purposes was:

"(a) a dwelling house or part of a dwelling house which is, or has at any time in his period of ownership been, his only or main residence, or (b) land which he has for his own occupation and enjoyment with that residence as its garden or grounds..."

35. Foster J held that the tax payer's caravan was within paragraph (a) of that definition. It formed no part of his conclusion that in the circumstances of the case the caravan which he had described had become a part of the land itself. In Stubbs v Hartnell [1997] 74 P&CR 36 the Court was concerned with liability to council tax in relation to a houseboat. But liability did not depend on whether the houseboat was part of the land or not. Accordingly, it is of no direct relevance to the question before us. In R v the Rent Officer of Nottinghamshire ex party Allen [1985] 2 EGLR 153 the question was whether a fully mobile caravan was a house for the purposes of the Rent Act 1977. The question whether it was part of the land was not argued. To the like effect, there is a decision in respect of a houseboat called the "Lady Betty" noted in [1949] 118 JPR 376. The question was whether it was a house within the meaning of the Furnished Houses Rent Control Act 1946, not whether it was part of the land.
36. In agreeing with the district judge, Judge Cotran said:
37. "The factors necessary to decide the preliminary issue were (a) the terms of tenancy - use and removability; (b) the degree of permanence and movability/immovability; and (c) the nature of the structure and its use. He..." - that is the district judge,

"... said that on the facts as he found them, and on the three factors of importance, the "Dinty Moore", nothing else was an ensured tenancy within the meaning of the Housing Act 1988. It seems to me that to argue that no houseboat can ever be protected is wrong. Certainly it is wrong if one considers the criteria that the case law has put forward. There has been no decision on a houseboat as such but there has been, in relation to a caravan and its mobility/immobility, and it makes not the slightest difference, as far as I am concerned, whether a houseboat lies on the land after removal from water or is attached to the river bed and/or float for part of the day, so long as it is permanently immobile and let as such."

38. In my view there are a number of criticisms which may be made of that passage. First the terms of the tenancy do not appear to me to have any relevance to whether there has been the requisite degree or purpose of annexation. They show the intention of the parties in regard to the contract, but, as Lord Lloyd of Berwick pointed out in Elitestone v Morris (page 693 F) the intention of the parties is irrelevant save in so far as it is derived from the degree and object of the annexation. Second, the judge considered that the only points of importance were whether the object was permanently immobile and let as such. On the first point he was wrong as a matter of fact that the Dinty Moore could be easily detached from its moorings and service connections and towed away by a barge. The second point was only relevant if the Housing Act applied, and that depended on whether the Dinty Moore was part of the land; thus reliance on the second point begged the question to be determined. Third, the judge did not seek to apply Elitestone v Morris, or, as was required by that decision, the twin factors of degree and object of annexation. Indeed at page 15B of the transcript of his judgment he said that that case did not assist the argument.
39. In the light of these criticisms I reject the submission by counsel for Mr Pope that the issue was one of fact on which both judges below had reached clear conclusions with which this Court should not interfere.
40. The proper test is that laid down in Holland v Hodgson as approved in Elitestone & Morris. The Court has to consider both the degree and object of annexation. The Dinty Moore is attached to the river wall and the river in the manner described by Tuckey LJ ultimately by ropes and service connections. Those ropes and services may be untied and disconnected without any undue effort to enable the Dinty Moor to be towed away by a barge. Thus the degree of annexation does not require recognition of the Dinty Moore a part of the land.
41. Counsel for Mr Pope emphasise that the purpose of the annexation was to provide a home. Certainly the object of the conversion of the landing craft and its attachment to the services was to provide a home. But there is nothing to prevent the removal of the Dinty Moore from this mooring to another. The provision of a home does not necessitate annexing the structure (be it a caravan or a boat) to the land so as to become a part of it; it is sufficient that it is fitted out for living in.
42. I agree with Tuckey LJ that the Dinty Moore cannot, in these and the other circumstances to which he refers, be regarded as a part of the land. In those circumstances the second question, whether the Dinty Moore is a dwelling house within the Housing Act 1988, does not arise.
43. I too would allow this appeal.

(Short adjournment)

JUDGMENT ON ORDER FOR POSSESSION

44. LORD JUSTICE MORRITT: The question arises on the form of the order as to whether we should make an order for possession in 28 days or whether we should remit the matter to the county court for the determination of the further issues alleged by counsel for Mr Pope still to be in play.
45. The position is that following our judgment Mr Pope has no security of tenure. The licence under which he formerly occupied was last extended to 31st August 1997. Accordingly the term under which he last occupied expired at that date. The notice to quit, which on our findings was not strictly required, was served on 18th November 1997 and required Mr Pope to give up possession on 1st January 1998.
46. The proceedings were commenced on 20th March 1998 and the notice of appeal was served on 26th April 1999. It seems to me that both the notice, the service of the proceedings and the service of the notice of appeal seeking an order for possession were more than sufficient to terminate any residual right of occupation which Mr Pope might have had. Even if it be assumed that he held over on terms requiring reasonable notice to be given, for my part I am satisfied that one, other or all three of those gave the requisite notice. Accordingly for my part I would make the order for possession within 28 days as sought.
47. LORD JUSTICE TUCKEY: I agree.
48. LORD JUSTICE WALLER: I also agree.

JUDGMENT ON STAY

49. LORD JUSTICE MORRITT: We refuse a stay of execution of our order on the undertaking of the claimants that they will forthwith on receiving vacant possession of the boat remit it for the necessary repairs, and, if they consider that the boat is beyond economic repair then we give liberty to both parties to apply to the county court to determine what if any further relief would be sought. It is also on the undertaking that if the boat is capable of economic repair, is repaired, and if the House of Lords determine we were wrong, that the claimants will let Mr Pope back into occupation of it.
(Appeal allowed with costs; costs not to be enforced without leave of the court; possession order in 28 days; question one of preliminary issues answered in the negative).