England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM NEWPORT (IOW) COUNTY COURT
His Honour Graham Jones
7N101150

		Royal Courts of Justice Strand, London, WC2A 2LL
		28th July 2011

Lord Justice Patten :

Introduction

1. Tristmire Limited ("Tristmire") is the leasehold owner and registered proprietor of plots 14 and 30, Embankment Road, Bembridge Harbour on the Isle of Wight. It acquired these plots at an auction held on 5^th June 2007. The vendor was a company called Maritime & Leisure Investments Limited ("MLIL") which was granted a long lease of the harbour in 2003 by Bembridge Harbour Improvements Company Limited ("BHIC") which owns the freehold.
2. The plots in question are roughly rectangular in shape and are situated around the edge of the harbour adjacent to the public highway. They are covered by the sea at high tide. MLIL sold six such plots at the auction. Each of them is occupied by what was described in the auction particulars as a houseboat. On Plot 14 is the houseboat "Emily" which is owned by the first defendant, Mr Mew. Plot 30 is occupied by the houseboat "Watershed" owned by Ms Just.
3. The evidence provided by Mr David Shields, a civil engineer who inspected the sites and acted as a jointly instructed expert, is that the houseboats are converted landing craft which were constructed locally during the Second World War but not used in service. At the end of the war they were sold off and then modified by their owners with the addition of a super-structure so as to make them watertight and habitable. They were once capable of floating but, like many of the other houseboats in the harbour, they now rest on wooden platforms which are supported by wooden piles driven into, and in some cases cemented into, the bed of the harbour.
4. Mr Shields reported that there was severe deterioration of the original hulls of the converted landing craft which were built of wood. In each case they could only be removed from the platforms by the use of a crane with an extensive supporting cradle. Given the present condition of the hulls, this is likely to result in damage to or the destruction of the houseboats. But when originally put into position on the platforms they could have been removed by crane and then floated to a new location.
5. Both "Emily" and "Watershed" have mains services such as water, electricity and gas but these could easily be disconnected. They are not fixed on to their supporting platforms but Mr and Mrs Mew have constructed a wooden PVC-clad extension to one side of "Emily" which is fixed on to the supporting platform and which Mr Shields said could not be removed without demolition.
6. There is no real evidence as to how "Emily" and "Watershed" (or the other similar houseboats) came to be placed on the supporting platforms or when that occurred. The freehold of the harbour was transferred from the British Railways Board to BHIC under the Pier and Harbour Order (Bembridge Harbour) Confirmation Act 1963 ("the 1963 Act"). This authorised BHIC to continue to operate the harbour:

"subject to the rights, duties, contracts, liabilities and obligations affecting the same (including all rights of access to landing-places, piers, quays and jetties existing immediately before the day of transfer": see s.11(2).

7. It is apparent from the 1963 Act that there were already a number of houseboats in the harbour because s.15 expressly provides that:

" (1) The Company may provide, place, lay down, maintain, use and have moorings, buoys, marinas and like apparatus and conveniences for vessels and houseboats on land owned or leased by the Company and on any other land with the consent in writing of the owner and lessee thereof in the harbour.

(2) The Company may demand, receive and recover in respect of any vessel using any of the moorings, buoys, marinas or like apparatus or conveniences provided by the Company under this section such reasonable charges as may be prescribed by the Company and approved by the Minister.

(3) The Company may demand, receive and recover in respect of any houseboat within the harbour such reasonable charges as the Company may from time to time determine."

8. In s.3 of the 1963 Act "houseboat" means:

"any vessel lying in the water or on the foreshore of the harbour which is used or capable of being used as a place of habitation and if so used whether such use be temporary, intermittent or permanent or as a place for accommodating or receiving persons for purposes of shelter, recreation, entertainment or refreshment or as club premises or as offices but shall not include –

(i) a vessel normally engaged in the transport of persons or goods; or

(ii) any pleasure vessel used in navigation; or

(iii) any lightship or watch barge;

….

"vessel" includes any vessel, ship, lighter, keel, barge, boat, raft, pontoon, hover vessel, and craft of any kind howsoever navigated, propelled or moved and except for the purpose of levying rates any seaplane on the surface of the water;"

9. BHIC was empowered by s.24(1) to make byelaws including ones for the regulation of the mooring, careening, beaching or anchoring and keeping of vessels and houseboats in the harbour.
10. The records of BHIC do not disclose whether houseboats like "Emily" and "Watershed" were originally secured to floating moorings and were then raised up on to the existing platforms or whether they have always rested on their present supports. Mr Mew purchased "Emily" in 1993. Ms Just acquired "Watershed" in 1991. In both cases what they bought was the houseboat itself rather than any interest in the land it occupies. The purchase agreement signed by Mr Mew which is in evidence contains a covenant by him with the vendor to "pay all harbour dues and any other fees, tolls or other sums due for mooring" but does not include an assignment of the tenancy or licence under which the site was occupied.
11. The practice seems to have been for BHIC to be informed of the change of ownership and thereafter to bill the new owner for the fees due. So, in the case of Mr Mew, BHIC invoiced him from 1993 in respect of "site-rent" for his plot which was payable quarterly in advance at the rate of £96 per quarter. This practice continued until 1998 when the billing seems to have changed to monthly charges for "mooring". In May 2007 Mr Mew received a letter from BHIC "in connection with your houseboat in Bembridge Harbour and the leases we have been granting to the owners of the houseboats". The letter went on to explain that the company had offered long leases of the various plots to the houseboat owners but was now writing to Mr Mew because he had indicated that he was not interested in acquiring such a lease in respect of his own plot. BHIC intended therefore to dispose of the remaining plots at auction which it did on 5^th June 2007. Thereafter Mr Mew would have a new "landlord".
12. By the time of the auction BHIC had granted a long lease of the plots and other land to MLIL and the successful purchasers at the auction were granted sub-leases of the individual plots for terms of 99 years (less 3 days) from 25^th March 2005. The auction particulars contain details of the rents paid by the houseboat owners for the plots which are calculated on the length of the houseboat concerned. The special conditions of sale referred to Mr Mew and Ms Just as holding under oral licences at those rents.
13. On 13^th July 2007 Tristmire gave to each defendant notice terminating their licences and requiring them to deliver up possession on 31^st August 2007. Proceedings for possession were issued in October 2007. The defendants served defences contending that they occupied the plots as tenants not licensees and that their houseboats were dwellinghouses so as to give them protection as assured tenants under the provisions of the Housing Act 1988 ("the 1988 Act"). They also pleaded that the notices served on 13^th July 2007 were invalid in any event because they did not comply with the requirements of the Protection from Eviction Act 1977. As a consequence, two further sets of notices were served on 11^th November 2008 requiring possession to be given up on 11^th February 2009. One set referred to "Emily" and "Watershed" by name and contained the prescribed information. The other set referred to the plots occupied by the houseboats and did not contain that information. At the same time Tristmire also served notices under s.13 of the 1988 Act which purported to increase the rent with effect from 15^th May 2009.
14. On 5^th March 2009 another two sets of identical notices were served expiring on 5^th June 2009 together with a further set of s.13 notices. On 22^nd December 2009 a yet further set of s.13 notices were served which were stated to take effect at the beginning of the next period of the defendants' tenancies commencing after six months from the date of service of the notices.
15. After the trial had taken place and the draft judgment had been circulated to the parties, Tristmire served further notices to quit dated 25^th November 2010 which expired on 25^th February 2011. The notices were given in respect of the plots themselves and on the footing that the defendants were only licensees.
16. The principal issue for the judge at the trial was whether "Emily" and "Watershed" were dwellinghouses let as separate dwellings so as to make the defendants assured tenants under s.1 of the 1988 Act. If they were assured tenants then it is common ground that none of the notices to quit was effective to determine the tenancies and entitle Tristmire to an order for possession. To obtain possession it would have to serve a s.8 notice specifying one of the statutory grounds for possession and obtain an order for possession on that basis. If, however, the defendants occupy only as licensees and are not tenants of a dwellinghouse consisting of the houseboat then it is also agreed that the notices served on 25^th November 2010 were effective to terminate their rights of occupation.
17. The other issue for the judge was the question of rent. If the defendants occupy as assured tenants then any increases in rent are governed by s.13 of the Housing Act 1988. The defendants counterclaimed for a declaration that the s.13 notices served on 11^th November 2008 were invalid because the period of notice was too short.
18. The trial took place before His Honour Graham Jones. He held that the defendants were not assured tenants but were at all material times merely licensees of the plots occupied by "Emily" and "Watershed". He found that they had not become annexed to the land comprised in the plots so as to be part of the realty and that there had therefore never been a tenancy of either of them as a dwellinghouse. He also expressed the view that even if they had become affixed he was not persuaded that a tenancy as opposed to a licence was ever created. On the question of notices, he held that the November 2010 notices were effective to determine the licences and could be relied upon even though served long after the proceedings commenced. In view of his finding that the defendants are licensees, the issue about the s.13 notices did not arise.

Assured tenancies

19. The first of the two conditions for the creation of an assured tenancy under s.1 of the 1988 Act is that it should be a tenancy "under which a dwelling-house is let as a separate dwelling". Any tenancy granted to the defendants was in respect of plots 14 and 30 which accommodate the wooden platforms on which the houseboats rest. These can only therefore have been tenancies of a dwellinghouse if the houseboats (as well as the wooden platforms) have become part of the land comprised in the tenancies. If the correct analysis is that they have remained chattels removable (although with some difficulty) by the tenants at the end of the lease then the conditions for an assured tenancy are not satisfied.
20. The judge made the following findings of fact which I will quote in full:

"23. Although the evidence is limited, I consider that, on the balance of probability, the following findings of fact can safely be made

(1) Originally, the units were WW2 landing craft. Their appearance is consistent with that finding. That was what the owners told Mr Shields (albeit necessarily based on report to them). Mr Shields states that "observation would suggest that this is probably the case".

(2) The owners also reported to Mr Shields that the landing craft were constructed locally and were surplus to requirements at the end of the war. Again, this seems more likely than not. There are a number of similar units in the Harbour. The fact that they are in a harbour with direct access to the Channel makes it more likely that they were constructed there than brought there over land.

(3) Originally the units floated. It is improbable that landing craft were constructed which could not float.

(4) It is more likely than not that, originally, the units were houseboats in a true sense i.e. they provided floating residential accommodation. It is more likely than not that a converted boat capable of floating and floating on the tide in a harbour would be used as floating accommodation. Others of the units in the Harbour (of which there are a substantial number) are still used in that way.

(5) When the units were raised above high water level, none was attached to the supporting structures. "Merlin" and "Watershed" remain unattached, resting on the supporting structures by their own weight. In the case of "Emily", the extension work carried out (some five years ago according to Mr Mew) it itself physically attached to the harbour bed and in turn to the original structure. The original structure itself remains unattached to its supporting structures resting on them by its own weight.

(6) "Merlin" and "Watershed" could still be lifted off their supporting structures by crane. Such an operation could not be carried out without causing damage to the units but the sole cause of that damage would be the deterioration resulting from failure to maintain the units. In the case of "Emily", removal could not take place without damage to the additional structure and to the original unit to which the additional structure is physically and substantially attached. In the case of each unit, the mains services could be easily disconnected.

(7) It was the unqualified understanding of all three Defendants (and indeed everyone else involved) that they were acquiring their respective units by purchase on the basis that they were chattels: the Defendants did not take assignments of leases or tenancies; each apparently acquired ownership of a houseboat. It is highly likely that these transactions were part of a series of like transactions, all previous dealings having been on the same apparent basis, sale by one owner to the next.

(8) Various terms have from time to time been used by or on behalf of the Harbour Company such as "site rent", "mooring fees", "tenancy" and "licence". It is clear, however, that the Harbour Company has always considered and treated the units as owned by the occupiers and not by it. The "site rent" or "mooring fees" have been based upon "the length of the houseboat". Tristmire has not entered into any arrangement or relationship with the Defendants different from that which subsisted between the Harbour Company and the Defendants but is subject to it, whatever it was.

(9) The Defendants occupy their respective units as their sole permanent residential accommodation, paying council tax."

21. Annexation so as to become part of the realty is a question both of intention and degree. But it is common ground in this case that two matters are irrelevant. The first is the current state of repair of "Emily" and "Watershed". Although it is unlikely that they could now be removed without breaking up, that is not material to the question whether they became affixed to the land. That question has to be answered by reference to their condition at the time when they were placed on to the supporting structures. Because there is no evidence about this, it has to be assumed that they were then in a reasonable state of repair.
22. The second matter is the extension to "Emily" which Mr and Mrs Mew constructed subsequent to their purchase in 1993. Again it is accepted by Mr Glen that the issue of annexation cannot be determined by reference to these subsequent improvements. It must depend on the position when the houseboat was first placed on to its present supports.
23. Perhaps the leading authority on this issue is the decision of the House of Lords in Elitestone Ltd v Morris [1997] 1 WLR 687. The defendant in that case was the owner of a wooden bungalow which he had placed on a plot of land which he occupied under an annual "licence". The bungalow had been put together on site from materials that were brought it. It had a timber floor suspended on some concrete pillars that were attached to the ground. But it rested on these pillars by its own weight without any additional fixing.
24. The freehold owners of the site sought possession and the defendant claimed to have the benefit of a protected tenancy under the Rent Act 1977. That depended (as in this case) on whether he was the tenant of a dwellinghouse that was let as a separate dwelling. It was therefore necessary for him to prove that the bungalow had become part of the land held under the "licence" agreement.
25. Mr Morris, like the defendants in this case, had purchased his bungalow from its previous owners separately from any assignment of the licence or tenancy. But the House of Lords held that the degree and object of annexation was such as to make it part of the realty.
26. On the issue of the degree of annexation, Lord Lloyd of Berwick (at page 690) described the bungalow in these terms:

"the photographs show very clearly what the bungalow is, and especially what it is not. It is not like a Portakabin, or mobile home. The nature of the structure is such that it could not be taken down and re-erected elsewhere. It could only be removed by a process of demolition. This, as will appear later, is a factor of great importance in the present case. If a structure can only be enjoyed in situ, and is such that it cannot be removed in whole or in sections to another site, there is at least a strong inference that the purpose of placing the structure on the original site was that it should form part of the realty at that site, and therefore cease to be a chattel."

27. It is, however, important to note that annexation in that case turned on whether the wooden bungalow itself (rather than the bungalow plus the concrete supports) had been affixed to the land. Lord Clyde makes this clear in his speech at page 694F where he says that:

"we are required to proceed on the basis that the bungalow is not physically attached to the land. The next consideration is whether the foundations form part of the bungalow. These are sunk into the ground and, if they were to be treated as part of the bungalow, would clearly be an element of physical connection with the ground. But it does not appear that there is any particular adaptation of the foundations to the structure above nor any adaptation of the structure to suit the foundations. The main structural elements of the bungalow simply rest on the concrete blocks. The bungalow and the foundations are severable from each other and it is not appropriate to treat the whole as a unum quid so as to conclude that the bungalow is built into the ground. It is with the wooden structure alone that the case is concerned."

28. The House of Lords confirmed that the degree of physical annexation was not conclusive as to whether the chattel had become annexed to the land. It has to be considered in conjunction with the purpose of the annexation in the particular case under consideration. So, in the context of a lease, heavy machinery which is bolted to the ground may be removed by the tenant at the end of the lease because it was only affixed for the purpose of the tenant's trade. The same principle was applied in Webb v Frank Bevis Ltd [1940] 1 All ER 247 to a large shed built on a concrete floor to which it was attached by iron straps. It remained a chattel which the tenant was allowed to remove.
29. Elitestone Ltd v Morris was the converse of that case. The wooden bungalow was not affixed as such to the concrete supports in any way. Like the houseboats in the present case, it simply rested on those supports. But that was not regarded as fatal to the issue of annexation when the purpose of the bungalow being placed where it was had been taken into account.
30. Lord Lloyd (at page 692) said this about the purpose of annexation:

"Many different tests have been suggested, such as whether the object which has been fixed to the property has been so fixed for the better enjoyment of the object as a chattel, or whether it has been fixed with a view to effecting a permanent improvement of the freehold. This and similar tests are useful when one is considering an object such as a tapestry, which may or may not be fixed to a house so as to become part of the freehold (see Leigh v Taylor [1902] AC 157, [1900–3] All ER Rep 520). These tests are less useful when one is considering the house itself. In the case of the house, the answer is as much a matter of common sense as precise analysis. A house which is constructed in such a way so as to be removable, whether as a unit or in sections, may well remain a chattel, even though it is connected temporarily to mains services such as water and electricity. But a house which is constructed in such a way that it cannot be removed at all, save by destruction, cannot have been intended to remain as a chattel. It must have been intended to form part of the realty. I know of no better analogy than the example given by Blackburn J in Holland v Hodgson (1872) LR 7 CP 328 at 335, [1861–73] All ER Rep 237 at 242:

'Thus blocks of stone placed one on the 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.'

Applying that analogy to the present case, I do not doubt that when Mr Morris's bungalow was built, and as each of the timber frame walls were placed in position, they all became part of the structure, which was itself part and parcel of the land. The object of bringing the individual bits of wood onto the site seems to be so clear that the absence of any attachment to the soil (save by gravity) becomes an irrelevance."

31. Lord Clyde (at page 699) said that:

If one considers the object or purpose which the structure serves by being placed where it is, it was clearly placed there to enable the amenity of Holtsfield to be enjoyed through the establishment of a residence. The bungalow was built there in order that people could live in what is represented as being an idyllic rural environment. The Court of Appeal, however, had regard to the belief of Mr Morris that he owned the bungalow as evidence of his intention. But his belief cannot control the operation of the law in relation to accession and the matter of intention has to be judged objectively. Indeed, the fact that the freeholders may have believed and reminded the occupants that their rights to remain could be terminated, which was also a factor on which the Court of Appeal relied, cannot affect the operation of the law.

Accession also involves a degree of permanence, as opposed to some merely temporary provision. This is not simply a matter of counting the years for which the structure has stood where it is, but again of appraising the whole circumstances. The bungalow has been standing on its site for about half a century and has been used for many years as the residence of Mr Morris and his family. That the bungalow was constructed where it is for the purpose of a residence and that it cannot be removed and re-erected elsewhere point in my view to the conclusion that it is intended to serve a permanent purpose. If it was designed and constructed in a way that would enable it to be taken down and rebuilt elsewhere, that might well point to the possibility that it still retained its character of a chattel. That the integrity of this chalet depends upon it remaining where it is provides that element of permanence which points to its having acceded to the ground. The Court of Appeal took the view that the bungalow was no more annexed to the land and just as much a chattel as the greenhouse in Deen v Andrews [1986] 1 EGLR 262 (or, as I have already mentioned, the large shed in Webb v Frank Bevis Ltd [1940] 1 All ER 247). But there is a critical distinction between Deen v Andrews and the present case in the fact that the greenhouse was demountable while the bungalow is not. I prefer the conclusion reached by the learned assistant recorder after hearing the evidence and visiting the site to form his own impression of the situation. As he observed towards the end of his judgment, a judgment which deserves commendation for the detail and care which has gone into it:

'… it seems to me clear that at least by 1985 and probably before, it would have been clear to anybody that this was a structure which 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.'

In my view, the conclusion reached on this matter by the assistant recorder was correct."

32. Before turning to the facts of the present case I need to mention one other authority which is the decision of the Court of Appeal in Chelsea Yacht & Boat Co Ltd v Pope [2000] 1 WLR 1941. This concerned a houseboat moored to a pontoon and to the bank of the Thames. Although connected to mains services, the houseboat could be untied, the services disconnected, and then it could be towed to a new location. The Court of Appeal held that there was no assured tenancy of the houseboat. That was a much easier case to decide than the present one because the houseboat remained floating alongside the Thames embankment and was attached both to the river wall and to the pontoon which the owners of the adjoining boatyard were permitted by the Port of London Authority to attach to the bed of the river. As Tuckey LJ said (at page 1945):

"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.

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.

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 of Berwick in the Elitestone case [1997] 2 All ER 513 at 518–519, [1997] 1 WLR 687 at 692). 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."

33. The present case has features of both the cases I have just referred to. "Emily" and "Watershed" began life as landing craft and could (and, on the judge's findings, probably did) continue to float even when converted into houseboats. Had they remained floating in the harbour attached to one of the harbour company's pontoons they would clearly not have been let under assured tenancies.
34. What is said to have made the difference is their removal on to the wooden platforms which now support them clear of the tide. They are not affixed to those platforms but neither was the bungalow in Elitestone Ltd v Morris. Their placement in those positions is said to give them a degree of permanence so as to make them part of the plots on which the platforms stand. They cannot now be removed without their disintegration but even when in a proper state of repair they had, objectively speaking, become permanent structures like houses on stilts which were not intended to be removed.
35. The judge was not persuaded by this. He set out his reasons for holding that "Emily" and "Watershed" remained chattels in the following paragraphs from his judgment:

"33. In the present case, the materials out of which the landing craft were originally constructed were not brought to their respective present sites and assembled there. Each landing craft was originally a chattel, brought as such to its mooring in the Harbour, and it remained a chattel even after the superstructure had been added and the conversion to residential accommodation accomplished. As I have found, the probability in all the circumstances is that each became and was used as a floating houseboat. As such, in accordance with principle and indeed on the authority of Chelsea Yacht and Boat Co each remained a chattel.

34. Did the houseboats each become part and parcel of the harbour bed when they were respectively raised on to the structures on which they stand? There is no evidence when this was done or how it was achieved, although it predated the occupancy of the Defendants. How it was done, in my view, can be inferred and is material. The houseboats could not have been floated to a height above that of the highest tide. It is extremely improbable, even if practically possible, that they were taken apart and then rebuilt on the supporting structures. They can only have been jacked up from the harbour bed beneath or raised by means of a crane onto their respective supporting structures. That conclusion is consistent with the engineer's report.

35. The significance of the conclusion, in my view, is that they could be and were placed on their respective platforms, in the words of Parke B cited by Lord Clyde in Elitestone "integre, salve, et commode, without injury" to themselves. Having been placed upon the supporting structures in that way, they could just as easily have been removed in the same condition. In Lord Clyde's view, the fact that the bungalow in Elitestone was not removable in one piece nor demountable for re-erection elsewhere was "one powerful indication that it is not in the nature of a chattel" (page 696H). Equally, the fact that each houseboat could have been removed in one piece without damage or injury to itself and placed on a lorry or barge to be transported to a platform elsewhere is in my view a powerful indication that it remained in the nature of a chattel. In this respect, it seems to me not essentially different from a mobile home.

36. Even if the supporting structure or parts of them became affixed to the land, it does not follow that the houseboats themselves became so affixed. It is of course the case that a structure or object may become affixed to the land even if it is not physically affixed but simply remains in position by virtue of its own weight. But these houseboats could easily have been physically fixed to the supporting structures. There was no reason for them not to be so affixed. The fact that none of them ("Emily" apart much more recently) has ever been fixed in any way to the supporting platforms is, in my view, consistent with their being removable in one piece and is further support for the conclusion that they continued to be chattels.

…

39. Applying commonsense, I consider that these units were not "houses" within the normal usage of that term. They were and remained essentially boats, albeit adapted for residential use. When they came to be placed on their respective supports, they were placed as whole units, the construction of the entire structure (boat and supports) being such in each case that the boat remained removable as a unit. Hence (respectfully echoing Lord Lloyd but here to the contrary conclusion) they cannot have been intended to form part of the realty. They must have been intended to remain as chattels.

40. Lord Clyde in Elitestone did apply the test whether the purpose of annexation was for the better enjoyment of the object as a chattel or whether with a view to effecting a permanent improvement of the freehold. He said (page 698E-F):

'It is the purpose which the object is serving which has to be regarded, not the purpose of the person who put it there. The question is whether the object is designed for the use or enjoyment of the land or for the more complete or convenient use or enjoyment of the thing itself".

He concluded (page 699A) that the bungalow in question was built for the use or enjoyment of the land, "in order that people could live in what is represented as being an idyllic rural environment".

41. In the present case, in my judgment the units were raised up on their supporting structures for "the more complete or convenient use or enjoyment" of the units themselves. In no realistic sense could they be said to have been put into position for the use or enjoyment of the harbour bed. Their occupants enjoyed the amenity of the harbour when they were moored as floating houseboats. The purpose of raising them above high water level was for their more complete or convenient use or enjoyment as chattels. They no longer rose and fell with the tide. Entry of sea water or the risk of it was removed."

36. Mr Glen criticises the judge's reasoning in a number of respects. The judge's central error, he says, was to regard "Emily" and "Watershed" as retaining the character of boats once they had been raised on to the platforms above the water. Although hypothetically capable of floating, they were never intended thereafter to navigate or even to enter the water unlike the houseboat in the Chelsea Yacht & Boat Co case which remained moored in the river. When re-positioned they retained the character of houses which, for the reasons explained by Lord Lloyd in Elitestone, are generally to be treated as an accretion to the land.
37. One of the judge's errors, Mr Glen submits, was to fail to consider the houseboats or units as he termed them as one with their supporting structures. In Elitestone this was not appropriate because the concrete supports had not been specifically designed to accommodate the bungalow. Mr Glen submits that this case is different. The supporting platforms were built specifically for the houseboats and, once raised on them, rent was then charged for the main plots and not simply for the right to moor a boat on a pontoon. If one takes the two together then the result is obvious. The platforms have wooden piles driven or cemented into the harbour bed which are clearly intended to be a permanent feature of the harbour. Under the 1963 Act BHIC was specifically empowered to provide moorings and other supports of this kind. A letting of the plots must therefore have included the platforms and, with them, the houseboats they accommodate.

Discussion

38. Attractive as these submissions are I am not persuaded by them. There is no evidence that the supporting platforms were constructed by anyone but the harbour company in exercise of its statutory powers under s.15 of the 1963 Act. The judge's finding that the landing craft, once converted to houseboats, were originally floating on moorings in the harbour is consistent with this. BHIC (like the PLA in the case of the Thames) owned the bed of the harbour and therefore had the exclusive right to lay down and maintain moorings and conveniences for vessels and houseboats on their land. Those moorings would have been their property as s.16 of the 1963 Act makes clear by the imposition of criminal penalties for pulling up or removing any poles or stakes driven into the ground for the purpose of the moorings.
39. It is not therefore possible to short-circuit the issue of annexation by concentrating on the houseboats and their supporting platforms as single units. Although undoubtedly constructed to accommodate the houseboats, they belonged to BHIC and merely provided a facility which the owners of the houseboats could make use of for a fee. The issue therefore (as it was in Elitestone) is whether a tenancy or licence of the plot including supporting platforms extended to the houseboat once it had been placed into position and notwithstanding the fact that the houseboat at that point in time was undoubtedly a chattel which had been purchased by its owners and which was subsequently sold separately from any assignment of the tenancy. If Mr Glen is right about the houseboats becoming part of the realty and therefore the tenancy on being placed on the platforms it must follow that their owners ceased to be entitled to remove them or to sell them on as removable chattels in the way in which they in fact did.
40. In Elitestone the fact that Mr Morris had also purchased the bungalow from its previous owner and had then continued to pay the licence fee to the freeholder was not considered material to the question whether annexation had taken place. No estoppel could arise except between the parties to the sale. The same must apply in the present case. BHIC and its successors in title are not bound by the course of dealings between successive owners of "Emily" and "Watershed". But that course of dealing is material insofar as it forms part of the relevant factual background against which the question of the purpose of the annexation falls to be judged.
41. A structure like the bungalow in Elitestone which is positioned on a residential site for which a rent or licence fee is paid has, from the start, all the attributes of a house and none of the features of removability inherent in, for example, a caravan or a boat. The fact that it is not bolted as such on to the pillars which support it is immaterial. By its very nature it is intended to be a permanent feature of the site. The bungalow was constructed on site from components brought in for that purpose. It was not readily transportable as a unit and its removal would always have involved its demolition or destruction. In these circumstances, it is much easier to infer that the purpose of its annexation was that it should become part of the site.
42. But the same cannot be said of the houseboats in this case. Whatever condition they may now be in, they were, on the judge's findings, structures which could have been removed without being dismantled or destroyed in the process. They also fall into a category of items such as caravans which, as designed, are moveable. When one takes into account the background facts about the ownership of the harbour; the construction and regulation of moorings under the 1963 Act and the course of dealing between BHIC, its successors and the defendants, the overwhelming inference is that the licences or tenancies of the plots did not extend to the houseboats themselves but continued to be limited to the plots and the supporting platforms which BHIC had provided for the owners of the houseboats. BHIC continued in my view to provide facilities for the location of the houseboats at a rent as it was empowered to do under s.15. Such arrangements cannot have been converted into a lease of a dwellinghouse merely by reason of the fact that the defendants' predecessors in title chose to avail themselves of those facilities. The context points the other way.
43. I therefore consider that the judge was right to conclude that the houseboats have not become affixed to the land and that the defendants are not assured tenants. On that basis, his decision that the plots are held on licences cannot be disturbed although even had they been held on tenancies, the result would have been no different. A tenancy of the plot and supporting platform alone does not attract any statutory protection and would have been determined by one of the sets of notices served. It is therefore unnecessary to consider the judge's alternative finding that, even if affixed, "Emily" and "Watershed" were only ever held on licences or the further question of whether a tenancy of the houseboats would have qualified as a tenancy of a dwellinghouse. For the same reasons, the issue about the validity of the notices to increase the rent does not arise.
44. Mr Glen, as part of the appeal, kept open the point as to whether the judge should have allowed the claimant to rely upon the notices to quit served after the trial but there is no absolute bar on relying on a cause of action which post-dates the issue of the proceedings and, in my view, the judge was entitled in this case to allow an order for possession to be made on the basis of the last set of notices.

Conclusion

45. For these reasons I would dismiss the appeal.

Lady Justice Arden :

46. I agree.

Lord Justice Maurice Kay :

47. I also agree.