Fixtures and Accession

Question 1

Diamond Neon v TD Realty

Answer 1

Facts: P signmaker had contract K1 saying “The display shall remain the property of the Owner and shall not by reason of attachment to any realty be deemed a fixture. Upon the termination of this lease the Owner may remove the display.” P leased the 3 things (in Issues) to Uptown (tenant; used car dealer), on land owned by Western. Later, Dueck became tenant and Uptown assigned its rights under K1 to Dueck, after K1 expired, Dueck leased the things on own contract K2. K2 expired and Dueck left the land, P expected might be able to lease to another used car dealer on the land. Western sold land to D, D had no knowledge of any contract related to the things. D sold the things, P claims wrongful conversion of chattels.

Held: D wins. both the degree of annexation and the object of the annexation force the conclusion that the things had become part of the realty before the defendant bought the land

Reasons:

• the degree of attachment of the things was a strong one and this indicates that the things are to be considered part of the land
• there is nothing showing an intention that the things should merely be chattel, but rather the reverse
• the contracts between the plaintiff and Uptown and Dueck respectively have no significance, the defendant being a stranger to them without notice of their contents
• P claims he informed D of items 6 months after D bought the land. TJ found against this, BCCA won’t question TJ. But even if P did inform, this wouldn’t affect the things as title already passed to D at the date of sale.

Dissent:
- Analogy of two signs, one for address and one for name/office hours etc. of lawyer/doctor: I would think that a purchaser of the premises would be entitled to assume that the address plate was intended to be a fixture forming part of the realty but suggest that, in the absence of evidence of abandonment, the name plate was intended to remain a chattel belonging personally to the tenant
- A sign bearing the name and stating the business of a former tenant, in the absence of evidence of abandonment, is not necessarily conclusive of the intention, but it ought to have put the purchaser (D) on enquiry
o The fact that the purchaser subsequently severed the signs from the realty and sold them as chattels is confirmatory of the expectation that they might have been viewed as chattels at the time of the sale and purchase of the realty (questionable? You can sell fixtures if you want as the new owner)

Question 2

Ilford-Riverton Airways v Aero Trades

Answer 2

Facts: P is bankrupt, claims it is owner of engine purchased from D. D claims it owns the engine and P had possession under a rental agreement.

Held: D wins. The engine was not sold to P, it was rented.

Reasons:
- Difficult to envision D selling engine to P on open credit if they already owed them so much money
o Much more likely what happened is what D claims: rented by the hour
- No accession
o Cites Goode: “Thus the view has been expressed that ‘with respect to automobile parts, equipment and accessories, which under modern methods of production are removable and interchangeable, courts are less likely to apply the doctrine of accession’.”
o Goode held to be consistent with SCC in Firestone case (tires on a truck not accession)
o “To say now that the engine was an integral part of the aircraft and could not be removed, would be a distortion of the accession doctrine.”