Borwick Development Solutions Ltd v Clear Water Fisheries Ltd [2019] EWHC 2272 (Ch)
Summary
This case concerned the sale of a commercial fishery which operated on freehold land. A dispute arose as to whether the fish stock and solar panels passed to the buyer of the land.
After analysing cases dating back to 1844, the High Court held that the fish stock did not pass to the buyer but that the solar panels did. The fish had been isolated from "the wild" and the solar panels were fixed to the premises for the benefit of the premises.
The facts
The Claimant (Borwick) was the former owner of land which had operated as a commercial fishery since 2005. The fishery comprised nine man-made lakes and pools. These areas were connected to allow for water movement between them but the fish were isolated within their pools save for some very small fish that could travel through the mesh that had been installed within the pipework. Visitors to the fishery were required to return any caught fish to the lakes.
Between 2011 and 2012, Borwick installed solar panels onto the land. The purpose of this arrangement was to supply electricity to a new restaurant on the land and to receive income from any surplus. This arrangement was documented between Eon and Mr Smith who was the sole director / shareholder of Borwick. The panels were placed within a metal frame which was bolted to a wooden platform which was then concreted into the land.
Borwick borrowed money from Eastern Counties Finance Limited (Eastern) for the restaurant project and charged the fishery to Eastern as security for the monies advanced.
Unfortunately the restaurant project was not a success. Borwick then sought a buyer for part of the site at a guide price of £1m and entered into negotiations with the Defendant (Clear Water). Those negotiations broke down after Borwick reduced its offer from £900,000 to £850,000. Eastern then appointed receivers who eventually sold the entire site to Clear Water for £625,000.
Following the sale, Borwick asserted ownership to the fish stock and the solar panels and brought a claim for damages under the tort of conversion. In order to succeed, Borwick was required to show that it had a right to possession of the fish stock and the panels.
The arguments – the fish
Borwick accepted that there could be no ownership in wild animals whilst they were living. However, it argued that the fish in this case were not wild animals as:
- The vast majority of the fish were purchased from third parties for the sole purpose of the sport carried on at the fishery.
- The fish were contained to the site as a whole and could not therefore escape into the wild.
- 14 of the largest fish had been named by anglers which suggested ownership of those fish.
- Steps were taken to protect the fish using medicinal treatments and patrols to prevent them being stolen.
Clear Water disagreed and relied on the principle that there could be no ownership in wild animals.
Decision
The court noted that no previous case had considered the ownership of animals in a zoo, safari park or indeed a sea world centre. However, it considered that the appropriate test was that of separation and control. Borwick had isolated the fish in the lakes and pools and so it did have a qualified right to ownership. If, however, any of the fish escaped into the wild, Borwick would not be able to enjoy and ownership in those fish.
The arguments – the solar panels
Both parties accepted the applicability of the well-established tests as to whether something is a chattel (which would not pass on a sale) or a fixture (which would pass on a sale). Generally it would depend on:
- The method and degree of annexation of the object to the land, and
- The object and purpose of the annexation to the land.
In recent times, the second test has become more important given that objects can be more easily removed from land using modern techniques.
Borwick argued that there was no objective intention that the panels should become fixtures as the electricity contract was a personal one between Eon and Mr Smith for 25 years. There was every possibility that the land might be sold during that period. The panels were instead an asset of the company used for the benefit of its business wherever it was located. Borwick argued further that the degree of annexation demonstrated by the concrete was not as relevant as the primary issue of the object and purpose of the annexation.
Clear Water did not agree. It argued that the panels were deeply embedded in the soil. The units had actually been removed by the time of the trial and the extensive work had needed three days labour by six men
Clear Water also relied on the fact that the object of installing the panels was to generate electricity for use on the property and for actual enjoyment of the property. Decision: the panels were fixtures which did pass to Clear Water on the sale as, firstly, they were clearly affixed to the land in such a way that they became fixtures. Secondly, the object of affixing the panels was for the enjoyment of the property rather than enjoyment of the panels themselves.
Our comments
There was a lot of history to this matter given the abortive sale to Clear Water and the subsequent sale by receivers. However, the case does illustrate the importance of explicitly dealing with all matters that may be found on land being sold and identifying what is included or excluded. This will often affect the overall valuation of the land.
