7 October 2021
RED alert - Autumn 2021 – 6 of 7 Insights
The High Court held that the operator of boating facilities had no right to remove a boathouse constructed by it when its concession contract expired, as it formed part of the land.
In 1998, Bluebird Boats were granted a concession to operate a boating service on the Serpentine lake in Hyde Park. A few years later, the royal park management company (the Royal Park) decided to re-tender the concession so as to provide enhanced facilities and this process made clear that the successful applicant would be required to replace the boathouse and jetty at their own cost.
Bluebird Boats won the tender and the concession contract granted them a licence to occupy the park premises. The contract expired in 2020 and was not renewed.
Bluebird Boats wanted to dismantle and remove the boathouse so that it could be reassembled for use in other parks whereas the Royal Park disputed its ability to do so. The latter brought proceedings for a declaration to determine the matter.
Bluebird Boats argued that the boathouse was a chattel and not a fixture and that, consequentially, it retained ownership of it. It alternatively argued that the boathouse was designed so that it could be assembled in parts at the lakeside and subsequently dismantled and was a substantial capital investment to be removeable in the event the concession ended. As a result, the Royal Park should be estopped from denying Bluebird Boats' ownership of the parts of the boathouse that could be removed.
The Royal Park argued that the boathouse was a part of Hyde Park as it was constructed to form part of the land.
The High Court held that:
A declaration was made in favour of the Royal Park with the consequence being that the boathouse belongs to the Royal Park and will remain in Hyde Park following expiry of the concession.
Whilst the legal tests were applied in their usual way here, these are a novel set of facts and demonstrate the importance of parties understanding the impact of contractual obligations when agreements come to an end.
Given the complexities surrounding whether certain structures are chattels or fixtures, we recommend that legal advice is sought if you are negotiating agreements relating to the occupation of land or dealing with dilapidations liabilities.
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