Fixtures or Chattels and the Case of the Missing Vacuum Canister #377
CATEGORY: Legally Speaking
TAGS: Contract of Purchase and Sale Fixtures
By Gerry Neely
An experienced nominee recently related an instance of a buyer's agent trying to settle a problem for his client by paying for a built-in vacuum canister that the seller intended to take. Since stories like this are common, he suggested revisiting Legally Speaking 247 and 260, and the question of chattels and fixtures.
Legally Speaking 247 contains a set of rules created by a BC Supreme Court judge to determine whether an object is a chattel or fixture, and 260 reviews a case where the rules were used to decide which among the disputed items were chattels or fixtures. However, the application of the rules can be uncertain due to many conflicting court decisions.
This issue starts with paragraph 7 of the Contract of Purchase and Sale, where a buyer's agent lists the items to be included or excluded from the purchase price of the assets sold to the buyer. The form includes all assets that are "fixtures, appurtenances and attachments." It leaves the question of what is a fixture or chattel open to interpretation, but removes some uncertainty by identifying other assets that are included in the purchase price. Fewer assets are identified on the form than in the Licensee Practice Manual's Listing Checklist, which contains both chattels and fixtures, including a built-in vacuum canister and attachments.
It's important to use a list when completing paragraph 7, as illustrated by a 1996 decision in a foreclosure case, where the Contract of Purchase and Sale was used in a court ordered sale. No additional items were added to paragraph 7, but the phrase "all chattels and non fixtures" was added to the exclusion clause. The buyer expected to receive, among other items, a canister that the foreclosed owner had removed because she thought it was a chattel. The master agreed, concluding the canister was a chattel because it hung only by screws on a wall, and the plumbing and piping in the wall were fixtures.1
Arguably, this conclusion is wrong because it doesn't address the question of whether the canister was a paragraph 7 appurtenance or attachment to the plumbing and piping. The use and design of the canister indicate that it is both an appurtenance (belonging to) and an attachment (thing attached or to be attached to a device for a special purpose).
The master's conclusion is consistent with rule 4 in the Legally Speaking 247 case, which was applied in the Legally Speaking 260 case to decide that a canister was a chattel. However, the contract was not a factor in either case, since one was a dispute between a trustee in bankruptcy and a mortgagee, and the other was based on a court order. Consequently, while the rules are a useful guide, their application clearly depends on the facts of each case.
If you think this is confusing, it is. Do your part by listing the buyer's expectations, thereby removing the argument of chattel or fixture, appurtenances and attachments.
|1.||Royal Bank of Canada v. Connor,, SCBC, Vernon Registry, Reasons for Judgment, December 23, 1996.|
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