THE ADVOCATE 699
VOL. 78 PART 5 SEPTEMBER 2020
the land. See also Sutherland v Canada (Attorney General), 2002 BCCA 416
at para. 91. Accordingly, the fact that the parties to the transaction in this
case characterized the machinery as “personal property” in their asset
purchase agreement, while binding on those parties, has no bearing on
the legal issue to be determined here. Emphasis added.
With respect, I believe that this is incorrect. There is a long line of contrary
authority suggesting that in scenario (b) the parties may make “a law
for themselves” as to the ownership of the chattel after it is attached to the
building and that their agreement will overcome the normal common law
rule that the landlord owns the chattel after it is so affixed.7 The Canadian
cases that have cited Melluish (Inspector of Taxes) v. BMI (No. 3) Ltd.8 and Elitestone
Ltd. v. Morris9 may be regarded as having been decided per incuriam for
failing to refer to contrary authority. The Privy Council’s decision in Standard
Portland Cement,10 which should have been but was not discussed by the
English cases, held that fixtures belong to the tenant if the parties so agree.
More importantly, at least as far as British Columbia is concerned, in the
1995 decision of Sawridge Manor Ltd. v. Selkirk Springs International Corp.,11
the B.C. Court of Appeal held definitively that a tenant may by agreement
with the landlord own a chattel even after it is affixed to the landlord’s
51 Counsel for the respondents, however, submits that parties to a
lease can agree that that which would be tenant’s fixtures at common law
are chattels and, thus, never become subject to the consequence of nonremoval
by the tenant during his possession under his tenancy. To put it
another way, chattels they are and chattels they remain and can never
become, as the phrase is, “a gift to the landlord”.
52 I accept the proposition that parties to a lease can make such an
agreement, but here two questions arise:
1) Was there such an agreement;
2) If so, is it binding upon the appellant as purchaser of the lands
and assignee of the reversion?
. . .
53 I see nothing in the clauses of the lease modifying the common law
rule but I consider the modification of lease does modify the rule as to
the things therein described. By it, those things remain chattels for all
purposes. Emphasis added.
Assuming for the moment that Sawridge Manor represents the law in B.C.,
so that the parties may agree that the tenant will own the chattel after it is
affixed to the building,12 what about scenario (d)? May a tenant own a building
that is attached to land owned by the landlord?