A Substantial Fixtures Dispute with Revenue Implications

One of the issues which most frequently features in the Law Society’s Property Law Committee Dispute Resolution Scheme is whether items at premises are fixtures or chattels.

Whether an item is a fixture or chattel can have revenue implications. That was the first of several issues that arose in SPIC Pacific Hydro Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 395; [2021] NSWSC 486.

• The value of the wind farm plant and equipment exceeded the $25,000 jurisdictional limit of the committee (the value of the plant and equipment assets was over $227 million).

• A related issue was a duties assessment of $12.4 million.

Whether an item has become a fixture depends essentially upon the objective intention with which the term was put in place. The two considerations which are commonly regarded as relevant to determining the intention with which an item has been fixed to the land are first the degree of annexation, and secondly, the object of annexation (Conti J in National Australia Bank Ltd v Blacker (2000) 104 FCR 288).

The fixtures issue was analysed using the familiar, conventional analysis typified in APA v Coroneo. The key findings were:

• The wind turbine generators, masts and transmission lines were fixtures – specifically, tenant’s fixtures.
• Roads and tracks on the land were landlord’s fixtures.
• The right of a tenant to remove leasehold improvements from the land is a legal rather than an equitable interest.
• The value of the site including fixtures exceeded the landholder duty threshold. The valuation methodology was slightly flawed, leading to a revocation of the original assessment with a new assessment to follow with roughly a 10% reduction.
• The reduction in the original assessment led to an order that the Commissioner pay the plaintiff’s costs.

The contents of this article are general in nature. For advice specific to your circumstances, please contact your legal practitioner.

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