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Leased Heating Equipment: Chattel or Fixture?
Leased Heating Equipment: Chattel or Fixture?  
By Brian Madigan LL.B.The Ontario Court of Appeal recently quoted with approval a decision of the House of Lords (Melluish). In this case, a company leased plant and machinery (including central heating equipment) to a housing authority for installation in its subsidized townhouses which were then leased to tenants.The Court of Appeal considered this case when making its decision in the City of Mississauga v. GTAA.The equipment leases between the company and the owner/landlord provided that the leased equipment would remain personal or moveable property that the company would continue to own it, notwithstanding that the equipment might have become affixed to any land or building. Apparently, the purpose of this specific statement was to ensure that the company could depreciate the equipment for tax purposes and could repossess the equipment, if required.The House of Lords confirmed that the equipment had indeed become a fixture, and that the taxpayer company could not claim depreciation, because the equipment had become attached to the land and was therefore, in law, owned by the housing authority, notwithstanding any agreement between the parties to the contrary.Lord Browne-Wilkinson held as follows: · The equipment in these cases was attached ... more

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