EON METALS NL v COMMISSIONER OF STATE TAXATION (WA)

Judges:
Ipp J

Court:
Supreme Court of Western Australia

Judgment date: Judgment handed down 3 October 1991

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Ipp J

In terms of s 74(1) of the Stamp Act 1921 every agreement for the sale of any estate or interest in any property shall be charged with the same ad valorem duty (to be paid by the

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purchaser) as if it were an actual conveyance on the sale of the estate, interest or property agreed to be sold. An exception however is made in respect of a conveyance or transfer of any estate or interest in ``goods, wares, or merchandise''. (See s 16(1) read with Item 2(7) of the Third Schedule.)

The question for decision in this appeal is whether the exception in favour of goods, wares and merchandise covers certain mining plant and equipment sold by Homestake Australia Pty Ltd to the appellant by agreement dated 21 June 1989. I shall refer to the particular plant and equipment concerned as ``the Eon equipment''. It is common cause that the exception will cover the Eon equipment if the latter has not become affixed to the land and is to be regarded as personalty and not realty. That is the fundamental enquiry involved.

The history of the transactions leading to the sale by Homestake to the appellant of the Eon equipment is relevant. The Eon equipment initially formed part of plant and equipment used on the Matilda Mine, located 16 kilometres south of Wiluna, some 600 kilometres north of Kalgoorlie. Until 1989 Chevron Exploration Corporation (Chevron) had operated the Matilda Mine, extensively, for some 10 years. Chevron was the holder of several mining tenements (mining leases) on which the mine was located. In 1989 Chevron sold to Homestake the plant and equipment located on the mine. That plant and equipment included the Eon equipment, the subject of this appeal. Shortly thereafter Chevron sold to the appellant its interest in the mining tenements as well as improvements, fixtures and fittings (including plant and equipment) except those which were the subject of the property sold under the agreement between Chevron and Homestake. In particular, Chevron did not sell to the appellant any of the plant and equipment that Chevron had earlier sold to Homestake. Homestake, however, did not wish to retain all the plant and equipment that it had bought from Chevron and proceeded to sell some of it, comprising the Eon equipment, to the appellant. The sale by Homestake to the appellant of the Eon equipment was effected by agreement dated 21 June 1989.

The Eon equipment so sold falls into four categories. The first is a borefield. The second category is a ball mill. The third category is a power station. Finally there is a general category described as ``the infrastructure''.

The first argument advanced by the appellant in support of its proposition that the items of Eon equipment were chattels was that, even assuming that the Eon equipment had initially been permanently affixed to the land, the dealings firstly between Homestake and Chevron and secondly between Homestake and Chevron and secondly between Homestake and the appellant, had, in law, severed the Eon equipment from the land.

In terms of the agreement between Chevron and Homestake the parties agreed that on or prior to 1 June 1989 they would take whatever action was necessary to ensure that all the items of plant and equipment sold thereunder (which, as I have pointed out, included the equipment that was to become the Eon equipment) were capable of being immediately lifted from their respective locations and transported from the site. If due to circumstances beyond their reasonable control the parties were unable to comply with that obligation then they undertook to each other that they would use their best endeavours to do so as soon as practicable after 1 June 1989. They further agreed that possession of the plant and equipment would be given and taken on 1 June 1989 or as soon thereafter as the plant and equipment had been so rendered transportable.

The Eon equipment was however not moved from the site and no alteration was made to the physical condition or to the position of any of the items of that equipment. That was because, as I have explained, pursuant to its agreement with Chevron, the appellant had become the holder of the mining tenements and had taken possession of them, and further had purchased the Eon equipment from Homestake. Thus although Chevron had sold the Eon equipment to Homestake (as part of the sale of all of the plant and equipment on the Matilda Mine) and Homestake had sold the Eon equipment to the appellant, there was practically speaking no need for any change to be made in the physical position of the Eon equipment, and, in fact, no change was made. The appellant merely took over the working of the mine and utilised the Eon equipment in the position in which it had always been.

Thus there was no physical severance of the Eon equipment from the land.

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It is true that under the agreement between Chevron and Homestake the parties intended that the Eon equipment would, at some future time, be physically moved from the land. However, as I have explained, no removal took place.

In such circumstances, in my opinion (on the hypothesis that the items forming part of the Eon equipment had - prior to the agreement between Chevron and Homestake - been part of the land), the mere intention of the parties concerned to remove those items from the land at some future date did not transform them into chattels.

As was said by White J in
Emanuel (Rundle Mall) Pty Ltd v. Commr of Stamps (SA) 86 ATC 4004 at 4009-4010; (1986) 17 ATR 307 at 313:

``Fixtures in situ and intended to remain in situ are intrinsically part of the land and have no separate legal existence or entity apart from the land. It is true that fixtures can be agreement be excluded from sale and removed; but if they are not severed by the time when the conveyance operates, they are still part of the soil and pass with the conveyance of the land. In my opinion, they cannot be validly excepted in any relevant sense for stamp duty purposes.''

And later at ATC 4010; ATR 314 his Honour said:

``I would draw a distinction between fixtures which are intended to remain in situ by the parties and fixtures which are intended to be removed by the parties. Fixtures which are intended to be removed might well, like minerals which are intended to be removed, be the subject matter of exception; but the removal would have to take place prior to the conveyance for them to escape stamp duty.''

Thus had Homestake in fact removed the Eon equipment from the land, the plant and equipment would have become chattels. However, because the Eon equipment remained exactly where it always had been, and was not removed, it must be regarded as remaining part of the land to which it was attached (that is, on the hypothesis - as I have said - that it initially did form part of the land). The mere intention to sever items from land does not transform the items into chattels; physical severance must occur; cf
Great Fitzroy Mines Ltd v Commissioners of Stamps (1913) St R Qd 161.

Counsel for the appellant drew attention to s 74(1) of the Act which provides that:

``Every contract or agreement, howsoever executed, for the sale of any estate or interest in property shall be charged with the same ad valorem duty to be paid by the purchaser as if it were an actual conveyance on sale of the estate, interest or property contracted or agreed to be sold.''

Counsel submitted that, by virtue of s 74(1), the Eon equipment should be deemed to have been conveyed upon the entering into of the agreement for the sale thereof. On that basis, it was said, by the agreement between Homestake and the appellant the Eon equipment is deemed to have been conveyed to the appellant, separately from the land, and, therefore as having been severed from the land.

The words ``as if'' in s 74(1) are used for the purpose of creating a statutory fiction, and when used in that sense the purpose for which the statutory fiction is introduced is crucial:
Muller v Dalgety & Co Ltd & Anor (1909) 9 CLR 693 at 696. Section 74(1) provides that - for the purposes of causing duty to be payable on an agreement for the sale of any estate or interest in property - the agreement itself is to be regarded as if it were a conveyance of the estate, interest or property concerned. Thus s 74(1) triggers the payment of duty upon the entering into of an agreement; the duty so payable being dependent on the character of the property sold. The ``as if'' provision s 74(1) is to be used for the purposes of that trigger alone. That provision is not intended to be used for the purposes of determining the character of the property concerned. The latter is a different and separate enquiry to which the ``as if'' provision does not apply.

In the circumstances, I do not accept the submissions based on s 74(1).

The appellant, in the alternative, submitted that, in any event, in accordance with ordinary legal principles, each of the items of the Eon equipment should be regarded as a chattel and not as a fixture.

The law reports contain innumerable decisions dealing with the principles to be applied in determining whether chattels have become part of realty. Earlier decisions,

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particularly, reflect views that frequently conflict and it is difficult to determine consistent threads.

The foundation of the modern approach to the question is the judgment of the Court of Exchequer Chamber in
Holland v Hodgson (1872) LR 7 CP 328. Blackburn J, in delivering the judgment of the Court, said at 334-335:

``There is no doubt that the general maxim of the law is, that what is annexed to the land becomes part of the land; but it is very difficult, if not impossible to say with precision what constitutes an annexation sufficient for this purpose. It is a question which must depend on the circumstances of each case, and mainly on two circumstances as indicating the intention, viz, the degree of annexation and the object of the annexation.''

In more recent times the authorities have been extensively reviewed by Mahoney JA in
NH Dunn Pty Ltd v LM Ericsson Pty Ltd (1979) (2) BPR 9241. He pointed out (at 9246) that several of the rules expressed in the cases have not been applied rigidly. He said that it was now accepted that:

``a chattel may become part of realty notwithstanding that it is not, in any formal sense, annexed to it but rests on it merely by its own weight:
Reid v Smith (1906) 3 CLR 656 at 668, 669, 679. Even if a chattel is physically annexed to the realty, it may yet remain, at all times, personalty:
Attorney-General of the Commonwealth v RT Company Pty Ltd (1957) 97 CLR 146 at 156-157;
Anthony v Commonwealth (1973) 47 ALJR 83 at 89E;
Australian Provincial Assurance Company Ltd v Coroneo (1938) 38 SR (NSW) 700 at 712.''

His Honour also stated that he found difficulty in ``accepting that the matter can be tested simply by reference to whether the annexation to the realty is intended to be temporary or otherwise''. He said at 9244:

``I doubt that such a view is consistent with, eg, Attorney-General of the Commonwealth v RT Company Pty Ltd (No 2) (1956-57) 97 CLR at 156-7; cf
Kay's Leasing Corporation Pty Ltd v CSR Provident Fund Nominees Pty Ltd [1962] VR 429 at 433-4; or Anthony v Commonwealth (1973) 47 ALJR at 89. Both Fullagar and Walsh J held that the items there in question were not part of the realty, notwithstanding that they had obviously been annexed for a purpose which, at least within the meaning of the term in Holland v Hodgson (1872) LR 7 CP 328 at 336, was not a temporary purpose.''

Mahoney JA considered (at 9244) that the actual or subjective intention of the parties and, a fortiori of one of them is not conclusive as to the status of the item concerned, but nevertheless their intention is relevant. He explained the rule in relation to intention as follows:

``Whatever be the correct formulation of the fact of be proved in such dispute, it is not whether the owner of the chattel or any other person subjectively intended that it should or should not become part of the realty. Therefore a statement of the intention as to that particular matter is not a statement tending, as such, to prove the fact to be proved. But that intention, as such, is not necessarily irrelevant. Whether the question of whether chattels have become part of the realty is a question of fact... or a conclusion of law, various matters have been seen as of assistance in the final determination of it. The period of time for which the chattel was to be in position, the degree of its annexation to the land, what was to be done with it, and the function to be served by its annexation, are all matters which have been seen to be relevant for this purpose.''

Glass JA pointed out at 9246 that the ultimate question is whether a chattel has become part of the realty to which it is attached. That question is to be determined having regard to all circumstances which include the purpose of annexation and the mode of annexation. Although both of these factors are relevant neither is conclusive.

It is plain that while regard should be had to all relevant circumstances, no particular factor necessarily has primacy and every case depends on its own facts. Nevertheless there does appear to be a trend towards attaching particular significance to the intention with which the item is placed upon land. In
Palumberi v Palumberi (1986) NSW ConvR ¶55-287 Kearney J, after canvassing the relevant cases, said at 56,672:

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``It would seem from the perusal of these and other authorities in the field that there has been a perceptible decline in the comparative importance of the degree or mode of annexation, with a tendency to greater emphasis being placed upon the purpose or object of annexation, or putting it another way, the intention with which the item is placed upon land. This shift has involved a greater reliance upon the individual surrounding circumstances of the case in question as distinct from any attempt to seek to apply some simple rules or some automatic solution.... No standard solution is to be derived from (the decided) cases which upon ultimate analysis, are found to turn upon their individual facts.''

As regards intention, while subjective intention may be relevant, it is objective intention that is of paramount significance. As Mahoney JA pointed out in NH Dunn Pty Ltd v LM Ericsson Pty Ltd (at 9244-9245) the ultimate fact to be proved is the objective intention that ought to be imputed or presumed from the circumstances of the case.

Counsel for the appellant submitted that there were aspects of the present case which were determinative.

Firstly, he pointed to the fact that the Eon equipment had been placed upon Crown land. Chevron and thereafter the appellant had become the holders of the mining tenements on the land but neither had ever been the owner of the land. It was submitted that this demonstrated that neither Chevron nor the appellant could have ever had the intention of allowing the equipment to become part of the land as it was never contemplated that either could become owner of the land. In my opinion, however, little assistance can be gained from the fact that the Eon equipment was brought on to land of another. It is well recognised, for example, that objects brought on to land by tenants may become fixtures albeit that the land is not owned by the tenants:
The North Shore Gas Company Ltd v Commissioner of Stamp Duties (NSW) (1939-1940) 63 CLR 52 at 68. Accordingly while the fact that the land concerned was Crown land is not irrelevant, it is but one of all the factors which have to be taken into account.

Counsel for the appellant further submitted that there was some special quality about equipment placed or constructed on mining land. The underlying basis of this submission was that equipment on mining land is seldom, if ever, intended to remain on the land permanently. Mining equipment is usually removed at the end of the life of the mine, if not before. Counsel drew attention to a condition of the Matilda Mine mining tenements to the effect that on completion of operations all buildings and structures (including pipelines and power lines) are required to be removed from the site or demolished and buried.

Counsel for the appellant referred to a passage in the judgment of Griffith CJ in Reid v Smith (1906) 3 CLR 656 at 668 where his Honour suggested that a manager's house erected on a gold mining lease might well not be regarded as having been erected with the intention that it should become part of the land. A similar attitude was taken in
Stephen v Bell & Ors [1934] WALR 52 where Dwyer J said at 56:

``So, one starts off with the knowledge that the erection of any building on a mining lease is merely ancillary to the purpose of mining and the lease itself has a restricted period of duration, so that no building erected on a mine is necessarily intended to be there permanently.

Having regard to the evidence, and what was common knowledge regarding mining practice in this State, this strikes me as one of the cases where a building erected on land does not necessarily so attach to it as to become part of the land itself. There may be such intention, and there may not, but it is a fact that goldfields houses are frequently moved, and one is justified in expecting a somewhat greater degree of annexation for such residences than would be sufficient if a similar building were erected on residential land of a freehold character.''

There is nothing however in these authorities which supports the submission that objects placed on mining land, with the intention that they should be removed or destroyed when the mining is concluded, should necessarily, for that reason alone, be regarded as chattels.

In several cases (not dealing with mining land) it has been held that items of equipment were fixtures even though they were brought on to land for a limited period. For example, in

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Kay's Leasing Corporation Pty Ltd v CSR Provident Fund Nominees Pty Ltd [1962] VR 429 Adam J found that virtually all the plant and machinery became fixtures despite the fact that the hiring or leasing arrangements were only for a period of five or six years. In
Wellsmore & Ors v Ratford & Ors (1973) 23 FLR 295 Dunphy J held that a fibreglass home which was to be exhibited for 12 months only was a fixture principally because it had been fixed to the premises by steel spikes driven into the ground and welded to steel base plates on each of the four steel legs which supported the home. I have already referred to NH Dunn Pty Ltd v LM Ericsson Pty Ltd where Mahoney JA doubted that the question could be tested simply by reference to whether the annexation to the realty is intended to be temporary or otherwise. These cases were followed by
Pan Australian Credits (SA) Pty Ltd v Kolim Pty Ltd [1981] 27 SASR 353 where Matheson J held that air conditioning equipment installed in a convention centre and leased to the owner of the centre for five years had become essentially a part of the convention centre and was a fixture, by reason of its nature and the manner of its installation.

As regards mining land, in North Shore Gas Company Ltd v Commissioner of Stamp Duties (NSW), Dixon J remarked at 69 that some of the language used by Lord Blackburn in
Wake v Hall (1883) 8 App Cas 195:

``is consistent only with the view that the buildings erected by the miners, though subject to removal by them and remaining their property, yet pending removal took on the character of land.''

In
The Commissioner of Stamps (Western Australia) v L Whiteman Ltd (1940) 64 CLR 407 machinery bolted to concrete bases and used for brick making, was held to be part of the land despite the fact that when the clay from the land was exhausted the machinery would be moved from the position it then occupied.

In my opinion, there is no inherent quality attaching to mining equipment placed on mining land that makes it inevitable that such equipment should be regarded as personalty. The nature of the equipment and the land is, of course, relevant to the general inquiry which has to be undertaken in accordance with the ordinary principles to which I have referred.

Before dealing with the separate categories of Eon equipment there are additional certain matters that are generally relevant.

It is important to bear in mind that at the time the appellant bought the Eon equipment the expected life of the mine was about four years.

Further, it is a fairly common practice to remove items of mining equipment during the lifetime of a mine. Indeed, in assessing the economic viability and budgetary requirements of a mine the fact that such items can be moved and sold or used elsewhere is taken into account. Nevertheless, the likelihood of removal depends (apart from the nature of the item concerned and the specific needs of the mine operator) on economics. There has to be a balance between the value of the item and the cost of its removal.

It was mainly because of Homestake's view of that balance that it did not remove the Eon equipment pursuant to its agreement with Chevron. Firstly, certain of the Eon equipment was not taken because it was surplus to Homestake's particular requirements. Secondly, certain items were simply difficult to move without causing them damage or destroying them. The remainder comprised items which were not economically worthwhile to move.

All these matters have to be taken into account when assessing whether individual items of Eon equipment became part of the land.

I propose now to deal separately with the four different categories of Eon equipment.

The first category, that is the borefield, consists of 12 kilometres of PVC piping, 5.1 kilometres of high voltage power lines complete with poles, isolators, lightning arresters and other associated attachments; 6 transformers; 4 Grundfos pumps; a steel transfer tank with a belt driven tank and a motor; and 2 process water dam PVC liners.

The borefield is about 15 or 16 kilometres from the mine site. It comprises four or five bores each approximately 30 to 40 metres deep. Pipes pass through the bores to the water and each has a submersible pump which projects into the water. Electric cabling travels through the casing and carries power to drive the pumps. Power is generated at the borefield and reticulated around the bores by way of

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a transmission line. The power lines go underground to the generating sets. There is also equipment to control the flow of water. Water is pumped to a central transfer station. Water is reticulated by way of underground pipes, firstly to a transfer tank and then, by way of the same method, where required.

Mr WJ Holly, a consulting engineer, testified on the appellant's behalf. In discussing the borefield he said that if a borefield had to be dismantled everything that could be salvaged would be removed. I understood him to mean that only the equipment that would be worthwhile economically would be ``salvaged''. He accepted that it is not common practice to transport borefield equipment but asserted that the above ground equipment could readily be removed.

The 12 kilometres of PVC underground piping is buried about half a metre underground. The 5.1 kilometres of high voltage power lines, with associated equipment, are attached to poles embedded in the ground. The transformers are attached to the poles. The Grundfos pumps are free standing units to which cabling is attached.

The transfer tank could possibly be moved but leaks are likely to result and economically it would be unlikely to be worth moving.

Mr RJ Webster, the planning and development manager of Homestake, was called to give evidence by the respondent. He was, practically speaking, responsible, on Homestake's behalf, for the sale of the Eon equipment to the appellant. As regards the borefield, he testified that, had Homestake not sold the Eon equipment to the appellant, Homestake would have removed the Grundfos pumps and the transformers from the powerline poles. He was of the view that nothing else (of the borefield equipment) was economically worth salvaging.

Applying the principles to which I have referred above, I conclude that the Grundfos pumps and the transformers should be regarded as chattels, but no other borefield item should be so classified.

The Grundfos pumps and the transformers are readily removed from the land. They are only lightly attached and can be removed without damage to themselves and to anything else. They would be economically worth moving. They fall into the class of mining equipment, the capacity of which to be transported with facility, is taken into account when planning the economic viability of the mine. Accordingly, they possess significant indiciae of personalty.

I have taken into account the fact that the items in question form part of a complete system, much of which I consider to have become attached to the land. Notwithstanding that, I conclude that the facility with which the pumps and transformers can be moved, and the economic incentive for doing so, gives them overall the characteristics of chattels and they should be regarded as such.

The remainder of the borefield equipment I consider to be fixtures. I come to this conclusion despite the fact that that equipment would not remain indefinitely on the land. As I have pointed out above I do not think that the length of time for which equipment is intended to be placed on land is necessarily and overriding factor. The remainder of the borefield equipment is firmly attached to the land. Both the function of that equipment and economic considerations lead to the irresistible conclusion that none of it would ever be moved during the lifetime of the mine, and thereafter it would be destroyed. These matters give that equipment a quality of permanence during the lifetime of the mine.

As regards the powerlines, I have noted that in
Anthony v The Commonwealth of Australia (1973) 47 ALJR 83 Walsh J considered a power line supported on a pole set in concrete to a depth of approximately six feet was a chattel. As I have said, however, each case depends on its own facts. In coming to the conclusion that he did Walsh J had particular regard to the object of annexation in that case. In the present case I consider the circumstances to which I have adverted lead to a different conclusion.

The second category is a ball mill shown in a diagram forming part of the agreement. It is a rotating cylindrical device into which steel balls are added together with ore and water in order to grind ore to a very fine size. It is driven by a motor attached to it.

The ball mill is probably more than 20 years old, but nevertheless, according to the evidence, ball mills of that age and type tend to move from mine to mine. Commonly ball mills can be bought and transported all over the

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world. They are readily reusable. The uncontraverted evidence was that it was an economic proposition to remove and sell the ball mill in question. According to Mr Webster, Homestake would have removed the ball mill (and presumably dealt with it commercially) had it not sold it to the appellant.

The ball mill sits on U-shaped concrete plinths which are embedded in the ground. There was some evidence that the mill was bolted to the concrete plinths, but it is plain that the mill could be removed and transported from its present location without any difficulty.

In my opinion, the same considerations applicable to the Grundfos pumps and transformers apply to the ball mill and it should be regarded as a chattel.

The third category consists of a complete power station incorporating five diesel generating sets, ancillary equipment and control gear enclosed in a metal clad shed. Each generator is a self-contained skidmounted unit consisting of a direct coupled diesel engine alternator assembly mounted on a rigid base frame and complete with radiator, governor, fuel day tank and starting equipment. The switch room adjacent to the generator area is complete with generator circuit, breaker controls and all controls and equipment for the operation of the generating set. There is a day tank, as well as fuel lines and an associated pump located outside the metal clad shed.

According to Mr Holly, the generators, engines, alternators and related equipment, making up the power plant are readily removable. In support of his assertion that the engines could be transported without difficulty Mr Holly stated that the engines had recently been removed for their 20,000 hour services which involved an exchange of those engines for a reconditioned engine. The engines were merely detached from their base plates and another engine was put in their place. He said, and this was not disputed, that it is a very common thing to remove engines for power plants; engines in power plants are no different from the engines in boats or trucks. They are standard engines that are offered by specialist engine companies.

Mr Webster agreed that the equipment in the power house could be moved. As I understood his evidence he said that had Homestake not sold the equipment in the power house to the appellant, it would have removed that equipment. (He referred to the equipment in the power house as ``the power plant''.) He said that ``with the power-house, the engines and the alternators and the metal pieces can be moved fairly easily''. He said that Homestake would have removed everything inside the power-house shed.

The generators and the rest of the power plant sit on a concrete floor. The generators are set in concrete by a matter of some half an inch (described by Mr Webster as ``a superficial amount of concrete'') to prevent lateral movement. Steel framework is bolted to the generators and the steel frames are connected in some way to the concrete. The cable tray is connected to the generators. The generators are bolted to steel frames and the frames are mounted on and embedded in a concrete floor.

Cables that run from the generators are housed in specially designed steel cable trays. The cable trays are bolted to the floor or cemented in. The frame that houses the cabling is embedded in the concrete.

Other cable work runs underground. According to Mr Holly this cabling could be recovered and it might be used again or simply sold as scrap. It is not clear to me whether this underground cabling is part of the power station or part of the borefield.

The shed has a steel framework supporting the cladding around the outside and is probably bolted to the steel framework. The steel framework is embedded in concrete footings which, in turn, are embedded in the ground. Mr Holly accepted that, while the shed is in theory, removable, the cost of dismantling and moving it would be more than the actual cost of buying and erecting a new shed.

Counsel for the respondent referred to the fact that all items comprising the power plant were securely bolted to the floor. He submitted that on the authorities this was sufficient to establish that they were fixtures. There is certainly much authority consistent with this proposition. See for example
Hobson v Gorringe [1897] 1 Ch 182; Holland v Hodgson at 339; Commissioner of Stamps (WA) v L Whiteman Ltd. Nevertheless, as I have pointed out above there is high authority where different conclusions have been reached and the rule is by no means to be rigidly applied.

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Taking into account the limited life of the mine, the transportable character of the equipment concerned, the common practice to transfer equipment of that kind, the economic incentive to remove it, the relatively slight degree of attachment to the ground, and the facility with which detachment could occur, I consider that the items making up the power plant should be regarded as chattels. By the ``power plant'' I mean the equipment inside the shed. I do not intend to include any underground cabling or the shed itself, or anything outside the shed.

On the evidence the capacity to be readily transported does not attach to the same degree to the equipment that is part of the power station but located outside the shed. Moreover economic factors render it unlikely that that equipment will ever be moved and it is likely to be destroyed when the life of the mine comes to an end. I consider those items of equipment to be fixtures and part of the realty.

Although the shed is capable of being transported it is likely to suffer some damage if moved and, in any event, it would simply not be economically worthwhile to move it. The probabilities are that the shed will stay where it is until the end of the life of the mine when it will be destroyed. Accordingly, I consider that the shed should be regarded as a fixture and part of the realty: cf
Webb v Frank Bevis, Ltd [1940] 1 All ER 247.

The fourth and final category is a general one described as ``the infrastructure'' consisting of a transportable shed used as a warehouse/maintenance workshop, perimeter fencing, gates and two fibreglass potable water storage tanks complete with two potable water pumps and reticulation piping.

The uprights of the perimeter fencing are cemented in the ground, that is, the corner posts are cemented but the intermediate posts are not. The two fibreglass potable water storage tanks simply rest on the ground. Any movement would probably cause them damage. The transportable shed is affixed to the ground in a way similar to the shed housing the power plant.

These items of equipment are attached with differing degrees of firmness to the ground. Some will be damaged if an attempt is made to remove them. What is common to them all is that none is worth salvaging. The likelihood is that all will remain where they are until eventually destroyed at the end of the lease.

In my opinion, these items are to be classified as realty. The degree of annexation coupled with the objective intention with which they have been attached to the land during the lifetime of the mine leads to that conclusion.

In the circumstances the appeal is partially successful and I will hear counsel as to the orders sought.