S Franses Ltd v The Cavendish Hotel (London) Ltd.

United Kingdom

05.12.2018

Tenancy

Landlord’s intention to demolish or reconstruct premises must exist independently of tenant’s statutory claim to a new tenancy

Issue in present appeal is regarding qualified security of tenure enjoyed by business tenants, pursuant to Part II of the Landlord and Tenant Act, 1954. His Honour Judge Saggerson in the County Court considered that the landlord genuinely intended to carry out the works and that ground (f) was made out. On appeal to the High Court, Mr Justice Jay agreed, but gave permission for a leap-frog appeal to this Court (by-passing the Court of Appeal). The question which arises on this appeal is whether it is open to the landlord to oppose the grant of a new tenancy if the works which he says that he intends to carry out have no purpose other than to get rid of the tenant and would not be undertaken if the tenant were to leave voluntarily.

Section 30(1)(f) of the Act assumes that the landlord’s intention to demolish or reconstruct the premises is being obstructed by the tenant’s occupation. Hence the requirement that, the landlord “could not reasonably do so without obtaining possession of the holding”. The Court shall not hold this requirement to have been satisfied, if the works can reasonably be carried out by exercising a right of entry and the tenant is willing to include a right of entry for that purpose in the terms of the new tenancy.

These provisions show that the landlord’s intention to demolish or reconstruct the premises must exist independently of the tenant’s statutory claim to a new tenancy, so that the tenant’s right of occupation under a new lease would serve to obstruct it. The landlord’s intention to carry out the works cannot therefore be conditional on whether the tenant chooses to assert his claim to a new tenancy and to persist in that claim. The acid test is whether the landlord would intend to do the same works if the tenant left voluntarily.

Just as the landlord’s motive or purpose, although irrelevant in themselves, may be investigated at trial as evidence for the genuineness of his professed intention to carry out the works, so also they may be relevant as evidence of the conditional character of that intention. In both cases, the landlord’s motive and purpose are being examined only because inferences may be drawn from them about his real intentions. Likewise, although the statutory test does not depend on the objective utility of the works, a lack of utility may be evidence from which the conditional character of the landlord’s intention may be inferred.

Present Court allowed the appeal and it is declared that on the facts found, the landlord does not intend, within the meaning of Section 30(1)(f) of Act, to carry out the works specified in the scheme of works relied upon in opposition to the tenant’s application for a new tenancy. Lord Briggs agrees with Lord Sumption and explained that examining evidence as to the landlord’s purpose or motive is likely to be a valuable means of testing not merely the genuineness (i.e. honesty) but also the conditionality of the landlord’s intention, so as to ascertain whether it is in accordance with the statutory objective behind Section 30(1)(f) of Act.

Tags : Tenure Security New tenancy Grant

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