Landlord and Tenant
What happens when a Landlord wants to oppose the renewal of a protected business tenancy under s.30 ground (f) of the Landlord and Tenant Act 1954?
S Franses Limited v The Cavendish Hotel London Limited Judgment
This article seeks to provide further insight into the recent judgment of one of the most noteworthy cases to reach the Supreme Court in 2018.
In summary, the case was brought to the court due to the tenant (S Franses) challenging the landlords (Cavendish Hotel) opposition to a new tenancy under section 30 ground (f) of the Landlord and Tenant Act 1954. Specifically, the case dealt with the rationale and the conditions behind the landlord’s primary objective in redeveloping the land.
In what was a remarkable outcome, the Supreme Court ruled in favour of the tenant. It became clear as the case progressed that the landlord’s intention to carry out works was not in fact ‘settled’ and in actuality, the landlords aim was to gain vacant possession of the property.
The crux of the dispute in this case came down to whether such a fabricated intention was the original objective of the statute and therefore if the ground should fail, or whether the reasoning is immaterial. Nonetheless, the Supreme Court went further than this and used the ‘acid test’. This essentially sought to evaluate the basis of intention and whether the landlord would propose the same works if the tenant left of his own accord. In application to the case, the landlord did not wish to do the works if they could be done whilst the tenant remained in possession. The conclusion therefore (made by Lord Sumption) was that this kind of intention was “not the fixed and settled intention that ground (f) requires.”
The judgment sets a higher burden of proof on landlords relying on ground (f) and having to show a ‘settled intention’. It lays the foundation that a tenant’s statutory right to renew should not be bypassed by proposed works which would not have been carried out by the landlord if the tenant had left voluntarily.
Although this decision found in favour for the tenant, we will not know its effects until it is referred to in County Court cases. The actual application of this case may be limited as it is not commonplace for a landlord to be so open about its manufactured proposal of works. However, the court will need to be satisfied that the works will be done, even if the tenant was to leave voluntarily and that the motive of the landlord is only to do the works.
For further information please contact Sophie Papworth by email at sophie.papworth@jackamans.co.uk or call 01394 279636.