Business tenancy — Landlords opposing grant of new lease — Landlords intending to occupy for business purposes — Landlord’s interest held in trust — Landlords intending to let — Whether landlords’ right to occupy arose directly from their interests under the trust — Appeal by tenant allowed
The appellant is an estate agent and the tenant of premises at 11 Gildredge Road, Eastbourne, Sussex; he held a 12-year lease which expired on June 24 1987 and applied under the Landlord and Tenant Act 1954, Part II, for a new tenancy. The respondent landlords, trustees under a trust for sale, acquired the reversionary interest in 1980. Two of the three respondents are partners in a firm of solicitors, Mayo & Perkins, of which there are 11 partners in all. The appellant’s application for a new tenancy was opposed on ground (g) of section 30(1) of the 1954 Act, as it was the respondents’ intention that the premises should be used by their firm to whom a lease on commercial terms would be granted.
In the Eastbourne County Court (February 3 1989) His Honour Judge Hammerton dismissed the appellant’s application as he accepted that the landlords had established an intention to occupy the premises for the purposes of their business. He referred to section 41(2) of the 1954 Act, which states: “Where the landlord’s interest is held on trust the references in paragraph (g) … to the landlord shall be construed as including references to the beneficiaries under the trust or any of them …”, and decided that as two of the trustees were also beneficiaries, they had shown an intention to occupy and it did not matter that they would do so with the rest of the partnership under a lease.
Held The appeal was allowed.
Where a landlord intended to oppose the grant of a new tenancy under ground (g) of section 30(1), and relied on his beneficial interest under a trust, he had to show that his proposed occupation was for the purposes of and in the manner intended by virtue of his beneficial interest under that trust: see Frish Ltd v Barclays Bank Ltd [1955] 2 QB 541 at p 552.
Two of the respondent landlords, Messrs Riddick and Naylor, were partners in the firm; the third, Mrs Naylor, was not. In order not to exclude Mrs Naylor from the benefit of her beneficial interest under the trust for sale, it was necessary for the three trustees to let the premises under a lease to the partnership as a whole. In this way the first two respondents would then occupy the premises, not by virtue of their beneficial interest but under the lease; they were entitled to occupy the premises not for the purposes of their business as beneficiaries of the trust but under the lease. That was not occupation as “beneficiaries” under the 1954 Act and did not satisfy ground (g).
Carsbalton Beeches Bowling Club Ltd v Cameron
(1978) 249 EG 1279 considered.
Robert Pryor QC and Wayne Clark (instructed by Winter & Co, of Eastbourne) appeared for the appellant; and Graham Platford (instructed by Mayo & Perkins, of Eastbourne) appeared for the respondents.
