Landlord and Tenant Act 1954, Part II, section 30(1)(g) — Tenants’ appeal against dismissal by county court judge of their application for new tenancy — Judge had held that landlord had established an intention to occupy the holding for the purpose of a business to be carried on by her therein — The premises comprised two properties which had been occupied by the tenants as a private hotel or lodging house; they were situated in south-west London — The landlord, who lived outside London, intended, if her opposition to a new tenancy was successful, to run the premises as a hotel by way of a family enterprise — Her husband, who had business experience, would attend to the day-to-day management — Her daughter, who was studying hotel management, would after qualification move in as a manageress and in the meantime give some limited assistance — It was not suggested that the landlord would move into the premises herself — A partnership between husband and wife was contemplated but no formal arrangements had yet been made
submitted by the tenants that these proposed arrangements did not satisfy
section 30(1)(g) of the 1954 Act, which required that the landlord should
intend to occupy the holding for the purpose of the business to be carried on
by her therein — In the present case, it was argued, there may have been a
genuine intention, and there would be occupation of the premises by the
landlord through her agent, her husband, but this was not sufficient to show
that the landlord would be ‘carrying on a business’ on the holding — This
submission was rejected by the court — It was clear from the authorities that
it was not necessary to show that the landlord would physically occupy the
premises and it was not necessary that she should carry on the business by
herself without help from others — The county court judge was justified in
holding that all the ingredients of section 30(1)(g) had been established —
Having so found, he had no discretion in the matter — Appeal dismissed
The following
case is referred to in this report.
Lewis v Graham (1988) 20 QBD 780; 22 QBD 1
This was an
appeal by the tenants, William Skeet and Mary Rose Skeet, from the decision of
Judge Harris QC, at Westminster County Court, refusing their application for
new tenancies of properties at 35 and 37 St George’s Drive, London SW1, and
upholding the landlord’s ground of opposition under section 30(1)(g) of
the Landlord and Tenant Act 1954. The landlord was Mrs Miranda Powell-Sheddon,
who resided at Newport Pagnell.
Jonathan Barnes
(instructed by I V Heap & Co, of Croydon) appeared on behalf of the
appellants; Michael Rich QC and Stephen Bickford-Smith (instructed by Bull
Astley & Harding, of Newport Pagnell) represented the respondent.
Giving
judgment, RUSSELL LJ said: This is an appeal by the applicants from an order of
His Honour Judge Harris QC, sitting at the Westminster County Court, when on
February 1 1988 he refused the appellants’ applications for new leases which
they sought under Part II of the Landlord and Tenant Act 1954. I shall
hereafter refer to the appellants before this court as ‘the tenants’; I shall
hereafter refer to the respondent as ‘the landlord’.
In the appeal
the tenants seek to reverse the finding of the learned judge, and they seek a
declaration here that they are entitled to a new lease, the terms of which will
have to be decided hereafter, in respect of two properties, 35 and 37 St
George’s Drive, London SW1.
Those two
properties were occupied by the tenants under leases which expired on December
25 1986. It is common ground that for approximately seven years prior to the
termination of the leases the tenants had used the premises, combined together,
as a private hotel or lodging-house.
The
applications for new leases, which were dealt with together, were opposed by
the landlord pursuant to section 30(1)(g) of the Landlord and Tenant Act
1954. That provides as follows:
The grounds on
which a landlord may oppose an application under subsection (1) of section 24
of this Act are such of the following grounds as may be stated in the
landlord’s notice under section 25 of this Act or, as the case may be, under
subsection (6) of section 26 thereof, that is to say . . .
(g) subject as hereinafter provided, that on the
termination of the current tenancy the landlord intends to occupy the holding
for the purposes, or partly for the purposes, of a business to be carried on by
him therein, or as his residence.
In reply to
that opposition to the applications for new leases, the tenants asserted that
the landlord was not entitled to rely upon section 30(1)(g) because
there operated, as a result of a conversation which allegedly took place years
ago, a promissory estoppel precluding the landlord opposing the application. On
the facts the learned judge rejected the tenants’ evidence in relation to
estoppel and no appeal is launched here against that finding.
The judge
dismissed the application on the basis that the landlord had proved to the
requisite degree, namely the balance of probabilities, that she had brought
herself within the terms of section 30(1)(g).
Before this
court Mr Barnes, on behalf of the tenants, has analysed the provisions of the
subparagraph, and really at the heart of his argument is the contention that on
the facts as found by the learned judge the landlord, Mrs Powell-Sheddon, did
not demonstrate that she intended to occupy the holding for the purposes of a
business to be carried on by her therein. Mr Barnes accurately analyses subpara
(g) by pointing out that there are three elements, or ingredients, in
the paragraph, all of which have to be proved. First, he says that the landlord
has to demonstrate to the satisfaction of the judge that he or she has a
genuine intention as to the future in relation to occupation and the carrying
on of business. That was plainly under challenge before the learned judge, as
the notes of evidence demonstrate. It was put to both the landlord and her
husband that the real intention behind their opposition to the applications was
that at some date in the near future there would be a sale of these properties.
The judge found that there was an intention, and a genuine intention, on the
part of the landlord to occupy these premises for the purposes of carrying on a
business, and at the conclusion of his submission Mr Barnes realistically
recognised that the judge, having seen and heard the witnesses, was perfectly
entitled to accept the opposition of the landlord to these applications as
being a genuine one.
The next
ingredient that has to be demonstrated, submits Mr Barnes, is that the landlord
intends to ‘occupy’ the holding. At one stage during the course of the argument
for my part I wondered whether that was challenged, but Mr Barnes now
realistically accepts that in the light of the authorities to which he drew our
attention it is
physically occupy the premises.
That brings me
to a short rehearsal of what it was that the landlord asserted before the
learned judge. She is a lady of substantial private means who resides in
Newport Pagnell. She has a daughter who is currently studying hotel management.
She has a husband who is a businessman with a variety of interests. The
evidence presented to the learned judge was to the effect that if the
applications for new tenancies were refused, the landlord, Mrs Powell-Sheddon,
would enter into a partnership agreement with her husband whereby her husband
would be responsible for the day-to-day management of the hotel, which it was
proposed should continue to operate at the premises the subject-matter of the
application. As to the daughter, after qualification it was proposed that she
should move into the premises as a manageress; while a student she would be
able to give some limited assistance in the running of the hotel. Mrs
Powell-Sheddon did not suggest at any stage that she would move into the
premises herself. No definitive arrangements had been made between the husband
and the wife; no partnership agreement had been drafted; no application in the
name of the landlord and her husband had been made for any licence in respect
of the consumption of liquor on the premises — indeed, such an application
would have been premature.
The learned
judge, however, having heard evidence from the landlord and her husband, came
to the conclusion that they did genuinely intend, if the applications for new
leases were refused, to run a business at these premises in the way of a
private hotel. Mr Barnes’ submission to this court is that, on the facts as
found, while there may have been a genuine intention, while there would be an
occupation of the landlord through her agent, the husband, her evidence and
that of her husband did not demonstrate that within the meaning of section
30(1)(g) the landlord, Mrs Powell-Sheddon, would be ‘carrying on a
business’ on the holding.
Various
authorities have been cited to us in support of the proposition, so submits Mr
Barnes, that the evidence failed to disclose an intention to carry on business.
Speaking for myself on this particular point, I am bound to say that I have not
derived very much assistance from the authorities save, perhaps, as Ewbank J
pointed out during the course of argument, that in one of the cases, Lewis
v Graham (1888) 20 QBD 780, Lord Coleridge LJ said at p 781:
. . .
‘residence’ and ‘business’ are elastic words, of which an exhaustive definition
cannot be given, but they must be construed in every case in accordance with
the object and intent of the Act in which they occur.
Quite plainly,
the Landlord and Tenant Act 1954 afforded to a landlord protection, if that be
the right word, from applications of tenants for new leases in circumstances in
which the landlord genuinely intended, if the applications were refused, to
occupy the premises either personally or through an agent, so as to carry on a
business there.
In my
judgment, this landlord, being the owner of the freehold of these properties
and being the wife of the person whom she proposed to entrust with the day-to-day
activities in the hotel, was entitled to regard herself as carrying on business
within the holding, particularly when one has in mind the relationship between
her and the person who was going to be engaged in the day-to-day activities of
the business, and particularly when one bears in mind that that relationship
would be underpinned, as it were, by the existence of a formal partnership
agreement. This business would not be carried on between two people who were at
arm’s length; it would be a business carried on in the way of a family business
by husband and wife, with, at the appropriate time, the daughter giving the
necessary assistance.
Accordingly,
in my judgment it would be an abuse of language to suggest that in such a
situation Mrs Powell-Sheddon was not, and would not be, herself, in company
with others — for there is no need to demonstrate that she counted on carrying
on the business exclusively — carrying on a business within the holding. This
was the conclusion at which the learned judge arrived. Having considered not
only those matters to which I have earlier made reference in this judgment, but
also having had regard to the features of the case which impinge upon the three
ingredients of section 30(1)(g) to which I have referred, in my judgment
the learned judge was perfectly entitled to come to the conclusion that this
landlord had proved all the ingredients of section 30(1)(g). Once he
came to that conclusion he had no discretion in the matter, though it is worth
observing that he expressed appropriate sympathy with the tenants, who had, it
seems, expended considerable sums of money upon the property during the course
of the tenancy. In relation to that, of course, the statute does afford at
least some remedy.
I would
dismiss this appeal.
EWBANK J
agreed and did not add anything.
The appeal
was dismissed with costs.
