Business premises — Tenancy – Intention to occupy – Respondent tenants wanting to renew lease – Appellant landlords opposing renewal because intending to occupy premises for own business – Judge finding appellants having no intention to use premises for business — Whether judge erring in law – Appeal dismissed
The appellant landlords held a leasehold interest in business premises pursuant to a lease for 995 years from December 1996. Pursuant to a five-year sublease from March 2002 at an initial rent of £17,000 pa, the respondent tenants occupied the ground floor and basement from which they sold newspapers and confectionery. They applied to renew their tenancy but the appellants opposed their application, by virtue of section 30(1)(g) of the Landlord and Tenant Act 1954, because they wanted to occupy the premises for their own business.
It was common ground that, under section 30(1)(g), the appellants had to show that: (i) they would be able to give practical effect to their intention to occupy the premises for the purposes of their business; and (ii) they had a subjective intention to use the premises to run their business. The appellants stated that they proposed to carry on a newsagent’s business at the premises.
The judge held that the first requirement was satisfied but, with regard to the second requirement, he was concerned about the appellants’ intentions, although the appellants had informed the court that they would give an undertaking not to use the premises for two years for any purpose other than as a newsagent. The judge was not impressed by that undertaking, taking the view that it created doubt on the appellants’ intention, which ought to have been a substantial and genuine intention to run the business for the foreseeable future. He concluded that he was not satisfied that there was a real intention such as the 1954 Act required, so that the requirements of section 30(1)(g) were not satisfied. The appellants appealed.
Held: The appeal was dismissed.
The court could conclude that the landlord had not shown the requisite intention to occupy premises where it had found that a sale was merely likely as opposed to intended. Moreover, the court was entitled so to conclude in the circumstances of the instant case.
The central idea of section 30(1)(g) was that the landlord should genuinely intend to occupy the premises to carry on its business: the landlord bore the onus of proof on that issue, but that was all that it had to prove. Whether the landlord had that intention was a question of fact to be decided on consideration of the circumstances. A separate, additional and independent requirement to show that the premises would not be sold within five years did not arise. However, as with any factual question, if other evidence threw doubt on its case, unless it rebutted that evidence, it might fail to prove its case. It was not necessary to analyse that process in terms of the evidential burden on any issue passing to it because it had the burden of proof throughout, but it did need to rebut or explain any matter that the tenant raised and that threw doubt on its case.
Section 30(1)(g) did not require that the landlord should intend to occupy the premises for any particular length of time. Its intended occupation should not be fleeting or illusory, but that was a minimum requirement that might be an appropriate test to apply where the business was to be continued through successors in title. In other circumstances, the intended occupation for the purpose of carrying on the landlord’s business should be real and the occupation had therefore to be more than short-term. Parliament could not have intended that the landlord should be able to prevent the renewal of the business tenancy if that were not so. What was short-term depended on the facts of the particular case. However, if the judge, as in the instant case, found that the landlord was likely to sell, that likelihood was a factor that the court had to take into account in deciding whether the landlord had discharged the burden of proving that it had a genuine intention to occupy the premises for the relevant purpose. That was a multifactorial question to be decided on all the relevant evidence: Cunliffe v Goodman [1950] 2 KB 237 and Willis v Association of Universities of the British Commonwealth [1965] 1 QB 140 considered.
One of the functions of the Court of Appeal on a question of fact was to establish whether the trial judge had drawn incorrect inferences from the facts but in doing so the court would make due allowance for the fact that the judge heard oral evidence. Applying that test, the judge in the instant case had been was entitled to conclude that the appellants had not shown the necessary intention to occupy the premises for the purposes of their business. He had heard the witnesses and the evidence had covered many issues of fact. This was not a case when the appeal court could interfere with the trial judge’s inferences from the evidence.
Tamsin Cox (instructed by Wright Son & Pepper) appeared for the appellants; Jamal Demachkie (instructed by S Satha & Co) appeared for the respondents.
Eileen O’Grady, barrister
