Business tenancies – Application for new tenancy – Ground of opposition in section 30(1)(f) of Landlord and Tenant Act 1954 – Intention to redevelop – Appellant tenant applying for summary judgment dismissing ground of opposition – Application refused – Whether respondent landlord required to show requisite intention as at date of anticipated trial or date of summary judgment hearing – Appeal dismissed
The appellant was the tenant, under three leases, of a supermarket and adjoining land for terms expiring in March 2008. The respondent became the appellant’s landlord in 2006, when it acquired the freehold with a view to redevelopment. In 2007, the appellant served notices on the respondent, under section 26 of the Landlord and Tenant Act 1954, requesting new tenancies. The respondent served counternotices, indicating that it would oppose the grant of new tenancies on the ground in section 30(1)(f) of the 1954 Act, namely that, on the termination of the existing tenancies, it intended to demolish, reconstruct or carry out substantial works of construction to the demised premises.
The appellant applied to the court for the grant of the new tenancies and an order was made for a trial of the respondent’s ground of opposition as a preliminary issue. In February 2009, the respondent went into administration. The application had not then proceeded to trial, but the appellant obtained the court’s permission to continue the proceedings pursuant to para 43(6) of Schedule B1 to the Insolvency Act 1986. A directions timetable was set with the trial date anticipated to be between March and May 2010. The appellant applied for summary judgment rather than waiting for the trial. A district judge heard and dismissed that application in October 2009. He held that the appellant had failed to establish that the respondent would be unable to make out the ground of opposition either at the date of the summary judgment hearing or within a reasonable time thereafter.
The appellant appealed. The central issue was the date at which the respondent’s intention fell to be determined for the purposes of a summary judgment application in respect of a claim for new tenancies under the 1954 Act. The appellant contended that it was entitled to summary judgment if it could show that the respondent had no real prospect of establishing the requisite intention at a date determined by reference to the date of the summary judgment hearing. The respondent argued that the relevant date was to be determined by reference to that of the trial.
Held: The appeal was dismissed.
The date of the hearing at which the necessary intention had to be shown to exist was always the date of the substantive trial of the landlord’s ground of objection: Betty’s Cafés Ltd v Phillips Furnishing Stores Ltd (No 1) (1958) 171 EG 319 applied. What was envisaged was a hearing at which evidence was tested and facts found for the purpose of a final determination of the landlord’s ground of opposition. Although a preliminary issue hearing was a hearing of that nature, a summary judgment hearing was not, since no determination would be made of disputed facts and it could result in the substantive issue coming to an end only if the decision went one way, namely if it was the tenant’s application and it was successful: Dutch Oven Ltd v Egham Estate & Investment Co [1968] 1 WLR 1483 considered.
The essential nature of summary judgment was to determine whether a party had a real prospect of establishing its cause of action or defence at a future trial date. The “real prospect” test applied on such an application was forward-looking, and the substantive nature of the cause of action or defence was not affected by the fact that the matter was considered at an earlier date than that of the trial. Where summary judgment was sought on the ground of opposition under section 30(1)(f), the court had to ask whether the landlord had a real prospect of forming, and proving that it had formed, the necessary intention by the anticipated future trial date. In so far as it was necessary to show a reasonable prospect of being able to commence work by reference to a particular date, that date also had to be determined by reference to the anticipated trial date.
Any other conclusion would not only produce logical difficulties but could transform the balance of the statutory regime from favouring the landlord to favouring the tenant, which could bring forward the date at which the landlord’s intention had to be shown by the simple expedient of applying for summary judgment. That would be a wholly unintended consequence of the procedural changes introduced by the CPR. Alternatively, it could result in increased costs, with the parties disputing such applications only to have to conduct the same dispute at the final hearing. Accordingly, the district judge’s decision was upheld, but for different reasons from those he gave.
Mark Wonnacott (instructed by Hill Dickinson LLP, of Liverpool) appeared for the appellant; Nicholas Dowding QC and Greville Healey (instructed by Eversheds LLP) appeared for the respondent.
Sally Dobson, barrister
