Supreme Court decision has clearly left an impact on case preparation, although it has yet to play a full role.
In the depths of last winter, I wrote a piece about the possible consequences of the decision of the Supreme Court in S Franses Ltd v Cavendish Hotel (London) Ltd [2018] UKSC 62; [2019] EGLR 4. Readers of this august journal will hardly need reminding that thenceforth, landlords opposing renewal of business tenancies on the ground of a redevelopment intention under section 30(1)(f) of the Landlord and Tenant Act 1954 (the 1954 Act) must show not merely that they intend to carry out the qualifying works, but also that they would do so even if the tenant left voluntarily. Think of it as an intention to redevelop “whatever”.
I suggested then that this evolution of the approach to redevelopment might call for a rethink of strategy. I am still waiting for my example to materialise (where landlord Apocalypse wants to carry out what most would regard as entirely pointless work, in order to suit its proposed new industrial chic fashion retailer tenant Derelicte, which likes that sort of thing) – but signs of strategic thinking in other guises are reaching the courts and tribunals. Two decisions came to online prominence this July. On closer analysis, neither turned on conditionality (although Franses was cited), but each is interesting in its own right as an example of 1954 Act tactics at play, and each will no doubt be used as a practice model for future occasions.
Playing catch-up
The first, London Kendal Street No 3 Ltd v Daejan Investments Ltd [2019] PLSCS 166 was a decision of Judge Saunders, sitting in the County Court at Central London on 16 July 2019 (see Legal Notes, p59). The claimant tenant occupied a ground-floor unit in a large 10-storey mixed-use building containing many units, part of which the defendant landlord intended to redevelop. The tenant applied for a new tenancy in 2017, and the landlord opposed its application on the ground that it proposed to demolish or reconstruct its unit (or a substantial part of it) and could not reasonably do so without obtaining vacant possession.
This claim therefore started life as a pre-Franses case: all that the landlord would have to do, it then seemed, was to prove that it intended to do the necessary works, and had the wherewithal to do so. Equipped with the decision in Franses, however, the tenant contended (among other things) that the works would not be commenced within the required three-month period of the end of the lease (or any other reasonable period required by law), because the landlord would not carry out the works other than as part of a much bigger project which it was not yet ready to do. So, the issue was whether the landlord had the current intention to carry out the works at the termination of the tenancy.
As we lawyers like to say, cases turn on their own facts, and it is relatively rare for a principle to emerge which might be of use in other cases. In this case, ultimately, the issue was whether the landlord would be in a position to carry out the works at all, rather than the more interesting question (which ultimately did not arise) of whether, had the tenant volunteered to leave early, the landlord would have carried out the works there and then, or waited until it was ready to carry out the other works.
In the end, the landlord maintained that it would carry out all the works together, and given that it had placed a works contract to that effect, it was effectively common ground that all the works would proceed together – to the extent that the landlord could do them at all. As to that, the judge accepted that it was likely that the works would proceed.
Telecoms and redevelopment
Our second case in which Franses was cited is the decision of the Upper Tribunal (Lands Chamber) in EE Ltd and another v Trustees of the Meyrick 1968 Trust [2019] UKUT 164 (LC); [2019] PLSCS 131, decided a week earlier on 9 July.
The claimants were tenants of a mast site; their lease (excluded from the security of tenure provisions of the 1954 Act) had expired; and they had therefore to seek rights to remain in possession pursuant to paragraph 20 of the Electric Communications Code. The defendant landlords were opposed to the claim under paragraph 21(5) (“the relevant person intends to redevelop all or part of the land to which the Code right would relate, or any neighbouring land, and could not reasonably do so if the order were made”), ostensibly because they proposed to install their own mast in place of the tenants’ mast. Had they been able to do so, they would have been able to charge the tenants a substantial rent, in place of the meagre amount available under a Code agreement. The reason for that is that a right to place telecommunications apparatus on other apparatus, such as a mast, cannot in itself be a Code right, and does not therefore attract the restrictive rental valuation provisions under the Code.
A cunning plan indeed – and one which could well have worked. In this case, it did not, because the tribunal held that it was wholly implausible that the landlords, as trustees with fiduciary duties to their beneficiaries (and also as landowners who claimed to be committed to the welfare of their land and their tenants) would waste their resources on it, given the poor return available. In reality, as the tribunal held, the landlords’ redevelopment plans had been conceived in order to defeat the claim for Code rights. Franses appeared therefore to play a role – but ultimately the tribunal just did not believe that the landlords would carry out the works at all. Its opposition would therefore have failed in a pre-Franses world as well.
The decision is interesting, because it shows that the tribunal had no difficulty, despite the difference in the statutory language, in applying the authorities on the redevelopment ground of opposition, including Franses, in a telecoms context.
Guy Fetherstonhaugh QC is a barrister at Falcon Chambers
