Landlord and Tenant Act 1954, section 30(1)(f) — Whether landlord’s intention to carry out development had been established — Landlord had opposed the grant of a new tenancy to the tenant on the ground that she intended to develop the site, used as a cold store and garage for vehicles in connection with the tenant’s ice cream business, by the construction of 10 residential flats — To substantiate the landlord’s intention to develop it was necessary to satisfy the court that she had attended to three matters, planning permission, finance, and arrangements with a developer or building contractor — The evidence was that outline planning permission had been obtained and it was unlikely that there would be any problem about obtaining detailed approval — As to finance, there was evidence that a bank was willing to fund the project — The main challenge by the tenant was that no agreement had been made with a developer or building contractor — It was suggested on behalf of the tenant that, although it might not be necessary to show that there had been a signed and concluded agreement, there should at least be an agreement as to the basic points on which the developer would proceed; in particular, if it was to be a building contract, the price — The Court of Appeal did not consider that the landlord had to go as far as that — In the present case it was clear from the evidence that a small development company, which had already carried out a similar development in the same town, had approached the landlord and were keen to carry out the development in question — It was probable that an agreement would be reached between them and the landlord — Held, having reviewed the leading authorities, that the county court judge was justified in concluding that the landlord had established the ground under section 30(1)(f) of the 1954 Act — A reasonable man, looking at all the circumstances objectively, could not come to any other conclusion than that the landlord had a reasonable prospect of achieving his object — Appeal dismissed
The following
cases are referred to in this report.
Betty’s
Cafes Ltd v Phillips Furnishing Stores Ltd [1959]
AC 20; [1958] 2 WLR 513; [1958] 1 All ER 607; [1958] EGD 92; (1958) 171 EG 319,
HL
Cunliffe v Goodman [1950] 2 KB 237; [1950] 1 All ER 720, CA
DAF Motoring
Centre (Gosport) Ltd v Hutfield & Wheeler
Ltd (1982) 263 EG 976, [1982] 2 EGLR 59
Gregson v Cyril Lord Ltd [1963] 1 WLR 41; [1962] 3 All ER 907; [1962]
EGD 298; (1962) 184 EG 789, CA
Reohorn
v Barry Corporation [1956] 1 WLR 845; [1956]
2 All ER 742; [1956] EGD 243; (1956) 167 EG 604, CA
This was an
appeal by the tenant, Antonio Capocci, from the decision of Judge Wilson at
Oxford County Court in favour of the landlord, Mrs Sylvia May Goble, on the
preliminary point as to whether the landlord had established the ground under
section 30(1)(f) of the Landlord and Tenant Act 1954 for refusing the renewal
of a business tenancy of premises in Bell Lane, Bicester, used by the tenant in
the course of his ice cream business.
W J Mowbray QC
and C Braham (instructed by Lovell Son & Pitfield, agents for Alfred Truman
& Son, of Bicester) appeared on behalf of the appellant; David Neuberger QC
and A Hill-Smith (instructed by Herbert & Gowers, of Bicester) represented
the respondent.
Giving
judgment, MAY LJ said: This is an appeal from a judgment of His Honour Judge
Wilson sitting in the Oxford County Court on August 15 1986. The learned judge
then had before him a preliminary point in a landlord and tenant matter. That
was whether on the material then before him a landlord had established the
ground for refusing the renewal of a business tenancy within the provisions of
section 30(1)(f) of the Landlord and Tenant Act 1954, namely that
on the
termination of the current tenancy the landlord intends to demolish or reconstruct
the premises comprised in the holding or a substantial part of those premises
or to carry out substantial work of construction on the holding or part thereof
and that he could not reasonably do so without obtaining possession of the
holding.
The evidence
before the learned judge was solely in the form of various affidavits put in on
behalf of the landlord. There was no evidence in opposition on behalf of the
tenant, save for the statutory notification of unwillingness at the date of
termination to give up possession of the property comprised in the tenancy. The
judge held that the landlord had established the ground set out in the
statutory provision which I have quoted and therefore dismissed the tenant’s
application for a new tenancy. The tenant now appeals to this court against
that decision.
The site of
the premises with which this litigation is concerned is in Bell Lane, Bicester.
The case for the landlord, Mrs Goble, is that she intends to develop that site
on the determination of the appellant tenant’s tenancy of it by the
construction of 10 flats. The tenant, Mr Capocci, presently uses the site for a
cold store and as a garage for vehicles which he uses in the course of his ice
cream business.
It was
accepted both before the learned judge and also before us that in the
circumstances to which I have briefly referred the court was and is bound to
accept the affidavit evidence as true; the issue in the case is whether it goes
far enough. The evidence can be summarised in this way. First of all, outline
planning permission for the proposed development has been granted. It has been
granted subject to two conditions, but the only evidence there is with regard
to them is that there will be no difficulty in obtaining detailed planning
permission in due course.
Other evidence
referred to by the judge below was, first, that of a Mr Philip Brown. He is a
director and shareholder of a building company known as Maylarch Properties
Ltd. He deposed to the fact that the landlord/respondent’s proposed development
is very similar to another which his company had carried out nearby in St
John’s Street, Bicester, and he was and remained interested in involving his
company in the landlord’s project. The earlier development carried out by his
company in St John’s Street was successfully completed and all the flats there
have now been disposed of. He went on to say that he had had discussions with
the company’s bankers, Lloyds Bank of Bicester, and the manager had confirmed
in principle the bank’s willingness to assist in the proposals. I refer also to
two other paragraphs from Mr Brown’s affidavit which the learned judge did not
specifically mention in his judgment but clearly had in mind. In para 6 Mr
Brown said that he was presently involved in negotiations with the landlord
through their identical solicitors and had made certain proposals to her with
regard to the development of the site. His affidavit concluded by saying that
his company was in a position to start site clearance works immediately and to
start construction work as soon as detailed planning permission was obtained.
There was then
evidence from the landlord herself, to which the judge referred. She deposed to
the fact that it was her intention to redevelop the site and she took an active
part in the decision about the planning. She said that she proposed to enter
into a commercial agreement for the development of it and was presently engaged
in bona fide negotiations with Mr Brown’s company, Maylarch. She went on to add
that she had a son-in-law, a Mr Wilson, who was an established building
contractor with the capacity to do the development for her if she should decide
to enter into a contract with him.
In addition
our attention has been drawn to part of the evidence sworn to by Mr Coker, the
landlord’s solicitor, in paras 5 and 6 of his affidavit to the effect that Mr
Brown’s company had recently completed the earlier development, to which I have
referred, and were anxious to enter into a building contract with the landlord
as soon as possible. Then, perhaps more importantly, he said:
The
[landlord] already has possession of the rest of the site of which the holding
forms part and there are no other impediments to the project save the
[tenant’s] occupation of the holding.
That is a
summary of the material evidence that was before the learned judge below.
There was no
dispute before the learned judge, nor is there any dispute before this court,
that the test whether the necessary intention referred to in the statutory
provision has been proved is the one which has been stated in different words
but, as I think, to precisely the same sense in a number of earlier decided
cases. The locus classicus is Cunliffe v Goodman [1950] 2
KB 237 and the passage frequently quoted is from the judgment of Asquith LJ at
p 253:
An
‘intention’ to my mind connotes a state of affairs which the party ‘intending’
does more than merely contemplate: it connotes a state of affairs which, on the
contrary, he decides, so far as in him lies, to bring about, and which, in
point of possibility, he has a reasonable prospect of being able to bring
about, by his own act of volition.
To the same
effect but in other words I quote a brief dictum of Lord Morton in the equally
well-known case of Betty’s Cafes Ltd v Phillips Furnishing Stores Ltd
in the House of Lords [1959] AC 20 at p 42:
There was
much discussion in the course of the argument as to the nature of the intention
which must exist at the relevant date, but ultimately counsel on both sides
agreed that the landlord must prove that he has definitely decided to carry out
the work and that this decision has a reasonable prospect of being carried into
effect.
Finally on
this point, I refer to each of the three judgments in this court in the more
recent case of DAF Motoring Centre (Gosport) Ltd v Hutfield &
Wheeler Ltd (1982) 263 EG 976 where Griffiths LJ , [1982] 2 EGLR 59(as he
then was) said:
. . . a
landlord who wishes to obtain possession under subparagraph (f) must prove his
intention by showing, firstly, that he desires to carry out the redevelopment
and, secondly, that it is a reasonably feasible prospect for him to do so.
Slade LJ in
his judgment quoted from Woodfall on Landlord and Tenant, 28th ed, and a
reference to Cunliffe v Goodman:
The test is
an objective one; would a reasonable man believe on the evidence that the
respondents have, first, reached the necessary state of decision, and, second,
have a reasonable prospect of being able to fulfil that decision by their own
act of volition?
Finally Ormrod
LJ in the same case quoted the test in the words of Lord Diplock in Gregson v
Cyril Lord [1963] 1 WLR 41 at p 46 in this way:
Landlords
must prove that in point of possibility, they have a reasonable prospect of
being able to bring about this occupation by their own act of volition or to
carry out the proposed redevelopment.
That is the
test which has to be applied. I also remind myself that Lord Evershed in the Betty’s
Cafes case expressed the view which was adopted by Slade LJ in the DAF
Motoring Centre case that intention is not to be equated to a state of
affairs in which the landlord has to show that he is not only ready but in all
respects able to carry out the redevelopment. The passage in Lord Evershed’s
judgment in the Betty’s Café s case quoted by the learned lord justice
in DAF Motoring Centre was to this effect:
The adoption
of Asquith LJ’s language by this court in later cases cannot be treated as
having (in effect) substituted for the word ‘intends’ in paragraph (f) . . . of
the section the words ‘is ready and able’, so as to impose upon the landlord
the onus of proving that, at whatever be the proper date, he has not only
finally determined upon the course proposed but has also taken all necessary
steps for the satisfaction of any requisite conditions to which the course proposed
is subject.
I remind
myself also that each of these cases must ultimately depend upon their own
facts and one can clearly, for instance, distinguish another case to which our
attention was drawn, namely Reohorn v Barry Corporation [1956] 1
WLR 845; indeed Lord Evershed did so in the Betty’s Cafes case, where he
said:
In the Reohorn
case the Barry Corporation had expressed itself as desirous that the land then
in question used as a car park should be developed, but in order that such a
proposal should be carried into effect by the Corporation it would be necessary
for them, amongst many other things, to take steps to obtain authority to raise
a very large capital sum. It was proved that none of these steps had been
taken, nor was it clear by any means what the result of taking them would be.
In those circumstances, and there were others of the same kind, the court
invoked Asquith LJ’s language by way of support and emphasis for the view that
the proposition for development, though favourably entertained by the Barry
Corporation, could not fairly be said to have been the subject of an intention.
That is something which they could seriously be said to have in truth and in
fact resolved.
The argument
below and before us on behalf of the appellant in the instant case is that the
evidence upon which the landlord relies to discharge the burden upon her under
the relevant statutory provision does not go far enough. It is submitted that
substantial details of the proposed redevelopment remain to be worked out. The
ultimate redevelopment will depend not only on the landlord’s own volition, but
also on that, for instance, of Maylarch or any alternative developer that may
take Maylarch’s place. There has been, it was submitted, no sufficient evidence
of the commercial viability of the project. There is and will be ample scope
for a change of mind on the part both of the landlord and Maylarch or both.
Therefore it is still no more than tentative, provisional and exploratory. It
has not yet reached the ‘valley of decision’, to use the phraseology of Asquith
LJ in the Cunliffe case.
I for my part
have been grateful for the cogency and succinctness of Mr Mowbray’s argument on
this point. I cannot, however, accept it. It seems to me that it is shown that
the landlord in this case has decided that this particular site, ripe for
development as it is, shall be redeveloped.
The planning
permission is clear. There is no obstacle to detailed planning permission being
obtained. On the financial aspect of the proposed redevelopment Mr Mowbray
suggested that the details available to the court were not firm, or indeed
sufficiently particularised, but he was able and ready to accept that perhaps
that was not his best point in this appeal. The fact of the matter is that
Maylarch has done this sort of development in the same town before. It was they
who approached the landlord with a view to redeveloping the site. They have
been told by their architects that there should be no obstacle to it. They have
been to their bank and the manager has confirmed in principle his willingness
to assist. In my opinion, it is not merely a reasonable possibility but indeed
a probability on the evidence that is available that finance from the bank will
be forthcoming for this proposed redevelopment.
The only
further point which might prevent the development taking place would be,
canvassed in the course of the argument, that the landlord and Maylarch might
not be able to reach an agreement. Again I agree that this is a theoretical
possibility, but the whole tenor of the evidence seems to me to be that this is
unlikely. I think on the totality of the evidence that it is shown that the
respondent has definitely decided to carry out the work of redevelopment and
that this decision has a reasonable prospect of being carried into effect. To
put it another way, I am satisifed that, to a reasonable man looking at all the
circumstances objectively, he could not reach any other conclusion than that
the respondent has a reasonable prospect of achieving what she intends.
In those
circumstances I respectfully agree with the conclusion to which the learned
county court judge came and I would dismiss this appeal.
Agreeing,
GLIDEWELL LJ said: In order to succeed in her opposition to a grant of a new
tenancy, Mrs Goble had to prove, to use the words of Lord Morton, which May LJ
has already quoted, from his speech in Betty’s Café s Ltd v Phillips
Furnishing Stores Ltd that, first, she has definitely decided to redevelop
the site as proposed and, second, that there is a reasonable prospect that she
will be able to do so when she obtains possession of the site.
As to the
first of those matters, there was really no issue. Mr Mowbray effectively
accepted that Mrs Goble had decided to redevelop the site; certainly she has
made it clear that she wants to do so. As to the second, before she can
redevelop the site there are three matters to which she has to attend. First,
planning permission has to be obtained; second, she has to obtain the necessary
finance; and, third, she has to make an agreement with either a developer or a
building contractor. There is no problem about planning permission in this
case. The evidence establishes that outline permission has been granted and it
is not suggested that there will be any problem about obtaining detailed
approval. As to finance, though it is the case that there is no evidence that
Mrs Goble herself has made an approach to her own bank to obtain the necessary
finance, there is the evidence, to which May LJ has referred, that Mr Brown of
Maylarch has been told by his own bank that in principle they are willing to
advance to Maylarch the necessary funds for them to carry out the development.
It was the
third matter that in the end formed the basis of Mr Mowbray’s attack, that is
to say that no agreement had yet been made with a developer or a building
contractor. Though Maylarch had expressed their interest in carrying out the
development, Mr Mowbray submits that that is not enough. He does not, I think,
go so far as to say that a landlord has to show that she has a signed and
concluded agreement, but he submits that, before she can show that there is a
reasonable prospect that she would be able to carry out the development, she
must also show that there is at least an agreement as to the basic points on
which the developer will proceed; in particular, if it is to be a building
contract the price, if it is to be a contract under which a lease is granted
the terms of the lease in broad outline.
For my part I
do not accept that the landlord has to go so far as that. It is clear that
there is here a small development company who have already carried out a
similar development in the same town. Their own solicitors, knowing of the
existence of this site, suggested to them, as Mr Brown’s affidavit makes clear,
that they might take an interest in the development of this site and thus it is
apparent that it was Maylarch who approached Mrs Goble. It is therefore clear
from the evidence before the learned judge that Maylarch are keen to carry out
the development and it must follow, as May LJ has said, that it is more
probable than not that an agreement between them and Mrs Goble will be reached
to enable the development to go ahead. That, in my view, is sufficient.
I, too, would
dismiss this appeal.
The appeal
was dismissed with costs.
