Landlord resisting request for new tenancy on ground that he intended to occupy for his own business – Whether trial judge had given sufficient weight to factors adverse to viability of landlord’s plans – Tenant’s appeal dismissed
The tenant, a members’ club, had operated a nine-hole golf course close to Snowdonia National Park for 50 years, and had done so under a series of leases, the latest of which was for 21 years expiring on March 26 1996. By clause 4(2) of the lease the club was entitled, at the end of the lease, to remove buildings and structures which it had erected, unless the landlord served a notice, before the expiry date, of his intention to purchase the same at a price to be determined by an arbitrator in default of agreement. In 1986 the defendant landlord obtained planning permission to develop adjoining land as a nine-hole course, and opened negotiations with the club with a view to going into a joint 18-hole venture. That proposal was turned down by the club in 1990 because it did not consider it to be financially viable. Notwithstanding that refusal the landlord expended some £80,000 on preparatory works over the years 1986-1996. By notice dated April 19 1995 the club served a request for a new tenancy under section 26 of the Landlord and Tenant Act 1954, which the landlord opposed under section 30(1)(g), stating his intention to occupy the land for the purpose of establishing and 18-hole course as a business. The trial judge ruled in favour of the landlord after finding as a fact that the landlord: (i) was determined to set up the new business; (ii) that he had demonstrated business skills in other areas; (iii) that he had considerable capital at his disposal; (iv) that the existing course would continue to attract business. The club appealed on the ground that insufficient weight had been given to various factors adverse to the landlord’s plans, notably expert views that the business would not be profitable, the landlord’s failure (to date) to exercise the option in clause 4(1), the need to apply for further planning permissions and building consents.
Held The appeal was dismissed.
1. As judicially interpreted (see Gregson v Cyril Lord Ltd [1963] 1 WLR 41) para (g) of section 30(1) required the landlord to establish first, as a subjective matter, a genuine intention to occupy for the purpose of a business; second, as an objective matter, a reasonable prospect of bringing about such occupation by his own act of volition. The appeal was limited to the second issue.
2. Notwithstanding acceptance by the judge of many of the criticisms and fears about the profitability of the business he could not be said to have misdirected himself. The function of the judicial gloss on the statutory test of intention was to determine the reality of a landlord’s intention to start a business, not the probability of his achieving its start, or even less, its ultimate success. The wisdom or long term viability of the project were not candidates for further judicial gloss on that provision: see Cadogan v McCarthy & Stone Developments Ltd [1996] EGCS 94. Nor was it always appropriate to test reasonable practicability by reference to the presence or absence of detailed building plans, planning and licensing consents: see Palisade Investments Ltd v Collin Estates Ltd [1992] 2 EGLR 94, per Balcombe LJ, at p97.
David Parry (instructed by Kingsford Stacey, London agents for J Charles Hughes & Co, of Dolgellau) appeared for the appellant; Christopher Cant (instructed by Thorpe & Thorpe, of Ross-on-Wye) appeared for the respondent.
