Landlord and Tenant Act 1954 – Business lease – Renewal – Respondent landlord opposing renewal of appellants’ business lease – Respondent relying on history of litigation between the parties – Sections 23(3) and 30(1)(c) of 1954 Act – Whether new lease properly refused – Whether past litigation a reason connected with tenant’s use or management of the holding within section 30(1)(c) – Whether subject matter of past litigation forming part of “holding” within section 23(3) – Appeal dismissed
The respondent was the landlord and the appellants were the tenants under a lease of commercial premises granted in 1981 and subsequently renewed. The lease demised a shop, from which the appellants sold women’s clothing, together with two rights of way and the right to use six parking spaces. The appellant’s tenancy was protected by the security of tenure provisions in Part II of the Landlord and Tenant Act 1954 relating to business tenancies.
There had been frequent litigation between the parties, over 16 years, in relation to the rights of way and the parking spaces, with the appellants complaining that their rights were being obstructed. Ultimately, the respondent refused to renew the lease. It opposed the appellants’ application for a new lease on the grounds of an intention to redevelop, within section 30(1)(f) of the 1954 Act, and further relied on the ground in section 30(1)(c), namely that the tenant ought not to be granted a new tenancy in view of “any other reason connected with the tenant’s use or management of the holding”.
In the court below, the judge held found that the section 30(1)(f) ground was not made out but that the grant of a new tenancy should be refused under section 30(1)(c). He took into account the past litigation between the parties and found that the appellant’s conduct in that regard had grossly exceeded that which was reasonable.
The appellants appealed. They contended that the history of litigation was not capable of being a “reason… connected with the tenant’s use or management of the holding”. An issue also arose as to whether the “holding”, as defined by section 23(3), included the rights of way and the parking spaces to which the litigation had related.
Held: The appeal was dismissed.
(1) The “holding”, for purposes of section 23(3) of the 1954 Act, included not only the shop but also the two rights of way and the six parking spaces; these were “property comprised in the tenancy” within the meaning of the section 23(3) definition.
(2) There were two limbs to section 30(21)(c), the first relating to “substantial breaches by [the tenant] of his obligations under the current tenancy”, and the second concerning “any other reason connected with the tenant’s use or management of the holding”. Unlike the first limb, no breach of covenant was required in order to fall within the second limb, which should be given a wide interpretation. Applying that approach, the judge had been entitled to find that the historical litigation was a reason connected with the tenant’s use or management of the holding and that, making a value judgment, it provided sufficient justification for refusing a new tenancy: Eichner v Midland Bank Executor & Trustee Co Ltd [1970] 1 WLR 1120; (1970) 216 EG 169 applied.
John Randall QC and Robert Bridgman (instructed by Wragge & Co LLP) appeared for the appellants; Edmund Farrell (instructed by direct access) appeared for the respondent.
Sally Dobson, barrister
