The Landlord and Tenant Act 1954 permits landlords to oppose applications for the grant of new business tenancies if they intend to demolish, or reconstruct, their premises: section 30(1)(f). However, they must first show that there is a reasonable prospect of being able to carry out their intention: Cunliffe v Goodman [1950] 2 KB 237.
Warwickshire Aviation Ltd v Littler Investments Ltd [2019] EWHC 633 (Ch); [2019] PLSCS 57 concerned land that was used as an airfield. It was occupied by tenants with oral monthly tenancies, offering different aviation services. But the income from the airfield was modest and the landowner was keen to maximise the value of its land. So it decided to promote the site for residential development. It planned to begin the process by demolishing the buildings on the airfield – but needed both vacant possession and planning permission in order to do so, because the local authority had made an order removing permitted development rights.
In the contested 1954 Act proceedings that followed, the question was: could the landowner show that there was a reasonable prospect of obtaining planning permission to demolish the buildings? The local authority’s development plan was supportive of the airfield and its facilities and the tenants argued that the chances of obtaining planning permission to demolish the buildings were no higher than 30%.
The landowner disagreed, citing Westminster City Council v British Waterways Board [1985] AC 676; [1984] 2 EGLR 109. In that case, the House of Lords confirmed that, for the purposes of section 30(1)(f), the court is required to assume that the landlord has resumed possession of the premises.
The landowner argued that no one could compel it to use the land for aviation purposes, once it resumed possession of the airfield, and that there were good economic reasons for not doing so. Consequently, it believed there was a 65% chance of obtaining planning permission for demolition because, to quote Lord Bridge in Westminster: “in a contest between the planning merits of two competing uses, to justify refusal of permission for Use B on the sole ground that Use A ought to be preserved, it must… be necessary at least to show a balance of probability that, if permission is refused for Use B, the land in dispute will be effectively put to Use A”.
Both the county court and the High Court ruled in favour of the landowner. Both agreed that a numerical analysis of what “a reasonable prospect” means was not the right approach. The fact that experts use percentages to help them express their opinion about a likelihood does not mean that, as a matter of law, the court should attempt to translate “a reasonable prospect” into a percentage and then measure it.
The landowner’s intentions were not determinative, but they were relevant. It was also relevant that the land could be used for other purposes that did not need planning permission. The local authority could not force the landowner to use the land for aviation and, since there was no realistic prospect that the landowner would do so, there was a reasonable prospect that the landowner would be granted planning permission to demolish the buildings. Consequently, the tenants were not entitled to new business tenancies.
Allyson Colby, property law consultant
