The history of litigation between the parties, mostly instigated by the tenant, was a valid ground of opposition to the renewal of a business lease

The Landlord and Tenant Act 1954 sets out various grounds of opposition to the renewal of a business lease. Should the landlord fail to establish any of these grounds, the tenant will be entitled to a new tenancy. Certain grounds of opposition relate to the tenant’s behaviour. As a result, the court can refuse to order the renewal of a lease where the tenant has failed to keep the premises in repair or has persistently delayed in paying rent. In addition, section 30(1)(c) of the 1954 Act enables the court to refuse to order the renewal of a lease if it considers that “the tenant ought not to be granted a new tenancy” in view of other substantial breaches of the tenant’s obligations, or for any other reason connected with the tenant’s use or management of the holding. The wording used in section 30(1)(c) indicates that a tenant need not be in breach of covenant for the provisions relating to the tenant’s use or management of the holding to apply. This would appear to allow the courts considerable latitude. However, cases based upon this particular ground for possession do not feature often in the law reports, which is surprising, given that a landlord who successfully opposes an application for renewal on this ground will not be required to compensate the tenant on the termination of the lease. Horne & Meredith Properties Ltd v Cox [2014] PLSCS 93 concerned the renewal of a lease of a shop, which had the benefit of rights of way and the use of six parking spaces. When the term ended, the landlord opposed the tenant’s application for the renewal of the lease, citing section 30(1)(c). It claimed that the tenant ought not to be granted a new tenancy in view of the history of litigation between the parties regarding alleged obstructions of the rights of way and parking spaces. The trial judge decided that the tenant had maintained a remorseless campaign against the landlord, changing its solicitors many times and running up substantial legal costs. There had been ten sets of proceedings in all and the tenant was unlikely to desist. The parties’ relationship had broken down and the tenant ought not to be granted a new tenancy. The tenant appealed, arguing that the history of litigation between the parties was not “connected with the tenant’s use or management of the “holding”, which did not include the rights of way and parking spaces anyway. The Court of Appeal has upheld the decision. It applied the decision in Pointon York Group plc v Poulton [2006] EWCA Civ 1001; [2006] 3 EGLR 37 and ruled that the “holding” did include the rights of way and parking spaces. It drew attention to the fact that section 30(1)(c) is expressed in broad language and ruled that the court is entitled to look at everything which it thinks relevant in connection with the tenant’s use or management of the holding when exercising the judgment required by that section. Litigation between the parties, even if initiated by the tenant, will not necessarily preclude the renewal of a business tenancy. However, it would not be right to foist a warring tenant onto the landlord. Consequently, the landlord succeeded in its opposition to the renewal of the lease in this case. Allyson Colby is a property law consultant