Shade v Eric Wright Commercial Ltd

Whether proposed works satisfy ground (f) of section 30(1) of the Landlord and Tenant Act 1954 is principally a question of fact and common sense. A landlord cannot rely on existing rights of entry where the works cannot reasonably be carried out without obtaining possession, including because the landlord cannot make good the resulting damage as required by the lease. The assessment of unreasonable delay is context-specific and depends on the nature of the tenant’s business. A tenant seeking protection under the statutory scheme must also comply with any applicable requirement to make a positive proposal.

The tenant occupied a café and basement under a business tenancy which expired on 28 September 1999. The landlord opposed a new tenancy under ground (f) of section 30(1) of the Landlord and Tenant Act 1954, relying on intended demolition, reconstruction and substantial construction works.

His Honour Judge Howarth accepted the landlord’s bona fide intention and found that the works were sufficiently substantial. He also held that the landlord could not reasonably carry them out under the lease’s rights of entry because the resulting damage would not be made good and the works would cause unreasonable delay. The tenant renewed an application for permission to appeal after refusal by Lord Justice Potter.

1. Application refused. There was no reasonable prospect of success, and permission to appeal was refused.
2. The judge’s findings that the landlord intended to demolish a substantial part of the premises and carry out substantial construction works were findings of fact. The question whether the works went beyond refurbishment and improvement was properly assessed by reference to fact and common sense, consistently with Gordon Bewlay (Tobacconists Ltd v British Barter Shoe Co Ltd [1959] 1 WLR 45.
3. The final requirement in ground (f), that the landlord could not reasonably carry out the works without obtaining possession, was not confined to the physical act of entering the premises. Heath v Drown [1973] AC 498 recognised the relevance of acquiring legal possession, but that case involved a concession that the works could be carried out under existing rights of entry. No such concession applied here.
4. The lease permitted entry for alterations and repairs only if the landlord caused as little damage as possible and made good all damage without unreasonable delay. The proposed works would leave gaps in the north wall and would not restore the shop front, toilet, cubicle, or the existing position of the electrical and gas mains. The landlord therefore could not rely on the contractual right of entry to avoid the need for possession.
5. The requirement to make good damage and avoid unreasonable delay was not limited by importing a concept of structural work. A 20 to 30-week disruption could properly be regarded as unreasonable for a café near Victoria Station, although a longer period had been accepted in the different context of a management consultancy business.
6. A further ground based on section 31A(1) was also unsustainable because the tenant had failed to make the required positive proposal.

• Manchester County Court: His Honour Judge Howarth found that ground (f) of section 30(1) was established.
• Court of Appeal (Civil Division): Lord Justice Potter refused permission initially. Lord Justice Longmore refused the renewed application, with Lord Justice Henry agreeing.