Somerfield Stores Ltd v Spring (Sutton Coldfield) Ltd

For opposition to a business-tenancy renewal on redevelopment grounds, the landlord’s requisite intention must exist at the date of the substantive trial, not necessarily at the earlier date of a summary judgment hearing. A summary judgment application does not alter the substantive issue or bring forward the date by which the intention must be formed. The court must instead ask whether, looking forward to the anticipated trial, the landlord has a real prospect of establishing the necessary intention and, where relevant, a reasonable prospect of commencing the works by the corresponding date.

The tenant occupied premises under three leases governed by the Landlord and Tenant Act 1954. The leases had expired, and the landlord opposed renewal under section 30(1)(f), asserting an intention to redevelop.

The tenant applied for summary judgment, arguing that the landlord had no real prospect of establishing the requisite intention by the date of that application. The District Judge dismissed the application. The tenant appealed, raising the question whether the relevant date was the summary judgment hearing or the anticipated substantive trial.

1. The appeal was dismissed and the District Judge’s decision upheld, although the reasoning differed.
2. Under section 30(1)(f) of the Landlord and Tenant Act 1954, the landlord must establish at the substantive hearing both a firm and settled intention to undertake the relevant redevelopment and a reasonable prospect of being able to commence its implementation by the relevant date.
3. The relevant date is determined by the date of the substantive trial. Sections 64(1) and 64(2) postpone termination of the existing tenancy until the application is finally disposed of and any appeal period has expired. Accordingly, the court assumes at trial that the landlord’s objection succeeds and that no appeal is brought.
4. The decision in Betty’s Cafes Ltd v Phillips Furnishing Stores Ltd established that the intention must exist at the hearing at which the landlord’s opposition is finally determined. Dutch Oven Ltd v Egham Estate and Investment Co Ltd was consistent with that approach because a preliminary-issue hearing finally determines the ground of opposition.
5. A summary judgment hearing is different. The CPR 24.2 real-prospect test is forward-looking and permits consideration of evidence that may realistically emerge before trial. The court must therefore ask whether the landlord has a real prospect of forming and proving the requisite intention at the anticipated trial date, not whether that intention already exists at the summary judgment hearing.
6. Applying the tenant’s proposed approach would create circularity, risk factual findings on written evidence without cross-examination, and encourage artificial tactical applications. Concerns about delay should be addressed through an expedited directions timetable and appropriate case-management applications.

The judgment records that the District Judge dismissed the tenant’s summary judgment application on 27 October 2009 and granted permission to appeal. The High Court dismissed the appeal and upheld that decision.