Humber Oil Terminals Trustee Ltd v Associated British Ports

For the purposes of Landlord and Tenant Act 1954, section 30(1)(g), intention has its ordinary meaning. The landlord must have a genuine, firm and settled intention to occupy the holding for its business, together with a reasonable prospect of implementing that intention. The court may make findings about likely events after termination, including the tenant’s probable response. It need not determine whether the proposed business will be financially successful or economically wise. A landlord may satisfy the provision while using contractors or existing operators, provided the business is carried on for the landlord. The intention must relate to occupation on termination, although arrangements needed to implement it may be completed thereafter.

Humber Oil Terminals Trustee Limited held four leases comprising important facilities at the Immingham Oil Terminal. Associated British Ports served notices opposing renewal under section 30(1)(g) of the Landlord and Tenant Act 1954, stating that it intended to resume occupation, provide port facilities and services, maintain refinery supplies and open the terminal to third-party users.

The court was asked to determine whether ABP had the required intention, and when and in what circumstances it intended to occupy the premises. The issue arose as a preliminary issue in HOTT’s claims for new tenancies.

1. Outcome. The court answered both preliminary questions in ABP’s favour. ABP intended to occupy the IOT for the purposes, or partly for the purposes, of a business carried on by it, and intended to do so on termination of the Leases.
2. Applicable test. The word intention in section 30(1)(g) has its ordinary meaning. The authorities establish two interlinked requirements: a genuine, firm and settled commitment to the proposed business, and a reasonable prospect that the landlord will be able to implement it. The question is ultimately the single statutory question identified in Zarvos v Pradhan [2003] 2 P&CR 9.
3. Future events. The court rejected HOTT’s submission that it could assume only that the Leases had ended and could not consider what HOTT or its associated companies were likely to do thereafter. Section 30(1)(g) necessarily requires some assessment of future events. The likely response of Total and CoP was relevant to whether ABP had a reasonable prospect of occupying and operating the facilities.
4. Evidence. ABP’s sustained board decisions, evidence and operational proposals established a genuine, firm, settled and unconditional intention. Its plans were not defeated by the absence of detailed arrangements with HOTT, APT or alternative operators. ABP was a substantial port operator with the resources and ability to offer port services, including to third parties.
5. Financial viability. The court did not have to decide whether expansion or third-party business would be commercially successful. Following Dolgellau Golf Club v Hett (1998) 76 P&CR 526, the court was not required to police the financial wisdom of genuinely held plans.
6. Nature and timing of occupation. ABP would occupy for its own business even if APT or another contractor performed technical or cargo-handling functions. The most likely arrangement involved HOTT continuing to use the IOT while paying ship and cargo dues and APT operating for ABP. If HOTT removed its equipment, ABP would still be likely to provide some port services promptly and develop the facility. The court would hear counsel on the precise order, costs and interim rent.

The claims were issued in the Great Grimsby County Court on 21 December 2009 and transferred to the Chancery Division on 16 March 2010. The preliminary issue was ordered by Morgan J on 28 June 2011. The judgment records a pending appeal concerning the striking out of HOTT’s competition claims, but that issue was excluded from this preliminary determination.