Aksu v London Borough of Enfield

When a landlord opposes the grant of a new business tenancy under section 30(1)(b) of the Landlord and Tenant Act 1954, the court applies an objective test and exercises its discretion in light of the tenant’s payment history. It may consider very good reasons for past delay and very good grounds for confidence that the default will not recur. Security or a guarantee addresses the landlord’s remedy after default; it does not establish reliable future payment. An earlier proposal by the landlord for a different tenancy does not displace the statutory test or create an estoppel without a clear representation and detrimental reliance. An appellate court should not substitute its view for a first-instance discretionary assessment that involved no misdirection.

The appellant occupied mixed business and residential premises under a protected business tenancy. In May 2009, the respondent landlord served notice under section 25 of the Landlord and Tenant Act 1954 and opposed a new tenancy under section 30(1)(b), relying on persistent delay in paying rent.

The Central London County Court, Mr Recorder Hockman QC, dismissed the claim on 15 August 2011. The judge found persistent delay, no very good reasons for the historic delays, and insufficient evidence that future rent would be paid reliably. Patten LJ refused permission to appeal on the papers on 20 October 2011. The present matter was a renewed application for permission, concerning the effect of proposed security, an alleged earlier offer of a new lease, and the application of the statutory test.

1. Disposition. Rimer LJ refused the renewed application for permission to appeal. The proposed appeal had no real prospect of success.
2. Section 30(1)(b) of the Landlord and Tenant Act 1954 involves an objective test and a discretionary decision whether the tenant ought not to receive a new tenancy. The court must consider the history of rent payments, whether there are very good reasons explaining the delays, and whether there are very good grounds for assurance that the situation will not recur. This approach was stated in Hurstfell Ltd v Leicester Square Property Company Ltd (1983) 37 EG 109, endorsing the reasoning in Betty’s Cafés Ltd v Phillips Furnishing Stores Ltd [1957] Ch 67.
3. The recorder was entitled to find that the first limb was not met because persistent delay was undisputed and no very good reasons had been advanced. He was also entitled to find that the second limb was not met. Despite an adjournment and an express indication that financial evidence was required, the appellant produced no business plan, cash-flow projections, profit projections, or comparable evidence supporting future reliability.
4. A rent deposit and guarantee concern the landlord’s remedies if default occurs. They do not establish that the tenant will pay punctually and do not materially answer the statutory concern. The recorder considered those offers and the evidence that the appellant’s financial circumstances had improved, but was entitled to attach little weight to them.
5. There was no procedural irregularity concerning the alleged April 2009 meeting. The recorder could assess the appellant’s and his son’s evidence even though the landlord’s witnesses had not attended. The proposed shop lease was not an unequivocal representation that the landlord was unconcerned about the rent history. There was no detrimental reliance and therefore no estoppel. The possibility that the landlord might have proceeded under section 30(1)(f) did not prevent reliance on section 30(1)(b).
6. The recorder considered the material evidence, made a permissible discretionary assessment, and neither misdirected himself nor relied on immaterial matters. The Court of Appeal would not substitute a different view.

1. Court of Appeal (Civil Division) — On the renewed application, Rimer LJ refused permission to appeal, holding that the proposed appeal had no real prospect of success: [2012] EWCA Civ 60.
2. Court of Appeal (Civil Division) — Patten LJ refused permission to appeal on the papers on 20 October 2011.
3. Central London County Court — Mr Recorder Hockman QC dismissed the claim by order dated 15 August 2011, finding the section 30(1)(b) ground established.