Smyth-Tyrrell v Bowden

For the purposes of the business tenancy provisions, an individual carries on a business only where the activity amounts to a trade, profession or employment. An activity need not produce direct remuneration for the individual. Work undertaken to make a related company’s commercial activity more attractive and profitable may qualify where it has a sufficient commercial purpose. Where a business tenancy continues under Landlord and Tenant Act 1954, section 64, the landlord cannot obtain possession or mesne profits until the statutory continuation period has ended. The court may instead declare the parties’ rights and give liberty to apply.

The judgment concerned the form of order following the court’s earlier decision that the claimants’ tenancy was not protected by the Agricultural Holdings Act 1986, but was a business tenancy under Part II of the Landlord and Tenant Act 1954. The defendant had established opposition to a new tenancy under ground 30(1)(g). The claimants had sublet the cottage, where the holiday-lettings business was conducted, to their company, while retaining the surrounding woodlands. The issue was whether woodland work undertaken to create a rural ambience for the company’s holiday-lettings business amounted to a business carried on by the individual claimants.

The court held that the claimants’ work on the woodlands constituted a business for the purposes of Part II of the Landlord and Tenant Act 1954.

1. For an individual, the categories of trade, profession and employment exhaust the relevant meaning of business under section 23(2). The claimants’ woodland activity was partly motivated by personal interest, but it was also undertaken to make their company’s holiday-lettings business more attractive and profitable. That indirect commercial purpose was sufficient.

2. The continuation of the business tenancy under sections 26(5) and 64 applied to the whole tenancy, including the woodland retained by the claimants. The tenancy therefore continued until three months after the application for a new tenancy had been finally disposed of, including any appeal proceedings and expired time for appealing.

3. The court could not make an order for possession or mesne profits at that stage. It granted a declaration concerning the parties’ rights, taking account of the statutory continuation, and gave the defendant liberty to apply for possession once that continuation had ended.