S Franses Ltd v The Cavendish Hotel (London) Ltd

For a landlord to oppose a business tenant’s new tenancy under section 30(1)(f) of the Landlord and Tenant Act 1954, it must have a firm and settled intention to undertake the qualifying works independently of the tenant’s claim. The acid test is whether the landlord would undertake the same works if the tenant left voluntarily.

Motive and objective utility are not separate statutory requirements. They may, however, reveal that the professed intention is conditional. Where a scheme contains works which would be undertaken only to secure possession, the court should normally assess ground (f) by reference to the works intended unconditionally.

The tenant occupied business premises within the landlord’s hotel. When the tenant sought a new tenancy under the Landlord and Tenant Act 1954, the landlord relied on section 30(1)(f) and proposed extensive works. The works had no practical utility and were designed solely to obtain vacant possession. The landlord genuinely intended to undertake them if necessary to defeat the tenant’s claim, but not if the tenant left voluntarily.

The County Court held that ground (f) was established and refused a new tenancy. Jay J upheld that decision in the High Court, [2017] EWHC 1670 (QB), and permitted a leap-frog appeal. The central issue was whether an intention conditional upon the works being necessary to remove the tenant satisfied section 30(1)(f).

1. Appeal allowed unanimously. Lord Sumption, with whom Lady Hale, Lady Black and Lord Kitchin agreed, held that the landlord lacked the intention required by section 30(1)(f) of the Landlord and Tenant Act 1954. Lord Briggs agreed with that conclusion and reasoning, with Lady Black and Lord Kitchin also agreeing with his judgment.

2. The touchstone of section 30(1)(f) is a firm and settled intention to undertake qualifying works. The landlord’s motive, the reasonableness of its proposals and the works’ objective utility do not constitute independent statutory requirements. Motive and purpose may nevertheless be examined as evidence of whether the professed intention is genuine and whether it is conditional.

3. Sections 30(1)(f) and 31A assume that the tenant’s occupation obstructs works which the landlord otherwise intends to undertake. The intention must therefore exist independently of the tenant’s statutory claim. The acid test is whether the landlord would intend to undertake the same works if the tenant left voluntarily. An intention to undertake works only if they are needed to obtain possession is not the fixed and settled intention required by ground (f).

4. The landlord’s intention was genuine but disqualifyingly conditional. Its works had no practical utility and would not have been undertaken had the tenant departed voluntarily or had possession proved unnecessary. The proposed undertaking to the court confirmed honesty of intention but did not cure its conditional character.

5. Where a scheme combines unconditional works with additional works intended only to secure possession, the result will depend on the precise facts. If the landlord would omit the additional works following voluntary departure, the tenant’s application should normally be determined by reference only to the works intended unconditionally.

6. The statutory inquiry remains directed to the landlord’s intention at the hearing date. Lord Briggs explained that examining the continuing purpose or motive behind the works is a legitimate way of determining the quality of that present intention, even where voluntary departure has become hypothetical. A desire to remove the tenant does not itself disqualify the landlord; the inquiry is confined to whether the relevant works would have been undertaken upon voluntary departure.

7. The court declared that, on the facts found, the landlord did not intend, within section 30(1)(f), to undertake the scheme relied upon in opposition to the application for a new tenancy.

1. United Kingdom Supreme Court: The appeal was allowed unanimously. The court declared that the landlord lacked the intention required by section 30(1)(f) of the Landlord and Tenant Act 1954.

2. High Court: Jay J upheld the County Court’s decision and granted permission for a leap-frog appeal: [2017] EWHC 1670 (QB).

3. Central London County Court: HHJ Saggerson held that the landlord genuinely intended to undertake the proposed works and that section 30(1)(f) was established. He therefore declined to order a new tenancy.