Man Limited v Back Inn Time Diner Limited

For opposition to a new business tenancy under section 30(1)(f) of the Landlord and Tenant Act 1954, the landlord must establish both a subjective intention to undertake qualifying works and an objectively realistic prospect of doing so within a reasonable period after termination. The objective requirement is not proof on the balance of probabilities. It requires a real, rather than fanciful, prospect of overcoming practical obstacles, including planning and finance.

An appellate court should respect an evaluative case-management decision unless there is an error of principle, reliance on an irrelevant matter, or failure to consider a relevant matter. A judgment should be reopened after circulation only where the applicant establishes a significant justification for reconsideration on the material available.

The tenant operated an American-style diner in premises leased from the appellant landlord. After the lease expired, the tenant sought a new tenancy under section 26 of the Landlord and Tenant Act 1954. The landlord opposed the grant on several grounds, but proceeded at trial only on the redevelopment ground in section 30(1)(f).

HHJ Duddridge, sitting in the County Court at Chelmsford, held that the landlord had not established the required intention because it had not shown a realistic prospect of obtaining planning permission and funding the works within a reasonable time. After circulation of the draft judgment, planning permission was granted, but the judge declined to reopen the decision because the funding deficiency remained. The landlord appealed the funding findings and sought permission to challenge the evidential and reopening decisions.

1. Disposition. Permission to appeal on the challenges concerning admission of evidence and reopening the decision was refused. The appeal on the funding-test and evidential-sufficiency grounds was dismissed.
2. Ground (f) test. The landlord had to prove both a subjective intention to carry out qualifying redevelopment and an objective real, rather than fanciful, prospect of implementing it within a reasonable period after termination. The same standard applied to planning permission and finance. Proof that funding was more likely than not was unnecessary, but the evidence had to show a genuine prospect on which a reasonable landlord could act.
3. Construction of the first-instance judgment. Although some passages referred to the landlord being able to fund the works, the judgment read as a whole showed that HHJ Duddridge had applied the correct real-prospect test to both planning and funding. The conclusion that the evidence of finance was inadequate was therefore not based on a legal error.
4. Evaluation of evidence. The judge was entitled to regard the evidence as thin. The late bank statements had properly been excluded under CPR 31.21, and the refusal of relief from sanctions was an evaluative case-management decision. The alleged failure to identify documentary evidence relating to one property was immaterial in the context in which the evidence had been introduced.
5. Reopening. The later grant of planning permission did not require reconsideration because the independent funding problem remained. The applicant had not begun to establish the significant burden required for reconsideration between circulation of judgment and the consequential order.

• High Court (Chancery Division): appeal from the decision of HHJ Duddridge sitting in the County Court at Chelmsford on 28 March 2022. Appeal dismissed on Grounds 2 and 4; permission refused on Grounds 1 and 3.