Harmohinder Singh Gill (as Trustee of the Gilcrest UK Pension Scheme) v Lees News Limited

On an appeal concerning renewal of a business tenancy, the appellate court must show strong respect for the trial judge’s factual findings and evaluative discretion. It should intervene only where the decision is plainly wrong, based on irrelevant or ignored considerations, or outside the range of reasonable decisions.

Under Part II of the Landlord and Tenant Act 1954, the grounds of opposition should not be treated compartmentally. Once a factual precondition is established, the court must evaluate whether the tenant ought not to receive a new tenancy, having regard to all relevant circumstances and, where appropriate, the cumulative effect of the grounds.

A materially new point requiring further evidence or a differently conducted trial will generally not be permitted for the first time on appeal.

Lees News Limited occupied business premises under two leases. It served notices seeking new tenancies under section 26 of the Landlord and Tenant Act 1954. The landlord opposed renewal under sections 30(1)(a), (b), (c) and (f).

The trial judge found substantial disrepair caused by breach of the repairing covenant and persistent delay in paying rent. He rejected the other-breaches and redevelopment grounds, but exercised the statutory discretion in favour of Lees News and ordered the grant of new leases. He awarded Lees News 75 per cent of its assessed costs.

The landlord appealed, alleging that the tenants’ conduct during the litigation had been dishonest or seriously misleading, that the repairing covenant had been breached, and that the discretionary and costs decisions were wrong.

1. Appeal dismissed. The landlord failed to establish that the trial judge’s factual findings or exercise of discretion were plainly wrong.
2. The appellate court must respect findings of primary fact unless the judge was plainly wrong. It must assume, absent compelling reason, that the trial judge considered the whole of the evidence. A judgment should not be subjected to narrow textual analysis or treated as though it were legislation or a contract. The same restraint applies to an evaluative discretion: intervention is justified only for recognised errors of principle, irrelevant or ignored considerations, or a decision outside the range of reasonable choices.
3. The judge had not adopted an impermissibly compartmentalised approach to sections 30(1)(a), (b) and (c). Although he considered the individual grounds, he expressly returned to the position overall and considered their combined effect. Conduct during the litigation was taken into account, particularly in relation to ground (c), and was not required to be characterised as dishonest before it could affect the statutory evaluation.
4. The judge was entitled to find that the tenants’ conduct was unsatisfactory and wrong in aspects, without making an express finding of dishonesty. The evidence provided a rational basis for that conclusion. The appeal court was not conducting a retrial.
5. The repairing covenant in clause 2(8)(b) applied only where age, dilapidation or another specified circumstance made rebuilding necessary to restore a building or structure to a first-class condition. Whether the works amounted to rebuilding had not been litigated below. The landlord could not raise that issue for the first time on appeal because further evidence might have been required.
6. Conduct during litigation could in principle constitute a reason connected with the tenant’s use or management of the holding for section 30(1)(c). The judge had not adopted a contrary proposition, but was entitled to conclude that the conduct did not establish a substantial breach or justify refusal of renewal.
7. The costs order also fell within the trial judge’s broad discretion. The 25 per cent reduction in Lees News’s costs was not outside the permissible range.

The appeal was brought against the order of HHJ Monty KC dated 12 May 2022. The High Court dismissed Grounds 1 to 6; Ground 7 had been dealt with by consent. The orders granting new leases and awarding Lees News 75 per cent of its assessed costs were upheld.