Court of Appeal rules on a landlord’s opposition to new tenancy under the Landlord and Tenant, 1954 Act

The Court of Appeal has recently delivered its judgment in the case of Gill v Lees News Limited [2023] EWCA Civ 1178.

The judgment has provided some guidance on the grounds that a landlord can rely on to oppose a lease renewal under the Landlord and Tenant Act 1954 (the “Act”).

Background

The tenant, Lees News Limited, operated a newsagent and convenience store under two leases in West London. The landlord, Mr Gill, was the trustee of a pension scheme which owned the reversion. The tenant sought to renew its leases under the Act, but the landlord opposed the grant of a new tenancy on various grounds under section 30(1) of the Act, namely (a), (b), (c) and (f).

The landlord’s grounds of opposition were dismissed at trial and the Judge ordered the grant of a new tenancy.

Whilst the premises were in substantial disrepair at the date of the section 25 notice, the tenant remedied the defects by the date of the hearing. The Judge found the other breaches, such as the late payment of rent and breaches of other tenant obligations were in fact ‘minor’.The landlord appealed the decision to the Court of Appeal on two separate issues. First, the date on which the grounds in section 30(1) of the Act have to be established. Second, the interpretation of the phrase “the tenant ought not to be granted a new tenancy”.

The period to be taken into consideration

The tenant claimed that the judge could only look at the condition of the premises on the day of the hearing. The Court disagreed and adopted a wider approach by looking at how well the tenant had maintained the premises throughout the tenancy. The Court emphasised that fixing the disrepair between the notice and the hearing was also important, but it was not the only period that it would consider.

The relevant date

The Court rejected the argument that when a landlord relies on LTA 1954, s 30(1)(a), the Court should only look at the tenant’s performance of its repairing obligations when deciding whether a tenant ‘ought not’ to be granted a new tenancy. Instead, the Court should look at the various breaches as a whole (where the landlord is relying on multiple breaches of the tenancy to oppose a lease renewal) to decide whether the tenant “ought not” to be granted a new tenancy.

The Court also highlighted that it would consider the positions of both the landlord and the tenant, and how its decision as to whether a tenancy should be granted would affect each party, for example, whether it is fair for the Court to require the landlord to enter into the new tenancy and if the tenant would suffer as a result of a new tenancy not being granted. The Court also emphasised that the tenant’s conduct during the proceedings would be considered in deciding whether a new tenancy should be granted.

The implications of the decision for landlords, tenants and practitioners

It is important to remember that the tenant’s conduct across the whole tenancy will be taken into consideration in the Court’s decision to grant a new tenancy. The tenant should still make an effort to remedy any breaches between the date of the notice or counter notice and the date of the hearing. It is also important to note that the Court will take a holistic approach and consider the tenant’s breaches together in deciding whether to grant a new tenancy. The Court will also consider the potential fallout and the impact of granting a new tenancy on each party.

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