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Opposing tenancy renewal on the basis of owner occupation

Posted on 10 December 2021

In order to oppose the renewal of a tenancy, which is protected under the Landlord and Tenant Act 1954, a landlord needs to satisfy one of the grounds of opposition set out in section 30(1) of the Act. Historically, ground (g), which allows a landlord to oppose on the basis it intends to occupy the relevant property itself, was seen as the ground with the best prospects of success. The recent case of Macey v Pizza Express (Restaurants) Limited [2021] has shone a spotlight on how ground (g) has been affected by the Supreme Court's decision in S Franses Ltd v Cavendish Hotel (London) Ltd [2018].

Mr Macey opposed a renewal to Pizza Express on the basis he intended to run a wine bar from the premises in Exeter. In order to meet the test, Mr Macey had to prove that:

  1. he had a firm and settled intention to occupy and run the wine bar from the premises; and
  2. his intention was capable of achievement. Mr Macey's position was that this was the case as there was no practical or legal impediment to his plans because he had obtained, or had a reasonable prospect of obtaining, the necessary consents, funding and other practical matters to implement the scheme.

Following the decision in Franses, Mr Macey had to overcome the additional hurdle of demonstrating that his intention was unconditional. This means that he had to show that he would still have occupied the premises in order to run the business even if the tenant left voluntarily.

At first instance, the County Court came to the conclusion that the ground was not made out as Mr Macey did not hold the requisite intention. Mr Macey appealed on six grounds. He asserted that the judge had: (1) misapplied the decision in Franses; (2) not determined the question of intention correctly; (3) not dealt with the evidence correctly; (4) wrongly discounted some of Mr Macey's evidence and dismissed material as irrelevant; (5) been incorrect in his conclusion that Mr Macey's intention was not capable of achievement; and (6) failed to give adequate reasons for his decision.

Mr Justice Marcus Smith rejected Mr Macey's arguments. He found that the County Court's decision was based on the fact that Mr Macey had failed to demonstrate a firm and settled intention to occupy and run the business from the premises. Amongst other factors, the lower Court's decision highlighted that Mr Macey had failed to: (a) call witnesses that would have supported his case; (b) incur significant expenditure to progress his intention of running the business; and (c) disclose relevant evidence in support before the disclosure deadline. Accordingly, the Court has not misapplied the decision in Franses as the Court's decision was not based on the Franses test. Mr Justice Smith was also satisfied that the County Court had not fallen foul of the other matters raised in the grounds of appeal and was therefore justified in coming to its decision.

The key takeaway for landlords wishing to oppose on ground (g) is that they must consider how they will prove a firm and settled intention at an early stage, as the Court is likely to throw out cases in which assertions of intention are unsubstantiated.

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