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S Frances Ltd v The Cavendish Hotel (London) Ltd (2018)

The facts

The tenant, an art dealer, was in occupation of the ground and basement floors of the Cavendish Hotel. The tenant’s 25 year lease was protected by the Landlord and Tenant Act 1954 (“LTA 1954”) and, upon its expiry, the tenant served a statutory notice on the landlord requesting a new lease.

The landlord opposed the tenant’s request for a new tenancy under section 30(1)(f) LTA 1954 (“Ground F”). Under Ground F the landlord can successfully oppose the tenant’s request for a new lease if they intend to demolish or reconstruct the premises or a substantial part thereof or to carry out substantial works to the building that they could not reasonably do without obtaining possession of the premises. In this case, the landlord produced evidence of its intention to carry out such works to the building. However, it was accepted that these works were of no practical use and merely a way in which the landlord may recover occupation of the premises from the tenant.

Decision

In the first instance at the County Court, the landlord’s claim succeeded as they had provided sufficient evidence to support the claim that they intended to carry out the works required by Ground F.

On appeal, the Supreme Court found that Ground F could not be invoked on the basis that the landlord’s intention to carry out the works was conditional upon whether the tenant asserted its right to a new tenancy. The landlord did not intend to carry out the works if the tenant voluntarily left the premises, the benefit of the works was purely to evict the tenant.

The effects of the case

The Supreme Court agreed that the landlord’s motive was irrelevant except to test whether the required intention under Ground F exists. As such, the landlord’s motive in carrying out any works pursuant to Ground F could be taken into account by the courts when considering whether the landlord has the requisite intention to carry out such works and whether this intention is conditional on the tenant claiming its statutory right to a new tenancy.

The landlord’s intention to carry out works to premises must exist independently of the tenant’s claim to a new tenancy. This means that a landlord may not be able to invoke Ground F if they intend to carry out the works for the sole purpose of taking occupation of the premises from the tenant.

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