London Kendal Street No.3 Limited v Daejan Investments Limited (County Court)
Earlier this summer the County Court at Central London issued the first decided case to apply the test given in the Supreme Court case of S Franses Ltd v Cavendish Hotel (London) Ltd in a lease renewal matter under the Landlord and Tenant Act 1954 (the “LTA”).
Daejan, the landlord, opposed the grant of a new tenancy of premises in Marble Arch to its tenant, London Kendal Street, on the ground of redevelopment (s.30(1)(f) of the LTA). The provision requires the landlord to demonstrate that “on the termination of the current tenancy, (it) intends to demolish or reconstruct the premises….or a substantial part of those premises….and he could not do so without obtaining possession…”
The County Court was tasked with assessing whether Daejan’s intention was genuine by reviewing whether the works would have gone ahead in any event whether or not the tenant left the premises voluntarily, being the test given in the S Franses case.
It was common ground between the parties that the landlord’s works fell within the scope of s.30(1)(f), however, what was disputed was whether the landlord had the intention to do those works at the termination of the tenancy.
The tenant claimed that:
- the landlord’s works would not be commenced “on the termination of the current tenancy”;
- the works would be noisy and intrusive upon the other tenants in the building, breaching their right to quiet enjoyment and causing a nuisance, such that an injunction was likely to be sought which would delay the commencement of the works beyond the termination of the tenancy.
The court decided that Daejan did have the necessary intention to carry out works and as such the test was met:
- the works did not have to commence on the day following termination of the current tenancy but within a reasonable period of it. On the facts of the case, a reasonable timeframe for commencement of the works was within 6 months and 21 days from trial. On the evidence, the works would commence within this period;
- the landlord did face the real possibility of defending an application for an interim injunction but it was “far from automatic” that it would be granted. In any event it would be subject to separate proceedings and the issues which may be faced in the injunction were capable of resolution;
the landlord had the funding, planning permission and contracts in place together with realistic timescales for the works.
This is a County Court decision so whilst useful to see how the acid test in Franses v Cavendish is being applied, it is not binding.
- The court stressed that the reasonable timeframe for commencement for works would vary from case to case and 6 months and 21 days should not be taken as being a set timescale in every instance.
- It was clear, from the evidence, that the landlord had the intention and the ability to be able to carry out the works and this was incredibly persuasive for the court. This highlights that it is important to have all of your evidence in place if you want a successful outcome at trial.
- The Court decided that the potential impact that the Landlords’ proposed works might have on other tenants of the premises would not be fatal in this case. However, landlords should give thought to the effect of any redevelopment on third parties, and the potential impact that should have on its ability to commence works within a reasonable period when evidencing its intention.
- We understand that permission to appeal is being sought.