It is unusual for landlords to oppose a lease renewal under section 30(1)(c) of the Landlord and Tenant Act 1954, but a recent decision by the Court of Appeal in the case of Horne & Meredith Properties v Cox and Billingsley has made it easier for them to do so.
Section 30(1) of the Landlord and Tenant Act 1954 contains various grounds on which the landlord may oppose a renewal of an existing lease (including breach of repairing covenants (s.30(1)(a)) and arrears of rent (s. 30(1)(b)). However, section 30(1)(c) goes on to provide:
“that the tenant ought not to be granted a new tenancy in view of other substantial breaches by him of his obligations under the current tenancy, or for any other reason connected with the tenant’s use or management of the holding”.
In this case, the tenants had occupied a shop since 1981. The lease had already been renewed once previously. For the past 16 years, the tenants had been in “remorseless litigation” against the landlord in relation to a right of way granted under the lease. The landlord had incurred very heavy costs as a result – over £300,000 for defending just one set of proceedings. The tenants had incurred over £500,000 costs in bringing the proceedings. None of the litigation initiated by the tenants had been successful and a limited civil restraint order had been imposed against them in the county court to prevent them from bringing more proceedings without the leave of the court.
In the Court of Appeal, the tenants’ barrister argued that section 30(1)(c) was now superfluous to the Landlord and Tenant Act 1954, since there had been little case law on the point since the Act had been passed. The Court of Appeal disagreed, saying that the court was not entitled to ignore statutory provisions. The court did, however, consider whether the conduct of the tenants was a reason connected with “the tenant’s use and management of the holding” under section 30(1)(c) which entitled the landlord to oppose the grant of a new tenancy to the tenants.
The Court of Appeal found in favour of the landlord on the following grounds:
- the relationship between the landlord and the tenants had broken down irretrievably and there was no reason to think this would change under a new lease;
- the “holding” included the shop and the right of way, so matters relating to the right of way could be taken into account;
- litigation by the tenants over the right of way could be a “reason connected with the tenant’s use or management of the holding” under section 30(1)(c);
- the use of the word “or” in section 30(1)(c) separates the provision into two disjunctive parts, so the landlord does not need to show that there has been a “substantial breach” as well as establishing a “reason connected with the tenant’s use or management of the holding”.
On this basis, the tenants ought not to be granted a new tenancy.
While the use of section 30(1)(c) as a ground of opposition is likely still to be relatively unusual, the court’s judgement brings some clarity to the interpretation of the section and means that landlords will more easily be able to bring a tenant’s past conduct to bear when seeking to oppose a lease renewal.