The Supreme Court gives us a new test of ‘intent’ under the Landlord and Tenant Act 1954: S Franses Ltd v The Cavendish Hotel (London) Ltd [2018] UKSC 62

The Supreme Court has handed down its landmark decision on the meaning of ‘intention’ in grounds F and G of section 30(1) of the Landlord and Tenant Act 1954, changing a test that has been essentially settled since the 1950s. Landlords seeking to obtain possession of a tenancy protected by Part II of the LTA 1954 will now need prove that they would have followed their proposed scheme of construction or redevelopment (under ground F) or occupy the holding for the purposes of their own business (under ground G) even if they did not need to make out the test in order to evict the tenant.

The test

Tenancies protected by Part II of the LTA 1954 can only be brought to an end in a number of ways prescribed by the Act. For a landlord to secure possession following the end of the contractual term, he or she must establish at least one of the grounds in section 30(1). To satisfy section 30(1)(f), the landlord must show that “on the termination of the current tenancy the landlord intends to demolish or reconstruct the premises comprised in the holding or a substantial part of those premises or to carry out substantial work of construction on the holding”.

The facts and the appeal

The facts in the S Franses Ltd case were especially stark. The landlord’s principal witness confirmed that the scheme was “all there is to it.” As the landlord’s principal witness put it, the third scheme was “designed purely for the purpose of satisfying ground (f)”: there was no other economic motive save for obtaining vacant possession.

The judge at first instance found that the landlord genuinely intended to carry out the works if they were necessary in order to get rid of the tenant, but that it did not intend to carry out the works if it were not necessary to do so for that purpose. He found that the landlord genuinely intended to carry out the works and that ground (f) was made out. He therefore declined to order a new tenancy. On appeal to the High Court, Jay J agreed, but gave permission for a leap-frog appeal to this court.

What did the Supreme Court decide in S Franses Ltd v The Cavendish Hotel (London) Ltd?

The two-part test of intention finds its provenance in the Court of Appeal decision in Cunliffe v Goodman [1950] 2 KB 237. Lord Sumption developed the test further, however: he stated at [17] that “This appeal does not, as it seems to me, turn on the landlord’s motive or purpose, nor on the objective reasonableness of its proposals. It turns on the nature or quality of the intention that ground (f) requires.” He decided that the test of intention in the statutory provisions exists independently of the tenant’s statutory claim to a new tenancy. What he styled the “acid test” was “whether the landlord would intend to do the same works if the tenant left voluntarily”. A conditional intention (so that the landlord did not intend to do the works if the tenant left voluntarily) was not enough to satisfy ground F.

About the author

David Sawtell is the co-author, along with Richard Hayes, of ‘A Practical Guide to the Landlord and Tenant Act 1954: Commercial Tenancies’, published by Law Brief Publishing (http://www.lawbriefpublishing.com/product/lta1954/) and also available at Amazon (https://www.amazon.co.uk/Practical-Guide-Landlord-Tenant-1954/dp/1911035223) and in legal bookshops.