Our case this month saw the Court of Appeal clarifiy the test for a landlord successfully resisting an application for a new lease on the basis it intends to occupy the premises for the purpose of its own business.

Suspicion and mistrust are words which can be used all too often to describe the relationship between some landlords and tenants of commercial premises.

Where a business tenant has security of tenure under the Landlord and Tenant Act 1954, the landlord can oppose renewal on one of several grounds, which include the ground in section 30(1)(g) – broadly (so far as relevant here), that the landlord intends to occupy the premises for the purposes of a business to be carried out by him at the premises (ground G). Where this is the case, tenants sometimes accuse landlords of having an actual intention to simply repossess and sell the property.

It is well established that the landlord must show ’a fixed and settled desire’ (the subjective element) and a reasonable prospect of being able to implement his intention (the objective element): see Humber Oil Terminals Trustee Ltd v Associated British Ports [2012] EWCA Civ 596.

In our case this month, Gulf Agencies Ltd v Ahmed [2016] EWCA Civ 44, the landlord was a solicitor who had purchased the freehold of the building in which the premises were situated. As Lord Justice David Richards said, giving judgment in the Court of Appeal, ‘there appear to have been antagonistic relations between him and the tenants since then’.

The landlord sought to repossess the premises under ground G. The tenant challenged the truthfulness of the landlord’s evidence; alleged that versions of a lease and licence had been ‘concocted’; and contended that one document had been forged.

The judge found for the tenant and rejected the landlord’s case as to both the subjective and objective elements. The landlord appealed on grounds relating to both these issues, and also on the basis that there had been apparent bias.

At first instance, the judge had had concerns before the trial began. He had searched the Law Society website and had not been able to find the name of the landlord registered as a solicitor. It transpired that the judge had searched under the wrong name, and the position was soon clarified.

The Court of Appeal held that there was nothing to show any bias, apparent or otherwise, towards the landlord. In relation to this ground, the appeal was rejected. However, Lord Justice David Richards commented that: ‘In a case which clearly involved the credibility of the landlord, his online researches before the start of the trial unfortunately but inevitably gave the impression that he was looking for evidence adverse to the landlord.’

As to the subjective element, ‘a fair reading of the judgment’ suggested that the judge implicitly did not believe the landlord, although he made no express finding to that effect. The Court of Appeal pointed out that this was an unacceptable way of deciding the case. It was a serious concern for the landlord that ‘he appears to have been disbelieved without any clear finding or any clear statement of the grounds for that finding’.

Furthermore, as to the objective element, he had planning permission for use for up to two years. Aside from the general procedural points, the case is also noteworthy for the comments made by the court to the effect that planning permission for two years’ occupation was sufficient here to establish the ‘objective element’ of the test.

However, there had been an issue in relation to the revocation of a certificate of lawful use, and it was held that the matter would have to be examined at a re-trial, which the Court of Appeal ordered having allowed the appeal and set aside the first instance decision in relation to the findings as to both subjective and objective elements.