Where a landlord served a notice of termination on a tenant of his business tenancy under the amended provisions of section 25 of the Landlord and Tenant Act 1954, and sought to fulfil the requirements of 25(6) and (7) of that Act by stating in the notice that he was opposed to the grant of any new tenancy on the ground, specified in section 30(1)(f) of the 1954 Act, that he intended to demolish and reconstruct the property, the relevant date for determining whether he had such an intention was the date of the hearing of an application for a new tenancy.

The Court of Appeal, Civil Division so held when dismissing an appeal by the claimant, Richard Hough, against the decision made by Judge Ellis sitting in the Croydon County Court on 29 May 2014 (1) to dismiss the claimant’s application under section 24(1) of the 1954 Act for a new tenancy of business premises on property owned by the defendant landlord, Greathall Ltd, following the defendant landlord’s notice of termination of the existing tenancy under section 25 of the Landlord and Tenant Act 1954; and (2) to order the claimant to give up possession.

As required by section 25(6) and (7) of the 1954 Act (as amended), the defendant’s notice of termination of the existing tenancy stated that the defendant was opposed to the grant of a new tenancy to the claimant on one of the grounds specified in section 30(1) of the 1954 Act, namely that he intended to demolish and reconstruct a property on the termination of a tenancy. The judge held that the intention of a landlord to demolish and reconstruct a property within the meaning of section 30(1)(f) of the 1954 Act had to be established at the date of the hearing of an application for a new tenancy, that the defendant had established that intention at the date of the hearing before him, and therefore that the claimant was not entitled to an order for the grant of a new tenancy. The judge considered himself bound by the decision of the House of Lords in Betty’s Cafés Ltd v Phillips Furnishing Stores Ltd [1959] AC 20 where in a case of a tenant’s request for a new tenancy under section 26 of the 1954 Act, it was held that the relevant date on which the landlord’s intention had to be established was the date of the hearing. The claimant argued that the relevant date was not the date of the hearing but the date of service by the defendant of its notice determining the contractual term of the current tenancy under section 25 of the 1954 Act. The judge found that, at that date, the defendant did not have the requisite intention.

McCOMBE LJ, dismissing the appeal, said that the leading case as to the date upon which a landlord’s “intention” had to be established for the purposes of section 30(1)(f) of the 1954 Act was the decision of the House of Lords in Betty’s Cafés Ltd v Phillips Furnishing Stores Ltd. Since that decision it had been widely understood that the date upon which the landlord’s intention had to be established was the date of the hearing of the court application. As originally enacted, the 1954 Act required the landlord to state in his section 25 notice that the tenant was required to notify the landlord of whether he would be willing to give up possession (the tenant’s “counter-notice”) and that unless the tenant did so, his application to the court for a new tenancy would not be entertained. As the requirement for the tenant’s counter-notice proved to be merely a trap for the unwary and was thought to serve little benefit to landlords, following the Law Commission’s recommendation, that requirement was later removed from the 1954 Act. The previous, unamended section 25(6), required the landlord to state whether he “would oppose” an application for the grant of a new tenancy and on which of the section 30 grounds “he would do so”. The new, amended provisions by contrast now required the landlord’s notice to state whether the landlord “is opposed” to the grant of a new tenancy and to specify the section 30(1) “ground or grounds for his opposition”. Section 26(6) had remained constant in requiring the landlord’s notice of opposition to state on which of the grounds the landlord “will oppose” the application. The claimant submitted that the new provision spoke in the present tense, not in the conditional (or implicitly, the future) tense as before, and that as a result of that change of wording to section 25(6) and (7) of the 1954 Act, the general understanding of the position in law was wrong in cases where the procedures were triggered by a landlord’s termination notice under section 25 and any statement of opposition to a new tenancy under section 25(7). He contended that, however, the wording of the parallel provisions under section 26 applying to procedures initiated by a tenant’s request for a new tenancy remained unchanged. His Lordship, rejecting the claimant’s submissions, said that the change in wording in section 25 of the 1954 Act was precipitated by the abolition of the counter-notice procedure. The old subsection (6) used the conditional tense (“would oppose”) for the case where the landlord was waiting to see whether or not a counter-notice would be served stating the tenant’s unwillingness to give up possession. Once the counter-notice provisions fell out of play, there was no need for the conditional tense. That was the sole purpose of the amendment. There was nothing to indicate that, beyond that, Parliament intended to revise the settled law as to the timing for the demonstration of the landlord’s relevant intention for the purposes of section 30(1)(f) of the 1954 Act, whether in a section 25 or a section 26 case. The landlord’s intention at the determination of the current tenancy to demolish or reconstruct could only realistically be shown at a subsequent hearing and there was no practical reason why he should also be required to prove that he held that intention, with a reasonable prospect of being able to bring it about, when serving the notice of opposition. The purpose of the notice of opposition was precisely the same as that stated in Betty’s Cafés’ case, namely to perform the function of a pleading to inform the tenant of the case to be met at trial and to prevent him being taken by surprise as to the grounds of opposition.

VOS and BURNETT LJJ agreed.