MVL Properties(2017) Ltd v The Leadmill Ltd [2025]
European Convention on Human Rights not breached by a landlord’s opposition under ground (g) of the 1954 Act.
Mr Justice Alastair Norris, sitting in the High Court, rejected the tenant’s argument that s.30(1)(g) must be read as not applying to a case where the landlord intends to carry on “essentially the same business” (namely a music and entertainment venue) as that which the tenant has been carrying on at the premises, since that would have the result of appropriating for himself the tenant’s goodwill that had become attached to the premises (which it called “the adherent goodwill”) in contravention of the tenant’s right to property under article 1 of the First Protocol to the European Convention on Human Rights (“A1P1”).
Wayne Clark and Daniel Black acted for the successful landlord in opposing the tenant’s renewal in face of multiple defences raised by the tenant. Wayne and Daniel were instructed by Leanne Bowler and Armel Elaudais of Fladgate LLP.
In summary the High Court held:
- The landlord’s subjective intention could be satisfied by an undertaking to carry occupy land carry on the business, Espresso Coffee Machine Co v Guardian Assurance Co Ltd[1959] 1 WLR 250 followed, but here there was in any event ample evidence to show that the landlord possessed a firm and settled intention to occupy for business purposes.
- Where the tenant’s lease enabled it to render the demise premises a shell upon vacating, it was not appropriate to consider the cost of restoration simply to consider that which the landlord intended to effect to enable it to occupy the premises for business purposes. Accordingly, the tenant’s estimate of some of £5 million to restore the premises was to be rejected and the landlord’s expert’s estimate of £2 million, taking into account that which the landlord intended to effect, was more realistic.
- The period of time to effect the work to render the premises fit to be opened for business was that contended for by the landlord’s expert, namely, just under 6 months (some 35 weeks) as opposed to the 18-month period contended for by the tenant’s expert.
- It could not be said that that the landlord did not intend to occupy the premises for business purposes within a reasonable time of termination of the current tenancy, for the evidence was clear that the landlord intended to enter the premises immediately upon termination (as terminated in accordance with the 1954 Act) in order to commence fitting out, and the commencement of fitting out was sufficient business occupation: Pointon York Group v Poulton [2007] P & CR 6, CA followed.
- Even if what was required was the commencement of trading (not the commencement of works preparatory to trading) what is a reasonable time within which actually to commence and complete work and enable the commencement of trading must depend upon the condition of the premises on the termination of the tenancy. The tenant could not be heard to say, “Because we intend to reduce the premises to a state of dereliction it will be impossible for you objectively to intend to occupy for the purposes of a business within a reasonable time”. In any event, a 35-week programme could not be said to be an unreasonably long one given the state in which the tenant intended that the building should be left.
- The tenant could not complain about the fact that the landlord intended to carry on the same type of business is that of the outgoing tenant; the decision Humber Oil Terminal Trustees Limited v Associated British Ports [2011] L&TR 27, Vos J (Ch)
- The tenant accepted that Humber Oil decided that the landlord could carry on the same type of business, but argued that the landlord was, nevertheless, depriving the tenant of a possession contrary to the terms of Article 1 Protocol 1 of the ECHR, in that the landlord was acquiring the tenant’s goodwill without adequate compensation.
- This argument was to be rejected as:
- “goodwill” can in principle be a “possession” within A1 P1 I provided that it is an asset with a monetary value: Van Marle v The Netherlands (1986) 8 EHRR 483; In Tre Traktorer and Iatridis v Greece (GC) App No 31107/96 (1999)
- Loss of future income was insufficient: an expected future income stream does not constitute a present “possession” for the purposes of A1P1: Bryer Group v Department of Energy [2015] 1 WLR 4559 at [28] to [49].
- In any event, goodwill “cannot merely be asserted: it must be proved”. Albeit the tenant suggested the goodwill was valued at £100,000 in its accounts to the year-end 31 March 2023, it offered no explanation as to how this figure was reached. Further, it apparently related to goodwill in general (including that relating to the trademark signs and get up which the tenant stated it was going to destroy in the course of reducing the building to a shell, and the advantage of which it will take in any new venture it founds). The Court simply could not identify or value what the tenant alleged was the so called “the adherent goodwill”.
- Even if there was some notional goodwill the tenant would not be unlawfully “deprived” of such a possession because it only ever had a contingent right to renewal and the landlord has established that the relevant contingency had occurred: it did indeed want the premises for the purposes of its own business: Wilson the First County Trust[2004] 1 AC 816 at [106]
- Even if the Court was wrong in that view, such “deprivation” (or “interference”) had occurred, it occurred in the public interest and subject to conditions provided for by law.
- Further, on the evidence although the premises were at present a music venue and will (when the landlord took possession) continue to be used as such in accordance with permitted planning use, the tenant had not established that the landlord would be carrying out “effectively the same business” as that of the tenant.
The judgment may be viewed here.
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