The Meaning Of ‘Intent'

S Franses Ltd (Appellant) v The Cavendish Hotel (London) Ltd (Respondent) [2018] UKSC 62 On appeal from: [2017] EWHC 1670 (QB)

Business tenants have the protection of security of tenure. When their business tenancy ends they are generally entitled to a protected renewal tenancy at an open market rent. However a landlord can oppose a renewal tenancy if it intends to substantially demolish or reconstruct the premises occupied by the tenant. The question which was leapfrogged from the High Court to the Supreme Court was whether it is open to the landlord to oppose the grant of a renewal tenancy (under section 30(1)(f) of the Landlord and Tenant Act 1954) if the works which the landlord says he intends to carry out would have no proper purpose other than to rid the landlord of the tenant and would not be undertaken at all if the tenant were to leave voluntarily.

This case concerned the ground floor and basement of 80 Jermyn Street, St James's in central London. The tenant is S Franses, a textile dealership and consultancy, specialising in antique tapestries and textiles. It occupies the ground floor and basement as a retail art gallery, showroom and archive. The rest of the building is occupied and managed by the landlord as the Cavendish Hotel. In March 2015, S Franses served statutory notices requesting a new tenancy. In May 2015, Cavendish Hotel served a statutory counter- notice opposing the grant of a new tenancy on the grounds of substantial reconstruction. Cavendish Hotel's scheme of works included the lowering of part of the basement floor slab, in a way which the Court concluded would achieve nothing other than the creation of an impractical stepped floor in one of the retail units; the repositioning of smoke vents for no reason; and the demolition of an internal wall at ground floor level followed by its immediate replacement with a similar wall in the same place. It would be impossible to make any use of the retail units without planning permission for change of use, which Cavendish Hotel did not intend to seek. In addition, one of the two retail units that would be created would also be unusable having no entrance from the street. Nevertheless, Cavendish Hotel provided a written undertaking to the Court to carry out the works costing approximately £800,000 if the renewal tenancy was refused. Cavendish Hotel in evidence acknowledged that the sole purpose of the substantial building works was to obtain from the Court a refusal of the...