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BUSINESS TENANCY: PROVING INTENTION TO REDEVELOP

In Somerfield Stores Ltd v Spring (Sutton Coldfield) Ltd (In Administration [2010] EWHC 2084 (Ch) HHJ Cooke held that the relevant date for a landlord having to prove the requisite intention to redevelop the property for the purposes of s 30(1)(f) of the Landlord and Tenant Act 1954 is not the date of the summary judgment hearing, but of the prospective trial.  As he noted, to hold that it is the summary hearing date would give a “very valuable tactical weapon for a tenant since it would greatly reduce the time available to a landlord to formulate and put in place his proposals for the redevelopment.”

It has been clear since the House of Lords’ decision in Betty’s Cafés Ltd v Phillips Furnishing Stores Ltd [1959] AC 20 that the landlord must have formed his (subjective) intention to redevelop by the date of the hearing itself (and not by an earlier date), and, since Megarry J’s decision in Dutch Oven Ltd v Egham Estate and Investment Co Ltd [1968] 1 WLR 1483, that the relevant hearing is the trial of the grounds of the landlord’s opposition as a preliminary issue.

Only since the CPR was introduced in 1999 has summary judgment become a possibility in these cases. In these kinds of cases, however, what has to be proved is not a past fact but the question of whether the “landlord has a real prospect of forming, and proving that he has formed, the requisite intention at an anticipated trial date”.  Taking the relevant date as that of the summary judgment hearing is not consistent with Betty’s Café  as the summary judgment procedure does not give an opportunity for the evidence to be tested and facts found.

According to HHJ Cooke, a number of other cases were waiting in the County Court for the outcome of the case.

Butterworths Property Law Service: 09.2010