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PropertyThursday 12 October 2023

Judgment handed down in Gill v Lees News Ltd

In Gill v Lees News Ltd [2023] EWCA Civ 1178 the Court of Appeal has today given important guidance on some of the grounds on which a landlord may oppose the grant of a new tenancy to a business tenant under the Landlord and Tenant Act 1954.

Three of the grounds of opposition – grounds (a), (b) and (c) – are concerned with tenant default or misbehaviour: ground (a) with disrepair; ground (b) with persistent delay in paying rent and ground (c) with other substantial breaches of the tenancy or with aspects of the tenant’s use and management. In each case the court is required to make a decision as to whether the tenant “ought not” to be granted a new tenancy in view of the default or misbehaviour.

The Court has decided that ground (a) does not confine the court to consideration of the state of repair of the holding at the date of the hearing. It is engaged by even minor disrepair at the date of the landlord’s s.25/s.26(6) notice and earlier in the term. The consequence of this decision is that a landlord may oppose the grant of a new tenancy on ground (a) even though the disrepair has been remedied, although the substantiality of the disrepair and whether or not the tenant has remedied it are both clearly relevant to the court’s judgment as to whether the tenant “ought not” to be granted a new tenancy.

The Court of Appeal has also confirmed that disrepair to areas of the premises other than the holding falls within ground (c).

Guidance has also been given about the width of the value judgment as to whether or not a tenant “ought not” to be granted a new tenancy. There are many factors of potential relevance to this decision. The court does not consider matters only from the perspective of the landlord but may consider the consequences for the tenant of refusing a new tenancy. The decision in Gill v Lees News also provides welcome clarification that the court does not take a compartmentalised approach to its value judgment, but should look at the grounds both individually and cumulatively. This clears up some previous tension in the authorities.

Joanne Wicks KC appeared for the successful Respondent with Ben Walker-Nolan of Thomas More Chambers, instructed by David Cooper of David Cooper & Co.

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