Global menu

Our global pages

Close

Lawbite: Fault and fairness

  • United Kingdom
  • Litigation and dispute management
  • Real estate
  • Real estate litigation - LawBite

12-02-2021

Kent v Guest [2021] EWHC 51 (Ch)

The High Court has re-affirmed the approach to the ‘fault grounds’ relied upon by a landlord who wishes to oppose a new tenancy under section 30(1)(a) to (c) of the Landlord and Tenant Act 1954 (the “Act”).

The claim related to racing stables occupied by the tenant, Mr Guest. The landlord, Mr Kent, sought to terminate the tenancy and served an opposed section 25 notice, relying on sections 30(1)(a) and (c) of the Act.  These grounds are referred to as “fault grounds” as they are based on the tenant’s breach.  The first relates to a substantial breach of the repairing and maintenance covenants, the second other substantial breaches. Mr Guest, however, wanted a new lease.

In proceedings the County Court found in favour of the landlord, Mr Kent, and Mr Guest appealed.

The High Court employed the usual two stage test: i) the landlord must make out the relevant ground of opposition and ii), the court must exercise their statutory discretion as to whether the tenant “ought not to be” granted a new lease.

Upholding the County Court’s decision, the High Court found that:

i)    there was no question that the grounds had been made out.  Various challenges based on the fact that the Recorder had not in the judgment expressly described the various breaches as “substantial” were not upheld.  It was clear from the evidence (or lack of on the part of Mr Guest) that there was no other conclusion the Recorder could have reached other than that the various breaches were substantial;

ii)    the (unchallenged) finding on the part of the Recorder that the property was likely to deteriorate further and at a greater speed due to Mr Guest’s persistent absence from the property and lack of plan for its future would have been enough of a reason of itself to justify not granting a new lease.  The fact that some of the breaches (failure to insure, parting/sharing occupation) appeared to have been later remedied did not provide any remotely satisfactory answer to the discretionary question for the court.  This was particularly as Mr Guest had throughout failed to acknowledge his breaches and also in evidence indicated his plan to commit a further breach by sharing occupation/ possession with another third party;

iii)    the court exercised its discretion on a ground by ground basis but acknowledged that breaches under grounds (a) and (c) can be considered together in the exercise of an overall discretion under section 30(1).

Accordingly, it would have been unfair to compel Mr Kent to enter into a new lease with Mr Guest and Mr Guest ought not to be granted a new tenancy.

Key points

  • landlords seeking to oppose a renewal lease on more than one of the fault grounds may be pleased to hear that the total impact of numerous breaches may be considered at the discretionary stage of the test.  This could produce a fairer outcome in some situations than a compartmentalised ground by ground approach
  • these “fault grounds” of opposition for a new tenancy are not often considered by the court and as such it is helpful to have this decision
  • It was intended that the lease in question was to exclude the security afforded by the Act but the landlord failed to follow the correct procedure on lease commencement.  Had the landlord taken legal advice and followed the correct procedure it could have avoided these proceedings