Business granted new tenancy despite opposition from landlord

A business has been granted a new tenancy despite opposition from the landlord, who claimed breaches of the tenancy agreement.

The court found that although there were instances of disrepair and rent arrears, the balance of the grounds came down in favour of the tenant. The judge found that the tenant had made a genuine attempt to carry out the works necessary to put the premises in repair and that late payment of rent would not reoccur. The High Court dismissed the landlord's appeal, finding that the judge had not misdirected himself on the law and had considered the grounds of opposition separately and together.

A business has been granted a new tenancy despite opposition from the landlord based on breaches of the tenancy agreement. The case involved Gill v Lees News Ltd. The landlord opposed the tenant’s application for a new tenancy on grounds of disrepair, rent arrears, various other breaches of the agreement and an intention to redevelop the premises. A county court judge held that there was disrepair and persistent delay in paying rent but that the other grounds were not made out. He found that although the tenant's conduct in respect of disclosure and disrepair had been unsatisfactory, there had been a genuine attempt to carry out the works necessary to put the premises in repair. Those works had been completed, and the husband and wife who operated the business would not allow the tenant to fall into breach of the repairing covenant again. He further found that late payment of rent would not reoccur. 

Considering the grounds together, the balance came down in favour of the tenant and the landlord's grounds of opposition did not mean that the tenant ought not to be granted a new tenancy. The landlord submitted that the judge had paid insufficient regard to the tenant's dishonest conduct in denying that the premises were in disrepair and at the same time carrying out works, and that the judge had or should have found dishonesty disqualifying the tenant from the grant of a new tenancy.

The High Court dismissed the appeal. It held that the judge had not misdirected himself on the law and had considered the grounds of opposition separately and together. He had considered the conduct alleged against the tenant, that it had denied disrepair at the same time as works were being carried out. He found that that did not prevent the discretion being exercised in favour of the tenant because he was satisfied that there would be future compliance. The landlord failed to show that there was serious disrepair requiring rebuilding. The judge's conclusion that the tenant would comply with its obligations in future was within the range of reasonable conclusions.

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