The High Court was asked whether an order opposing the renewal of a business lease on the grounds of Section 30(1)(g) of Part II of the Landlord and Tenant Act (LTA) 1954 constituted a breach of Article 1 of the European Convention of Human Rights (ECHR).
Background:
"The Leadmill" is a music venue and nightclub. Leases were granted to The Leadmill Ltd. The venue originally underwent extensive refurbishment and opened to the public in late September 1982.
Over time the leases came to be vested in The Leadmill Ltd. The most recent lease of the venue is dated 14 October 2003 and created a term of 20 years starting on 25 March 2003 in favour of Leadmill Ltd. The lease contained a list of ‘improvements’. In 2025, the assessment was around £665,000. The lease also included a list of fixtures and fittings installed by the tenant.
The freehold of the venue was put up for sale by auction in 2013 and 2014 by a property developer who had acquired it with the intention of redeveloping the site as residential apartments. It failed to sell at two auctions. The Leadmill offer of £150,000 was not acceptable to the vendor.
On 3 November 2017, the freehold reversion was acquired by MVL Properties (2017) Ltd. (MVL17). On 28 March 2022, MVL17 gave notice under Section 25 of the 1954 LTA, terminating the tenancy on the 26th of March 2023, stating that it would oppose the grant of a new tenancy on the ground specified in Section 30(1)(g) of the 1954 LTA. On 27 July 2022 MVL17 issued a County Court Claim form seeking to establish ground (g) to the satisfaction of the Court. Their intention was to run their own music venue and nightclub under a different name. The Leadmill objected to MVL's opposition to the grant of a new tenancy.
Decision:
Mr. Justice Alastair Norris ruled that Section 30(1)(g) grounds had been established, based on the strong evidence from the landlord of its intention to operate a live entertainment business from the venue. The Court rejected the argument that the length of the landlord’s refurbishment programme would be a break in the continuity of trading and that the landlord could not show an intention to carry on the business ‘on the termination of the tenancy’. The Court ruled that MVL17’s subjective intention to occupy the premises for business was sufficient.
The High Court held that Section 30(1)(g) did not breach Article 1 of the First Protocol to the ECHR. While "goodwill" can be deemed a "possession" under Article 1, a tenant must provide actual evidence of goodwill, as a schedule of predicted earnings is not enough. Additionally, as the landlord planned to strip the venue to its shell, any goodwill attached to the look of the venue would be extinguished.
Moreover, the fact that the landlord intended to run ‘essentially the same business’ from the premises, prevented the Court from granting an order for possession on the ground that it would deprive the tenant of the goodwill attached to the premises. Even if the tenant could prove goodwill, the LTA 1954 provides a tenant with a contingent right to renew and therefore cannot be deprived of its ‘possession’.
Implications:
Although rejected in this case, the argument under Article 1 of the First Protocol to the ECHR is novel. This judgement leaves the door open by establishing that goodwill can be a ‘possession’ within Article 1 as, in certain circumstances, it can be valued in monetary terms. However, for the argument to succeed, the party relying on it must provide a realm of evidence as the stated value is not sufficient in of itself. However, the Judge also noted that the interference was within the limits of Article 1.
The case also made it clear that, even if notional goodwill was demonstrated, the tenant would not have been unlawfully deprived of it because there had only been a contingent right to renewal under the LTA 1954.
Finally, it is clear that the landlord does not have to show that his business will be viable and operational directly on the termination of the lease. Indeed, landlords are afforded a reasonable time to get any works or refurbishment completed.