Evidencing Ground (f) in Opposed Lease Renewals

To be successful under Ground f, a landlord must show a firm and settled intention to carry out the redevelopment (subjective intention) and a reasonable prospect of achieving that intention (objective intention).

The Courts apply the “realistic prospect” test to the objective limb, meaning that a landlord has to stand a “real chance” rather than a “fanciful” chance of achieving the intention. The more advanced the landlord’s redevelopment plan is, the better the landlord’s position.

To evidence its intention, a landlord should generally take steps to obtain/implement planning permissions, building contracts and financing.

The landlord was refused permission to appeal on two of those grounds and granted permission to appeal on the following grounds:

1. That the first instance judge was wrong in his decision to consider bank statements showing firm evidence of funding.

The landlord had failed to disclose bank statements demonstrating funding until the start of the trial. The trial judge had refused to admit these statements as evidence.

The appeal judge found that the trial judge was correct in his finding, and the landlord’s appeal was dismissed. The failure of the landlord to disclose the evidence was serious, there was no good reason for it, and the trial judge had considered prejudice.

The appeal judge also found that the trial judge had not made any error in failing to refer to documents evidencing the landlord’s ownership of other property.

These properties were not referred to in witness statements, and there was little, if any, link between these properties and any prospect of them being used as security to assist with funding the development.

2. That the judge had set the threshold too high when considering the evidential burden on the landlord regarding funding.

The landlord claimed that when considering funding, the trial judge had repeatedly referenced the landlord having to be able to provide that it “would be able to fund the development” rather than “having a real prospect” of funding the development.

The appeal judge acknowledged that the language used by the trial judge in the judgment could be inferred as applying a higher threshold concerning the funding.

However, when reading the judgment as a whole, the appeal judge was comfortable that the trial judge had the right test in mind when making the judgment, and the appeal was dismissed.