Landlord and Tenant Act 1954: opposing new lease because the landlord wants the property for its own business

Humber Oil Terminals Trustee Ltd v Associated British Ports ([2012] EWCA Civ 596, CA (Eng)) concerned leases of the Immingham Oil Terminal on the Humber Estuary in England. ABP (the landlord) opposed the grant of new leases on the expiry of the current leases on the basis that it intended to occupy the property for the purposes of its own business. The test of intention in this context has a subjective and an objective dimension. The subjective dimension considers whether the landlord has actually formed the intention. The objective dimension requires a consideration of whether the landlord has a reasonable prospect of being able to bring about the desired result. The landlord could only continue to use the facilities for their present purpose if the tenant co-operated (since the tenant controlled much of the relevant infrastructure and possessed the sophisticated know-how needed to use it). It had been decided on the balance of probabilities that the tenant probably (though not necessarily) would reach a deal with the landlords to allow them to use the jetty and facilities even if the landlord took back possession of the demised property. This was enough to lead to the conclusion that the objective dimension of the test had been satisfied.

The tenant argued that the judge at first instance had made a mistake in assuming that the landlord would have possession of the property at the end of the lease (so that business reality would force the tenant to do a deal for the use of the jetty). Rather, the tenant, argued, when conducting the ‘objective’ intention test, the court should imagine that the tenant remained in possession (and so had no need to co-operate with the landlord). The Court of Appeal rejected this. The assumption is that the landlord has notionally taken back possession.

The possible role of competition law in these proceedings had been considered by the English Court of Appeal in an earlier decision).

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