The recent case of Humber Oil Terminals Trustee Limited v. Associated British Ports [2012] EWHC 1336 (Ch) provides a useful insight on the approach that the Court takes when a landlord seeks to establish grounds under Section 30(1)(g) of the Landlord & Tenant Act 1954) (“Ground (g)”) ie where a landlord has an intention to occupy the premises.
The Facts
Associated British Ports (“ABP”) was the landlord of an oil terminal and Humber Oil Terminals Trustee Limited (“Humber”) was the tenant. Humber installed a complex system of pipes and equipment at the terminal for its own purposes. Under one of the leases Humber was entitled to remove the pipes and equipment at the end of the lease and was also exempt from paying ship and cargo dues.
ABP served Section 25 Notices on Humber opposing renewal of the lease on Ground (g) and a preliminary issue was ordered to determine whether ABP intended to occupy the holdings for the purpose, or partly for the purpose of a business to be carried on at the premises within the meaning of Section 30(1)(g) of the Landlord & Tenant Act 1954, and if so when, and in what circumstances ABP so intends.
The Challenge
Humber sought to undermine ABP’s ground on the basis of the economics of the situation should they not be granted a new lease.
They also stated that it would cost them in the region of £19 million to decommission its plant and equipment but it would also have significant financial impacts for ABP. Humber asserted that it would cost ABP around £60 million to replace the equipment and there would be a further loss of revenue for them. They claimed that ABP would not be able to run the operation without their assistance, which they were not prepared to give.
The Findings
Despite the economic concerns, the Court found that ABP had made out Ground (g) for the following reasons:
They had shown a genuine, firm and settled, and unconditional intention to run the terminal themselves
They had provided board minutes and memoranda evidencing their decision
It was not for the Court to decide whether this was a prudent business decision but simply to be satisfied that the intention had a reasonable prospect of being fulfille
Although ABP would be allowing a third party operator to run the terminal, this did not mean that ABP was not occupying it nor that they would be occupying for a business not “carried on by” them
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