Goodwill hunting – the Human Rights Act and opposed renewal claims

In MVL Properties (2017) Limited -v- The Leadmill Limited [2025], the Business and Property Courts considered a novel argument raised by the tenant about the interpretation and application of section 30(1)(g) Landlord and Tenant Act 1954 (the “Act”).

Background

The Leadmill has been a nightclub since September 1982, occupied/operated by the Defendant pursuant to a lease between the Claimant and Defendant (the “Lease”).

Before the Lease expired, the Claimant served a section 25 Notice opposing the grant of a new tenancy under section 30(1)(g) of the Act (i.e. the Claimant intended to occupy the premises for the purposes, or partly for the purposes, of carrying on a business).

The Claimant issued proceedings and stated that the property would “continue to host and promote a range of live music, clubs and arts events within the premises”. In short, the Claimant planned to use the premises for (largely) the same purposes as the Defendant.

The Defendant’s Arguments

The Defendant initially argued that ground (g) could not include an instance where a landlord is continuing the business of the sitting tenant, as it would “enable a landlord to acquire […] a substantial part of the goodwill of that business without providing compensation to the tenant.”

Ultimately, the Defendant did not pursue this argument at trial, and the court agreed that they were right to do so as the courts have previously ruled that a landlord can carry on the same business as the tenant – Humber Oil Terminal Trustees Limited -v- Associated British Ports [2011].

Instead, the Defendant argued that the Claimant’s annexation of their “adherent goodwill” would contravene the Defendant’s right to a “possession” under article 1 of the First Protocol to the European Convention on Human Rights (“A1 P1”).

The court therefore had to consider whether:

a) The Defendant’s “adherent goodwill” could constitute a “possession” under A1 P1; and

b) Whether applying ground (g) in these circumstances would constitute a breach of A1 P1.

The Court’s Decision

Ultimately, the court ruled that goodwill can be a “possession” for the purposes of A1 P1 in principle, providing that it is an asset with monetary value. This was established in prior cases heard by the European Court of Human Rights, such as Van Marle and Others -v- the Netherlands [1986].

However, the Defendant’s argument that they were unlawfully deprived of this “possession” was rejected on several of grounds:

1. On applying Bryer Group -v- Department of Energy [2015], an expected future income stream cannot be a present “possession” for the purposes of A1 P1;
2. Goodwill “cannot be merely asserted, it must be proved”. While the Defendant provided a set of accounts allegedly quantifying the estimated losses (valued at £100,000), they failed to explain how this figure was reached.
3. The Defendant’s evidence included goodwill that the Defendant would: a) destroy in the course of reducing the building to a shell (e.g. trademark signs); and b) take with them into any future ventures;
4. The Defendant only ever had a contingent right to the renewal. As the Claimant had effectively demonstrated that they wanted to occupy and use the premises, the “contingency” was made out and the tenant has not been unlawfully deprived of their possession; and
5. Even if the Defendant was deprived of a possession, the deprivation occurred in the public interests and was subject to conditions provided for by law.

The Claimant had also made out both the objective and subjective elements of ground (g), namely that they had:

a) A “fixed and settled desire” to occupy the premises for business purposes; and

b) A reasonable prospect of implementing this intention within a reasonable time after the termination of the Lease.

Therefore, the court granted the possession order sought by the Claimant.

Key Takeaways

The Defendant, while ultimately unsuccessful, raised a novel argument regarding the interrelationship between the Act and A1 P1. The case also demonstrates the wide application of ground (g) and re-affirmed the ruling in Humber Oil that a landlord can rely on ground (g) for the purposes of continuing the tenant’s business.

While they didn’t pursue this at trial, the Defendant reserved the right to argue elsewhere that the court’s decision in Humber Oil was wrong. We may therefore see an appeal lodged in the not-too-distant future.