Broadway Investments Hackney v Lowell Gerald Grant [2006]

A tenant was found to have a business tenancy rather than a residential tenancy, so a possession order due to rent arrears had been made wrongfully.

The Council of the London Borough of Hackney granted the tenant a ten year lease which described the premises as shop premises, in which the lower part would be dedicated to the sale of fish and fish-keeping equipment and the upper part for residential purposes. The lease also obliged the tenant to keep the premises open as a shop during usual business hours. Broadway Investments bought the council’s freehold of the property in 2002, and in February 2005 sought to repossess the property. The tenant owed arrears of rent of over £25,000.
The court enforced a possession order, treating the lease as a business lease. This denied the tenant the rights he would have had under a residential tenancy, and the tenant appealed.

On appeal:
HELD: The Court of Appeal had to decide whether the tenancy created by the lease was an assured tenancy under the Housing Act 1988, or a business tenancy governed by the Landlord and Tenant Act 1954. If the tenancy was not a business tenancy, the possession order would be deemed incorrect because the tenant would be an assured tenant with statutory rights, and the procedure for possession under the Housing Act would be enforced instead.
The question for the court was whether the tenant occupied the premises for the purposes of his business, as required of a business tenancy under the 1954 Act. As required by the lease, the tenant occupied the ground floor and basement for his shop business. Although part of the reason he had taken the lease was likely to have been in order to provide himself with a home, the terms of his lease did not allow for the business use of the premises to be incidental to its use as a home. Therefore, the when the tenant began to trade at the shop, he became a business tenant under the Landlord and Tenant Act 1954. The Court of Appeal approved the lower court’s order for possession unless the rent arrears were paid off.

 

Citation: Broadway Investments Hackney v Lowell Gerald Grant [2006] EWCA Civ 1709