England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM WEST LONDON COUNTY COURT
(HIS HONOUR JUDGE COWELL)

		Royal Courts of Justice Strand London, WC2 Friday, 11th October 2002

1. LORD JUSTICE PILL: Lord Justice Waller will give the first judgment.
2. LORD JUSTICE WALLER: This is a renewed application for permission to appeal a decision of His Honour Judge Cowell given on 9th May 2002 at the West London County Court. Permission was originally refused on paper by Robert Walker LJ (as he then was), but he directed that if renewed it should be renewed on notice and that has in fact happened. Mr Clarke represents the landlord and Mr Higginson represents the tenant.
3. What the judge had to decide was whether Mr Zarvos, who was the landlord, represented by Mr Clarke as I say, had established that:

"He intended to occupy certain premises for the purpose of a business to be carried on by him."

in reliance on section 30(1)(g) of the Landlord and Tenant Act 1954.

4. The history briefly is that Mr Zarvos had purchased 98 Lillie Road SW6 in London in 1977. He occupied and has always occupied the first and second floors as a maisonette where he and his family lived. In 1977 he started the business of a restaurant on the ground floor and basement, and ran that business as "The Bitter Lemons Taverna" for 17 years.
5. Mr Zarvos it seems was thinking of returning to Cyprus in 1994 and at first put the restaurant up for sale. In November 1994 he entered into a form of agreement with persons that became the tenants (as I say represented here by Mr Higginson), and it would seem at the same time Mr Zarvos abandoned his intention of retiring to Cyprus and decided to continue to live in London. At the end of 1994 he purchased and ran a sandwich bar, "Tower Snacks".
6. Disputes arose between the tenants and Mr Zarvos which has led to much litigation. But for the purposes of today it is sufficient to say that the form of agreement between Mr Zarvos and the tenants was accepted to be a business tenancy. That tenancy was held to have come to an end. Thus the question arose as to whether the tenants were entitled to a renewal or whether Mr Zarvos could rely on section 30(1)(g).
7. He served a notice of his intention to rely on that provision in November 2000. So he was saying in November 2000 that he was intending to occupy the premises for the purpose of carrying on a business.
8. But by the time the matter was heard by His Honour Judge Cowell, Mr Zarvos had little evidence to show plans for the business or how it was going to be financed. Before the judge there was a rather general letter from his accountants, a rather general letter from a bank and he produced some profit forecasts. But those were only produced, so far as I can tell any way, under pressure from the solicitors acting for the tenants and very close to the date of the trial. They are dated 2nd May, this trial taking place on 8th and 9th May. But Mr Zarvos' basic case, first, was that he had run a restaurant for some 17 years at these premises; second, the restaurant was still physically there, although it may need a deal of money spent on it; third, that he would have no difficulty raising such money as he required because his bank was, if I can put it this way, onside and he had substantial equity in the whole of the property. The evidence in relation to substantial equity was produced, as I understand it, on the second day of the trial. Thus he was saying, "I do intend to run a business" and he was saying, "There is a reasonable prospect of me being able to do so."
9. What a landlord has to prove in order to be entitled to rely on section 30(1)(g) one can glean for present purposes from the dictum which was quoted by the judge at page 16 in our bundle:

"The question of whether the landlords intend to occupy the premises is primarily one of fact but the authorities establish that to prove such intention the landlords must prove two things; first, a genuine bona fide intention on the part of the landlords that they intend to occupy the premises for their own purposes; secondly, the landlords must prove that in point of possibility they have a reasonable prospect of being able to bring about this occupation by their own act volition, and it is essentially an objective test. That is to say, would a reasonable man on the evidence before him believe that he has a reasonable prospect of being able to bring about his occupation by his own act of volition?"

From that one can see that there are essentially two limbs to the test, one of which is whether the landlord has a genuine bona fide intention and, secondly, whether the landlord can prove in point of possibility that he has a reasonable prospect of being able to bring about that occupation by his own volition.

10. The judge held against Mr Zarvos. One difficulty in my view with the judge's judgment is that it is not absolutely clear whether he was finding that Mr Zarvos had a genuine intention but could not carry it out; or whether he was saying that because of the absence of material in relation to setting up the business, he was finding that Mr Zarvos had no genuine intention at all. If the latter was his finding, that is to say that he had no genuine intention at all, then, as it seems to me, it would be most unlikely that the Court of Appeal would interfere with that finding of fact. But if his finding was that Mr Zarvos did have a genuine intention to set up a business, then it seems to me that there is force in Mr Clarke's submission that, a finding that he could not carry it out was not a finding that he could properly reach.
11. As it seems to me, it really would be wrong for this court to attempt to analyse the judgment and decide for itself exactly what the judge was finding. All I would say is that there are indications that he was simply concentrating on the second limb, if one looks at paragraphs 21 and 24 of his judgment, and that when one comes to paragraph 29, which is the only paragraph which can be relied on for suggesting that the judge is finding no bona fide intention at all, it is not, in my view, expressed in clear language.
12. As it seems to me, that being so, it would be right to allow the full court to consider this matter and I would grant permission to appeal. I say straightaway not without some hesitation, but I would grant permission to appeal.
13. LORD JUSTICE PILL: I agree, though not without hesitation.
ORDER: Application for permission to appeal granted; time estimate 3-4 hours. (Order not part of approved judgment)