Can a landlord's refusal to renew a lease violate a tenant's human rights? The judgment in MVL Properties (2017) Limited v The Leadmill Limited [2025] tests protections under Article 1 of the First Protocol to the European Convention on Human Rights (A1P1) in the context of an opposed application to terminate a lease of commercial property.
The legendary Leadmill
Sheffield's famous long-standing music venue, "The Leadmill" has been home to performances from the likes of Coldplay, Arctic Monkeys, The Killers, and Pulp and has been in the news recently, as a result of a lengthy legal battle with the landlord MVL Properties (2017) Limited (MVL) for a new lease.
MVL served a hostile notice pursuant to section 25 of the Landlord & Tenant Act 1954 (the 1954 Act), relying on s30(1)(g) to terminate the lease and oppose the grant of a new tenancy, on the basis that MVL intended to occupy the property, in order to continue running it as a music venue itself.
The intention to occupy
The tenant, The Leadmill Limited (TLL) raised challenges relating to the refurbishment programme and funding – both of which were dismissed by the Court which was satisfied on the evidence that MVL (i) had the necessary subjective intention to occupy for its own business purposes and (ii) objectively, would be in a position to embark upon and complete all necessary works and operate as a music venue itself.
Entering the property immediately for the purposes of fitting out (as MVL intended to do) was sufficient to constitute business occupation and (even if this were not the case) a landlord is entitled to a reasonable time to commence trading. What would be a reasonable time depends on the condition in which the property has been left and as TLL had indicated that it would carry out stripping out works and hand the property back as a shell, MVL's anticipated 35-week programme of works was not unreasonable.
The Court also acknowledged the decision in Humber Oil Terminal Trustees Limited v Associated British Ports [2011] which held (in response to an argument that the 1954 Act cannot have been intended to allow a landlord to expropriate a tenant's business and assets) that landlords should be entitled to their land back, notwithstanding the tenant's security of tenure, if they genuinely wish to use that land for their own business purposes.
The human rights challenge
However one of the most interesting points of contention from TLL, was that, notwithstanding the decision in Humber Oil, MVL should not be permitted to terminate the lease and then continue the same type of business as TLL, as MVL would then be appropriating for itself TLL's goodwill that had become attached to the premises in contravention of TLL's right to property under A1P1.
1. Does business goodwill constitute a possession under A1P1?
The Court acknowledged that some goodwill can be a possession for the purposes of A1P1. However, it found that TLL had failed to provide sufficient evidence to prove the existence or value of its goodwill in this case.
This may seem to open the door to such an argument succeeding in future opposed lease renewals if adequate evidence is provided. However, the Court went on to consider what the position would have been if it had found some notional goodwill of an ascertainable value which might constitute a possession.
2. Was there a deprivation of the possession?
The Court held that TLL had never had an unqualified right to continue to exploit the goodwill attached to the premises. This was always subject to the provisions for termination and renewal of its lease as set out in the 1954 Act. This case was simply an instance of the qualifications in the 1954 Act being enforced against TLL and it could not be said that TLL would have been unlawfully deprived of its goodwill, even if it had been found to have any.
3. Would any deprivation be justified?
The Court also found that, even if there had been a deprivation of property it was in the public interest to respect the ownership rights of MVL as landlord in accordance with the 1954 Act which strikes a fair balance between the right of renewal and the right of repossession.
The judgment in this case contains a comprehensive analysis of the landlord's intention and all of the evidence in deciding whether ground (g) was made out and indicates that tenants are unlikely to be able to rely on arguments about goodwill to protect them from landlords who seek to exercise their right to possession in accordance with the statutory formula set out in the 1954 Act.
Please contact a member our property litigation team if you require advice in respect of lease renewal or termination pursuant to the 1954 Act.
