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Judgment handed down in the appeal in Pridewell Properties (London) Ltd v Spirit Pub Co (Managed) London Ltd [2026] EWHC 953 (Ch)

Fancourt J has given judgment in the appeal in Pridewell Properties (London) Ltd v Spirit Pub Co (Managed) London Ltd [2026] EWHC 953 (Ch), a case under Ground (f) of the 1954 Act in which Nat Duckworth KC appeared for the successful tenant instructed by Nigel Maguire at Roythornes. 

The decision will be of interest to property law practitioners because the judgment includes consideration of what is really meant by a “reasonable time” after termination of the existing tenancy in Ground (f) and explains how the line is to be drawn in a given case. The judgment can be found here.

In these Ground (f) proceedings, the central issue was whether the Landlord had the requisite intention to carry out works involving the construction of new residential accommodation on the upper floors of an existing pub and mews houses in what is currently the pub’s beer garden; specifically, whether the Landlord had a real prospect of:

1. securing funding for the works;
2. obtaining planning permission;
3. overcoming problems associated with certain restrictive covenants which burdened the property;
4. commencing the works “on the termination of the current tenancy”.

At trial, HHJ Hellman resolved three out of the four issues in the Landlord’s favour, but sided with the Tenant on the issue of funding; he therefore held that Ground (f) was not made out.

The Landlord appealed, with permission of the Leech J, and the Tenant renewed the other three points by means of a Respondent’s Notice

Given that the timing point ((iv) above) will be of most interest to those who undertake 1954 Act work, this Note summarises the arguments and Fancourt J’s determination of that point first.

The Time Point

By the time of the Ground (f) trial, the Landlord had not yet submitted a planning application for the works and it had not prepared the acoustics and structural engineer’s reports that would need to accompany any planning application. The Landlord’s problem was that its reserved rights under the lease were not broad enough to enable it to obtain access to the demised premises for the purposes of carrying out acoustics tests and digging trial holes. The Landlord had asked the Tenant to volunteer access for those purposes, but the Tenant had declined to do so.

Having heard expert evidence from both planning experts and building surveyors, HHJ Hellman made a finding that the Landlord would need between 10 and 14 months after the possession to obtain planning permission and complete the other steps needed to enable it to commence the works. (That finding was not challenged on the appeal).

In his judgment, HHJ Hellman referred to Jay J’s decision at first instance in S Franses Ltd v Cavendish Hotel (London) Ltd [2017] EWHC 1670 (QB) and said that he understood from Jay J’s explanation of the law on this point that the Landlord needed to be able to start the works “within a reasonable time” of the termination of the current tenancy. The judge stated that 10 to 14 months was “an exceptionally long period to count as a reasonable time” but ultimately concluded as follows:

    “…In the present case, the reason why the acoustic report and necessary investigations have not yet been obtained or carried out is relevant when considering whether “within a reasonable time” should include time for them to be obtained or carried out after the determination of the current tenancy.

    126. The Defendant cannot fairly be criticised for not having progressed the Development further. Were the Claimant to obtain possession of the Premises, the acoustic survey and the necessary investigations could be carried out, enabling the preparation and filing of an application for planning permission, and the other steps charted by the building surveyors in their joint report to be undertaken.

    127. There is a reasonable explanation for each element of the 10 – 14 month period. There is a clear and specific path from the date of determination of the current tenancy to the commencement of construction. In my judgment, on the particular facts of this case, works commencing within that 10 – 14 month period would count as works undertaken upon the determination of the tenancy.”

On the appeal, the Tenant maintained that the judge had been misled by his reading of Jay J’s decision in Franses into asking himself the wrong question, namely whether the period required to start the works was a reasonable period (i.e. one that could be justified) in all the circumstances, rather than whether an expected 10-14 months delay in starting work meant that the Landlord did not intend to carry out the works “on the termination of the current tenancy”, or within a reasonable time of its termination. The judge had overlooked the statutory scheme which already gave landlords who were not quite ready to start works the benefit of the “near-miss” provision in s.31(2) of the 1954 Act and the ability to seek a short renewal term or a redevelopment break clause. 10-14 months was altogether too long, argued the Tenant, to be accommodated within the statutory tolerance under Ground (f).

The Landlord argued that the judge had correctly directed himself as to the legal principles; that he had reached an evaluative decision, on undisputed facts, about what was a reasonable period of time to allow in the circumstances of the case and that he was well within his rights to conclude that the time to be added on should include the time needed to secure planning permission.

Fancourt J observed that this aspect of the appeal raised “an important general question on the operation of the 1954 Act, where there appears to have been a misunderstanding of the relevant test” (§28). He noted that “judicial exegesis, invoking the policy of the 1954 Act, ha[d] created some leeway as regards the literal requirement that the works be intended to be done at the termination of the tenancy” (§50) before reviewing the cases on the nature and extent of that leeway:

• Reohorn v Barry Corporation [1956] 1 WLR 845 where Birkett LJ had said that the statutory language in Ground (f) did not mean “that ‘the bulldozers would arrive the next day’” and that it instead meant “on a reasonable interpretation, that it is the settled intention [of the landlord] to end this tenancy for this purpose and that the work will begin, not at any long delayed time, but on the termination of the tenancy”, and where Parker LJ pointed out that the Ground (f) exercise did not involve any element of discretion.
• Fisher v Taylor’s Furnishing Stores Ltd [1956] 2 QB 78 where Denning LJ said that the statutory language meant that “it is intended to do the works at once and not after a time”.
• Method Development Ltd v Jones [1971] 1 WLR 168, a Ground (g) case in which the expression “within a reasonable time” of the termination of the current tenancy had made its first appearance.
• Edwards v Thompson [1990] 60 P&CR 526 in which the Court of Appeal held, on the facts, that the inability of the landlord to start the works within a few months of the possession date meant that the landlord did not intend to carry them out “on the termination of the current tenancy”.
• London Hilton Jewellers Ltd v Hilton International Hotels Ltd [1990] 1 EGLR 112, a Ground (g) case where a delay of “a month or so” was held to be within the statutory tolerance.
• S Franses Ltd v Cavendish Hotel (London) Ltd [2017] EWHC 1670 (QB), where Jay J said (in a passage to which HHJ Hellman had referred) that the statutory tolerance required “…consideration not just of how long is reasonably required to initiate the works, but also of what is reasonable in all the circumstances of the case in the context of these underleases…”

The Landlord argued that Jay J’s formulation (what is reasonable in all the circumstances) was consistent with the Method Developments formulation (within a reasonable time of the termination of the current tenancy) and that Fancourt J should follow Jay J unless satisfied that he was plainly wrong.

Fancourt J ultimately concluded that the Tenant’s argument on the time point was right in principle and that the judge’s determination could not stand. His reasoning was as follows:

1. The correct question under Ground (f) was “not whether the estimation of the length of the delay is reasonable, on the evidence, but whether, given that a delay of that length is likely, the Landlord could be said to intend to carry out the works “on the termination of the current tenancy”, i.e. by a reasonable time after that termination”. The judge had instead “addressed a subtly different question from the question that the 1954 Act requires” and “his evaluation was therefore flawed” (§62).
2. The correct test had been authoritatively established by the Court of Appeal decisions (Reohorn, Fisher, Method Developments and Edwards) and the “expression ‘within a reasonable time’ [was] only a paraphrase of the statutory test that indicates that literal compliance is not required” (§63).
3. Fancourt J was not therefore bound by or required to follow Jay J in Franses: both judges were bound by the Court of Appeal decisions. The Landlord was in any event wrong to suggest that Jay J was “postulating a freestanding broad test of what was reasonable in all the circumstances”; Jay J was instead inviting consideration of “what (implicitly relatively short) period could be added to the possession date in the circumstances of the particular case without the works ceasing to be done ‘at the termination of the current tenancy’” (§§64-66).
4. Here, the Landlord was proposing to apply for a contentious planning permission six to seven months after the possession date and the Landlord did not therefore not intend to do the works at the termination of the tenancy: “This was not just “after a time” but after a substantial time” (§71).
5. “The fact that the Landlord was unable to get further ahead with the planning process because the Tenant would not permit entry onto the Premises to carry out intrusive investigations is neither here nor there. Those were the consequences of the terms of the parties’ bargain” (§73).
6. The policy of the 1954 Act was “to facilitate redevelopment, while providing reasonable security of tenure for tenants”, and the statutory scheme enabled a landlord wishing to develop to seek a 1-year term or a redevelopment break clause. If the Landlord had taken that course in this case, it might not have been able to start works for two years, but it would in any event have been unable to start for up to 14 months and, from the Tenant’s point of view, the property could have been used during those 14 months rather than sitting empty (§§74-75).

On the question of the proper approach to the ‘reasonable time’, Fancourt J offered the following observations which may be said to be of general application in Ground (f) cases:

    “67. What relatively short period can reasonably be added to the possession date will be property- (and other circumstances-) specific. It is likely to include time to recover, secure and clear out the property, depending on its size and condition, and time to mobilise contractors and take other preliminary steps, before work actually commences on site. A reasonable landlord will expect to allow a short period to achieve this before the work actually starts. The reasonable time for this is likely to be longer if the holding in question is an upper floor in a high rise building, in a densely developed urban area, or if the works are very extensive, than if it is a smaller, self-contained property in a town or village, or where the works are more limited in scope.

    68. The clue to what is permissible lies in the language of the statutory test, which is concerned with what the landlord intends to do and when it intends to do it. It does not require a court in every case to predict what delay there will in fact be. If a landlord intends to set about the works on recovering possession, it intends to do them on termination of the tenancy. That does not require the works to be able to start on day one, as Birkett LJ explained. The fact that there may be some modest delay in starting the works does not affect the fact that the landlord intends to set about them on termination.

    69. If, on the other hand, the landlord intends to use the property for something else, or to leave it empty for a period, or if it cannot yet set about the works because there is something else that needs to be done first, then it does not intend to do the works on termination of the tenancy within the meaning of the statute.”

Funding

The Landlord company was an SPV which did not own other property. At trial, it accepted that the full cost of the works would have to come from a bank loan. The Landlord had approached its own bank and had been provided with an ‘indicative terms sheet’ setting out the terms on which the bank might be prepared to make the advance and outlining its lending requirements. Those requirements included provision of personal guarantees from the directors of the landlord company.

HHJ Hellman had concluded, in para 116 of his judgment, that it was “not fanciful to suppose that the Bank or some other lender would in principle be prepared to lend the [Landlord] sufficient money to carry out the Development” because the lender would be “satisfied that the Premises provided adequate security for the loan”. But in next paragraph, the judge pointed out that personal guarantees would be required and said that, in the absence of any evidence of the directors’ financial means, the judge could not “simply assume that the directors/shareholders would have sufficient assets to support guarantees for that or some similar amount”.

On the appeal, the Landlord argued that para 116 of HHJ Hellman’s judgment contained all the ingredients for a finding that the Landlord had surmounted the comparatively low bar of showing it had at least a reasonable prospect of obtaining the required funding and that the judge had fallen into error by considering the financial circumstances of the directors, that being an unnecessary and irrelevant consideration.

Fancourt J disagreed with the Landlord’s assessment of the judgment. He accepted the Tenant’s argument that, properly understood, para 116 contained the judge’s assessment of whether a lender would be satisfied with the proposal from a loan to value perspective and that it should not be read as containing his overall conclusion about whether there was a real prospect of securing funding (§§19-24). One of the other relevant factors identified by the judge was whether the Landlord would be able to proffer personal guarantees that would be regarded by the lender as being of substantial value and therefore satisfactory. The judge’s conclusions about that issue, in para 117, were relevant, not superfluous, to his overall decision about funding (§25). Fancourt J pointed out that the Landlord’s grounds of appeal had not included a challenge to the judge’s conclusion that the personal guarantees would need to be considered valuable by the lender – the Landlord had confined itself to its challenge to the relevance of guarantees – and the appeal was therefore dismissed (§26).

Planning

At trial, the judge heard evidence from the parties’ respective planning experts. The experts both drew attention to the ambitious housing targets in the Redbridge Local Plan (which the local authority was not on track to meet) and two policies in the London Plan 2021, D13 and HC7, which protected heritage pubs. Policy HC7(C) provided that approval for proposals which would involve depriving an existing heritage pub of ancillary accommodation or outside space and risk compromising the operation or viability of the pub should be resisted. That was relevant in this case because the Landlord’s proposals involved taking back the storage and staff facilities on the first floor, the pub manager’s flat on the second floor and 60% of the pub’s existing beer garden.

HHJ Hellman held that the Landlord did have a real prospect of obtaining planning permission for these reasons:

    “93. Whereas policies D13 and H7 weight against the grant of planning permission, the Redbridge Local Plan and the National Planning Policy Framework would tend to support it. If the local authority is not on track to meet its housing delivery target, that would tend to favour granting an application to build more housing.

    94. Evaluating all the circumstances, I find that a planning application would have a real prospect of success, albeit somewhat less than 50 per cent.”

On appeal, the Tenant said that it had been common ground between the experts that both D13 and HC7 would have to be satisfied if planning permission was to be granted and that the judge had adopted the wrong approach in carrying out a balancing exercise, weighing D13 and HC7 compliance against the countervailing advantages of reducing the housing deficit. The Tenant argued that the Judge’s findings about the effect of losing the first and second floors of the existing pub and most of the beer garden were all consistent with the conclusion that HC7(C) was not satisfied and that if the judge had conducted an independent assessment of the Landlord’s prospects of satisfying HC7, he would have concluded that the Landlord’s case on this issue failed.

Fancourt J agreed with the Tenant that the judge had been wrong to undertake a balancing exercise and that he had therefore asked himself the wrong question. Although Fancourt J said that it might be inferred from the judge’s findings elsewhere in the judgment that, had he asked himself the right question, he would have resolved it in the Tenant’s favour, the correct course, had the outcome of the appeal depended on this point, would have been to remit the matter back to HHJ Hellman for a further finding on this point (§§44-46).

Restrictive Covenants

The Landlord’s registered title recorded the existence of certain restrictive covenants imposed by an 1870 conveyance. The Landlord had overlooked the existence of the restrictive covenants recorded on its title until attention was drawn to them during the trial, and it had not been able to obtain a copy of the conveyance in the two additional weeks which the judge had allowed for that purpose following the conclusion of the trial.

The Tenant argued that in the absence of the conveyance or any other documents showing what the covenants said, the Landlord had two problems. First, the Landlord could not discharge the burden of proving that it had a real prospect of overcoming the threat to redevelopment posed by the covenants. Secondly, the Landlord’s bank had stated in the ‘indicative terms sheet’ that any loan would be conditional upon the bank’s solicitor providing confirmation that the redevelopment would not contravene any restrictive covenant.

HHJ Hellman disagreed. He held that it was speculative whether the person with the benefit of the covenants would enforce them and that, even if they did, there was a reasonable prospect of that the Landlord would be able to obtain an order under s.84(1) of the Law of Property Act 1925 modifying or discharging them. On the second point, the judge held that the Landlord had a real prospect of obtaining defective title insurance and persuading the lender to relax its requirements in respect of the covenants on basis of that policy.

On the appeal, the Tenant challenged the evidential foundation for the judge’s conclusions. Fancourt J held that although the judge’s conclusions were “broad brush findings”, he was an experienced judge who was entitled to have recourse to his own experience of these matters and general common sense, and that the findings were ones which the judge had been entitled to reach (§§30-35). The Tenant therefore lost on this point.

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