Goodwill Hunting: MVL Properties v The Leadmill [2025]

It has been a habit of those, often in retail, to spy their competitor in a new market doing well and think "I reckon I'd like that unit". While, at first blush, there may not be much that can be done about it, it has been a growing trend in the past decade to push past the age-old adage, "I want never gets", and overreach with ground (g).

Perhaps feeling that enough is enough, The Leadmill thought beyond the well trodden path of evidence in a normal '54 Act opposition and welcomed in Article 1 of the First Protocol to the European Convention on Human Rights ("A1 P1 ECHR") as its trump card when faced with their landlord, MVL's, s.30(1)(g) of the Landlord and Tenant Act 1954 ("LTA 1954") opposition proceedings.

Background

In March 2022, MVL served a notice pursuant to s.25 LTA 1954 on its tenant, Leadmill, opposing the grant of a new tenancy of "The Leadmill" under s.30(1)(g) LTA 1954. Since 1982, Leadmill occupied the premises as a nightclub which had gained a distinctive reputation as a music venue in Sheffield. MVL's plan? To take back the premises themselves and run it as its own music venue and nightclub under a different name. The Leadmill, however, was not prepared to give up its iconic venue without a fight. The Leadmill objected to MVL's opposition to the grant of a new tenancy.

Leadmill's Position

Instead of sticking to conventional arguments under the LTA 1954, Leadmill brought out a legal wildcard. The position advanced by Leadmill was that Section 30(1)(g) should not apply to cases where a landlord intends to carry on the same business as the tenant because it would infringe the tenant's right to property under A1 P1 ECHR; a legal argument rarely brought before the UK Courts even in an intellectual property context, let alone in a landlord and tenant dispute.  

Leadmill argued that MVL's plan to occupy a near identical venue would infringe its rights under A1 P1 ECHR because MVL's venue would mislead customers into believing that the new venue was associated with Leadmill's "goodwill" (an intellectual property right associated with reputation) and constitute "passing off" (where an entity falsely represents their business as another's). Leadmill argued that their "goodwill" was a "possession" under A1 P1 ECHR that MVL's opposition would constitute an unlawful deprivation of their "possession".

The Ruling

The High Court held that Section 30(1)(g) did not breach A1 P1 ECHR because:

1. While "goodwill" can be a "possession" under A1 P1 ECHR, a tenant must provide actual evidence of the presence of goodwill; a stated value is simply not enough.

2. Even if a tenant can prove "goodwill", the Preamble to the LTA 1954 states that objective of the Act is "to enable tenants occupying property for business, professional or certain other purposes to obtain new tenancies in certain cases…". The LTA 1954 only provides a tenant with a contingent right to renew; therefore, a tenant cannot be lawfully deprived of their "possession".

3. It is not in the public interest to prevent a landlord from recovering their property.

The High Court awarded MVL possession of the Premises.

Significance

The High Court's judgment serves as a reality check for tenants hoping to use "goodwill" as a shield against eviction. Whilst brand reputation and a legacy hold undeniable value, they do not override the statutory framework governing commercial leases. The statutory purpose of the LTA 1954 is to balance the interests of both landlords and tenants fairly. The judgment confirms that tenants who trade on their name and reputation are not entitled to rely on "goodwill" alone to displace the landlord's statutory right to regain possession of their property, even if the tenant's business benefits from a notable reputation and longstanding history. The public interest is in maintaining the integrity of commercial property law without eroding its predictability and disrupting a landlord's right to their property.  

If you require any advice in relation to a landlord and tenant act dispute or would like any advice following the ruling in MVL Properties (2017) Limited v The Leadmill Limited [2025], please contact our Real Estate Disputes team.

This article was written by Kate New and Cameron Trotman.