Can a landlord pub company recover possession without setting foot in the building? This case considers when a managed pub model satisfies the 1954 Act own occupation ground.
The County Court at Central London has considered whether a landlord operating a managed pub model can rely on ground (g), the own occupation ground, under the Landlord and Tenant Act 1954 (the 1954 Act) to oppose a lease renewal. The answer, on the facts of Star Pubs Trading Ltd v Gunmakers Arms (Essex) LLP [2026], was yes.
Star Pubs Trading Limited (Star) sought to recover possession of the Gunmakers Arms in Loughton, Essex from its tenant, Gunmakers Arms (Essex) LLP (GAE), which held a 20-year lease originally assigned in 2012 and protected by the security of tenure provisions in Part II of the 1954 Act. In March 2024, Star served a section 25 notice opposing renewal under section 30(1)(g), on the basis that it intended to occupy the premises through its "Just Add Talent" (JAT) management model.
Under the JAT model, Star contracts with a company owned by a self-employed operator to manage the pub on Star's behalf and employ staff to deliver Star's retail offering. The management services agreement defined the relevant business as "the business of Star operating as a public house from the Pub" and granted the operator only a limited licence to access the premises so far as necessary to discharge its management obligations, which would terminate automatically if the agreement came to an end. The pub, its fixtures and fittings, and the business itself all remained Star's property. The operator received a weekly base fee calculated as a percentage of revenue and a quarterly profit share of 20%.
GAE disputed that this arrangement would amount to Star's own occupation, emphasising that the operator company would physically have to occupy the premises by its staff, that Star provided no staff and had no on-site presence, and that accordingly the business must in reality be the operator's.
Legal Principles and Decision
Under section 30(1)(g), Star was required to establish that on the termination of the current tenancy it intended to occupy the holding for the purposes of a business to be carried on by it.
HHJ Johns KC considered three cases recently reviewed in Vodafone Limited v Icon Tower Infrastructure Limited [2025] UKUT 58 (LC), namely Dellneed Ltd v Chin [1987] 54 P&CR 172, Teesside Indoor Bowls Limited v Stockton-on-Tees Borough Council [1990] 2 EGLR 87, and Brumwell v Powys County Council [2011] EWCA Civ 1613, each of which confirmed that the degree of control retained over the business is the decisive factor in determining whether a management agreement model constitutes occupation by the principal.
Applying that principle, the court found that the MSA conferred a striking level of control on Star:
- Star entered into all contracts required to operate the business, including for food and drink, and fixed all prices — the operator had no authority to negotiate them.
- Star's operational manual governed virtually every aspect of the pub's management, from opening hours to food service times. All marketing was determined and paid for by Star, and the operator could not provide its own promotional material without Star's prior approval.
- Star held the premises licence, made all gaming machine arrangements directly with suppliers, and bore the risk of unprofitability — the operator had no covenant to pay a periodic sum for occupation.
- Star retained some control over staffing, including the right to require the removal of any member of staff.
The argument that the operator's physical presence on site prevented Star from establishing occupation was dismissed. The court held that the relevant question was not who was present, but in what capacity — and an agent's presence is the principal's presence. The judge noted that operator staff had featured in both Teesside and Brumwell without preventing the landlord from establishing occupation in either case.
A further argument — that the management agreement case law was irrelevant as it had been developed under section 23 rather than section 30(1)(g) of the Act — was also dismissed. Drawing on Lord Nicholls' observation in Graysim Holdings Ltd v P&O Property Holdings Ltd is [1996] AC 329, the court confirmed that the concept of occupation for business purposes bears the same meaning throughout Part II of the 1954 Act.
GAE's tenancy was duly terminated.
For pub companies and leisure operators using management agreement structures, this judgment offers valuable reassurance that a carefully drafted agreement can satisfy own occupation under section 30(1)(g). The degree of control retained by the landlord will be the decisive factor — and tenants should not assume that a landlord's absence from the premises will defeat such a claim.
