Simon Franses, director of the gallery, said: “I am delighted with the news. This has been a David versus Goliath battle which has been a huge and costly distraction that has lasted almost four years.”
The long-running dispute began when Franses’ 15-year lease came to an end in 2015. The Cavendish Hotel, run by The Ascott Limited which is a subsidiary of Singapore’s CapitaLand, did not grant Franses a new lease and instead said it planned to redevelop the gallery into two shops.
The case concerned lease renewal proceedings under the Landlord and Tenant Act 1954. The act allows a landlord to oppose the grant of a new tenancy to a business tenant where it intends, on the termination of the current tenancy, to undertake works to the premises.
But in court the landlord admitted in cross examination that the works it planned would not be carried out if the tenant vacated the premises voluntarily.
After earlier court decisions and appeals, the Supreme Court ruled unanimously in favour of the tenant on December 4.
Law firm Mishcon de Reya described the court result as a “game-changer”. In a statement it said: “In a departure from long-settled practice, a landlord seeking to oppose the grant of a new tenancy on the basis of redevelopment must now demonstrate that its intention to undertake works is independent of the tenant's right to a new tenancy.”
Frédéric Carré, regional manager for The Ascott in the UK, Germany, Spain and Georgia, said: “We are disappointed but we respect the court’s decision that Franses should be granted a new lease for the retail unit at our hotel. We will continue to look into ways to enliven the hotel premises for our customers and the community.”
Rising rents and rates
A number of art galleries in St James's and Mayfair in central London have been forced to leave the area due to rising rates and rents, often pushed up by demand from luxury fashion retailers.
Previously Franses and another Jermyn Street tenant, bespoke shoemaker Foster & Sons, applied to Westminster Council for planning protection. The application was approved, which means the two properties are restricted to use as art galleries and bespoke retail use only and could not be re-let to a general fashion retailer.
Westminster City Council’s new planning policy, called Special Policy Areas, gives planning protection against redevelopment to protect traditional businesses – including tailors and art galleries – in areas such as Cork Street, Savile Row, and St James’s.
Franses was previously known as S Franses after founder Sidney Franses. Simon Franses is his grandson.