Bank of Ireland v Lady Lisa Ireland Ltd

JurisdictionIreland
CourtHigh Court
JudgeO'Hanlon J.
Judgment Date01 January 1993
Neutral Citation1992 WJSC-HC 1414
Date01 January 1993
Docket Number[1991 No. 2276],No. 2276/1991

1992 WJSC-HC 1414

THE HIGH COURT

No. 2276/1991
BANK OF IRELAND v. LADY LISA (IRL) LTD

BETWEEN

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND
PLAINTIFF

AND

LADY LISA IRELAND LIMITED
DEFENDANT

Citations:

SERJEANT V NASH FIELD & CO 1903 2 KB 304

MOORE V ULLCOATS MINING CO LTD 1908 1 CH 575

HALSBURY'S LAWS 4ED V27 PARA 428

RULES OF THE SUPREME COURT 1926 O.3

RULES OF THE SUPREME COURT 1905 O.3 r6

LANDLORD & TENANT LAW AMDT ACT IRL 1860

KEATING V MULCAHY 1926 IR 214

ARDEN V BOYCE 1894 1 QB 796

MEARES V CONNOLLY 1930 IR 333

NOLAN V CULLEN 1901 2 IR 628

FITZSIMONS V PARKER 1949 IJ 59

THOMPSON V O'NEILL 90 ILTR 73

SWEENEY V POWERSCOURT SHOPPING CENTRE 1985 ILRM 442

RSC O.37 r7

RSC O.37 r11

RSC O.2 r1

RSC O.2 r2

RSC O.3 r2(a)

RSC O.2

Synopsis:

PRACTICE

Procedure

Land - Possession - Recovery - Forfeiture - Re-entry - Non- payment of rent - Summary summons inappropriate - (1991/2276 - O'Hanlon J. - 28/5/92) - [1992] 1 I.R. 404 - [1993] ILRM 235

|Bank of Ireland v. Lady Lisa Ireland Ltd.|

LANDLORD AND TENANT

Lease

Forfeiture - Re-entry - Method - Action - Institution - Recovery of possession - Non-payment of rent - Practice - Summary summons inappropriate - Re-entry not effected - Rules of the Superior Courts, 1986, order 2, r. 1 - Landlord and Tenant Law Amendment Act, Ireland, 1860, s. 52 - (1991/2276 - O'Hanlon J. - 28/5/92)

|Bank of Ireland v. Lady Lisa Ireland Ltd.|

1

Judgment delivered by O'Hanlon J., the 28th day of May, 1992.

2

The Plaintiff is the landlord of business premises at No. 44 Henry Street, Dublin 1, which were demised to the Defendant (then named Poltobe Services Limited) for a term of 35 years from the 14th November,1986.

3

The Plaintiff contends that the Defendant has been very remiss in payment of the rent reserved by the lease, and has consistently been late in making payment of the quarterly instalments of rent, so that proceedings have had to be instituted in times past on a number of occasions to compel payment of the amounts due.

4

Ultimately, the Plaintiff grew tired of allowing time, and caused a Notice of Re-Entry for Non-Payment of Rent to be served on the Defendant on the 12th December, 1991. It was headed "Notice of Re-Entry and Forfeiture" it recited that the quarter's rent due on the 1st October, 1991, had not beenpaid, and it concluded:

5

AND NOW TAKE NOTICE that pursuant to the terms of the said Lease and the proviso for re-entry therein contained, as agent for the Lessor we give notice that the Lessor hereby exercises its right to determine theLease for failure to pay the said rent and requires you to yield up possession of the said premises this 11th day of December, 1991.

6

The Notice was signed by the Solicitors for the Landlord.

7

The rent was payable quarterly in advance. I understand that the arrears of rent up to the date of the service of the Notice of Re-Entry have since been paid up and accepted by the Plaintiff, and that the balance of the quarterly rent for the quarter in question has been tendered and accepted by the Plaintiff as Mesne Rates. Nevertheless, the Plaintiff has elected to continue with the proceedings for possession commenced by Summary Summons issued on the 19th December, 1990 in accordance with Order 1, Rule 3 of the Rules of the Superior Courts.

8

While the facts of the case, as alleged by the Plaintiff, are not in dispute, the Defendant contends that the procedure adopted by the Plaintiff was ineffectual to achieve a re-entry on the part of the landlord, in accordance with the terms of the Lease, and further contends that the procedure by way of Summary Summons is inappropriate when an order for possession is claimed in reliance on re-entry for alleged breach of covenant.

9

I have considered the helpful submissions of Counsel on bothsides of the case and I have come to the conclusion that I should hold in favour of the Defendant on both the issues of law which arise forconsideration.

10

Where a landlord proposes to forfeit a lease in reliance on a proviso in the lease giving a right of re-entry for non-payment of rent or breach of other covenant in the lease, it has been held that the "re-entry" involved may only be effected in one of two ways - either by physical re-entry or by the issue and service of proceedings for recovery of possession of the premises.

11

In Serjeant v. Nash, Field & Co., (1903) 2 KB 304, Collins MR observed as follows (p. 310):

12

There is a final determination of a tenancy under a lease when the lessor, by some final and positive act which cannot be retracted, treats a breach of covenant by the lessee as constituting a forfeiture.... The only question is whether the lessor had availed herself of the breach of covenant in a final manner. I think that she had done so, for, except by taking physical possession of the premises, she had done the only thing that she could do to indicate her intention to put an end to the lease... It is clear that the writ in the action to recover possession was a conclusive election to treat the act of the lessee... as creating a forfeiture.

13

In the present case it was submitted that the notice served on behalf of the lessor was a "final and positive act treating a breach of covenant by the lessee as constituting a forfeiture" within the meaning of the expression as used by Collins MR in that judgment, but this contention is inconsistent with the decision of Warrington J. in Moore v Ullcoats Mining Co. Ltd., (1908) 1 Ch. 575 where noticeinwriting had been given purporting to determine the lease, and a further notice was served demanding possession of the mines.

14

Warrington J. said (at p. 587):

15

Then the Plaintiffs contend that if the writ was not an unequivocal demand there was a previous expression of their election contained in the two notices of April 29 and May 3, to which I have already referred. I am of opinion upon the authorities .... that where the condition in the lease is that the landlord may re-enter he must actually re-enter, or he must do that which is in law equivalent to re-entry, namely, commence an action for...

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