Bazsont Ltd Trading as Starbucks (Liffey Valley) v BVK Highstreet Retail Liffey Property Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Woulfe
• Judgment Date: 10 December 2021
• Neutral Citation: [2021] IEHC 773
• Court: High Court
• Docket Number: High Court Record No: 2020/208 CA

In the Matter of the Landlord and Tenant (Amendment) Act 1980

Between

Bazsont Limited Trading as Starbucks (Liffey Valley)

Plaintiff/Appellant

and

BVK Highstreet Retail Liffey Property Limited

Defendant/Respondent

[2021] IEHC 773

High Court Record No: 2020/208 CA

Circuit Court Record No: 2018/3274

THE HIGH COURT

Discovery – Relevance – Proportionality – Appellant seeking discovery – Whether discovery sought was relevant

Facts: The appellant, Bazsont Ltd trading as Starbucks (Liffey Valley), appealed to the High Court against the order of the Circuit Court (Judge Linnane) made on the 16th November, 2020. By that order the Circuit Court judge dismissed an appeal against the County Registrar’s refusal to direct discovery of two categories of documents sought by the appellant, and awarded costs in favour of the respondent, BVK Highstreet Retail Liffey Property Ltd. The proceedings arose in the context of a landlord and tenant relationship in respect of Unit 21, Liffey Valley Shopping Centre (the property), and concerned the appellant’s claim for a new tenancy pursuant to the provisions of the Landlord and Tenant (Amendment) Act 1980 in respect of the property. Category 3 sought discovery of all documents relating to the 2010 lease renunciation allegedly applying to the 2016 lease and/or deed of variation. Category 4 consisted of documents relating to the legal assistance received in connection with the 2016 lease.

Held by Woulfe J that the documents in category 3 could be seen as forming part of the “factual matrix”, and such evidence could be deemed admissible by the trial judge at the trial of the action. Woulfe J accepted the appellant’s submission that the question of the extent to which any of those documents were in fact admissible was one for the Court hearing the case, subject to the authorities and principles governing the admissibility of extrinsic evidence. Woulfe J was prepared to grant discovery of the documents in category 3, subject to some adjustment of the scope of the category, having regard to the principles of necessity and proportionality. The documents sought in category 3 were described as “including but not limited to all communications between the defendant and the plaintiff and/or their respective predecessors in title concerning the applicability of the renunciation to the 2016 lease”. Woulfe J held that while it appeared possible that some such communications could form part of the factual matrix, it is clear from the decision of the Supreme Court in Analog Devices v Zurich Insurance Company [2005] 1 I.R. 274 that any such communications which amount to pre-contractual negotiations are excluded from the admissible background. Woulfe J was satisfied that discovery of all such communications was not necessary for the fair disposal of the matter. Woulfe J was also satisfied that to order same would not be proportionate, as it would impose an excessive burden on the respondent as a result of an overly-wide ranging order for discovery. For those reasons Woulfe J added the following rider to the end of the wording of that category in respect of which he would order discovery: “other than any communications in the nature of pre-contractual negotiations which led to the 2016 deed of variation.” Woulfe J held that the documents sought in category 4 could not relate to any matter in question, and discovery of that category must be refused on the basis of that threshold requirement.

Woulfe J allowed the appeal in part and ordered discovery of the documents in category 3, subject to the amendment to the wording of that category.

Appeal allowed in part.

JUDGMENT of Mr. Justice Woulfe delivered on the 10th day of December, 2021

Introduction

1 This is the appellant's appeal against the order of the Circuit Court (Her Honour Judge Linnane) made on the 16th November, 2020. By that order the learned Circuit Court judge dismissed an appeal against the County Registrar's refusal to direct discovery of two categories of documents sought by the appellant, and awarded costs in favour of the respondent.

2 These proceedings arise in the context of a landlord and tenant relationship in respect of Unit 21, Liffey Valley Shopping Centre (“the property”), and concern the appellant's claim for a new tenancy pursuant to the provisions of the Landlord and Tenant ( Amendment) Act 1980 (“the 1980 Act”) in respect of the property. It is necessary first to set out the pleadings in some detail, as they establish the context in which the relevance of the disputed categories must be considered.

The Pleadings

3 In the Civil Bill issued on the 31st May, 2018, the appellant pleads as follows. By a lease dated the 24th February, 2010 (“the 2010 lease”), the respondent's predecessors in title granted a five year commercial lease to the appellant's predecessor in title from the 1st January, 2010 in respect of the property subject to the covenants, conditions and stipulations contained therein. By an agreement dated the 24th February, 2010, (“the renunciation”), it was further agreed that upon the termination of the 2010 lease, the then tenant did renounce its entitlement to a new tenancy. It is claimed that the renunciation was expressly stated to be operative in respect of the termination of the 2010 lease, and that no other lease or tenancy was agreed to be the subject of the renunciation. The 2010 lease duly terminated on the 31st December, 2014, and as and from that date the then tenant held the property pursuant to a new yearly tenancy, and it is expressly pleaded that the yearly tenancy thereby created was not subject to the renunciation.

4 On the 4th July, 2016, the plaintiff's predecessor in title was granted a further lease in respect of the property for a term up to the 30th June, 2018. The 2016 lease was subject to the covenants and conditions contained in the 2010 lease with modifications, but it is claimed that this lease was not subject to the renunciation, which renunciation was not agreed to form part of this lease.

5 The appellant pleads that the respondent has refused to honour its right to a new tenancy under the 1980 Act, in circumstances where the property constitutes a tenement and has been in the occupation of the appellant and/or its predecessors in title for upwards of five years and has been continuously operated bona fide as a coffee shop business and a going concern. The appellant served a notice of intention to claim relief under the 1980 Act dated the 30th April, 2018, but by letter dated the 4th May, 2018, the respondent refused to honour the appellant's renewal rights and demanded vacant possession of the property on the 31st May, 2018. The appellant claims a declaration that it is entitled to a new tenancy in the property beginning on the 1st July, 2018, or such other date as the Court shall deem appropriate, and an order pursuant to s.18 of the 1980 Act fixing the terms of the new tenancy.

6 In its Defence and Counterclaim delivered on the 22nd March, 2019, the respondent admits certain of the basic facts regarding the 2010 lease and the renunciation. It denies the yearly tenancy as pleaded by the appellant, and the plea that any such yearly tenancy was not subject to the renunciation. As regards what was agreed on the 4th July, 2016, the respondent pleads that by a deed of variation made on or about that date, the parties thereto altered the terms of the 2010 lease, inter alia, in the following respects:

• (i) the respondent's predecessors in title demised the property to the original tenant for the additional term as defined therein, which said term commenced on the expiration of the term as defined in the 2010 lease and expired on the 30th June, 2018, to the intent that the said lease should then be read and construed as if the additional term was set out in the 2010 lease;

• (ii) either the landlord or the tenant might terminate the said lease at any time from the 1st October, 2016, upon the service of at least four months' prior written notice on the other party specifying the date on which the lease was to be terminated (“the option date”), and further that the tenant would give full vacant possession on the option date; and

• (iii) the said lease would continue in full force and effect as modified by the deed of variation and would then be read and construed as though the amendments made by the said deed of variation were incorporated therein.

7 The respondent claims that, in the circumstances, at all material times the said deed of renunciation has remained extant, and in full force and effect, and that the original tenant, its successors and assigns, remain bound by same. It is denied that the appellant has any right to a new tenancy pursuant to the 1980 Act. In that regard the respondent pleads that on or about the 1st October, 2016, the appellant, in exercising the break option conferred by the lease as varied, gave notice that the lease would terminate on the 31st May, 2018. In circumstances where (i) the terms of the said lease terminated on the 31st May, 2018, by act of the appellant, and (ii) pursuant to the terms of the deed of renunciation, the original tenant, its successors and assigns (including the appellant herein), renounced any entitlement to a new tenancy in the property on the termination of the said lease, it is asserted that the appellant is not entitled to a new tenancy, and the notice of intention to claim relief is null and void and of no effect.

8 The respondent also counterclaims on the basis of the above matters. It claims that having exercised the break option by the notice dated the 1st October, 2016, the appellant was obliged to yield up full vacant possession of the property on the 31st May, 2018. Notwithstanding demand, the appellant has continued to wrongfully withhold possession of the property, and the respondent counterclaims for, inter alia, an order for possession of the...