Bewley's Lease Case

Author:Mr Kevin Hoy, Declan Black and William Carmody
Profession:Mason Hayes & Curran

There has been considerable media comment on the Bewley's lease case with some suggestions that the case has wider ramifications for the industry. This is not so in our view.

Leases are, in essence, agreements between landlords and tenants. The courts have the job of deciding what the language the parties use in leases actually means. In the Bewley's case (Ickendel Limited -v- Bewley's Café Grafton Street Limited), the High Court considered a rent review clause. Charleton J. decided that, on the basis of the specific wording used in the lease, the rent after review in 2012 would reduce in the light of market conditions. He did not decide this because of any policy conclusion on his part - he simply applied the rules of construction which courts generally use when interpreting commercial agreements.

The judge made clear that his decision was based on the particular facts before him. He confirmed that if the rent review language was clear in preventing a reduction in rent regardless of market conditions, then he would have enforced it:

"An agreement must be left alone once it is clear what the parties have agreed."

The judge examined the wording used in the lease and decided that the parties had clearly put a floor of the original rent (set in 1987) as the minimum rent payable regardless of market value on any review. However, Charleton J. decided that the parties had not used clear language to set out what would happen with...

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