Crumlin Investments Ltd v Mountaine

• Jurisdiction: Ireland
• Court: High Court
• Judge: Master of the High Court
• Judgment Date: 22 February 2002
• Neutral Citation: [2002] IEHC 40
• Docket Number: No.563S/2001
• Date: 22 February 2002

CRUMLIN INVESTMENTS LTD v. MOUNTAINE

BETWEEN

CRUMLIN INVESTMENTS LIMITED

PLAINTIFF

AND

JAMES MOUNTAINE

DEFENDANT

[2002] IEHC 40

No.563S/2001

THE HIGH COURT

Synopsis:

PRACTICE AND PROCEDURE

Motion

Motion for judgment - Landlord and tenant - Retail law - Summary judgment - Non-payment of rent - Credit and security - Management of shopping centre - Set-off - Equity - Counterclaim by defendant - Whether judgment should be granted - Whether equitable set-off available - Whether stay on judgment should issue - Rules of the Superior Courts, 1986 Order 37, rule 6 (2001/563 S - Master Honohan - 22/2/02)

Crumlin Investments Ltd v Mountaine

Facts: The plaintiff sought summary judgment in respect of a sum claimed to be owed as rent by the defendant, who was a tenant in a shopping centre. The defendant opposed the granting of summary judgment and sought to have the matter transferred into the Judge’s list. The defendant also submitted that Equity should intervene in the proceedings to allow him set off his claim for damages against the plaintiff’s lessor for the alleged mismanagement of the shopping centre. The plaintiff submitted that the rent payable could only be subject to deduction or set-off in respect of a liquidated sum owed by the landlord. It was contended that the damages claimed by the defendant were neither liquidated nor due when the rents claimed were payable. The defendant suggested (citing English caselaw) that equitable set-off was available in instances where lessees had suffered losses at the hands of lessors (or their managing agents).

Held by the Master of the High Court in making the following orders. It was not possible to decide whether a basis existed for the defendant’s damages or whether the defendant was entitled to an equitable set off. The weight of argument and precedent favoured the plaintiff. The Master was not satisfied that set off was available in this jurisdiction in these circumstances and there was therefore no answer to the plaintiff’s claim. Leave to enter judgment for the amount claimed would be entered. In relation to an application for a stay on judgment the Master assessed the defendant’s prospects in the forthcoming proceedings of establishing the lessor’s liability. The defendant had about a 25 % chance of recovery in relation to his claim. A partial stay would therefore be granted on judgment provided two thirds of the outstanding rent and service charges were paid within eight weeks.

Citations:

RSC O.37 r4

LANDLORD & TENANT (IRL) ACT 1860 (DEASYS ACT) S48

MCCAUSLAND V CARROLL 1938 72 ILTR 158

SWEENEY V POWERSCOURT 1984 IR 503

Master of the High Court

1 The Plaintiff's motion for liberty to enter final judgment for £61,834.11 inclusive of £10,230.29 for services, (in effect all rent due from February 1999 to April 2001) was argued before me more extensively than is usually the case, both parties submitting Books of Authorities to assist. This occurred because there had been some discussion of my being conferred, with the consent of both parties, with the same jurisdiction as that of a High Court judge to deal with the matter. This discussion was not altogether fruitful and the result is that the Defendant now asks me to deal with the motion on the basis that there is a "contest" apparent, of the sort which obliges me to transfer the motion to the Judge's list (0. 37, r. 6).

2 The plaintiff, on the other hand presses me for judgment, contending that the material put before me by the defendant discloses no contest in the sense that no defence is raised which answers his client's claim.

3 If there is a contest, I cannot adjudicate on it's merits. Of course, logically I do have to decide the jurisdictional issue - whether or not there is a contest in any real sense, or whether what the defendant urges in any case is effectively an empty formula.

4 It seems, I am sure, strange to the parties that I should have to devote so much time to hearing submissions on these points when the entire may have to be rehearsed afresh at a later date if it is my view that a contest exists. That duplication of effort is however of the nature of summary proceedings. All going well for a plaintiff, he may get his judgment without much delay or expense. If, on the other hand, a defendant disputes the Plaintiff's use of summary proceedings as appropriate to the circumstances of the case the dispute becomes a question of procedure, and the real issues are deferred to another day.

5 That said, it seems to me that procedures cannot be allowed to cause or prolong injustice. In a sense the defendant's main submission is a refined and cogent argument that Equity must intervene in these proceedings and allow him set off his claim as lessee, against the plaintiff lessor, for damages for what he alleges has been the mismanagement of the shopping centre. In separate proceedings (1997 13728P) the plaintiff is seeking more, in terms of quantum, than is being sought in these proceedings by the lessor for arrears of rent. There would be injustice if, where turnover in the shopping centre has fallen well short of(alleged) expectations, the retailer lessee were to have to continue to discharge rent in full. That is obviously true. It is also true that it would be equally unjust to the lessor for it to have to bear all the financial consequences of the turnover shortfall, borne in on it in the form of a unilateral rent strike, until such time as the lessee's Plenary proceedings are heard. The law must do its best for both parties and not permit a procedural device to be played to the advantage of one.

6 Firstly, let me say that it is clear that I cannot decide whether the basis exists for the defendant's case for damages, or that the defendant is entitled to an equitable set off on the basis of such case. I am precluded by the Rules from doing anything with a motion except to transfer it when one party asserts, and the other refutes, an Equitable entitlement to set off. That is a "contest" and except in very rare circumstances such as when no material is before me to support such an assertion, I must treat it as such, and transfer it.

7 In this particular case, however, I had to hear submissions from both parties not for the purpose of enabling me to assess or adjudicate the merits of the "counterclaim" the defendant's separate proceedings - but to evaluate the plaintiff's contention that I should not view the circumstances as having the substance of a "contest", the precise word employed in Order 37 Rule 4.

8 The Plaintiff submits that in consequence of the intervention of Statute (in the form of s.48 of Deasy's Act) the rent payable can only be subject to deduction or set off in respect of "a liquidated sum due by the landlord" and cite the analysis of that section by Maguire P. inMc Causland v Carroll 1938 72ILTR 158. The damages now claimed by the defendant were neither liquidated or due when the rents claimed were payable. The defendant cited English decisions in favour of lessees who have suffered losses at the hands of lessors (and their managing agents) whose neglect of pursuit of the oversell interests of a shopping centre was similar to the...