Dublin Docklands Development Authority v Jermyn Street Ltd & Black Tie Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 01 June 2010
• Neutral Citation: [2010] IEHC 217
• Court: High Court
• Date: 01 June 2010

[2010] IEHC 217

THE HIGH COURT

[No. 1298 S/2009]

Dublin Docklands Development Authority v Jermyn Street Ltd & Black Tie Ltd

BETWEEN

DUBLIN DOCKLANDS DEVELOPMENT AUTHORITY

PLAINTIFF

AND

JERMYN STREET LIMITED AND BLACK TIE LIMITED

DEFENDANTS

PITCHERS LTD v PLAZA (QUEESNSBURY) LTD 1940 1 AER 151

O'DWYER v BOYD UNREP SUPREME 4.7.2002 2002/22/5552 2002 IESC 54

GLEESON v GRIMES & MCQUILLAN 2007 4 IR 417

MOOHAN v S & R MOTORS DONEGAL LTD 2008 3 IR 650

PATTEL v PATTEL 2000 QB 551

CAMPUS & STATDIUM IRL LTD v DUBLIN WATERWORLD LTD 2006 2 IR 181

STOKES v KERWICK 1921 56 ILTR 24

GOLD ORES REDUCTION CO LTD v PARR 1892 2 QB 14

LANDLORD AND TENANT LAW

Lease

Default of rent - Summary summons - Arbitration -Arbitration clause - Stay pending arbitration - Entitlement to arbitration - Step taken in proceedings - Dispute between parties - Continuing interest on outstanding rent - Whether continuing interest on rent could be claimed in summary proceedings -Whether dispute arose - Whether step taken in proceedings - Whether filing replying affidavit step in proceedings -Whether arbitration clause applicable -Whether stay could be granted -Pitchers Ltd v Plaza (Queensbury) Ltd [1940] 1 All ER 151, Campus and Stadium Ireland Ltd v Dublin Waterworld Ltd [2005] IEHC 201 [2006] 2 IR 181, Stokes v Kerwick [1921] 56 ILTR 24 and O'Dwyer v Boyd (Unrep, SC, 4/7/2002) considered; Gleeson v Grimes [2007] 4 IR 417 applied; Moohan v S&R Motors (Donega)l Ltd [2007] IEHC 435 [2008] 3 IR 650 distinguished; Gold Ores Reduction Company Ltd v Parr [1892] 2 QB 14 followed - Relief granted (2009/1298S - Clarke J - 1/6/2010) [2010] IEHC 217

Dublin Dockland Authority v Jermyn Street Ltd

1. Introduction

2 2 1.1 The plaintiff ("DDDA") is a statutory body established, as its name implies, to procure development in the Dublin Docklands area. As part of that function, the DDDA developed the CHQ Building at the International Financial Services Centre in Dublin. That building comprised a significant number of retail units. The first named defendant ("Jermyn Street") took a lease of units 28/29 at the CHQ building on 7 ^th March, 2008 ("the Lease"). The second named defendant ("Black Tie") provided a guarantee in relation to the obligations of Jermyn Street under the Lease.

3 3 1.2 It would appear that no rent has been paid on foot of that Lease by Jermyn Street to the DDDA. On that basis, the DDDA has brought proceedings seeking to recover rent and other charges as against Jermyn Street and in relation to the guarantee of that rent and other charges as against Black Tie. Two questions now arise in respect of those proceedings.

4 4 1.3The first issue arises as a result of a motion brought by Jermyn Street and Black Tie in which it is sought to have the proceedings stayed pending arbitration. The second application is a motion for judgment brought, in the ordinary way, by the DDDA in which summary judgment is sought. For reasons which will become apparent there is an overlap of at least some of the issues that arise on both motions. However, it seems logical to first deal with the question of whether the proceedings, or any part of them, should be stayed pending arbitration. I, therefore, turn to that question.

2. Stay Pending Arbitration

2 2 2.1 The first issue which arises between the parties under this heading is as to whether, on its proper construction, the Lease entitles either or both of Jermyn Street and Black Tie to have disputes referred to arbitration.

3 3 2.2 So far as the Lease is concerned, same provides at clause 7.3.1 in the following terms:-

"Save as otherwise provided in this Lease differences arising out of or touching upon the rights or duties of the parties under this Lease shall be referred to the determination of a single arbitrator to be agreed upon by the parties or failing agreement to a person nominated by the President for the time being of the Law Society of Ireland provided by the Arbitration Acts. It is expressly agreed by the Landlord and the Tenant that the exercise by the Landlord of the rights reserved to it in clause 7.1 of this Lease shall not be referred to the determination of an arbitrator."

4 4 2.3 However, the DDDA also drew attention to the provisions of clause 9.2 of the Lease which provides as follows:-

"The Tenant submits to the exclusive jurisdiction of the Courts of Ireland for all the purposes of this Lease and the Tenant acknowledges that this agreement as to jurisdiction is incorporated at the request of the Landlord and for the benefit only of the Landlord."

5 5 2.4 It is argued on behalf of the DDDA that the combined effect of clause 7.3.1 and clause 9.2 creates a situation where Jermyn Street is not entitled to insist on arbitration of any disputes arising. Attention is drawn to the first phrase of clause 7.3.1 which states "save as otherwise provided". It is said that clause 9.2 amounts to such an "otherwise" provision, conferring exclusive jurisdiction on the Courts of Ireland rather than on an arbitrator. On that basis, it is said that clause 9.2 amounts to a removal of the entitlement of Jermyn Street to arbitration although not necessarily a removal of the rights of the DDDA. As to this latter point, attention is drawn to the fact that clause 9.2 is stated to be for the benefit only of the landlord (being the DDDA) such that the DDDA can, therefore, waive the exclusive jurisdiction clause if it should so wish and, at its election, therefore, have any dispute referred to arbitration.

6 6 2.5 I do not accept that the argument put forward by the DDDA represents the proper approach to the construction of the relevant terms of the lease. Clause 7.3.1 provides for arbitration in any case where there is not a provision to the contrary to be found in the Lease. The fact that disputes between the parties are referred to arbitration does not mean that the parties may nonetheless have to have recourse to the courts of some jurisdiction for the purposes of enforcing their rights. Binding interlocutory orders, for example, may be needed to secure the parties' position even if such orders are designed to maintain the status quo pending arbitration. Likewise, the results of an arbitration may require to be considered by a court either because one or other party challenges the result on the admittedly limited basis on which such is possible but also in order that a successful party may be able to avail of the full range of remedies for the execution of any award made in its favour.

7 7 2.6 It does not seem to me that clause 9.2 does any more than represent the agreement of the parties that any such court intervention is a matter on which the Irish courts are to have exclusive jurisdiction unless the provisions of clause 9.2 are waived by the DDDA such that it can, at its election, in those circumstances, bring proceedings in any other competent jurisdiction.

8 8 2.7 If it was the intention of the parties that the Lease was to provide that the DDDA could, at its election, refer any matters to arbitration but that Jermyn Street could not, then there would have been much easier ways of going about same in the drafting of the Lease. I am satisfied that the proper construction of the Lease is to treat clause 7.3.1 as an ordinary arbitration clause and clause 9.2 as an ordinary choice of jurisdiction clause. The choice of jurisdiction clause is not intended, and does not, in my view, oust the arbitration clause. Unless, therefore, there was any other provision in the Lease (that is a provision other than the choice of jurisdiction clause) which ousted the arbitration clause in respect of a particular category of dispute, (there is none such relevant to the issues which arise in this case) then the arbitration clause seems to me to be applicable.

9 9 2.8 A second question arises as to the applicability of the arbitration clause to the disputes which arise between the DDDA and Black Tie. The Lease in this case is, perhaps, a little unusual in the way in which it deals with guarantees. Clause 8.1.1 provides as follows:-

"Immediate Covenant

Where a Guarantor is named in the Particulars and is a party to this Lease the Guarantor covenants with the Landlords in the terms set out in the Fifth Schedule."

10 10 2.9In addition, clause 8.1.2 (i) provides as follows:-

"The liability of the Guarantor shall not exceed an amount equivalent to one year's rent payable by the Tenant to the Landlord under the terms of the Lease."

11 11 2.10 It is clear, therefore, that a guarantor may become a party to the Lease where that guarantor is named in the particulars. Black Tie is so named in the particulars of this lease. It is clear, therefore, that within the terminology used in this particular lease, a guarantor who signs up to the Lease document itself (rather than executing a separate and stand alone guarantee document) is a party to the Lease. I should emphasise that in many cases it would not be appropriate to describe a guarantor as a party to a lease where the guarantor guarantees the obligations of the lessee. The situation which arises in this case is as a direct result of the way in which the guarantee is provided for in the terms to which I have referred. In those particular circumstances, Black Tie is a party to this lease.

12 12 2.11 In those circumstances, it seems to me that Black Tie is a party covered by clause 7.3.1 in that reference to any differences arising out of the rights or duties of the parties under the Lease includes differences arising as and between the DDDA and Black Tie.

13 13 2.12 The terms of the guarantee are set out in the Fifth Schedule to the Lease which contains, at clause 10, a choice of jurisdiction clause which, in substance, is the same as clause 9.2 of the main provisions in the Lease to which I have...