EDWARD LEE & Company Ltd v N1 PROPERTY DEVELOPMENTS Ltd

JurisdictionIreland
JudgeMr. Justice Charleton
Judgment Date12 November 2012
Neutral Citation[2012] IEHC 494
CourtHigh Court
Docket Number[2011 No. 11692 P],Record number 11692P/2011
Date12 November 2012

[2012] IEHC 494

The High Court

An Ard-Chúirt

Record number 11692P/2011
Edward Lee & Co [1974] Ltd v N1 Property Developments Ltd
No Redaction Needed
Commercial

Between

Edward Lee and Co. [1974] Limited
Plaintiff

And

N1 Property Developments Limited
Defendant

COMPANIES (AMDT) ACT 1990 S20

LAND & CONVEYANCING LAW REFORM ACT 2009 S132

LAND & CONVEYANCING LAW REFORM ACT 2009 (COMMENCEMENT) (SECTION 132) ORDER 2009 SI 471/2009

LANDLORD & TENANT (AMDT) ACT 1980 S16

LANDLORD & TENANT ACT 1931 S21

LANDLORD & TENANT ACT 1931 S42

LANDLORD & TENANT (AMDT) ACT 1980 S85

LANDLORD & TENANT (AMDT) ACT 1980 S17(1)(A)

HARDIMAN v GALWAY CO COUNCIL 1966 IR 124

BANK OF IRELAND v FITZMAURICE 1989 ILRM 452 1988/7/1779

GATIEN MOTOR CO LTD v CONTINENTAL OIL CO OF IRL LTD 1979 IR 406

LANDLORD & TENANT (AMDT) ACT 1980 S23

LANDLORD & TENANT (AMDT) ACT 1980 S17(1)

PW & CO v MILTON GATE INVESTMENTS LTD 2004 CH 142 2004 2 WLR 443

HARRISON THE LAW & PRACTICE RELATING TO EJECTMENTS IN IRELAND 1903 124-5

BARRETT & ORS v MORGAN 2000 2 AC 264 2000 2 WLR 284 2000 1 AER 481

HYNES LTD v INDEPENDENT NEWSPAPERS LTD 1980 IR 204

UNITED SCIENTIFIC HOLDINGS LTD v BURNLEY BOROUGH COUNCIL 1978 AC 904 1977 2 WLR 806 1977 2 AER 62

HALSBURYS LAWS OF ENGLAND 4ED PARA 481

HARE v NICOLL 1966 2 QB 130 1966 2 WLR 441 1966 1 AER 285

DI LUCA v JURAISE (SPRINGS) LTD & ORS 2000 79 P & CR 193 1998 2 EGLR 125 1998 75 P & CR D15

CONTRACT

Construction

Misuse of technical term - Conformity with statute - Intent of parties - Whether court should presume lawful purpose - Whether court should look to form or substance of agreement - Passing of date for service of notice - Relief in equity - Balancing of equities - Whether time of the essence in service of notice - Whether plaintiff entitled to relief in equity following late service of notice - PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142 followed - Relief granted (2011/11692P - Charleton J - 12/11/2012) [2012] IEHC 494

Edward Lee & Co (19740 Ltd v N1 Property Developments Ltd

LANDLORD AND TENANT LAW

Lease

Surrender - Determination by notice - New tenancy - Upward-only rent review - Whether termination clause void by statute - Whether termination clause provided for surrender - Whether plaintiff entitled to new tenancy - Barrett v Morgan [2000] 2 AC 264 followed; Hynes Ltd v Independent Newspapers [1980] IR 204 applied; United Scientific v Burnley Council [1978] AC 904 considered; Hare v Nicoll [1966] 2 QB 130 and Benito di Luca v Juraise (Springs) Limited (2000) 79 P & CR 193 not followed - Landlord and Tenant Act 1931 (No 55), s 42 - Landlord and Tenant (Amendment) Act 1980 (No 10), ss 16 and 17(1)(a)(iii) - Land and Conveyancing Law Reform Act 2009 (No 27), s 132 - Relief granted (2011/11692P - Charleton J - 12/11/2012) [2012] IEHC 494

Edward Lee & Co (19740 Ltd v N1 Property Developments Ltd

LANDLORD AND TENANT

Lease

Surrender - Determination by notice - New tenancy - Upward-only rent review - Whether termination clause void by statute - Whether termination clause provided for surrender - Whether plaintiff entitled to new tenancy - Contract - Construction - Misuse of technical term - Conformity with statute - Intent of parties - Whether court should presume lawful purpose - Whether court should look to form or substance of agreement - Passing of date for service of notice - Relief in equity - Balancing of equities - Whether time of the essence in service of notice - Whether plaintiff entitled to relief in equity following late service of notice - Barrett v Morgan [2000] 2 AC 264; Benito di Luca v Juraise (Springs) Limited (2000) 79 P & CR 193; Brooke v Garrod (1857) De G & J 63; Davis v Thomas (1830, 1831) 1 Russ & My 506; Doran v Kenny (1869) IR 2 Eq 148; Gatien Motor Co v Continental Oil [1979] IR 406; Goodtitle v Bailey (1777) 2 Cowp 597; Gov & Co of the Bank of Ireland v Fitzmaurice [1989] ILRM 452; Hardiman v Galway County Council [1966] IR 124; Hare v Nicoll [1966] 2 QB 130; Hynes Ltd v Independent Newspapers [1980] IR 204; Lambert v M'Donnell (1864) 15 ICLR 136; Lynch v Lynch (1843) 6 ILR 131; Neville v Harman (1883) 17 ILTR 86; Oastler v Henderson (1877) 2 QBD 575; O'Reilly v Mercer (1865) 10 IJNS 149; PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142; Lord Ranelagh v Melton (1864) 2 Drew & Sm 278; Rye v Rye [1962] AC 496; Stirrup's Contract, In re [1961] 1 WLR 449; Street v Mountford [1985] AC 809; United Scientific v Burnley Council [1978] AC 904 and Weston v Collins (1865) 12 LT 4 considered - Landlord and Tenant Act 1931 (No 55), s 42 - Landlord and Tenant (Amendment) Act 1980 (No 10), ss 16 and 17(1)(a)(iii) - Land and Conveyancing Law Reform Act 2009 (No 27), s 132 - Relief granted (2011/11692P - Charleton J - 12/11/2012) [2012] IEHC 494

Edwards Lee & Co Ltd v NI Property Developments Ltd

Facts: The plaintiff was the tenant of a retail unit and unwittingly entered into an extension for 36 years of a 36 year lease by failing to serve a notice of surrender of tenancy within a window of between a year and six months prior to the expiry of that lease. The notice was served four days prior to the expiry of the original lease and was too late. The Court considered whether the relevant term of the lease was void by statute, whether equity could allow the notice to be served late and whether arrears of rent or mense rates were due to the defendant as landlord. The Court also considered the impact of the Land and Conveyancing law Reform Act 2009, which precluded upwards only rent reviews and its application to the lease explicitly providing for only upwards review and whether the tenancy arose pursuant to s. 16 of the Landlord and Tenant (Amendment) Act 1980.

Held by Charleton J. that in the result, the notice given by the plaintiff tenant to the defendant that it did not wish to exercise the option of a new 36 year lease on the same terms as the previous 36 year lease was valid. The notice did not disentitle the plaintiff tenant from statutory relief. There was little objection by either the plaintiff or defendant to an extension in the terms of the tenancy into another period. The case was about the cost of the tenancy and it was neither right nor fair for the passing of a date a generation after the lease was signed to establish rights in favour of the landlord commanding rents from another era. The notices under the Landlord and Tenant (Amendment) Act 1980 could be served. The Court would grant the appropriate declaration to the plaintiff as a matter of equity.

1

Mr. Justice Charleton delivered on the 12th day of November, 2012.

2

1 The plaintiff is part of the Dunnes Stores group of companies. The defendant operates the Northside Shopping Centre in Dublin. The plaintiff is the tenant of a retail unit in that shopping centre of which the defendant is landlord through succession in title. The plaintiff tenant has unwittingly entered into an extension for 36 years of a 36 year lease by failing to serve a notice of surrender of tenancy within a window of between a year and six months prior to the expiry of that lease. Such a notice was, in fact, served four days prior to the expiry of the original lease and was too late. At issue in this case is whether the relevant term of the lease is void by statute; whether equity can allow the notice to be served late by reason of time not being of the essence; and whether arrears of rent or mense rates are due to the defendant as landlord.

Background
3

2 The Northside Shopping Centre was developed in the 1970s. When the lease was first entered into in 1975 the rent reserved was £19,650 annually. There is no information as to by how much on the first rent review, six years later, the annual rent was increased. The usual term in leases from that period was to forbid any diminution in the rent on review. This lease has such a term. On the second six yearly rent review, in 1987, the rent had increased to £85,000; on the third, in 1993, the rent had increased to £125,000; then in 1999 to £175,000; and on the last relevant rent review, in 2005, the rent had become €336,840. Putting all sums into euros the increases are from €24,950 to €107,927 to €158,717 to €222.204 to €336,840, or an increase over 30 years of 1,250% or a multiplication of about 13.5. In 2005, at the last rent review, Dublin property prices, including retail letting, were at their height. Since then purchase price of property has dropped to about a third of its value for homes and retail rents have also been markedly affected. Many tenants have sought to escape from what once seemed to be wise bargains. No relief is available at law, however, to lower an agreed rent. A lease may be terminated by disclaimer by the liquidator of a corporation or repudiated under section 20 of the Company Law ( Amendment) Act 1990 by an examiner. In the latter case the landlord usually has the rights for voting purposes on the scheme of arrangement of an unsecured creditor. Neither liquidation of a company nor any power of an examiner can force a revision of the sum to be paid in rent where the corporation requires to retain the premises, as opposed to disclaiming or repudiating it. Upward only rent reviews, in respect of any lease entered into from 2009, are now subject to statutory reform. That reform arises from section 132 of the Land and Conveyancing Law Reform Act 2009. This section was commenced on the 28 th February, 2010, by the Land and Conveyancing Law Reform Act 2009 (Commencement) (Section 132) Order 2009 ( S.I. 471 of 2009) and provides as follows:

4

(1) This section applies to a lease of land to be used wholly or partly for the purpose of carrying on a business.

5

(2) Subsection (1) shall not apply where -

6

(a) the lease concerned, or

7

(b) an...

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5 cases
  • Friends First Managed Pension Funds Ltd v Smithwick
    • Ireland
    • High Court
    • 6 April 2017
    ...v. Safaryan [2009] EWCA Civ 303). Surrender cannot be brought about unilaterally. ( Edward Lee and Co. v. N1 Property Development Ltd. [2012] IEHC 494). It has often been said that its basis is estoppel (see Wallis v. Hand [1893] 2 CH 75; Foster v. Robinson [1951] 1 KB 149; Gibbs Mew Pl......
  • Friends First Managed Pension Funds Ltd v Smithwick
    • Ireland
    • Court of Appeal (Ireland)
    • 20 March 2019
    ...considered the jurisprudence, particularly the decision of Charleton J. in Edward Lee & Co. Limited v. N1 Property Development Limited [2012] 3 I.R. 201 where the learned judged had cited Harrison's ‘ Ejectments in Ireland’, published in 1903, where the author had considered the law on surr......
  • Dublin Port Company v Automation Transport Ltd
    • Ireland
    • High Court
    • 10 July 2019
    ... [1989] ILRM 452 and more particularly to the observations of Charleton J. in Edward Lee & Co. Ltd v. N1 Property Developments Ltd [2012] 3 IR 201. In the latter case, Charlton J. said at p. 209:- ‘At issue here is whether there has been a scheme to effectively force the tenant to surrende......
  • Knockacummer Wind Farm Ltd v Cremins
    • Ireland
    • Court of Appeal (Ireland)
    • 30 July 2018
    ...binding contract for the sale of the land.’ 154 As was stated by Charleton J. in Edward Lee & Co. Ltd. v. N1 Property Developments Ltd. [2012] IEHC 494: ‘Time will not be considered to be of the essence unless: (1) the parties expressly stipulate that conditions as to time must be strictly ......
  • Request a trial to view additional results

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