Egerton and Another v Edgeform Metals Ltd and Another
| Jurisdiction | Ireland |
| Judge | Mr. Justice Binchy |
| Judgment Date | 17 May 2023 |
| Neutral Citation | [2023] IECA 119 |
| Docket Number | Court of Appeal Number: 2022 141 |
| Court | Court of Appeal (Ireland) |
[2023] IECA 119
Whelan J.
Faherty J.
Binchy J.
Court of Appeal Number: 2022 141
THE COURT OF APPEAL — UNAPPROVED
Banking and Finance- Appeal of refused application for summary judgement in liquidated amount- Rent of Property - Evaluating assertion of agreements for rent reduction - Wills and Probate
Facts: On 17th May 2023, the appellant appealed a High Court decision made 12th May 2022 to refuse the application for summary judgment in a liquidated amount (directing that the proceedings be remitted for plenary hearing). Prior to his death in April 2011, Mr. Brian Egerton sold his shareholding in the first named defendant company (“the Company”) to a company called Waaigeest Ltd, a company with which Mr. Boylan had a close connection (potentially ownership and control). At the same time, the Company and Mr. Egerton entered into an indenture of a lease, whereby the landlord (Mr Egerton) demised unto the Company commercial premises for four years. On the same date, the second named defendant, Mr. Boylan, executed a guarantee in respect of the liabilities of the Company under the Lease. The Lease was amended to include the adjoining premises at no additional rent by the widowed Mrs Egerton in 2011; Following her death, the plaintiffs, the daughters of Mr and Mrs Egerton were registered full owners of the premises and tenants. Proceedings were issued on 6th October 2015, when it was claimed that the arrears of rent owned by the Company as of that date amounted to €49,280.16 whilst from 1st May 2013 the Company paid only €1,000 per month. On 13th June 2019, the appellants caused the issue of a motion seeking judgment against the defendants, pursuant to O.37, r.4 of the Rules of the Superior Courts, in the sum of €147,021.71 in respect of arrears of rent. In response, Mr. Boylan avers that he made a number of agreements with Mr. Egerton surrounding the sale of the Company, most significantly that Egerton agreed to guarantee a number of the company’s debtors in the event they failed to make payment as agreed (these included Barbary Construction Limited, Robert Copeland & Sons Limited, and Edgeline Metal Roofing Limited). On 12th May 2022, Barr J. reviewed the affidavit evidence of the party, concluding that the defendants raised an arguable defence and finding that there is evidence of an agreement that the Company would pay 50% of the annual rent until such time as the outstanding debts due from Copeland and Barberry had been paid. In their Grounds of Appeal, the appellant drew attention to the lack of evidence of alleged rent abatement, and the lack of defence in the non-payment of rent prior to the alleged abatement of rent. They submitted that for an estoppel to arise, it should be established that there was an unambiguous promise that a rent of €1,000 (inclusive of VAT) per month would be accepted.
Judgment: The judge held that the arguments of the respondents that they could defend the proceedings on the basis of a claim to set off or rent or on the basis of a promissory estoppel are nothing more than a mirage. The court claimed that the trial judge had fallen into error in concluding that the respondents had established a basis it could be argued that there was an agreement between the parties. It was asserted that the set-off defence offered by the respondents is not credible, in regard to the documents that were completed at the time of the sale and the purchase of the Company in 2010. Apart from the inconsistency of those documents, the judge found it amounted to no more than a mere assertion (by Mr. Boylan) that an agreement was made. Attention was drawn to the decision of Clark J. in McGrath v O’Driscoll & ors [2007] 1 ILRM 203, which made conspicuous that an assertion in of itself is an insufficient basis upon which to resist an application for summary judgement. Conclusively, there was no basis upon which those proceedings should be sent forward for plenary hearing for the purpose of enabling the respondents advance of defence. As to the second respondent, the appellants accepted that the guarantee of the rent provided by the appellant in respect of the rent payable by the Company may not continue beyond the term of Lease, which expired 30th September 2014.
Conclusion: The judge concluded giving judgement against the respondents jointly in the sum of €32,199.77, and, separately, judgement against the Company only in the sum of €177,503.52, i.e., €209.703.29 less €32,199.77. The appellant’s claim for the balance of the claimed against Mr. Boylan was sent forward to a plenary hearing.
JUDGMENT of Mr. Justice Binchy delivered on the 17 th day of May 2023
. This is a judgment in an appeal from a decision of the High Court (Barr J.) of 12 th May 2022, whereby the trial judge refused the application of the appellants for summary judgment in a liquidated amount, and directed that the proceedings be remitted for plenary hearing.
. The appellants are the successors in title to Mr. Brian Egerton who died on 7 th April 2011. On 3 rd February 2010, Mr. Egerton sold his shareholding in the first named defendant (“the Company”) to a company called Waaigeest Ltd (“Waaigeest”), which it appears may be a company owned or controlled by the second named respondent, Mr. Boylan, and while this was not clarified, it is, beyond any doubt, a company with which Mr. Boylan has a close connection. This transaction was agreed and implemented through a share sale and purchase agreement of the same date. Also on the same date, as part and parcel of the same transaction, Mr. Egerton and the Company entered into an indenture of lease (the “Lease”) whereby Mr. Egerton, as landlord, demised unto the Company a commercial premises known as Unit 2, Balbriggan Business Park, Balbriggan, Co. Dublin, for the term of four years and nine months from 1 st January 2010, at the yearly rent of €20,000 per annum, exclusive of VAT, but with the obligation on the Company to discharge any VAT payable arising out of the lease. On the same date, the second named defendant, Mr. Boylan, executed a guarantee in respect of the liabilities of the Company under the Lease.
. The Lease was amended in writing on 14 th July 2011, on which date, Ms. Elizabeth Egerton, widow and executrix in the Estate of Mr. Egerton, agreed to the inclusion in the Lease of the adjoining premises at no additional rent, also owned by the late Mr. Egerton, being Unit No. 1 Balbriggan Business Park. Mrs Egerton died soon afterwards, and following upon her death, the plaintiffs, being the daughters of Mr. and Mrs. Egerton, were registered as full owners of both premises, as tenants in common in equal shares. Both premises together comprise the hereditaments registered in Folio 93107L County Dublin.
. There is no disagreement about any of the foregoing. Nor is there any dispute that upon the expiration of the Lease on 30 th September 2014, the respondents continued in occupation of both premises, and that a periodic tenancy arose by implication thereafter.
. The Company paid the rent in full up to 30 th September 2012, but thereafter began to fall into arrears. It is not in dispute that no rent at all was paid for seven months, nor is it in dispute that from 1 st May 2013, when the Company resumed making payments, it paid only €1,000 per month, inclusive of VAT.
. The appellants caused these proceedings to be issued on 6 th October 2015, by which it was claimed at that time that the arrears of rent owned by the Company as of that date amounted to €49,280.16. The same amount was also claimed as against the second named defendant, as guarantor, and interest at the rate of 20% on the arrears of rent due was also claimed from the date the rent fell into arrears until payment, in accordance with the terms of the Lease. The summons also claimed any further arrears accruing up to the date of judgment, and interest thereon, and also sought an order for possession of the units on the ground that the amount due was in excess of one year's rent.
. There were some difficulties with service of the proceedings, and following upon an order of substituted service made by Baker J., in the High Court, on 18 th January 2016, the proceedings were served and an appearance was entered on behalf of the defendants on 26 th January 2016. No further steps in the proceedings were taken until 19 th June 2018, when a notice of intention to proceed was served by the appellants. On 13 th June 2019, the appellants caused the issue of a motion seeking judgment against the defendants, pursuant to O.37, r.4 of the Rules of the Superior Courts, in the sum of €147,021.71 in respect of arrears of rent, together with the VAT payable thereon and interest on the arrears of rent only at the rate of 20% per annum. This application was grounded upon the affidavit of Ms. Andrea Tighe, the second named appellant.
. Mr. Boylan swore a replying affidavit on behalf of both respondents on 15 th April 2021. He avers that in 2010, Mr. Egerton was not in the best of health and that he wished to sell the Company, and he, Mr. Boylan was eager to purchase it. However, he avers, at the time, the construction industry generally was “on its knees” and the Company had a number of significant debtors from whom payment seemed unlikely, if not entirely irrecoverable.
. Mr. Boylan avers that a price was agreed, but at the time it was necessary for him to borrow the sum of €50,000 from Mr. Egerton on a very short term basis, and that that sum was repaid on 19 th February 2010 by means of a personal cheque from Mr. Boylan to Mr. Egerton. Although not referred to by Mr. Boylan, it is apparent from the exhibits to an affidavit sworn in reply to his affidavit by the second named appellant,...
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