K.W. Investment Funds ICAV v Lorgan Leisure Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Denis McDonald
• Judgment Date: 12 March 2020
• Neutral Citation: [2020] IEHC 132
• Docket Number: [2019 No. 9812 P.]
• Court: High Court
• Date: 12 March 2020

BETWEEN

K.W. INVESTMENT FUNDS ICAV

PLAINTIFF

AND

LORGAN LEISURE LIMITED

DEFENDANT

[2020] IEHC 132

Denis McDonald J.

[2019 No. 9812 P.]

THE HIGH COURT

COMMERCIAL

Interlocutory injunction – Jurisdiction – Vacant possession – Plaintiff seeking an interlocutory injunction – Whether the plaintiff’s application had been properly brought in the High Court

Facts: The plaintiff, K.W. Investment Funds ICAV, in an interlocutory motion before the High Court, sought a mandatory order directing the defendant, Lorgan Leisure Ltd, to deliver up vacant possession of the premises known as Leisureplex, Stillorgan, County Dublin. The plaintiff claimed to be entitled to immediate possession of the premises in circumstances where the plaintiff had exercised a break option in the Short Term Business Letting Agreement between the parties dated 26th February, 2019 by giving three months’ notice to the defendant on 10th October, 2019 expiring on 10th January, 2020. The plaintiff also claimed, on a number of grounds, that the defendant had no right to a new tenancy in the premises under Part II of the Landlord and Tenant (Amendment) Act 1980. In the first place, the plaintiff relied on a written renunciation of rights executed by the defendant on 26th February, 2019. Secondly, the plaintiff maintained that the defendant did not have 20 years’ occupation of the premises as required by s. 13 (1) (b) of the 1980 Act. Thirdly, the plaintiff contended that the defendant was estopped from claiming a new tenancy under Part II of the 1980 Act. Fourthly, in reliance on the fact that the plaintiff had the benefit of a planning permission for a development on the site of the premises (which involved the demolition of the premises) the plaintiff said that, as a consequence of s. 17 (2) (a) (i) of the 1980 Act, the defendant would not be entitled to a new tenancy in the premises.

Held by McDonald J that the plaintiff had not established that an injustice would be done to it in the event that the court declined to accept jurisdiction in this case and instead directed that the matter should proceed in the usual way in the Circuit Court. He had not been persuaded by the plaintiff that this was a sufficiently urgent case to justify the maintenance of the proceedings in the High Court. Similarly, he had not been persuaded by the plaintiff that the defendant had little or no prospect of success in its application under Part II of the 1980 Act. In those circumstances, it seems to him that the only course that he could properly take was to decline jurisdiction to entertain the application and instead to dismiss it. In those circumstances, having regard to the manner in which the Oireachtas had chosen to confer jurisdiction on the Circuit Court, it would not be appropriate, in his view, for the High Court to intervene in this case. Accordingly, he dismissed the plaintiff’s application on the basis that it had not been properly brought in the High Court. In the circumstances, he held that it was unnecessary to consider the application for an interlocutory injunction.

McDonald J held that the plaintiff’s motion for an interlocutory injunction must be dismissed.

Motion dismissed.

JUDGMENT of Mr. Justice Denis McDonald delivered on 13 March, 2020

The application before the court

1 In the interlocutory motion before the court, the plaintiff seeks a mandatory order directing the defendant to deliver up vacant possession of the premises known as Leisureplex, Stillorgan, County Dublin (“the premises”). The plaintiff claims to be entitled to immediate possession of the premises in circumstances where the plaintiff has exercised a break option in the Short Term Business Letting Agreement between the parties dated 26th February, 2019 (“the 2019 agreement”) by giving three months' notice to the defendant on 10th October, 2019 expiring on 10th January, 2020. The plaintiff also claims, on a number of grounds, that the defendant has no right to a new tenancy in the premises under Part II of the Landlord and Tenant (Amendment) Act, 1980 (“the 1980 Act”). In the first place, the plaintiff relies on a written renunciation of rights executed by the defendant on 26th February, 2019. Secondly, the plaintiff maintains that the defendant does not have 20 years' occupation of the premises as required by s. 13 (1) (b) of the 1980 Act. Thirdly, the plaintiff contends that the defendant is estopped from claiming a new tenancy under Part II of the 1980 Act. Fourthly, in reliance on the fact that the plaintiff has the benefit of a planning permission for a development on the site of the premises (which involves the demolition of the premises) the plaintiff says that, as a consequence of s. 17 (2) (a) (i) of the 1980 Act (addressed further in para. 28 below), the defendant will not be entitled to a new tenancy in the premises.

2 The defendant contends that the 2019 renunciation is restricted to its right to a new tenancy under s. 13 (1) (a) of the 1980 Act based on five years' business user. However, the defendant claims that the renunciation does not extend to its right to a new tenancy under s. 13 (1) (b) of the 1980 Act based on 20 years' continuous occupation. Prior to the commencement of these proceedings on 19th December, 2019 the defendant, on 12th December, 2019, served a notice of intention to claim relief under s. 20 of the 1980 Act. In that notice, the defendant intimated an intention to claim a new tenancy under Part II of the 1980 Act or, in the alternative, compensation for disturbance. The notice claimed that the premises has been continuously in the occupation of the defendant or its predecessors in title for a period of more than 20 years. Subsequently, on 9th January, 2020 the defendant issued a Landlord and Tenant Civil Bill in the Circuit Court seeking an order granting a new tenancy in the premises on terms to be fixed by the Circuit Court under s. 18 of the 1980 Act. In the alternative, the Civil Bill claims compensation for disturbance.

3 In circumstances where Part II of the 1980 Act confers jurisdiction on the Circuit Court to hear and determine the claim for a new tenancy, it was strongly argued on behalf of the defendant that the plaintiff's application for an interlocutory order for possession is an “ill-conceived attempt to circumvent the entire statutory scheme governing landlord and tenant relations” and that there is no authority to support what counsel for the defendant described as the “radical proposition” advanced on behalf of the plaintiff that a commercial tenant, who is not in breach of the terms of the tenancy, with a proper claim to renewal rights (or compensation in lieu) can be denied the right to apply for relief from the Circuit Court under the 1980 Act through the mechanism of an interlocutory application mounted by the plaintiff to the High Court. In short, the defendant argues that the Circuit Court is the appropriate forum in which to resolve the present dispute and that the application for an interlocutory injunction should not be entertained.

4 It will, accordingly, be necessary to consider whether it is permissible for the High Court to intervene in this case notwithstanding the existence of the Circuit Court proceedings. If it is appropriate to intervene, it will then be necessary to consider whether the plaintiff has demonstrated that it has a strong case sufficient to warrant the grant, at an interlocutory stage, of a mandatory order for possession. If the plaintiff satisfies that hurdle, it will be necessary to consider whether the balance of convenience lies in favour of the grant of the order sought or whether the balance of convenience favours the status quo such that the defendant should be entitled to remain in possession of the premises pending the determination of these proceedings. Having regard to the case law discussed below, it may also be necessary to consider whether, even if the plaintiff is entitled to a mandatory order, a stay should be placed on that order pending the determination of the proceedings commenced by the defendant in the Circuit Court. Before doing so, it is necessary, in the first instance, to describe the underlying facts in more detail and also to outline the respective positions taken by the parties.

Relevant facts

5 Although the premises are currently described as Leisureplex, they were previously well known as the Stillorgan Bowl which was the name of the facility when it first opened in 1963. In addition to traditional ten pin bowling, the premises also provide facilities for snooker, pool, a Quasar games room, a children's adventure play area and a number of amusement machines. The facility is used by a number of clubs and community groups including several Special Olympics clubs. The defendant currently employs 55 staff at the premises. According to the affidavit of Ciaran Butler sworn on behalf of the defendant on 21st January, 2010, several of the staff employed at the premises have never worked anywhere else.

6 The facility was originally developed by a company called Ten Pin Bowling Company of Ireland (“Ten Pin Bowling”) which was unconnected with the defendant. In 1995 there was a corporate reorganisation under which a new company known as Amesview Ltd (“Amesview”) became a tenant of the property and a twenty-year lease dated 26th February, 1996 (“the 20-year lease”) was executed by a number of parties including Amesview and Ten Pin Bowling. Under the 20-year lease, the relevant term commenced on 29th December, 1995.

7 Not long after the corporate reorganisation described above, a company called Entertainment Enterprises Ireland Ltd (“ EEI”) purchased all of the shares in Ten Pin Bowling, Amesview and in another corporate entity which was also a party to the 20-year lease. Thereafter, there were a number of assignments of the tenant's interest to different companies within the EEI group but ultimately on 8th August,...