Maldua Ltd v Walton

• Jurisdiction: Ireland
• Judge: Mr Justice Kennedy
• Judgment Date: 16 August 2023
• Neutral Citation: [2023] IEHC 576
• Court: High Court
• Docket Number: Record No. 2023/2273P

Between

Maldua Limited

Plaintiff

and

Naomi Walton

Defendant

[2023] IEHC 576

Record No. 2023/2273P

THE HIGH COURT

Injunctions – Vacation of property – Undertakings – Plaintiff seeking interim injunctions directing the defendant to vacate a property pending trial – Whether the defendant had breached the agreement between the parties

Facts: The plaintiff, Maldua Ltd, owned and the defendant, Ms Walton, occupied a guesthouse on Galway Road, Clifden, Co Galway (the Property). The Plaintiff said that: (a) the parties entered into an agreement whereby the plaintiff licensed the Property to the defendant to permit her to operate it as a guest house; (b) the defendant carried out extensive unauthorised works which had severely damaged the Property, including structural and electrical works which ultimately caused a fire; (c) the works meant that the Property required new planning permission and fire safety certificates, which had not been obtained by the defendant; (d) the licence had terminated but the defendant refused to vacate the Property; (e) her unlawful actions had violated the plaintiff’s proprietary rights, caused serious damage to the Property and continued to pose a risk of further damage and fire; and (f) the plaintiff required interlocutory relief pending trial to protect the Property and its proprietary rights. The defendant argued that the agreement was a lease, not a licence. She accepted that she was using the Property to provide accommodation for Ukrainian refugees. She did not suggest that the works were authorised by the plaintiff but explained that the modifications were required to deal with urgently needed repairs and to facilitate the urgent use of the Property for refugee accommodation. She seemed to regard at least some of those works as enhancements and also said that such modifications could be reversed without detrimental impact to the Property. She said that the work was fully certified from a fire safety perspective and that the Property was fully insured. She also said that she took up occupation and invested substantial sums in the Property on the basis that she was to be permitted to buy the Property. The plaintiff’s notice of motion, dated 17 May 2023, sought interim injunctions pending determination of the proceedings directing the defendant, her servants or agents to vacate the Property and restraining the defendant from accessing the Property or interfering with the plaintiff’s enjoyment of the Property pending trial.

Held by the High Court (Kennedy J) that the plaintiff had made out a strong case that the agreement was a licence and that the defendant had breached it by her actions (since authorisation should clearly have been sought for many of the alterations irrespective of whether the agreement was characterised as a licence or a lease). Kennedy J found that the crucial issue was accordingly the balance of convenience. Kennedy J was satisfied that certain issues could be adequately addressed by an award of damages if the plaintiff ultimately succeeded at trial, but it was necessary to ensure that there were no further breaches of the agreement (without prejudice to the lease/licence issue) and, most importantly, it was necessary to ensure that the Property was fully certified in terms of fire safety and was otherwise being operated in compliance with planning and other applicable regulations. The defendant provided undertakings to the Court to deal with the range of issues identified by the parties, obviating the need for immediate injunctive relief. Accordingly, the application was resolved on the basis of the agreed undertakings together with agreed directions intended to progress the matter towards trial as quickly as possible.

Kennedy J, while encouraging the parties to engage with each other in the first instance, granted both parties liberty to apply if any further issue arose or if there was any issue with the undertakings, particularly in respect of the need for fire safety, regulatory and planning compliance.

Application resolved.

JUDGMENT of Mr Justice Kennedy delivered on 16 ^th day of August 2023

Summary

1 . In these proceedings, the Plaintiff sought interim injunctions directing the Defendant to vacate a Property pending trial on the basis that the Defendant had breached the agreement between them (which it characterised as a licence) by changing its use (from that of guest house to refugee accommodation for a larger number of people) and by carrying out extensive unauthorised modifications to the Property without authorisation and without complying with fire safety, planning and other applicable regulations. While the final determination of these issues will be matters for full trial, the Court was satisfied that the Plaintiff had made out a strong case that the agreement was a licence and that the Defendant had breached it by her actions (since authorisation should clearly have been sought for many of the alterations irrespective of whether the agreement was characterised as a licence or a lease).

2 . The crucial issue was accordingly the balance of convenience. The Court was satisfied that certain issues could be adequately addressed by an award of damages if the Plaintiff ultimately succeeded at trial, but it was necessary to ensure that there were no further breaches of the agreement (without prejudice to the lease/licence issue) and, most importantly, it was necessary to ensure that the Property was fully certified in terms of fire safety and was otherwise being operated in compliance with planning and other applicable regulations. The Defendant provided undertakings to the Court to deal with the range of issues identified by the parties, obviating the need for immediate injunctive relief. Accordingly, the application was resolved on the basis of the agreed undertakings together with agreed directions intended to progress the matter towards trial as quickly as possible. While encouraging the parties to engage with each other in the first instance, the Court granted both parties liberty to apply if any further issue arose or if there was any issue with the undertakings, particularly in respect of the need for fire safety, regulatory and planning compliance. This judgment outlines the detailed reasons for the Court's decision.

Background

3 . These proceedings concern a guesthouse on Galway Road, Clifden, Co Galway (“the Property”) which is owned by the Plaintiff and occupied by the Defendant, a businessperson. In short, the Plaintiff says that:

• a) The parties entered into an agreement whereby the Plaintiff licensed the Property to the Defendant to permit her to operate it as a guest house;

• b) The Defendant carried out extensive unauthorised works which have severely damaged the Property, including structural and electrical works which ultimately caused a fire;

• c) The works meant that the Property required new planning permission and fire safety certificates, which have not been obtained by the Defendant.

• d) The licence has terminated but the Defendant refuses to vacate the Property;

• e) Her unlawful actions have violated the Plaintiff's proprietary rights, caused serious damage to the Property and continue to pose a risk of further damage and fire;

• f) The Plaintiff requires interlocutory relief pending trial to protect the Property and its proprietary rights;

4 . In brief, the Defendant argues that the agreement is a lease, not a licence. She accepts that she is using the Property to provide accommodation for Ukrainian refugees. She does not suggest that the works were authorised by the Plaintiff but explains that the modifications were required to deal with urgently needed repairs and to facilitate the urgent use of the Property for refugee accommodation. She seems to regard at least some of those works as enhancements and also says that such modifications can be reversed without detrimental impact to the Property. She says that the work is fully certified from a fire safety perspective and that the Property is fully insured. She also says that she took up occupation and invested substantial sums in the Property on the basis that she was to be permitted to buy the Property. 5. There has been a fire at the Property. Fortunately, nobody was injured and damage to property was limited. Both parties blame the other for the circumstances which led to the fire.

The Current Application

6 . The Plaintiff's notice of motion, dated 17 May 2023, seeks interim injunctions pending determination of proceedings directing the Defendant, her servants or agents to vacate the Property and restraining Defendants from accessing the Property or interfering with Plaintiff's enjoyment of the Property pending trial.

The Plaintiff's Case

7 . Whereas the Defendant very much relies on the advertising and precontractual negotiation, including a signed Heads of Terms signed on behalf of both parties, which predated the formal signed agreement, the Plaintiff essentially relies on the terms of the final document and argues that all such evidence of pre-contractual advertising, representation or negotiations is inadmissible to determine the intentions of the contracting parties. The Plaintiff's affidavits aver that:

• a. The Plaintiff owns Maldua House, a Clifden guesthouse, and entered into a licence agreement with the Defendant, a businessperson, to allow her to operate the guesthouse business from it.

• b. The Defendant has carried out extensive works in breach of the agreement, including structural and electrical works which have resulted in a fire and severely damaged the Property. Mandatory fire safety certification and planning permissions have not been maintained or updated as required following such work.

• c. The Licence has terminated but the Defendant has refused to vacate. The Defendant's actions violate the Plaintiff's proprietary rights, have caused serious damage and pose a serious...