Myles Kirby v Express Bus Ltd
| Jurisdiction | Ireland |
| Judge | Mr. Justice Allen |
| Judgment Date | 29 October 2021 |
| Neutral Citation | [2021] IEHC 680 |
| Docket Number | [2019 No. 415 COS] |
| Year | 2021 |
| Court | High Court |
In the Matter of Ethafil Limited (In Voluntary Liquidation)
And in the Matter of an Application Pursuant to Section 631 of the Companies Act 2014
In the Matter of Ethafil Limited (In Voluntary Liquidation)
And in the Matter of an Application Pursuant to Section 678 of the Companies Act 2014
[2021] IEHC 680
[2019 No. 415 COS]
[2020 No. 228 COS]
THE HIGH COURT
JUDGMENT of Mr. Justice Allen delivered on the 29th day of October, 2021
This judgment is supplemental to a judgment I delivered on 14th May, 2021 [2021] IEHC 334 and should be read in conjunction with that earlier judgment.
The parties having been afforded time to consider my judgment, the matter was listed for argument as to how the questions posed by the liquidator in his application for directions should be answered, and what order should be made as to the costs of the motion.
This judgment also deals with an application by EBL for leave to issue proceedings against the Company. EBL's motion was issued before the liquidator's motion was heard but was stood over to await the outcome of the motion for directions and following delivery of my judgment was recast. I will come to it in due course.
It will be recalled that by his notice of motion issued on 7th November, 2019 Mr. Kirby asked the court to determine four questions, namely:-
-
1. Whether EBL is in lawful occupation of the property in Folio 51988F (or any part thereof);
-
2. Whether EBL holds a valid and subsisting option to purchase the property (or any part thereof) pursuant to the agreement of 11th November, 2015;
-
3. If the answer to question 2 is in the affirmative, whether EBL has validly exercised an option under the 2015 agreement;
-
4. If the answer to question 2 is in the affirmative, whether the liquidator is entitled to disclaim the 2015 agreement pursuant to s. 615 of the Companies Act, 2014.
As noted in my earlier judgment the questions as so formulated did not precisely identify the issues between the parties.
There was no issue as to the fact that EBL was in occupation of that part of the lands in Folio 51988F identified as Lot 2, and no issue as to whether it was in occupation of any other part of the lands. The question, then, is whether the occupation by EBL of Lot 2 is lawful.
As explained in my earlier judgment, at the time the motion issued there was no question that EBL held a valid and subsisting option. Rather the true issue to which the second question was directed was whether the agreement of 11th November, 2015 created a valid option by which EBL was entitled, in the first instance, to acquire Lot 2. The agreement contemplated an option which might be exercised within the first twelve months of the term of a five year lease. If, correctly construed, the 2015 agreement created an option, that option if not exercised in time would have lapsed, and if validly exercised would have given rise to a contract for the sale and purchase of Lot 2.
Mr. Crean, for EBL, argued, correctly, that question 2 was not really the right question but that the answer to the question as formulated should be “No”. While strictly speaking Mr. Crean is correct, I prefer the narrative answer suggested by Mr. McCarthy that the agreement of 11th November, 2015 created a valid option but that the option was conditional on the rent not being three months in arrears and lapsed because the rent was not paid.
It was effectively agreed that the findings in my earlier judgement that the option was conditional upon payment of the new rent and that that rent had not been paid meant that the purported exercise by EBL of the option was invalid, and so the answer to question 3 should be “ No”.
As I observed in my earlier judgment, the proposition that the liquidator might be entitled to disclaim the 2015 agreement was not argued. A valid exercise of the option created by the 2015 agreement would have given rise to a contract for the sale and purchase of Lot 2 and it was not suggested that any such contract might have been disclaimed. I think that the formal answer should be that the question was not argued.
As to whether the occupation by EBL of Lot 2 is lawful, Mr. McCarthy argued that the answer was simply “ No”. The effect of the findings of the court were that EBL was not, as was its primary submission, a purchaser in possession on foot of a contract for sale. Neither, as had been EBL's fall-back position, could it be entitled to a new lease at a rent of €35,000 per annum. EBL did not pay the rent contemplated by the 2015 agreement, bar the €25,000 paid on 14th June, 2016.
Mr. Crean submits that the answer to question 1, or at least the answer to the question when it was asked, must be “ Yes”. EBL has flagged its intention to appeal – which, of course, it is perfectly entitled to do – but counsel correctly acknowledges that the question must be answered according to the findings of the High Court. On the findings of the court, it is acknowledged that EBL is not a purchaser in possession, nor can it be entitled to a new lease from the expiration of the term of the lease of 15th May, 2012, nor can it be entitled to remain in possession pending the determination of any claim to such a lease. Since the agreement of 11th November, 2015 provided for a renunciation of any rights that might otherwise have arisen on the expiration of the five year lease provided for, EBL does not contend for any right by reference to that lease.
Citing para. 4.34 of Wylie “ Irish Landlord and Tenant Law” (3rd Edition) Mr. Crean submits that EBL is a tenant at sufferance. The passage relied upon is:-
“D. Tenancy at Sufferance
1. Nature
[4.34]
A tenancy at, or on, sufferance is a peculiar type of ‘tenancy’ which arises where a tenant holds over, after expiry of his existing valid tenancy, without the assent or dissent of the landlord and without statutory right. The nature of such a tenancy was considered by the old Court of Appeal in Holland v Chambers (No 1), [1894] 2 I.R. 442 where the question at issue was whether former weekly tenants were entitled to the franchise. They had been served with notices to quit, but continued in possession after expiry of the period of notice and were later served with summonses for possession. FitzGibbon L.J. stated:
‘The lowest form of tenancy is tenancy on sufferance; and I take it as the minimum requisite for the franchise. Tenancy on sufferance is thus defined by Woodfall (p 230): ‘A tenant on sufferance is one who has entered by lawful demise or title, and after that has ceased, wrongfully continues in possession, without assent or dissent of the person next entitled.’ This definition excludes a person who wrongfully continues in possession notwithstanding the dissent of the person entitled. The summons for possession served on each of these claimants was at least a formal declaration of such dissent; it made their possession thenceforth wrongful, and turned them from tenants into trespassers.’
Such a tenancy must, therefore, be distinguished from a tenancy at will, which may also arise as a result of a contractual tenant overholding, because a tenant at sufferance does not occupy by the ‘will’ or with the ‘agreement’ of the landlord. A fortiori it must be distinguished from a periodic tenancy which may arise by presumption in favour of an overholding tenant. Thus a tenant at sufferance has neither tenure nor any estate in the land capable of disposition. There is no relation of landlord and tenant between him and the landlord. This view of his position was confirmed by the Land and Conveyancing Law Reform Act 2009, which excludes such a tenancy from the definition 265 in s 3 of that Act. He is only called a ‘tenant’ because his original occupation of the land was under a contract of tenancy and in order, as the Holland case illustrates, to distinguish him from a trespasser in the strict sense. Since such a tenancy is confined to cases of contractual tenants overholding its incidence may have been reduced in modern times by statutory protection conferred on such tenants.”
Wylie, at para. 4.39, suggests that the concept of tenancy at sufferance appears to have been devised to protect the landlord from the old doctrine of adverse possession which has long since been abolished. I am bound to say that I struggle with the notion that a person who “ wrongfully continues in possession” might somehow be entitled to a declaration of dissent, or how such a declaration of dissent, whether by a summons for possession or otherwise, might make thenceforth wrongful what is already wrongful. In any event, taking EBL's argument at its height, a tenancy at sufferance may be determined by a formal declaration of dissent. Whatever may have been the position prior to the appointment of Mr. Kirby as liquidator, it was made absolutely clear thereafter that the Company took issue with the fact that EBL continued in possession of the property without paying anything and without having paid anything for the previous three years. If, at the time of Mr. Kirby's appointment, there was some doubt as to the basis on which EBL came to be and was continuing in occupation, it was clear that the Company, by the liquidator, wanted EBL out. While the notice of motion identified an issue as to whether EBL's occupation was lawful, the liquidator's unambiguous position was that on any analysis of what he could see from the Company's records and correspondence it was unlawful, and he went on to ask for such ancillary orders or directions as might be necessary to secure vacant possession.
With all due respect to Mr. Crean's indefatigable ingenuity, it would be wholly artificial to contemplate answering the...
To continue reading
Request your trial
-
Ethafil Ltd (in Voluntary Liquidation) v Express Bus Ltd
...defendant attempted to exercise the option. 8 . In a later and supplemental judgment dated 29 October 2021, Kirby v Express Bus Limited [2021] IEHC 680, Allen J stated, inter alia, that by failing to validly exercise the option it held, the defendant was consequently not in lawful occupatio......