OHS Ltd v Green Property Company Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Lynch
• Judgment Date: 09 January 1986
• Neutral Citation: 1986 WJSC-HC 1317
• Docket Number: [1985 No. 1417],Record No. 1417/1985
• Court: High Court
• Date: 09 January 1986

1986 WJSC-HC 1317

THE HIGH COURT

Record No. 1417/1985

O H S LTD v. GREEN PROPERTY CO LTD

DUBLIN CIRCUIT

COUNTY OF THE CITY OF DUBLIN

BETWEEN

O.H.S. LIMITED

PLAINTIFF/RESPONDENT

AND

GREEN PROPERTY COMPANY LIMITED

DEFENDANT/APPELLANT

Citations:

LANDLORD & TENANT (AMDT) ACT 1980 S67

Synopsis:

LANDLORD AND TENANT

Covenant

User - Restriction - Change of use - Lessor refusing consent to proposed change - Whether refusal reasonable - Demised premises being unit in shopping centre - Lessee restricted to business as victualler and fruit, fish and vegetable merchant - Identical business started by supermarket in shopping centre - Lessee's business becoming uneconomic - Building society willing to take assignment of lease - Lessee seeking lessor's consent to proposed change in use of premises - Sufficient number of financial institutions already holding units in centre - Success of centre affected by number of active commercial traders conducting business as holders of units in centre - Shopping centre financed and constructed by lessor - Held that lessor's refusal not unreasonable - Landlord and Tenant (Amendment) Act, 1980, s.67 - (Ct. App. - Lynch J. - 9/1/86) - [1986] IR 39; [1986] ILRM 451

|O.H.S. Ltd. v. Green Property Co.|

WORDS AND PHRASES

"Unreasonably withheld"

Landlord and tenant - Covenant - User - Restriction - Change of use - Lessor refusing consent to proposed change - Whether refusal reasonable - ~See~ Landlord and Tenant, covenant - (Ct. App. - Lynch J. - 9/1/86) - [1986] IR 451; [1986] ILRM 451

|O.H.S. Ltd. v. Green Property Co.|

1 Judgment of Mr. Justice Lynchdelivered the 9th day of January 1986.

2 This is an appeal by the defendant (hereinafter called the landlord) against an Order dated the 1st of July, 1985 of the Circuit Court declaring that the landlord's withholding of its consent to a change of user of certain premises held by the plaintiff (hereinafter called the tenant) was unreasonable and also against certain consequentialorders.

3 The premises in question are known as unit number 31 in the Northside Shopping Centre. These premises are landlord's premises in the sense that they were erected by and at the expense of the landlord and not of any tenant from the landlord. The premises were demised by a lease dated the 30th of September, 1975 from the landlord to one David Rafter for a term of 31 years from the 1st of October, 1974 at the then rent of£1,500 per year. There is a proviso in the lease for a review of the rent from time to time and at the time when the tenant became tenant of the premises by purchase thereof, the rent payable was £3,450per annum with another review falling due in September 1984.

4 Covenant No. 3.08 provided that the tenant was:

"To use the demised premises for the purposes of businesses of vitualler, fruit, fish and vegetable merchants and including the sale of frozen food and not without the lessor's consent in writing to use or permit or suffer the same or any part thereof to be used for any other purpose and not to permit any business to be operated in or from the demised premises by any concessionaire or licensee without the prior written consent of the lessor".

5 By an assignment dated the 22nd day of June, 1981 the then tenants of the premises under the said lease assigned their interest to the tenant in consideration of the payment of a sum of £15,000. The assignment was subject to the foregoing covenant as to user and no difficulty arose regarding that covenant on the occasion of that assignment because the premises were being used as a fruit and vegetable store by the predecessors in title of the tenant and were bought by the tenant with the intention of using them for the same purposes.

6 Following on the purchase by the tenant of the lessee's interest in the lease of the 30th of September 1975 the tenant commenced to trade in the premises as a fruit and vegetable merchant and did so successfully for a year and a half or two years. However, early in 1982 Messrs. Dunnes opened a supermarket premises very near to the tenant's unit number 31 and in fact gaining access to the main trading portion of their supermarket premises through units 27 and 28. More often than not it is advantageous to the tenant of a unit in a shopping centre to be in close proximity to a major supermarket as that brings into the vicinity of his shop a larger number of customers thanwould otherwise be the case. However, in this case Messrs. Dunnes supermarket included fruit and vegetable outlets and the tenant found that it was unable to compete with Dunnes supermarket and at best was trading on a break even basis. That being so the tenant sought to sell its interest in the premises under the lease of 1975 but could obtain no bid or offer for the premises for sale as a fruit and vegetable shop. The tenant, however, obtained an offer from a building society of£35,000 for the assignment to it of the tenant's interest in the premises under the said lease subject to the landlord's consent to a change of user of the premises to user for the purposes of a building society. The...