RGRE Grafton Ltd v Bewley's Café Grafton Street Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Denis McDonald
• Judgment Date: 20 January 2023
• Neutral Citation: [2023] IEHC 25
• Court: High Court
• Docket Number: [No. 2021/447 P.]

Between

RGRE Grafton Limited

Plaintiff

and

Bewley's Café Grafton Street Limited and Bewley's Limited

Defendants

[2023] IEHC 25

[No. 2021/447 P.]

THE HIGH COURT

COMMERCIAL

Landlord and tenant – Leased premises – Fixtures – Plaintiff seeking declaration that works form part and parcel of premises – Whether works constitute landlord’s fixtures

Facts: The plaintiff, RGRE Grafton Ltd, was the landlord of Bewley’s Café on Grafton Street, Dublin 2. The first defendant, Bewley’s Café Grafton Street Ltd, was the tenant. The second defendant, Bewley’s Ltd, was its subsidiary. A landlord and tenant dispute arose in relation to the ownership of stained-glass works by a Mr Clarke situated in the café. Four of the works were known as “the Four Orders”. The remaining two works were described as the “Swan Yard” works. The landlord claimed that the works comprised windows which formed part of the leased premises. On that basis, it was contended that the works were, as a matter of law, the property of the landlord. It was also claimed by the landlord that the works were commissioned in the late 1920s by Millar & Symes, architects, on behalf of the original landlord of the premises, Mr Bewley, to perform the function of windows at the premises. The tenant disputed the characterisation of the works as windows. The tenant characterised the works as “artworks” or “stained glass panels”. The tenant maintained that the works were decorative and ornamental and were not part of the premises. It was claimed that, at all material times, the works had been in the ownership of the tenant and that they were tenant’s fixtures and that, accordingly, they could not be said to be the property of the landlord. It was also claimed that the available evidence suggested that it was the tenant who paid Mr Clarke for the works. The tenant contended that the works were moveable and that they constituted removable fixtures of an ornamental or decorative nature intended to enhance the café in furtherance of the tenant’s café trade. The tenant also maintained that the works never functioned as windows but were installed inside and parallel to clear glass windows of the same dimensions and that it was solely the latter that functioned as windows in the external skin of the building. Against that backdrop, a counterclaim was advanced in response to the landlord’s claim claiming that the works were owned by the second defendant in whose favour the tenant had assigned its interest in the works. The validity of that assignment was challenged by the landlord.

Held by the High Court (McDonald J) that the plaintiff was entitled to succeed in relation to the Four Orders works. He believed that he should make a declaration that the works mounted in the window openings of the western wall of the premises form part and parcel of those premises. In his view, the element of the claim seeking a declaration that they constitute landlord’s fixtures was misconceived. He held that it was clear from the decision in Boswell v Crucible Steel [1925] 1 KB 119 that something which is part of leased premises cannot also be a landlord’s fixture; moreover, if something is part and parcel of leased premises, the lessee or tenant has the benefit of it for the duration of any lease of those premises. He held that the landlord had no entitlement to remove any part of the premises the subject of the lease. It seemed to him that the plaintiff was entitled to an order setting aside the purported transfer of the Four Orders works from the first defendant to the second defendant. In light of his findings, the first defendant had no title to the said works save that the first defendant, as lessee of the premises under the 1987 lease, was entitled to enjoy the works as part of the premises for as long as its leasehold rights continued. He held that the plaintiff had failed to prove its case in relation to the Swan Yard works and that element of its claim must be dismissed.

McDonald J held that the defendants had succeeded in establishing that the Swan Yard works constitute tenant’s fixtures. He held that the transfer of ownership of those works from the first defendant to the second defendant could not be impugned by the plaintiff and the second defendant was therefore entitled, on foot of its counterclaim, to a declaration that it is the owner of the Swan Yard works. He held that the form of the declaration as pleaded in the defence and counterclaim was framed in much too general terms; a more precise form of that declaration would accordingly have to be drafted by counsel for the defendants and submitted to counsel for the plaintiff and could later be settled by him. He held that the balance of the counterclaim relating to the Four Orders works must be dismissed.

Relief granted in part.

JUDGMENT of Mr. Justice Denis McDonald delivered on 20 ^th January 2023

Table of Contents

Introduction	2
The Four Orders works	4
The Swan Yard works	6
The photograph of the interior showing the hopper mechanism in place	7
Overview of the respective contentions of the parties	8
The questions that require to be determined	16
Gaps in the evidence	17
The café building and its situation	18
The contemporaneous correspondence of Harry Clarke	20
The minute of the board meeting of Bewley's Oriental Cafés Ltd. of 9th March 1928	31
The 1928 Lease	36
Subsequent events affecting the Harry Clarke works	37
The 1946 plan of the premises by McDonnell & Dixon	38
The 1949 lease	39
The 1970s	39
The acquisition by the tenant of the landlord's interest	39
The state of the café premises in 1986/1987 following the acquisition of the tenant by the Campbell Catering interests	40
The 1998 works	45
Conclusions to be drawn from the evidence in relation to the state of the premises as observed in the 1970s, 1980s and 1998	46
The ways in which the first named defendant has characterised the works prior to the outbreak of the current dispute	47
The conflicting positions taken by Mr. Slattery and Mr. O'Connell	48
Conclusions to be drawn from the evidence of the expert architects	61
Determination of the issues	71
At the time of their installation in 1928, did the Harry Clarke works become part and parcel of the café premises?	71
Has anything occurred in the years since 1928 which affects the status of the stained-glass works?	74
The potential impact of the 1928 Lease on the application of s. 17 of Deasy's Act	78
The potential impact of the 1987 lease on the application of s. 17 of Deasy's Act	82
The potential impact of the 1987 transactions more generally	82
Things to which I can have no regard	86
The orders to be made on foot of this judgment	86
Practice direction HC 101	87

Introduction

1 . These proceedings concern a landlord and tenant dispute in relation to the ownership of stained-glass works by the renowned illustrator and stained-glass artist, Harry Clarke. The works in question are situated in a long-established café operated by the tenant. The landlord claims that the works comprise windows which form part of the leased premises. On that basis, it is contended that the works are, as a matter of law, the property of the landlord. It is also claimed by the landlord that the works were commissioned in the late 1920s by Millar & Symes, architects, on behalf of the original landlord of the premises, Mr. Ernest Bewley, to perform the function of windows at the premises.

2 . The tenant disputes the characterisation of the works as windows. The tenant characterises the works as “artworks” or “stained glass panels”. The tenant maintains that the works are decorative and ornamental and are not part of the premises. It is claimed that, at all material times, the works have been in the ownership of the tenant and that they are tenant's fixtures and that, accordingly, they cannot be said to be the property of the landlord. It is also claimed that the available evidence suggests that it was the tenant who paid Harry Clarke for the works. The tenant contends that the works are moveable and that they constitute removable fixtures of an ornamental or decorative nature intended to enhance the café in furtherance of the tenant's café trade. The tenant also maintains that the works never functioned as windows but were installed inside and parallel to clear glass windows of the same dimensions and that it was solely the latter that functioned as windows in the external skin of the building. Against that backdrop, a counterclaim has been advanced in response to the landlord's claim claiming that the works are now owned by the second named defendant in whose favour the tenant has assigned its interest in the works. As noted below, the validity of that assignment is challenged by the landlord.

3 . The premises in question comprise the well-known Bewley's Café on Grafton Street, Dublin 2 ( “the café”). The plaintiff is the current landlord of the café. The first named defendant is the tenant. The second named defendant is its subsidiary. By an asset transfer and licence agreement dated 12 ^th December 2020, the first named defendant sought to transfer its interest in the works (and certain other material) to the second named defendant. In turn, the second named defendant licensed the first named defendant to continue to use the works in the café.

4 . The works were commissioned in 1927 in the context of the development of a new café to be occupied by Bewley's Oriental Cafés Ltd, a company then owned by members of the Bewley family. After a name change and also a change of ownership, that company is now known as Bewley's Café Grafton Street Ltd., the first named defendant in these proceedings. The first landlord was Mr. Ernest Bewley who...