The Leinster Leader Ltd ((in Liquidation)) v Formpress Publishing Ltd
| Jurisdiction | Ireland |
| Judge | Mr. Justice Robert Haughton |
| Judgment Date | 24 January 2024 |
| Neutral Citation | [2024] IECA 15 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Record Number: 2023/128 |
[2024] IECA 15
Woulfe J.
Faherty J.
Haughton J.
Record Number: 2023/128
High Court Record Number: 2021/420S
THE COURT OF APPEAL
JUDGMENT of Mr. Justice Robert Haughton delivered electronically on the 24 th day of January, 2024
. This is an appeal against the ex tempore judgment of Owens J. delivered in the High Court on 24 April 2023, and his order dated 24 April 2023 whereby he granted summary judgment against the appellant in the sum of €158,747.81, and whereby he ordered that the balance of the respondent's claim (which in total was for the sum of €178,376.31) be adjourned to plenary hearing. The trial judge also ordered that the appellant pay to the respondent the costs of the motion for summary judgment.
. The proceedings were commenced by summary summons issued on 12 July 2021. I will refer in this judgment to the respondent as “LLL” and the respondent's liquidator Mr. Declan de Lacey as “the liquidator”. The application for summary judgment issued on 7 December 2021, grounded on the affidavit sworn on 27 October 2021 by the liquidator. A replying affidavit of Eugene McCooey, financial controller of the appellant, was sworn on 16 March 2022. A supplemental affidavit was sworn by the liquidator on 18 May 2022 and a second replying affidavit was sworn by Mr. McCooey and filed on 2 June 2022. Two further affidavits were sworn by the liquidator, on 17 June 2022 and 24 April 2023. It is fair to say that the critical evidence was documentary or otherwise uncontested and the key areas of conflict related to the legal effect of the documents and admitted facts.
. The pleaded claim in the summary summons is for the payment of rent arrears due and owing in respect of a premises situate at and known as The Tempest Buildings, Douglas Place, Crowe Street, Dundalk, County Louth (“the Property”).
. The Property is owned by SKA Management Limited (“SKA Management”). On 29 May 1999 SKA Management was struck off the Register of Companies for failing to file returns. Despite this, on 16 August 2000 SKA Management entered into a lease of the Property to the LLL (“the Superior Lease”) for a term of 25 years commencing on 16 August 2000 at a yearly rent of IR£24,000 payable in equal quarterly instalments commencing on 1 October 2000.
. LLL paid just one sum of IR£6,000 as rent, to be held by SKA Management's solicitors in trust pending restoration of SKA Management to the Register.
. By order of the High Court (Keane J.) made on 22 October 2018 SKA Management was restored to the Register pursuant to s. 738 of the Companies Act, 2014. Pursuant to s. 738(3) of the 2014 Act the effect of that restoration was that:
“…the company shall be deemed to have continued in existence as if it had not been struck off the register …”.
In In re Amantiss Enterprises Ltd [2002] 2 I.R. 177 O'Neill J. held that the equivalent words in s. 311(8) of the Companies Act, 1963 and s. 12(B) of the Companies (Amendment) Act, 1982 “ have the automatic effect of validating retrospectively all acts done in the name or on behalf of the company during the period between its dissolution and the restoration of its name to the register.” It was not disputed that s. 738(3) of the 2014 Act has the same automatic effect.
. An extraordinary feature of this case is that restoration of SKA Management to the Register did not occur until 22 October 2018; had the application for restoration been delayed for another year it would no longer have been open to the court to make an order for restoration as there is a 20 year time limit, 1 and no rent would have been recoverable under the Superior Lease. As will be seen, following restoration SKA Management claimed in the liquidation payment of rent due under the Superior Lease from 2001 until the 31 December 2018.
. By Underlease entered into between LLL and the appellant on 28 March 2014 (“the Underlease”) the Property was underleased to the appellant for a fixed term of eight years commencing on 28 March 2014. The title page of the Underlease describes it as “ Underlease by reference to superior lease”, and in large part it mirrors the Superior Lease. The following somewhat unusual terms are important in the context of this appeal:-
“ Background
(A) The Landlord is entitled to possession of the Demised Premises under the terms of the Superior Lease (as hereinafter defined and a copy of which is appended thereto).
(B) The Landlord has agreed to grant an underlease of the Demised Premises to the Tenant on the terms set out in this Lease.
…
1.1 The definitions and rules of interpretation set out in this clause apply to this lease.
…
Annual Rent: an amount equivalent to all monies reserved as rent payable by the Landlord pursuant to the terms of the Superior Lease payable within 7 days of demand being served on the Tenant provided that the rent has been demanded of the Landlord in accordance with clause 2.7(a).”
“ Superior Lease: the lease by virtue of which the Landlord holds the Demised Premises a copy of which is appended hereto…”
“ Incorporated Terms: all of the terms, requirements, covenants and conditions contained in the Superior Lease with such modifications as are necessary to make them applicable to this Lease and the parties to this Lease:
(a) including:
(i) the definitions and rules of interpretation in the Superior Lease;
(ii) …”
“2. Grant
2.5 This grant is made on the terms of this Lease, which include the Incorporated Terms as if they were set out in full in this Lease.
…
2.7 The grant is made subject to the Tenant paying the following as rent to the Landlord:
(a) the Annual Rent but for the avoidance of doubt the Tenant shall not be obliged to pay the Annual Rent unless the rent payable under the Superior Lease has been demanded of the Landlord by the Superior Landlord or such other party acting on his behalf;
(b) all sums payable by the Landlord under the Superior Lease to the Superior Landlord for insuring the Demised Premises against the Insured Risks (as defined in the Superior Lease) but for the avoidance of doubt the Tenant shall not be obliged to pay such costs of insurance unless they have been demanded of the Landlord by the Superior Landlord or such other party acting on his behalf;
(c) the Additional Sums; and
(d) all interest payable under this Lease.
2.8 Where payment is made by the Tenant to the Landlord in accordance with clauses 2.7(a) or 2.7(b), the Landlord will, on receipt of written request from the Tenant, furnish to the Tenant reasonable evidence of the payment of those amounts received by the Landlord on to the Superior Landlord.
3. The Annual Rent
3.1 The Tenant shall from the Rent Commencement Date pay the Annual Rent in accordance with the term of this Lease.
…
6.2 The Landlord hereby exercises the Landlord's option to tax the Lease in accordance with Section 97 of the VAT Act and the Tenant shall pay to the Landlord on receipt of a valid VAT invoice on an amount equal to the VAT at the appropriate rate on the rents, fees and other sums payable by the Tenant under or in connection with this Lease and shall keep the Landlord fully and effectively indemnified against same.
…
15. Tenant's Acknowledgement
15.1 Tenant acknowledges that notwithstanding the terms of the Superior Lease, the Landlord has not applied for and the Superior Landlord has not granted its consent to the Landlord to the grant of this Lease.”
. Accordingly the annual rent due under the Underlease was IR£24,000 plus VAT, mirroring the appended Superior Lease, and this was payable on quarterly gale days of 1 January, 1 April, 1 July and 1 October in each year. However under Clause 1.1 the rent was only payable by the respondent if rent had first been demanded by SKA Management under the Superior Lease, in accordance with Clause 2.7(a) of the Underlease, and it was only payable by the appellant within seven days following demand being served on it.
. The appellant occupied the Property pursuant to the Underlease from 28 March 2014 until it vacated on 31 August 2017, as averred by Mr. McCooey in the affidavit which he swore on 16 March 2022 (paragraph 29). That averment is not disputed on affidavit, although the liquidator's submissions suggest that the appellant did not vacate until October 2017. Accordingly I must accept, at least for the purposes of this appeal, that the appellant vacated on 31 August 2017.
. Remarkably no rent was demanded by or on behalf of SKA Management pursuant to the Superior Lease during the period of occupation of the property by the appellant, presumably because SKA Management remained struck off.
. No rent was demanded of or paid by the appellant pursuant to the Underlease during the period of the appellant's actual occupation of the Property.
. The liquidator was appointed on foot of a resolution passed by LLL on 29 January 2019.
. By letter dated 18 February 2019 the liquidator informed the appellant of his appointment as liquidator, referred to the Underlease, and expressed his understanding that it remained in effect, and requested that “ … all future payments of rent pursuant to the [Underlease] should be made to …” the liquidator's account. He further indicated that he would need to deal with LLL's rights and obligations under the Superior Lease, and that he anticipated this might involve a surrender or disclaimer. This was followed up with an email on 6 March 2019 attaching the letter previously sent and requesting that the appellant would respond.
. With regard to the demanding of rent by SKA Management under the Superior Lease, the liquidator makes the following averment in the affidavit which he swore on 24 April 2023:
“3. I say that an oral demand for rent...
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