Twil Ltd v Kearney

• Jurisdiction: Ireland
• Court: Supreme Court
• Judge: FENNELLY J.,MR JUSTICE FRANCIS D MURPHY
• Judgment Date: 28 June 2001
• Neutral Citation: [2001] IESC 52
• Docket Number: [S.C. No. 290 of 2000]
• Date: 28 June 2001

[2001] IESC 52

THE SUPREME COURT

MURPHY J

MURRAY J

FENNELLY J

RECORD NO: 290/00

TWIL LTD v. KEARNEY

THE CIRCUIT COURT DUBLIN CIRCUIT COUNTY OF THE CITY OFDUBLIN

BETWEEN:

TWIL LIMITED

APPLICANT

AND

JOHN F KEARNEY

RESPONDENT

Citations:

LANDLORD & TENANT (AMDT) ACT 1980 S16

LANDLORD & TENANT (AMDT) ACT 1980 S13(1)(a)

LANDLORD & TENANT ACT 1931 S19(1)(a)

LANDLORD & TENANT ACT 1931 S19(2)

FARRELL V BARRON 1939 IJR 19

LANDLORD & TENANT (AMDT) ACT 1980 S13

LANDLORD & TENANT (AMDT) ACT 1980 S20

LANDLORD & TENANT (AMDT) ACT 1980 S21

LANDLORD & TENANT COMMISSION 1966 (PR NO 9685) PARA 9(b)

LANDLORD & TENANT (AMDT) ACT 1980 S20(A)(ii)

LANDLORD & TENANT (AMDT) ACT 1980 S13(1)

LANDLORD & TENANT (AMDT) ACT 1980 S21(3)

LANDLORD & TENANT (AMDT) ACT 1980 PART II

LANDLORD & TENANT (AMDT) ACT 1994

LANDLORD & TENANT (AMDT) ACT 1980 S3

LANDLORD & TENANT (AMDT) ACT 1980 S5

LANDLORD & TENANT (AMDT) ACT 1980 S5(1)(a)(iii)

LANDLORD & TENANT (AMDT) ACT 1980 S20(2)(a)

LANDLORD & TENANT (AMDT) ACT 1980 S28

MEALIFFE V WALSH 1987 ILRM 301

BAUMANN V ELGIN CONTRACTORS 1973 IR 169

DUBLIN CORPORATION V ASHLEY 1986 IR 781

Synopsis:

Property

Land; statutory interpretation; right to new tenancy deriving from business user; case stated from Circuit Court regarding relevant date by reference to which performance of tenant's conditions precedent to the grant of a new tenancy must be determined; (1) whether expression "at that time" (referring to the appropriate date) is the date of expiry of the lease; (2) whether the occupation of a subtenant for a period of time constitutes occupation by person who is tenant immediately before that time; s. 13, Landlord and Tenant Act, 1980;

Held: Affirmative; negative.

Twil Ltd. v. Kearney - Supreme Court: Murphy J., Fennelly J., Murray J. - 28/06/2001 - [2001] 4 IR 476

The proceedings were in the form of a case stated referred to the Supreme Court relating to the application for a new business tenancy under the Landlord and Tenant (Amendment) Act, 1980 ("the 1980 Act"). The applicant had been served with a notice of termination by the landlord and the applicant had in turn served a notice of intention to claim relief. The case stated centred around the interpretation of the phrase "at any time" relating to the three-year qualifying period (subsequently changed to five years but applicable here) of business use contained in section 13 of the 1980 Act. The applicant contended once the tenant had at any stage during its occupancy of the premises satisfied the qualifying period of three years business use the relevant provisions of the 1980 Act applied. In addition issues were raised as to whether continuous occupation by a sub-tenant would entitle the main tenant to relief. Fennelly J held that to allow a tenant "crystallise" his rights at any time would run counter to the nature and purpose of business equity. The phrase "at any time" was intended to relate to an inquiry as to whether a tenant had satisfied the requirements of the 1980 Act to the termination of the tenancy. The relevant date was the date of the expiry of the lease. The tenant seeking relief must be the same tenant that has occupied the premises for the entire period and did not include sub-tenants. Mr. Justice Murphy delivered a judgment in which he held that the relevant date was the expiry of the lease. Attention was also drawn by Murphy J to the deficiencies in the current legislation.

1 JUDGMENT OF MR JUSTICE FRANCIS D MURPHYDELIVERED THE 28TH DAY OF JUNE, 2001

2 By an indenture of lease dated the 12th day of March, 1970, P Donnelly & Sons Ltd demised the premises known as 76, Sir John Rogerson's Quay, in the City of Dublin to Transport and Warehousing (Ireland) Limited (whose name was subsequently changed to Twil Limited) for the term of 28 years from the 1st day of February, 1970. The interest of the lessor subsequently became, and is now, vested in the above named John F Kearney (the Lessor).

3 The right of Twil to a new tenancy in the said premises or any part thereof pursuant to s.16 of the Landlord and Tenant (Amendment) Act, 1980, was disputed by the Lessor and that matter came before Judge John F Buckley of the Circuit Court on the 16th day of March, 2000. Having regard to the questions of law which arose on the interpretation of the Landlord and Tenant (Amendment) Act, 1980, Judge Buckley stated a case dated the 31st October, 2000, for the consideration of this Court.

4 The facts as established or admitted before the trial Judge included thefollowing:-

5 1 The demised premises comprised a warehouse and yard consisting of the building with ancillary yard space comprising a total of approximately 38,000 square feet. Twil carried on the business of transportation and warehousing. In particular the premises and yard were used for the storage of goods for the customers of Twil. The customer was charged an appropriate rate depending upon size or weight of the goods stored and the length of time for which they were retained.

6 2 The demised premises were divided into six divisions. In the case of two of them (those numbered 2 and 6) Twil had made subleases with the consent of the Lessor. Unit number 6 had been sublet to Abbey Transport Ltd (Abbey) for a term of two years and nine months from the 1st April, 1993, but the sublease was surrendered in or about April, 1994. Unit number 2 was likewise sublet to Abbey (presumably as a replacement for unit number 6) for a period of one year and nine months from the 1st day of April 1994 to the 1st day of January, 1996. On the expiration of that subletting, Unit number 2 likewise reverted to Twil.

7 3 It seems that the following dates are material to the issues arising herein:-

8 (a) 1st April, 1994: surrender of the sublease of unit 6.

9 (b) 1st January, 1996: the termination of the sublease of unit number2.

10 (c) 31st January, 1998: termination of the Lease dated 12th March, 1970, by effluxion of time.

11 (d) 5th August, 1999: the date of the notice by the Lessor to Twil of the expiration of the Lease.

12 (e) 19th August, 1999: the date of the notice of intention by Twil to claim relief under s.20 of the Act of 1980.

13 (f) 31st January, 2000: the date of the application to the Circuit Court to determine the right of Twil to relief.

14 (g) 22nd March, 2000, and 6th April, 2000, the dates on which the application was heard by the Circuit Court Judge.

15 The fundamental issue which arises on the case stated derives from an apparently modest variation of the terms in which are expressed the right to a new tenancy deriving from business user in s.13(l)(a) of the Act of 1980 in comparison to the terms in which the same or a similar right had been expressed in s.19(1)(a) of the Landlord and Tenant Act, 1931.The Act of 1931 had provided as follows:-

"19(1) On the termination within the meaning of this section of a tenancy in a tenement, this Part of this Act shall apply to such tenement if such tenement complies with any one of the following conditions, that is to say:-"

(a) Such tenement was, during the whole of the three years next proceeding the termination of such tenancy, bona fide used by the tenant for the time being thereof wholly or partly for the purpose of carrying on a business and, immediately before suchtermination, either was held by the tenant thereof under a tenancy from year to year or under a lease or other contract of tenancy for a term of not less than one year or a lease for a life or lives or had been for not less than seven years continuously in the occupation of the person who was the tenant thereof immediately before suchtermination or of his predecessors in title..."

16 (emphasis added)

17 The comparable provision in the Act of 1980 is as follows:-

"13(1) This Part applies to a tenement at any time if-"

(a) the tenement was, during the whole of the period of three years ending at that time, continuously in the occupation of the person who was the tenant immediately before that time or of his predecessors in title and bona fide used wholly or partly for the purpose of carrying on a business."

18 (emphasis added)

19 The operation of the Act of 1931 had been complicated by the fact that s.19(2) thereof gave an artificial meaning to the expression "the termination of a tenancy". In the case of a tenancy terminating by the expiration of a term of years the termination was deemed to occur on the day which was three months before the actual expiration of the term. In the case of a tenancy terminated by notice to quit the tenancy was deemed to terminate on the date of the service of the notice. Further problems had been identified in the application of the Act of 1931 by the decision of Circuit Court Judge Davitt (as he then was) in Farrell .v. Barron. In that case it was held that a lessee who held over en the expiration of a lease and paid rent having served a notice of intention to claim a new tenancy was precluded from obtaining relief under the Act of 1931 because the subsisting lease, which arose by implication as a result of the payment and acceptance of the rent, had not been terminated.

20 In identifying the tenements to which the right of a new tenancy attached, the Act of 1980 not only abandoned the concept of an artificial termination of the tenancy but any reference to "termination" at all. It substituted for that word the phrase "at any time". The essential problem raised by the case stated is the meaning and effect to be given to the words "at any time" in s.13 of the Act of 1980 in relation to the right of a tenant to a new tenancy.

21 Before turning to the arguments recorded in the case stated and addressed to this Court it is important to advert to certain undisputed provisions of the Act of 1980, namely,

22 2 "1 Where a new tenancy is granted to the tenant of a tenement it commences "on the termination of his previous tenancy" (see section 16).

23 2 A...