Wanze Properties (Ireland) Ltd v Mastertron Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Murphy
• Judgment Date: 01 January 1992
• Neutral Citation: 1992 WJSC-HC 1188
• Docket Number: D.7259
• Court: High Court
• Date: 01 January 1992

WANZE PROPERTIES (IRL) LTD v. MASTERTRON LTD

(CIRCUIT APPEAL)

WANZE PROPERTIES (IRELAND) LIMITED, SUI MAN LAM AND CHOI LIN AND LAM

PLAINTIFFS (APPELLANTS)

AND

MASTERTRON LIMITED

DEFENDANT (RESPONDENT)

1992 WJSC-HC 1188

D.7259

THE HIGH COURT

Synopsis:

LANDLORD AND TENANT

Lease

Covenant - User - Change - Restriction - Consent of lessor required - Statutory provision - Consent not to be unreasonably withheld - Fast-food outlet desired - Tenement being unit of shopping centre containing other units demised by lessor - Land lord and Tenant (Amendment) Act, 1980, s. 67 - (Appeal from the Circuit Court - Murphy J. - 18/12/91) - [1992] ILRM 746

|Wanze Properties (Ireland) Ltd. v. Mastertron Ltd.|

WORDS AND PHRASES

"Unreasonably withheld"

Lease - Covenant - User - Change - Restriction - Consent of lessor required - Statutory provision - Consent not to be unreasonably withheld - Tenement being unit of shopping centre containing other units demised by lessor - (Appeal from Circuit Court - Murphy J. - 18/12/91) - [1992] ILRM 746

|Wanze Properties (Ireland) Ltd. v. Mastertron Ltd.|

Citations:

LANDLORD & TENANT (AMDT) ACT 1980

OHS LTD V GREEN PROPERTY CO LTD 1986 IR 39 1986 ILRM 451

LANDLORD & TENANT (GROUND RENTS) (NO 2) ACT 1978 S16(2)(a)

LANDLORD & TENANT (GROUND RENTS) (NO 2) ACT 1978 S10(7)(a)

LANDLORD & TENANT (GROUND RENTS) ACT 1967 S29

LOCAL GOVT (PLANNING & DEVELOPMENT) ACT 1963 PART IV

LANDLORD & TENANT (GROUND RENTS) (NO 2) ACT 1978 S28(2)(a)

1 Judgment of Mr. Justice Murphy delivered the 18th day of December 1991.

2 This is a claim by an intermediate lessee and the intended assignees of an underlessee for the consent of the superior lessor to a change of user of certain demised premises.

3 The application arises in circumstances which are somewhat unusual and potentially very unfortunate.

4 What happened is this by an Indenture of Lease dated the 13th day of December 1988 and made between Power Supermarkets Limited of the one part and Tradlew Limited of the other part Powers demised to Tradlew a site which was to become known as "the Hartstown Neighbourhood Shopping Centre" Castleknock in the County of Dublin for the term of 10,000 years from the 1st of October 1983 in consideration of the payment of a fine of £13,397 and the yearly rent of £1.00.

5 The rent aforesaid was subject to quinquennial reviews but as the increases were limited to the amount of £1.00 such reviews could have no financial significance. In addition to the fine paid by the lessee the lease imposed on it the obligation of constructing on the demised premises a retail shop not exceeding 1,200 square feet in accordance with plans approved by the lessor.

6 The 1988 Headlease contained (at Clause 4.26.2 thereof) a Covenant prohibiting a range of users in the following terms:-

"Not at any time to use the demised unit or any part thereof or allow the same to be used for any public meeting exhibition or entertainment or for any illegal or immoral purpose or for any noisey or offensive trade or business or occupation or as a fish and chip shop or as a pet shop or as a bookmaker's office and not to permit any musical instrument gramaphone radio television loudspeaker or similiar apparatus to be played or used thereon so as to be audible to a degree as so as to cause a nuisance or annoyance ——".

7 In addition, however, there was a further clause which regulated the business to be carried on in the demised premises in the following terms:-

"Not without the prior consent in writing of the landlord or its agent thereunto lawfully authorized to use or to permit or suffer or allow the demised unit or any part or parts thereof to be used for any purpose other than as set forth in Part II of the First Schedule hereto and for no other purpose or purposes whatsoever and at all times to carry on the said authorized business as a business of high quality standards and tone so as to protect the standing appearance and prosperity of the centre as a whole and that of the other tenants or occupiers of units therein".

8 The user permitted as set out in Part II of the 1988 Lease was in the following terms:-

"As a shop to be used for the sale or hire of Do It Yourself (D.I.Y.) goods to include the sale of glass, garden equipment, flower plants in season, bottled gas, prepacked coal and domestic and general hardware and other than for food retailing and other than as an off-licence premises PROVIDED that nothing herein shall preclude the landlord or tenant or occupiers of any other unit in the centre from trading in such manner or in any or all of the said items".

9 Again Part II of the 1988 Lease sought to regulate the discretion of the landlord as to the giving and withholding of consent to a change of user in the following terms:-

"It is hereby agreed and declared that the landlord shall be entitled at its absolute discretion to refuse its consent to any proposed change of user if the alternative user will be the same as or in competition with any part of the trade or business for the time being carried on upon any other portions of the centre whether being carried on by the landlord or otherwise and such refusal shall notwithstanding anything herein or in the Landlord and Tenant Amendment Act 1980or any such remodification or re-enactment thereof from time to time in force be deemed for all purposes to be reasonable if such change of user (if sanctioned) would or might result in the failure to maintain or the lessening of the necessary or desirable diversity of the nature of the businesses conducted in the centre".

10 In addition to describing the premises of which the demised unit formed part as "a neighbourhood shopping centre" the lease contains those provisions which are usual and indeed inescapable for the purpose of regulating the rights of tenants and customers using or having resort to the centre. The only other clause to which particular reference must be made is contained in the Second Schedule to the 1988 Lease which reserves to the landlord (Powers) the right to make rules and regulations governing the use of the centre generally and in particular the hours of trading thereat which it is provided (by Clause 12.11.2.) that:-

"Initially the centre shall be open for trading on Mondays to Wednesdays and Saturdays from 9 a.m. to 6 p.m. and on Thursdays and Fridays from 9 a.m. to 9 p.m."

11 It appears that the interest of the headlessor Power Supermarkets Limited subsequently became vested in Quinnsworth Limited and later still was transferred to and vested in the Defendants herein Mastertron Limited. The interest of the lessee Tradlew Limited was assigned to and is now vested in the first named Plaintiffs Wanze Properties (Ireland) Limited.

12 Originally the shopping centre consisted of a substantial store or supermarket comprising some 10,000 square feet of usable space which was occupied successively by Powers, Quinnsworth and now Super Valu. In addition there were four units of approximately 1,000 square feet of which the demised premises were one. About December 1990 three additional units were completed by or on behalf of the Defendants but no trading has as yet taken place from the new units. In addition the centre has ample car parking spaces for the business which it is likely to attract. The centre is situate in a well populated area but all of the witnesses are agreed that it must draw its customers from the immediately surrounding area as there are bigger centres providing more extensive facilities available to potential customers willing to travel for even relatively small distances.

13 It appears that Unit 3 was used originally as a D.I.Y. shop and subsequently by a Mr. Paul Dolan as a bicycle shop. The underlease under which Mr. Dolan (or his Company) held the premises was not forthcoming but it was understood to be for a term of 35 years from some date in 1988 subject to a yearly rent of £10,000. Again the parties were in agreement that this underlease permitted the use of the premises as a bicycle shop or as a D.I.Y. centre.

14 It appears that Mr. Dolan's business did not prosper. The evidence is that he ceased trading some time about May 1989 and that he had from time to time advertised his interest in the unit for sale in local newspapers. As a result of those advertisements Mr. Dolan came in contact with Mr. and Mrs. Lam the second and thirdly named Plaintiffs and at a meeting sometime in May 1990 Mr. Dolan agreed in principle with Mrs. Lam for the sale to her of his interest in the premises for a sum of £12,500.

15 Apparently there were difficulties in making title to Mr. Dolan's leasehold interest. This problem was solved with the assistance of the intermediate lessor Wanze Properties (Ireland) Limited. Instead of Mr. Dolan assigning his interest under the underlease to Mr. and Mrs. Lam it was agreed that in consideration of the payment to him of £12,500 he would surrender his underlease to Wanze and they would grant a new underlease to the "purchasers" on the same terms as the lease under which...