The High Court has found that Gradual Investments Limited is entitled to recover rent arrears from tenant Fiona Grant under a lease of a commercial unit in Stepaside, Dublin 18. The court also found that the lease’s interest provisions were penal and unenforceable, and that the landlord had not established its claim for service charges.
In a judgment delivered on 2 July 2024, Mr Justice Mark Heslin ruled after a plenary hearing that Grant’s breaches of a 2016 rent-abatement agreement ended her entitlement to its concessions. The agreement allowed reduced monthly payments and required €18,000 in post-dated cheques towards rent arrears. The judge found that cheques were repeatedly dishonoured and that, by the end of December 2018, no more than €10,000 had been paid. Unpaid rent arrears also supported the finding of breach.
The court held that, once the agreement became void, the rent obligation reverted to €52,000 a year plus VAT through 27 July 2019, payable quarterly in advance. It rejected the argument that the landlord’s invoices amounted to an agreement to accept lower rent. The judge also held that a 2015 Circuit Court default judgment had settled the 2014 rent review at €52,200 plus VAT; the parties later recorded an agreed annual rent of €52,000 plus VAT through July 2019.
For the review effective 27 July 2019, an independent expert determined open-market rent at €38,500 a year. Under the lease’s interim-payment terms, the tenant had to continue paying the prior rate until the next quarterly payment date after that determination, and then pay the reviewed rent and any shortfall. The court found the landlord entitled, at a minimum, to rent at €38,500 plus VAT from the review date. It also rejected the tenant’s argument that the lease’s consumer-price-index clause could not require the higher of the reviewed rent and the prior rent adjusted by CPI.
The landlord did not establish a right to recover €10,553.40 in service charges because it had not shown that the lease-required annual account was prepared, certified and provided to the tenant. The judge also ruled that the lease’s claimed interest rate, which the plaintiff said equated to just under 14% a year, was not a genuine pre-estimate of loss and was unenforceable. The appropriate commercial interest rate remains for agreement or a further hearing.
The judgment did not decide the validity of any forfeiture notice or make findings on alleged subletting. An injunction restraining enforcement of a forfeiture notice was extended until the first mention date after judgment. The judge gave preliminary views that the landlord should receive most of its hearing costs, subject to a modest reduction for the service-charge and interest issues; costs were not finally determined. The parties were invited to prepare a draft order within 14 days, with further submissions if they disagreed.