The High Court awarded Bronxville Investments Limited the costs of its proceedings against Cayenne Holdings Limited and two individual defendants after the landlord agreed to use the rent arbitration process in the lease. The court ordered the proceedings discontinued, while leaving the disputed side letters and other unresolved claims undecided.
The dispute concerned a restaurant operated by Bronxville at 11 O’Connor Square, Tullamore. The lease provided for rent review and arbitration if the parties could not agree on rent. Cayenne became the property’s owner in 2018.
In 2019, one of the individual defendants sought annual rent of €87,500, relying on a purported side letter dated 18 November 2015. Bronxville disputed that letter’s validity and said the rent should be determined under the lease. The judgment recounts that the defendants initially insisted the letter was binding and rejected arbitration. Bronxville also alleged that a defendant threatened to close the restaurant, remove its contents and change the locks. That account was disputed.
Bronxville issued proceedings in November 2019 seeking injunctions, declarations and damages. The defendants gave undertakings to the court not to interfere with the tenancy or change the locks. At a hearing on 20 December 2019, the court was told that Cayenne was prepared to engage in arbitration. The parties later accepted the arbitrator’s finding that the open-market rent was €44,725 a year.
The remaining application concerned costs, not the rent. Bronxville argued that it had achieved its objective because Cayenne ultimately accepted the lease’s arbitration process. The defendants said the validity of the side letters and the allegations about threats remained unresolved, and argued that Bronxville should bear the costs if it chose not to continue the case.
Mr Justice Mark Sanfey held that Cayenne’s eventual acceptance of arbitration was the event that resolved the interlocutory application in Bronxville’s favour for costs purposes. He said the court could justly decide liability for those costs even though it had not ruled on the injunction application itself. He also found that the proceedings’ objective had been attained and they had become moot following the agreement to arbitrate.
The court awarded Bronxville the costs of the proceedings, including any amount by which they exceeded the costs of the interlocutory application, and ordered the proceedings discontinued under Order 26, rule 1 of the Rules of the Superior Courts. It did not decide whether the 2015 side letter was valid, whether it displaced the lease’s arbitration clause, or whether a threat was made. The judgment gave either party seven days to apply in writing about the form of the order.