The High Court ruled that Express Bus Limited (EBL) was not lawfully occupying Lot 2 of a property in Folio 51988F, and that its attempted exercise of an option to buy the lot was invalid. The judgment, delivered by Mr Justice Allen on 29 October 2021, supplemented an earlier ruling in the companies’ liquidation proceedings.
The liquidator, Myles Kirby, had asked the court to determine whether EBL’s occupation was lawful, whether a 2015 agreement created an option to purchase Lot 2, whether EBL had exercised it validly, and whether the liquidator could disclaim the agreement. The court said the 2015 agreement created a valid option, conditional on rent not being three months in arrears. The option lapsed because the rent was not paid. The attempted exercise was invalid. Whether the agreement could be disclaimed was not argued, so the court did not decide that question.
The court rejected EBL’s position that it was a purchaser in possession or entitled to a new lease. It also rejected its fallback argument that it remained in lawful occupation as a tenant at sufferance. The court answered that EBL was not lawfully occupying Lot 2. It noted that EBL had not paid the rent contemplated by the agreement, apart from €25,000 paid on 14 June 2016.
On costs, the court ordered EBL to pay the costs of Kirby’s motion, to be assessed if the parties could not agree. Kirby’s costs were to be costs in the winding up. The court said the substance of the dispute had been decided against EBL, despite its success on whether the agreement initially created a valid option.
The judgment also addressed EBL’s application for leave to bring a new claim against the company in liquidation. EBL proposed seeking a beneficial interest in the property proportionate to its contribution to the purchase price, or an equitable lien to recover that contribution. The liquidator argued the claim should have been raised earlier and could be dealt with in the winding up.
Justice Allen said the claim arose from facts known to EBL during the earlier directions application and was brought late. However, he was persuaded, with some misgivings, that EBL should not be shut out from making it. The court did not determine whether EBL had an interest or lien, or whether it needed permission under section 678 to issue separate proceedings. That would depend on whether the claim was contested and whether the liquidator would seek directions.
The section 678 application was adjourned to allow the parties to consider the judgment. The court said counsel would later be invited to address how any contested factual issues should be resolved. It identified unresolved questions about the amount EBL contributed to the deposit and the purchase price used for the property.