The Court of Appeal has reduced a €200,791.78 High Court award against Stepaside shopkeeper Des Kennedy to €82,800 and rejected Gradual Investments Limited's claim to additional rent under a 2016-2018 rent-abatement agreement.
Kennedy succeeded his mother about 50 years ago in operating a newsagent, grocery shop and post office in Stepaside, County Dublin. In 2008 he took a 35-year lease of a retail unit in The Village shopping centre at an annual rent initially set at €137,000.
Following the financial crash, rent difficulties led to two abatement agreements. The dispute eventually centred on three sums: €25,800 linked to late payment under a 2014 variation, €57,000 claimed for 2015, and €117,911.78 sought after Gradual argued that breaches of lease covenants had retrospectively invalidated the second rent-abatement agreement covering 2016 to October 2018.
Ms Justice Máire Whelan, with Ms Justice Pilkington agreeing, upheld the first two sums. Kennedy had not produced sufficient evidence of detrimental reliance to establish an estoppel preventing Gradual from recovering the €25,800 and €57,000.
The position was different for the 2016-2018 agreement. The court found that Gradual could not treat it as automatically void. Notices concerning service charges did not clearly state that failure to pay would terminate the rent concession, while the landlord had not followed the notice procedure in the lease for alleged breaches concerning alterations and use of the premises.
The court also held that Gradual's communications and subsequent silence in February 2016 had induced Kennedy to enter the second abatement agreement believing earlier arrears had been cleared. His later expenditure on renovations amounted to detrimental reliance.
The High Court's interest award was also set aside. Gradual's contractual interest claim had already been found penal, and the Court of Appeal declined to substitute statutory interest.
Kennedy therefore remained liable for €82,800, without interest. The court's preliminary view was that he should receive 75% of his costs in both courts.