The High Court has directed a landlord and tenant to bear 50% of each other’s costs after finding that both sides were equally successful, or equally unsuccessful, in a commercial lease dispute.
In a costs ruling delivered on 14 March 2025, Ms Justice Siobhán Phelan ordered a set-off between the parties. Any costs they cannot agree, where there is a dispute over whether one side owes money to the other, are to be adjudicated by the Legal Costs Adjudicator.
The ruling followed a seven-day hearing. The judge said the proceedings had been more protracted than necessary and that both parties had contributed to their excessive length, though to different degrees. She said positions adopted by both sides had been improper or unreasonable and added to the case’s length and complexity.
The landlord, Ambasaid Limited and MKN Investments Limited, did not succeed on its primary claim relying on a break option in the lease. The tenant, MBCC Foods (Ireland) Limited, had argued that rent was paid up to the break date, but the judge rejected that position. She also rejected the tenant’s arguments that rent was payable monthly in arrears and that the rent-free period had been extended by agreement.
The judge found that rent became payable a week later than the landlord had claimed, but did not accept the tenant’s contention that it became due later still. She also found that the landlord had acted in breach of implied terms by seeking to frustrate the valid exercise of the break option, so it could not treat the option as invalid because of rent arrears.
On reinstatement, the judge rejected the landlord’s claim that the tenant had to strip out the property entirely to give vacant possession. However, she found the tenant liable for reinstatement costs, which formed the basis of the decree previously granted. The costs ruling noted that the award was for neither the sums claimed nor the landlord’s primary claim.
The judge said the parties had each prevailed on some discrete issues, while other issues were draws for costs purposes. The landlord lost on the agreed variation of rent and the date rent began; the tenant lost on when rent became payable under the lease and whether rent was paid up to the break date. Service-charge and VAT issues were treated as draws because each side succeeded or failed on different aspects.
Applying the costs principles in the Legal Services Regulation Act 2015 and the Rules of the Superior Courts, the judge concluded that neither party was entitled to all its costs as an entirely successful party. She said more reasonable conduct might have shortened or avoided the proceedings, and noted that neither side had pursued an open settlement offer or a Calderbank letter in a way that might have focused attention on costs earlier.