The High Court declared that Denis and Miriam Meagher had unreasonably and wrongfully withheld consent to the proposed sale and assignment of a pharmacy lease to Cellular World Limited. The court said damages were due for resulting loss, but its judgment did not set a final amount: it identified the losses to be measured from 20 October 1998 until Esat assumed the tenant’s interest.
Mr Justice Murphy’s judgment, dated 15 April 2005, concerned premises at No. 1 West Street, Drogheda. The landlords’ predecessor had granted Luke J. Healy Pharmacy Limited a 35-year lease beginning in 1971. The lease required the tenant to maintain and repair the premises and required written landlord consent for an assignment.
The parties accepted that the tenant had breached its repair obligations. After Patrick Hickey acquired control of the company, the tenant sought to assign or sublet the premises while repairs and negotiations continued. The landlords initially refused to consider an assignment until the works in a schedule of dilapidations were completed. The tenant later carried out substantial repairs, which an engineer said were completed in accordance with the schedule and good building practice.
The dispute before the court included the landlords’ handling of the proposed Cellular World assignment. The application included references and a 28-day completion notice, which expired on 20 October 1998. The landlords said the delay was not a refusal and relied on the outstanding repairs and concerns about Cellular World’s suitability. The judge found the delay unreasonable and prejudicial, and concluded that no reasonable objection had been taken to that proposed tenant by the deadline. He distinguished this application from an earlier proposal that lacked a concluded contract and references.
The tenant also alleged that the landlords, who were pharmacists and competitors, acted from motives outside the lease. The judge found on the balance of probabilities that the landlords had acted unreasonably and were motivated by considerations beyond the lease. He said the relationship was contractual, not fiduciary, and that no separate duty of good faith arose.
The court held that unreasonable withholding of consent could breach the implied statutory covenant under sections 66 and 67 of the Landlord and Tenant (Amendment) Act 1980 and support damages for proven loss. It declared the withholding of consent to the Cellular World assignment wrongful. The damages measure was rent and rates paid by the tenant from 20 October 1998 until Esat assumed the tenant’s interest, plus selling-agent fees for that assignment. The judgment specified the measure, but did not quantify the award.