The High Court has restrained Quinn Hospitality Ireland Operations 3 Limited from withdrawing a rent reduction for The Barge pub in Dublin and dismissed its counterclaim for possession. The court held that the company could not rely on a rent increase to forfeit the lease while the business remained adversely affected by prevailing economic conditions in the way it had been in April 2010.
The dispute concerned a lease held by The Barge Inn Limited for licensed premises at 42 Charlemont Street. The rent reserved in the lease was €400,000 a year. In April 2010, the previous landlord agreed to reduce it to €273,225. The High Court found that the reduced rent was to continue while economic circumstances continued to harm the pub’s business. It also found that the reduction was a standalone arrangement for The Barge, rather than one dependent on the tenants’ arrangements at two other pubs.
The court held that the rent reduction was not an enforceable contract because the tenant gave no consideration for it. But it found that the tenant could rely on promissory estoppel as a defence to the landlord’s attempt to enforce the higher rent. The tenant had relied on the promise, and it would be unfair to allow the landlord to withdraw the reduction without regard to the agreed conditions.
The landlord had served a forfeiture notice in October 2012 claiming rent arrears and unpaid rates. The tenant paid the sum demanded, and the landlord withdrew that notice. In November, the landlord said the reduced rent was temporary and that the annual rent would return to €400,000 immediately. A second forfeiture notice followed in January 2013, alleging arrears based on the higher rent.
The court found that the landlord had not agreed to a further reduction to €18,000 a month from January 2012. It also found that the January 2013 forfeiture notice was ineffective because it relied on rent that was not due after the landlord’s attempted withdrawal of the reduction. The lease had not been forfeited by that notice or by delivery of the counterclaim. The court therefore did not decide whether the tenant would be entitled to relief against forfeiture.
The order restrains the landlord from withdrawing the reduced annual rent while the business continues to be adversely affected by prevailing economic circumstances in the manner it was in April 2010. It also restrains steps to forfeit the lease or retake possession on foot of the notice, and dismisses the landlord’s counterclaim.