The High Court awarded Kilarden Investments Limited €199,435.60 in damages in its dispute with two guarantors of a Galway pub lease. The judgment rejected the guarantors’ argument that the lease had ended in May 2010, but dismissed the landlord’s remaining claim because the evidence did not allow the court to determine the later losses claimed.
The dispute concerned the former Robert Lee’s premises at Prospect Hill, later known as Cuba. Kirwans (Galway) Limited had leased the premises from Kilarden under a 1999 agreement. John P. Grealish and Paul Grealish had jointly and severally guaranteed the tenant’s obligations.
The tenant went into creditors’ voluntary liquidation on 14 January 2011. The lease was surrendered to the landlord on 2 June that year. The landlord had already obtained judgment against the tenant and guarantors for €107,443 in a separate case, covering arrears and insurance up to 27 March 2011.
Kilarden then sought to enforce a guarantee clause requiring the guarantors, after specified events including a lease disclaimer or forfeiture, to accept a new lease if the landlord gave notice within 12 months. The landlord gave notice in August 2011. It later re-let the premises under a ten-year lease beginning in May 2012 and sought damages instead of specific performance.
The guarantors argued that rent arrears had caused the original lease to end in May 2010, before the liquidation and surrender, and that the guarantee clause therefore did not apply. Justice Laffoy found there was no evidence of the formal rent demand needed for forfeiture on that basis. She also found that the parties’ conduct showed the lease continued: the tenant stayed in possession, paid reduced rent, and the landlord accepted those payments. The lease did not end in May 2010; it continued at least until the liquidation began.
The court also found that section 132 of the Land and Conveyancing Law Reform Act 2009 would have applied to a new lease granted to the guarantors under the guarantee. That section can allow rent reviews to move down as well as up. This affected how any loss after the landlord’s August 2011 notice would have to be assessed.
Justice Laffoy said the evidence and the way the case had been presented made it impossible to determine the amount of damages due for the later period. The landlord’s claimed total was €2,351,575.69, including projected future rent losses. The judge said there was no justification for giving the landlord another opportunity to pursue that part of the claim.
The court instead awarded €199,435.60 for the guarantors’ breach of their obligations under the guarantee between 27 March and 4 August 2011, including rent and the 2011 insurance premium. The judgment recorded a calculation totaling €199,435.60; the preceding paragraph contains a conflicting figure of €199,450.60. The remainder of the claim was dismissed.