The High Court has overturned a Circuit Court order that dispensed with the landlord’s consent to the assignment of a long lease over a unit at Westside Shopping Centre in Galway. It found that the tenant had not shown that consent was unreasonably withheld and dismissed the proceedings.
Cambervale Ltd sought to assign its interest in the unit to Western Islamic Cultural Centre Ltd, which intended to use it as a community centre. The landlord, Westside Shopping Centre Ltd, said the proposed use was unsuitable for the shopping centre and amounted to “dead frontage”.
The lease, created in 1984 for a term of 500 years, permits use as a licensed premises and requires the landlord’s consent for an assignment, which must not be unreasonably withheld. The High Court said a landlord may consider a proposed assignee’s intended use when deciding whether to consent to an assignment. It was not required to approve the assignment first where there were reasonable grounds to refuse consent to the intended change of use.
The court heard that the proposed assignee planned to seek both the landlord’s consent and planning permission for the change. It had said it would put the unit up for sale if either were refused. The judge said the landlord could take that stated intention into account.
The landlord’s case was that a community centre would not support the retail activity of the small, multi-unit centre and could create competition for customer parking. Its expert witness supported that view. The tenant’s estate-agent witness accepted that the proposed use could conflict with the centre’s retail use, including over parking, and could not give evidence about likely footfall. The judge preferred the landlord’s expert evidence and found that the proposed community-centre use could properly be regarded as dead frontage.
The tenant also alleged that consent was withheld to pressure it into surrendering the lease at an undervalue. The judgment said the tenant did not substantiate that allegation. The judge accepted the landlord’s evidence that it had no such motive, noting that a brief approach about a possible purchase in 2020 was not pursued. The court also observed that the tenant had not sought discovery of documents in the proceedings.
The High Court allowed the landlord’s appeal, set aside the Circuit Court order of 28 February 2023 and dismissed the proceedings. The judge’s provisional view was that the landlord should receive its costs in both courts. The tenant was given until 6 March 2024 to file written submissions seeking a different costs order; the judgment does not state the final costs order.