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Harrisrange Ltd. v. Duncan [2002] IEHC 14 (25th January, 2002)
THE
HIGH COURT
No.
2001 269S.
BETWEEN
HARRISRANGE
LIMITED
PLAINTIFF
AND
MICHAEL
DUNCAN
DEFENDANT
JUDGMENT
of Mr. Justice William M. McKechnie delivered the 25th day of January, 2002
1.
By Indenture of Lease made the 17th day of May, 1977, between
MEPC
Ireland Limited
of
the one part and
AURIC
Limited
of the other part, All That and Those the Hereditaments and Premises therein
described as Number 32A Dawson Street in the City of Dublin were demised unto
the said AURIC Limited for the term of 21 years from the 1st day of October,
1976, subject to the annual rent of £2,000 and to the other terms and
conditions as therein contained. As a result of an Indenture of Conveyance
dated the 24th day of March, 1984, Harrisrange Limited became entitled to all
of the estate and interest of MEPC Ireland Limited in the aforesaid premises.
Likewise, as a result of an Indenture of Assignment dated the 31st day of
March, 1986, the Defendant succeeded to the Lessee’s interest under the
aforesaid Lease. In addition, in consideration of receiving the Lessor’s
consent to this Assignment, Mr. Duncan, by Deed of Covenant also dated the 31st
day of March, 1986, covenanted with the Plaintiff Company to observe, abide by
and perform all the covenants and conditions on the Lessee's part, including
the payment of rent, as contained in the said Lease. As appears therefrom and
in the circumstances which occurred the term so created, expired by fluctuation
of time, on the 30th day of September, 1997.
2.
Being advised of his entitlement to assert a statutory right, Mr. Duncan on
the 1st October, 1996, served on his Lessor a Notice of Intention to Claim
Relief under
section 20 of the
Landlord and Tenant (Amendment) Act, 1980. This
Notice claimed a new tenancy and the sum of £10,000 for Improvements. In
the alternative a sum of £3 m was claimed for Disturbance. At the expiry
date of the term so created, no Notice of Application had been made, and
accordingly the Court did not have seisin of this matter. Whether as a result
of this or otherwise, the Plaintiff company not only attempted to, but in fact
re-entered the property by changing the locks on the external doors. The
response by Mr. Duncan was similar with further re-entries and attempted
re-entries being repeated on more than one occasion. Ultimately by the 14th
October 1997, both parties had instituted High Court proceedings effectively
seeking restraining orders one against the other. The resulting motions,
seeking this interlocutory relief, were, on the 2nd February, 1998, adjourned
generally with liberty to re-enter. This because, at that time, with the
Defendant retaining occupation of the property, it was agreed that the dispute
between the parties would be resolved through the medium of the Circuit Court
proceedings which by then had been served. On the 12th December an Ejectment
Civil Bill for Over Holding was issued with Mr. Duncan in his Defence and
Counterclaim, seeking a new tenancy as well as compensation for Disturbance
and/or Improvements.
3.
On 19th October, 1998 a Notice of Application, under
section 21 of the 1980
Act, was served by the Defendant in these proceedings who obviously was the
Applicant in that Notice. As with his Counterclaim, Mr. Duncan sought a new
tenancy and compensation for Disturbance and/or Improvements. Both the Civil
Bill and the Application were heard in the Circuit Court at the same time. On
the 5th November, 1998 His Honour Judge O’Hagan granted Harrisrange
Limited possession of the said property and dismissed the Defendant’s
Counterclaim. From that Order an appeal was taken with the Defendant obtaining
leave from the High Court to amend his original Defence and Counterclaim. That
amendment has no relevance to this case. Having heard oral evidence and having
considered the submissions as made, Mr. Justice Butler on 4th December, 2000,
dismissed the Defendant’s appeal and affirmed the Circuit Court Order.
He stayed the execution of his Order for the period from the 1st January to the
end of February, 2001, and did so on condition that for this length of time
mesne rates would be paid in a sum calculated, at what is now agreed to be,
£8,000 per annum. In compliance with this Order, possession of the
demised premises was then surrendered by Mr. Duncan to his now former Lessor.
4.
In the present proceedings, which were instituted by way of Summary Summons,
the Plaintiff company seeks from the Defendant, mesne rates for the period from
the 1st day of October, 1997 up to and including the 31st day of December,
2000; this at a rate of £12,500 per annum. In total, the amount claimed
in the Special Indorsement of Claim is £40,625 with interest, pursuant to
section 22 of the Courts Act, 1981, also being sought. On the
Plaintiff’s motion for liberty to enter final judgment the matter was
transferred from the Master’s List to this Court. Affidavits in support
of the reliefs claimed have been filed and served, as have the replying
documentation in which the Defendant seeks from this Court leave to defend
unconditionally or alternatively on the terms as suggested by him. No Notices
to cross-examine were served and no oral evidence given. The Motion was
therefore dealt with solely on Affidavit.
5.
Having being commenced by way of Summary Summons, the course of these
proceedings is governed by Order 37 of the Rules of the Superior Courts.
Following the entry of an Appearance, a defendant may, in response to the
aforesaid motion for judgment, show cause against such motion by way of
affidavit. Upon the hearing of this application:-
“.....
the Court may give judgment for the relief to which the plaintiff may appear to
be entitled or may dismiss the action or may adjourn the case for plenary
hearing as if the proceedings had been originated by plenary summons, with such
directions as to pleadings or discovery or settlement of issues or otherwise as
may be appropriate and
generally
may make such order for determination of the questions in issue in the action
as may seem just”.
(Rule 7). Emphasis added.
1. Under
Rule 10 leave to defend may be given unconditionally or subject to such terms
as to give security, or time and mode of trial, or otherwise as the Court may
think fit.
6.
Accordingly, as can be seen, the next procedural step following the entry of
an Appearance is the bringing of a motion by a Plaintiff wherein he seeks
liberty to enter final judgment. That motion may be contested by the Defendant
via affidavit evidence which of course may include, were appropriate, any
exhibits attached thereto. On the hearing of such a motion the Court may give
liberty to enter final judgment for the amount claimed or any part thereof, may
give the Defendant leave, conditionally or unconditionally, to defend or may
favour one of a number of other options which are available to it. When
deciding what is the most appropriate course to take, the Court, in order to
determine the questions in issue between the parties, is obliged under Rule 7
to do that which best meets the justice of the situation. That result is the
result which must be achieved.
7.
In this jurisdiction and elsewhere there have been several cases dealing with
the court’s function on the hearing of a motion for liberty to enter
final judgment under Order 37 or it’s equivalent. In
The
First National Commercial Bank Plc v. Anglin
[1996] 1 IR 75 Mr. Justice Murphy was of the opinion that the correct approach
which should be adopted was that as laid down in
Banque
du Paris v. de Naray
1984
1 Lloyds Reports 21, a case subsequently affirmed in the
National
Westminister Bank Plc v. Daniel
1993
1 W.L.R. 1453. In
The Governor and the Company of The Bank of Ireland v. Educational Building
Society
[1999] 1 IR 220 such a test was applied, certainly by Murphy J. and
2.
Barron J., with perhaps some modification of language in the Judgment of
Keane J. as he then was. Whilst in truth the Judgments in that case were much
more concerned with the law on Bills of Exchange rather than with Motions for
Judgment, nevertheless the decision is relevant, because in dismissing the
Plaintiff’s appeal and in upholding the High Court’s Order
remitting the matter to plenary hearing, the Supreme Court did so on the basis,
that from the written submissions of the parties, the argument of counsel and
the analysis of such submissions and arguments, it was clear that the defendant
had raised an issue of law in respect of which it was entitled to be heard.
In so deciding the following frequently quoted passage from the judgment of
Barry L.J. in
Crawford
-v- Gillmor
1891
30 L.R. Ir. 238 was again repeated. It reads:-
“I
am of opinion that ... the mere length of time which has been occupied by the
argument of this case - and I do not think one moment of our time was occupied
unnecessarily - shows that it does not come within the rule which allows final
judgment to be marked on motion”.
8.
In
A.C.C. Plc v. Elio Malocco
HC U.R. 7/2/2000 Miss Justice Laffoy, in applying
First
National
Commercial Bank Plc
,
went on to say that the whole situation should be looked at, which in turn
necessarily involved “an assessment of the cogency of the evidence
adduced by the Plaintiff in relation to the given situation which is to be the
basis of the defence”. See p. 14 of the text. In the most recent case
in this area namely
Aer
Rianta CPT v. Ryanair,
Limited
S.C. U/R. 13/11/2001, there were two judgments delivered in the Supreme Court.
In her opinion, under the hearing of
“The
Law and Conclusions”
,
Mrs. Justice McGuinness applied the test as suggested by Murphy J. in
The
First National Commercial Bank Plc
case. In his analysis of the law, Mr. Justice Hardiman surveyed what might be
described as the historical cases as well as the most modern authorities on
this topic. His conclusion was, I think that leave to defend should be granted
unless it was
“very clear”
that the defendant had no defence, not even one which could be described as
arguable.
9.
From these cases it seems to me that the following is a summary of the
present position:-
(i) The
power to grant summary judgment should be exercised with discernible
caution,
(ii) In
deciding upon this issue the Court should look at the entirety of the situation
and
consider the particular facts of each individual case, there being several
ways
in which this may best be done,
(iii) In
so doing the Court should assess not only the Defendant’s response, but
also
in
the context of that response, the cogency of the evidence adduced on behalf
of
the Plaintiff, being mindful at all times of the unavoidable limitations which
are
inherent on any conflicting Affidavit evidence,
(iv) Where
truly, there are no issues or issues of simplicity only or issues easily
determinable,
then this procedure is suitable for use,
(v) Where
however, there are issues of fact which in themselves are material to
success
or failure, then their resolution is unsuitable for this procedure,
(vi) Where
there are issues of law, this summary process may be appropriate but
only
so, if it is clear that fuller argument and greater thought, is evidently
not
required for a better determination of such issues,
(vii) The
test to be applied, as now formulated is whether the Defendant has
satisfied
the Court that he has a fair or reasonable probability of having a real
or
bona fide defence; or as it is sometimes put, ‘is what the Defendant says
credible?’,
which
latter phrase I would take as having as against the former
an
equivalence of both meaning and result,
(viii) This
test is not the same as and should be not elevated into a threshold of a
Defendant
having to prove that his defence will probably succeed or that
success
is not improbable, it being sufficient if there is an arguable defence,
(ix) Leave
to defend should be granted unless it is very clear that there is no
defence,
(x) Leave
to defend should not be refused only because the Court has reason to
doubt
the bona fides of the Defendant or has reason to doubt whether he has a
genuine
cause of action,
(xi)
Leave
should not be granted where the only relevant averment in the totality of the
evidence, is a mere assertion of a given situation which is to form the basis
of a defence and finally,
(xii)
The
overriding determinative factor, bearing in mind the constitutional basis of a
person's right of access to justice either to assert or respond to litigation,
is the achievement of a just result whether that be liberty to enter Judgment
or leave to defend, as the case may be.
10.
In this case the following issues arise for consideration:-
- What
effect on the Plaintiff’s claim, has Section 28 of the Landlord and
Tenant (Amendment) Act 1980, and in particular:-
- Whether
under that section, a tenant who avails of the right therein contained to
remain on in occupation pending the Courts’ determination of his
application for a new tenancy, is entitled to do so, paying only to the
landlord the rent as reserved in the pre-existing lease,
- Whether
such a tenant, on being ultimately unsuccessfully, is liable on vacating the
property to answer a landlord’s claim for mesne rates in respect of this
said period,
- Whether,
if he is not so amenable, the basis of his protection on the one hand and the
landlord’s restriction on the other, is to be found within the terms of
the section itself, or
(d)
Whether if in this regard the section itself is inconclusive, the landlord
can on some other basis, establish the necessary foundation for his pursuit of
a claim grounded as mesne profits,
- If
such a claim is maintainable what figure should be measured by this court as
representing mesne rates or profits for the period in question?
- Whether
the Defendant in these proceedings is entitled to assert a claim for
compensation for improvements and if so whether the resulting sum can be set
off against the landlord’s award, if any, and finally,
- Whether,
again in these proceedings, the said Defendant is entitled to claim damages for
wrongful re-entry, trespass, breach of covenant for quite enjoyment, assault
and battery - all of which it is alleged arise out of the events which took
place in early October, 1997.
11.
Before dealing with the substantive points in this case, it should be noted
that both the Plaintiff and the Defendant have agreed, that in the hearing of
this Motion, the principles set forth at
par 9
above should not be applied to the first issue for consideration namely the
interpretation of section 28, this because both parties are anxious for a
decision from this Court on the construction of that section. However, in
respect of each and every other issue between them the aforesaid test should
apply.
12.
ISSUE NO. 1
:-
3. Under
Part II of the Landlord and Tenant (Amendment) Act 1980,a tenant in respect of
what is defined by section 5 as a
“tenement”,
is entitled, in certain circumstances to a new tenancy in that tenement. By
virtue of section 13(1)(a), if a tenement was, during the whole of the period
of three years ending at that time, continuously in the occupation of the
person who was the tenant immediately before that time or of his predecessors
in title and bona fide used wholly or partly for the purposes of carrying on a
business, then Part II of the Act applied to such a
“tenement”
.
The period of three years was changed to five years by section 3 of the 1994
Act but only in respect of where the term in question commenced after the
coming into the operation of that last mentioned Act.
13.
Where such an entitlement exists, the new tenancy, which shall begin on the
determination of the previous tenancy, shall be on such terms as may be agreed
between the parties or in default as shall be fixed by the Circuit Court.
(sections 16 and 18(2) of
the Act). When the Court fixes the terms, the
duration of the new tenancy shall be thirty five years or such lessor period as
the tenant may nominate, save that, by an amendment introduced by
Section 5 of
the 1994 Act, the term of a new business tenancy has been reduced to twenty
years and cannot now be less than five, otherwise then with the
Landlord’s consent. If a tenancy is continued or renewed or a new tenancy
granted, then the continued, renewed or new tenancy shall and shall be deemed
to be a continuation of the tenancy previously existing and shall for all
purposes be deemed to a graft upon that tenancy (section 27). The doctrine of
“graft”
,
operates so as to prevent a person in a fiduciary position from acquiring
beneficially for himself the renewal or continuation of the Lease, as the case
may be, to the depravation of the beneficiary. See
Keech
v. Sandford Sel. Cas Ch. 61.
14.
The
procedure applicable where an existing tenant seeks a new tenancy is that as
set forth in the 1980 Act, essentially being contained in
sections 20 and
21
thereof. Following on from the service of a Notice of Intention to Claim
Relief, a Notice of Application is then made to the Court. If the landlord
should have issued his own proceedings, say for example to recover possession,
then that ejectment Civil Bill is heard at the same time as the application by
the tenant for a new tenancy. As indeed happened in this case. There must
inevitably be, it seems to me, a time lapse before the required documentation
is in order and before such disputed matters can get a hearing in the Court of
first instance. Of course either party, if aggrieved by the result, would be
entitled to appeal from such a decision, which of necessity would involve
further time. But what is the position between the expiry of an existing
tenancy and the final determination by the Courts, of a landlord’s claim
for possession as against the tenant’s claim for a new tenancy plus
perhaps other ancillary relief? It is what return or compensation the landlord
is entitle to obtain from the tenant for this period that is at the heart of
this Issue No. 1 in this case.
“28
- Where an application is pending under this Part for a new tenancy or to fix
the terms of new tenancy and the pre-existing tenancy was terminated otherwise
than by ejectment or surrender the tenant may, if he so desires, continue in
occupation of the tenement from the termination of the tenancy until the
application is determined by the Court or, in the event of an appeal, by the
final appellate court, and the tenant shall while so continuing be subject to
the terms (including the payment of rent) of such tenancy, but without
prejudice to such recoupments and readjustments as may be necessary in the
event of a new tenancy being granted to commence from such termination.”
4. As
appears from its wording, this section applies only as and from the date of the
tenant’s application to the Court and not from any earlier date even
where a Notice of Intention to Claim Relief has been served. See
Baumann
-v - Elgin Contractors [1973] IR 169
at p.176. The section therefore operates where an application for a new
tenancy or to fix the terms thereof is pending and where the pre-existing
tenancy was not terminated by ejectment or surrender. In such circumstances
the tenant may, if he so decides, continue in occupation until the application
is finally determined. But whilst so
continuing,
he is subject to the terms of the expired lease, including the obligation to
pay the rent reserved thereunder.
16.
Up to this point in the section there is no dispute, certainly as of now,
between the parties. This means that from the 30th of September, 1997 up to
the 31st of December, 2000, the Plaintiff Company notwithstanding
Baumann,
agrees that the Defendant was a person to whom
section 28 applied and therefore
that he was entitled to continue in occupation of the demised premises under
this section. For his part the Defendant accepts that for such a period his
occupation was on the same terms and conditions as contained in the expired
lease, including an obligation to pay the rent as specified therein. The point
of departure, however, is that the landlord now feels that for this period of
occupation it should be compensated in a sum not measured as against the rent
under the pre-existing lease, but rather under the heading of mesne profits or
rates, in a sum which reflects the open market rental value of it’s said
property.
17.
The
essence of this point in the case centres on the interpretation to be placed of
the last portion of
section 28, which portion reads as follows:-
“...
but without prejudice to such recoupments and readjustments as may be necessary
in the event of a new tenancy being granted to commence from such
termination.”
5. The
landlord claims that by applying a purpositive cannon of construction, this
Court could and indeed should declare an equality of position as between
tenants, whether successful in obtaining a new tenancy or not. Otherwise it is
said, an anomalous result occurs. Success on this point solely depends on this
section of the Act, as the Plaintiff Company is not in a position to advance
any other legal basis for the relief which it seeks. The Defendant on the
other hand, has a diametrically opposed view with the section in his opinion
being quite clear. A tenant, continuing in occupation for the relevant period
does so on exactly the same terms and conditions as in the expired lease. So
once he discharges the existing rent, his obligation to the landlord, in that
regard, is fully satisfied. This follows it is claimed from the clear wording
of this, the last portion of section 28.
18.
The right conferred by
section 28 is not new and is not confined to a business
relationship. The section in question has a predecessor in
section 38 of the
Landlord and Tenant Act 1931, which latter section, in its substantive form,
was virtually identically worded. It has in our law therefore, an antiquity
of at least 70 years. A similar provision, though not exactly the same, was
contained, in the context of reversionary leases, in
section 23 of The
Landlord
and Tenant (Reversionary Leases) Act, 1958 which section has largely been
reproduced in section 40 of the 1980 Act. Sub section (1) of section 40 deals
with a person who is entitled to obtain a reversionary lease but whose
interest in the land has expired prior to agreement having been reached or the
process having been concluded. Such a person can continue to hold the land
until he is declared either not to be entitled to or else has executed in his
favour a reversionary lease. During this period the land is held on the terms
so far as applicable -
“on
which he previously held them, subject to any recoupments or adjustments that
may be made under the reversionary lease if granted to him”.
6. Sub
- section (2) however is worded differently. That sub - section applies where
an application for a reversionary lease is made but where the existing interest
expires before it is determined. In such circumstances a lessee is given a
right to remain in possession until the application is finally disposed of. If
he chooses to exercise that right he does on the terms, so far as applicable,
on which he previously held the land but “
subject
to such recoupments or adjustments as the Court thinks proper”.
So, as can be seen, under sub - section (1) the recoupments or adjustments as
envisaged, at least
prima
facie
,
appear to arise only where a reversionary lease is granted whereas under sub -
section (2) no such context is specified for the operation of the
recoupment’s or adjustment provision.
19.
In addition to such a right being given to business tenants and to those in a
reversionary lease situation, a similar entitlement is available to those who
seek to statutorily acquire a
fee
simple
interest under The Landlord & Tenant (Ground Rents) (No 2) Act 1978, as
amended. Section 12 of the 1984 Act reads as follows:-
“
12
(1) A
person to whom Part II of Act (No 2) of 1978 applies by virtue of Section 73 of
the Act of 1980 and whose interest in the land has expired shall continue to be
entitled to hold the land until either he is declared not to be entitled to
acquire the fee simple or a grant to him of the fee simple is duly made and
during such period he shall hold the land on the terms (so far as applicable)
on which he previously held it, subject to all proper recoupments or adjustments.
(2) When
an application is made in relation to the acquisition of the fee simple and the
interest of the applicant in the land expires before the application is heard
and determined, the applicant shall be entitled to remain in possession of the
land until the application is finally heard and determined on the terms (so far
as applicable) on which he previously held it, subject to all proper
recoupments or adjustments
”.
7. Apart
from the wording difference when dealing with recoupments and readjustments
there is also some difference in the body of each of these sections themselves.
Section 28 refers to continuing “
in
occupation
”
and “
while
so continuing
”;
section 40(1) enables a person “
to
hold land
”
and “
during
such period he shall hold
...”, whereas ss (2) entitles a person “
to
remain in possession”
.
Section 12 (1) of the 1984 Act replicates ss (1) of section 40 with section
12(2) equally reflecting ss (2) of section 40.
20.
For the purposes of the issues under consideration in this case nothing in my
view turns on the different phraseology used in the aforesaid Sections of the
1980 and 1984 Acts. The reason is that such wording does not call for
interpretation, strictly speaking, in the context of a Landlord and Tenant
relationship. In my opinion the right conferred by these sections does not
create or establish any new statutory tenancy. It most certainly does not
create any new contractual tenancy as where for example a tenant remains in
possession after the expiry of his term and rent is paid and accepted, then
without more the parties by operation of law are presumed to have agreed to a
yearly tenancy on the same terms and conditions as are applicable. See
Phoenix
Picture Palace Ltd .v. Capital And Allied Theatres Ltd
(1951) Ir Jur Rep 55. The right is simply one to continue in occupation and no
more. Such continuation is of course on the terms as decreed by the various
sections but though such terms and conditions may differ, this does not change
the nature of the right so conferred. Such a right is I think personal, that
is personal to the pre-existing tenant and, quite unlike a contractual tenancy,
does not create any estate or interest capable of being transferred or
transmitted either
inter
vivos
or on death. It is also quite unlike any traditional statutory tenancies which
existed previously such as those under
section 32 of the
Rent Restrictions Act
1960 as amended by both
section 10 of the 1967 amendment act and
section 11 of
the Landlord & Tenant (Amendment) Act 1971. Such a tenancy so created,
which is now of course governed by the
Housing (Private Rented Dwellings) Act
1982 as amended, is expressly capable of conferring rights on identifiable
persons in certain specified circumstances. That is not the situation under
discussion, which incidentally is also quite unlike the old renewable 15 year
“judicial tenancies”, which arose under the Land Law (IR) Act of
1881 as amended, see Wylie Land Law at para. 149. As I have said in my view,
the right in this and similar situations is a bare one, and by itself does not
confer on the tenant any estate or interest in the land. Consequently, though
in
other areas of landlord and tenant law the above phraseology could and indeed
would convey quite different meanings, nevertheless I don’t believe that
there is any significant difference between them in the context of these
sections.
21.
The overriding
duty
of a Court when asked to construe any piece of legislation is to try and
ascertain what the true will and intention of the legislature is. The first
step in this process is to consider, in the context in which they appear, the
words themselves and, in the absence of any contra indicator to give to such
words their ordinary and natural meaning. If in so doing, the Court can in
this way, clearly identify what was intended by the Oireachtas then it will not
be necessary to invoke any of the very numerous subsidiary rules of
construction which have been established over the years. In
Cork
County Council v. Whillock
[1993]
I IR 231 at 237 Mr. Justice O’Flaherty stated:-
“...
it
is clear to me that the first rule of construction requires that a literal
construction must be applied. If there is nothing to modify, alter or qualify
the language which the statute contains, it must be construed in the ordinary
and natural meaning of the words and sentences
.”
In
the
Inspector
of Taxes v. Kiernan
[1981]
IR 117, Mr. Justice Henchy at pages 121 to 122 explored the meaning as
contextually based when he said:-
“A
word or expression in a given statute must be given meaning and scope according
to its immediate context, in line with the scheme and purpose of the particular
statutory pattern as a whole, and to an extent that will truly effectuate the
particular legislation or a particular definition therein ...
Leaving
aside any Judicial decision on the point, I would approach the matter by the
application of three basic rules of statutory interpretation. First, if the
statutory provision is one directed to the public at large, rather than to a
particular class who may be expected to use the word or expression in question
in either a narrowed or an extended connotation, or as a term of art, then, in
the absence of internal evidence suggesting the contrary, the word or
expression should be given its ordinary or colloquial meaning ...
The
statutory provisions we are concerned with here are plainly addressed to the
public generally, rather than to a selected section thereof who might be
expected to use the words in a specialised sense. Accordingly the word
“cattle” should be given the meaning which an ordinary member of
the public would intend it to have when using it ordinarily.
Secondly,
if a word or expression is used in a statute creating a penal or taxation
liability ...
Thirdly,
when the word which requires to be given its natural and ordinary meaning is a
simple word which has widespread and unambiguous currency the judge construing
it should draw primarily on his own experience of its use ...”
McCarthy
J., in
Texaco
(Ireland) Ltd. v. Murphy
[1991]
2 IR 449, reaffirmed the role of giving the words under construction their
ordinary and natural meaning and of doing so in the context in which they
appear. He said:-
“...
the first rule of statutory construction remains that the words be given their
ordinary literal meaning ...”.
In
Howard v. Commissioners of Public Works
[1994] 1 IR 101 at p.151, Mr Justice Blayney likewise took a similar view by
decreeing that:-
“The
cardinal rule for the construction of acts of parliament is that they should be
construed according to the intention expressed in the acts themselves. If the
words of the statute are themselves precise and unambiguous, then no more can
be necessary than to expound those words in their ordinary and natural sense.
The words themselves alone do in such a case best declare the intention of the
lawgiver
.”
8. And
finally see also
Lawlor
v. Flood
[1999]
3 IR 107 at 136 where Mrs. Justice Denham said:-
“The
words of the Statute are clear and unambiguous. Thus the ordinary sense of the
words should be applied ...
As
plain words make clear the meaning and intent of the section it is unnecessary
to apply any further Canon of Construction.
”
22.
Where
however an application of this literal approach leads to an
“absurdity” then recourse may be had to an alternative approach,
such as the one previously articulated as the golden or mischief rule but more
modernly being referred to as the schematic or teleological approach. This
permits the Court to attribute to the words a secondary or modified meaning
which they are capable of bearing. See for example
Frescati
Estate Limited -v- Walker
[1975] IR 177;
Nestor
-v- Murphy
[1979] IR 326 and
DPP (Ivers) -v- Murphy
[1999] 1 IR 98.
23.
In applying these principles to section 28 of the 1980 Act, it seems to me that
the relevant wording is clear, indeed unquestionably so, as to when and in what
circumstances recoupments or readjustments may be made under that section.
These can occur, the section says,
“in
the event of a new tenancy being granted
...
”
There is I feel no doubt, ambiguity or uncertainty about this phrase. The
plain meaning and understanding of the words can only convey the view that
under this section a tenant must have been successful in his assertion for a
new tenancy before there can be any question of recoupments or readjustments.
In my opinion it would be very difficult to read the section otherwise. If I
was to construe these words, in the manner suggested by the Plaintiff’s
Company, I would either have to delete a significant part of the section or
else insert words to the effect that a similar power exists even if the
application was unsuccessful. I firmly believe, that under the rules of
interpretation as above set forth, there would be no justification for me in so
doing.
24.
Nor do I believe that the interpretation which I propose to give section 28
and which necessarily follows from what I have already said, leads to an absurd
result. If it does then the absurdity may be either way. There are at least
three possible results which may follow the operation of section 28. The first
is that the rent, at expiry, is equivalent to the market rent and so remains
for the duration of the period of occupation. If so the landlord could have no
complaint in these circumstances. The second is what has occurred in this case
with the tenant, of course, having no complaint in such circumstances. But
there is a third where in a falling market a tenant could indeed feel quite
aggrieved at having to pay a pre-existing rent which could be much higher than
the market rent. True the latter has not tended to happen in the recent past
but this illustration shows that it is the market, at least in part, which
dictates the result. I can see nothing anomalous about that. Furthermore from
a landlord’s point of view there is no reason, certainly for the past 30
years, even with inflation, as to why, with the use of rent review clauses, the
rent of a pre-existing tenancy should not be in keeping with or at least very
close to the market rent at any given time. There are different forces at play
in this relationship from time to time with variable consequences. Simply
because in this case the result is adverse to the landlord, this does not in
my view, even if otherwise one had power to so do, afford any compelling reason
to depart from the otherwise clear meaning of the section.
25.
There
are a number of other reasons why I believe the above approach to section 28 is
justified. When a tenant is successful in his application for new tenancy, the
accruing benefit to a landlord is the guarantee of a return, fixed by the Court
if necessary, over a specified period as well as having his asset preserved
through the insuring and repairing obligations normally imposed on such a
tenant. For an unsuccessful applicant however, there is nothing. Compensation
for Improvements is but a method by which a tenant may recoup his expenditure
on the demised property, which expenditure has enhanced its value for the
landlord but in respect of which the tenant no longer enjoys occupation.
Compensation for Disturbance arises where a tenant has satisfied all of the
statutory preconditions for the obtaining of a new tenancy, but is denied such
a tenancy because of the landlord’s plans for the property. So under
neither hearing is there any additional benefit accruing to the former tenant.
Indeed under
section 18 (4) of the 1980 Act, a tenant is expressly denied any
right to compensation in respect of the termination of his previous tenancy.
Being so unsuccessful therefore the tenant finds himself in this situation,
whereas the landlord’s position may be significantly enhanced because, by
recovering possession of an asset without an occupying tenant, it may indeed be
very valuable to him. In such circumstances the Legislature may well have made
a deliberate decision in this regard.
26.
If
the aim of the Oireachtas was otherwise, it could in 1980 have re-enacted
section 38 of the 1931 Act in a different form, perhaps as in
section 12 of the
1984 Act, and in this way, at least have left open the possibility of a
landlord being in a position to seek what the Plaintiff Company now seeks
against its former tenant. Compare, for example, the wording of section 40 (2)
with section 28. Moreover, when inserting
section 12 in 1984, the Oireachtas
could have taken the opportunity of treating applicants for a new tenancy, who
continue in occupation, in the same way as it treated those who likewise
continue in occupation, but instead who sought the acquisition of the
fee
simple
.
It did neither, and to date has not done so. To effectively rewrite the
section, would I feel, be to unfairly attribute to the draughtsman an oversight
which I think may very well have been intentional. Of course if a tenant
attempted to use section 28 solely as a device or pretence then that would
constitute an abuse of the process and could be dealt with accordingly.
27.
On
behalf of the landlord it is suggested that this Court should apply a
purpositive approach to the interpretation of section 28, an approach which it
is said was adopted by the Supreme Court in
Twill
Ltd. v. John F. Kearney
,
U/R 28/6/2001. In that case what was in issue was the correct interpretation
of the phrase “ at any time” as contained in
Section 13 (i) (a) of
the 1980 Act. No fewer that seven possible meanings were canvassed in respect
of these words which according to Mr. Justice Murphy :-
“most,
if not all, of the foregoing candidates held significant attractions but also
serious shortcomings in their bid to fill the position as the operative or
relevant date by reference to which the performance of the tenant’s
conditions precedent to the grant of a new tenancy must be determined.”
9. Such
a situation is immediately distinguishable from the present case where in my
view there are no such competing interpretations and where that opted for does
not produce a
“serious
anomaly”.
The
Twill
judgment is however of interest in that in the opinion of Mr. Justice Fennelly
the phrase in question should to be considered in the context of the 1980 Act
and should be given a meaning
“which
is most consistent with the aims of the legislation ... (and)... the
legislative history including the Act of 1931”
and the report of the Conroy Commission. Such an approach is I feel supportive
of the conclusion above reached.
28.
In
any event even if I was to apply a schematic approach, I would arrive at a
conclusion which would not be of any benefit to the Plaintiff in these
proceedings. In my view, irrespective as to what approach is taken, the most
advantageous position which could result to the landlord, would be a conclusion
that section 28 was moot on the point in that it did not contain a prohibition
against the seeking of the higher return. However, on the other hand I could
not under any circumstances see the section being used as a legal basis for
such recovery. That being the situation the question then arises, even on this
interpretation, as to what other basis the Plaintiff company can rely upon as
grounding this claim. In my view there is none.
29.
Where
an owner has been deprived of his property, he is as a result, entitled to
recover possession and in addition in an action for trespass, all the profits
derived out of the lands by the person wrongfully withholding them.This from
the time when the owners title accrued. Mesne rates are recoverable from the
day on which the Plaintiff’s title to re-enter accrues. In ejectments
for overholding this is the day on which the tenancy was terminated by efflux
of time or by notice to quit, or otherwise. In forfeiture it runs from the day
on which possession under the forfeiture is demanded, as up to that date the
tenant is in possession with consent (
Meares
v. Redmond
1879 4 L.R. Ir 533).
Even
in the case of overholding, if the tenant remains on with the consent of the
landlord, he is not liable for mesne rates, as there cannot be a trespass with
consent. See pages 446-447 of Harrison, Ejectments in Ireland, and p. 69 of
the Black Deale where, in the commentary on section 77 of Deasy’s Act, it
is reiterated that such a claim for mesne profits arise only on trespass that
is where the Defendant wrongfully withholds possession of the plaintiff’s
lands . Quite evidently for the period in question Mr. Duncan was not a
trespasser and therefore I cannot see how recovery of the sum sought can be
based on a claim for mesne profits. Nor do I think has
section 5 of
Deasy’s Act any relevance or that the Plaintiff company can mount an
action for “use and occupation”. Under section 46 of the 1860 Act,
a landlord is entitled to recover “
a
reasonable satisfaction”,
for a tenant’s use and occupation of a demised premises but only where
such tenant is occupying with the agreement of the landlord and in
circumstances where no rent has been specified or determined. Obviously quite
unlike section 28. In addition there is no suggestion that an action could be
founded, much less successfully so, on the basis of any alleged breach by the
defendant of his covenant to deliver up quite enjoyment of the property on the
expiration of the term created by the said Lease. Furthermore, it cannot I
feel be claimed that Mr. Duncan was a tenant at will or at sufferance or that
some sort of
estoppel
exist
which could operate against him in defending these proceedings. The
fundamental position is that at no time up to the 4th day of December 2000
could it be said that the Defendant was a trespasser and accordingly none of
the aforesaid circumstances can be relied upon by the Plaintiff in order to
afford to it a cause of action wherein it could successfully seek the relief
now demanded. Consequently, in my opinion, by virtue of section 28 of the 1980
Act, and in the absence of any other cause of action available to the Plaintiff
in which it may recover mesne rates, the tenant is obliged to the landlord only
to the extent of the rent which was then current at the expiry of his tenancy.
This obligation has been acknowledged. Since in my view no greater sum is due
this part of the landlord’s claim cannot succeed.
10.
In such circumstances quite evidently there is no necessity to consider
the measure of any such profits.
30. ISSUE
NO. 3 :-
11. In
the Notice of Intention to Claim Relief served pursuant to section 20 of the
aforesaid Act of 1980, the defendant, in addition to seeking a new tenancy,
also claimed in the alternative, a sum of £3 million compensation for
Disturbance and £10,000 compensation for Improvements. In the original
Defence and Counterclaim, at paragraph 7(c) thereof, an order for compensation
for Disturbance and Improvements was also sought. This relief was repeated in
the amended Defence and Counterclaim. Equally so such a claim for both
Disturbance and Improvements was contained in the Notice of Application dated
the 19th day of October, 1998, which was made under section 21 of the Act. All
of this documentation was before the Circuit Court, when that Court at the same
hearing dealt with the Plaintiff’s Ejectment Civil Bill for Overholding
and the Defendant’s Application for a new tenancy. The resulting order
is dated the 5th day of November, 1998 and therein it is expressly recorded that
“the court doth order:- (1) that the Defendant’s Counterclaim
herein be and the
same
is hereby dismissed with no Order as to costs.”
31.
An
appeal was taken from this Order. It was heard by and resulted in Mr. Justice
Butler on the 4th of December, 2000 making an order on this Circuit appeal.
Again it is expressly recorded in this Order that the
“appeal
be dismissed and the order of the Circuit Court be affirmed”.
Consequently there is no doubt but that in the documentation which was brought
into existence for the purposes of dealing with this Landlord and Tenant
dispute, the Defendant at all stages asserted an entitlement to compensation
for Improvements. Equally so there is no doubt but that the order of both
courts expressly dismissed that claim. In these circumstances I cannot see how
Mr. Duncan can now, once again, attempt to reinstate and effectively argue
afresh this ground of relief. On his behalf it is said that since no evidence
was called in either courts dealing with this claim, it is now open to him to
relitigate this matter. I cannot agree with this submission. If what is said
is correct, then that course of action in not calling evidence, must have
followed from a decision deliberately taken by or on behalf of Mr. Duncan. It
was at all times open to him, on the pleadings, to adduce such evidence and
make such submissions on the question of improvements as he saw fit. If he
choose not to do so then the consequences are his and he must abide by them.
Therefore I am quite satisfied that by reason of the Orders of the Circuit
Court and the High Court, taken in conjunction with the pleadings, it is not
now open to the Defendant to reopen this issue of compensation and accordingly
I would refuse leave to defend on this point.
32.
ISSUE
No 4
12. It
is also claimed by Mr. Duncan, that if the within matter should be remitted to
plenary hearing it would be his intention to counterclaim against the plaintiff
for wrongful re-entry, for trespass, for breach of the covenant for quite
enjoyment which was contained in the 1977 Lease, and for assault and battery.
All of these matters arise out of the actions and activities of the plaintiff,
its servants or agents in the beginning of October, 1997, when on at least one
and probably on more than one occasion, it changed the locks on the external
doors of the demised premises and gained entry to it via this method. That in
turn prompted a similar response from Mr. Duncan which was followed by the
parties instituting cross-proceedings in the High Court on the 13th and 14th of
October, 1997 respectively. Arising out of these matters the defendant claims
that he has suffered loss and damage. Whilst it is surprising to note that in
the October 1997 High Court proceedings there was no mention of any relief
being sought on any of these grounds, an omission continued in the original and
amended defence and counterclaim, nevertheless save for the allegation of
assault and battery, I am satisfied, on the test set forth at par 9 above, that
the defendant’s cause of action is such, that it meet the threshold as
therein specified. Consequently if permission was needed, which is
questionable given the intention to progress this matter through a counterclaim
but if it was, then I would grant such leave and do so unconditionally.
33.
The situation of the alleged assault and battery is in a different category in
that if there is any foundation for such a claim, it occurred from
circumstances which happened not later than the end of week number two in
October, 1997. It is clear that Mr. Duncan had at the time full knowledge of
all of these circumstances including the identity of the persons
allegedly involved. It would therefore seem to me that his claim, if any,
which might have existed is statute barred, there being no grounds upon which
I could see any court granting an order enlarging the time under the
Statute of Limitations (Amendment) Act of 1991. I would therefore, if such a
matter is properly before me, refuse to permit the Defendant to proceed with
these allegations of assault and battery in this case.
34.
However
if in the manner permitted, this counterclaim is to travel it must in my view
do so independently of the Plaintiff’s claim. I would not be disposed to
making any Order of set off in this case. Clearly neither
section 21 of the
1860 Act or sections 61 or 87 of the 1980 Act have any application. The
closest provision is perhaps section 48 of Deasy’s act which reads
“All
claims and demands by any landlord against his tenant in respect of rent shall
be subject to deduction or set off in respect of all just debts due by the
landlord to the tenant.”
Even if it could be said that the Plaintiff’s claim is one for rent, the
section it would appear can only be invoked where the cross claim is for a
liquidated sum only. See the judgment of Maguire P in
Mac
Causland and Kimmitt -v- Carroll and Dooley
(1938)
72 ILTR 158. Consequently there will be no order of set off in this case.
35.
Finally
could I say that the unseemly events demonstrated by the landlords conduct at
the beginning of October 1997 are to be seriously disapproved of. No re-entry
is to take place unless it, and the method used, are lawful and in accordance
with law. The procedures available are quite adequate to vindicate any persons
rights and access to the Courts for that purpose is unlimited. Those who
refuse to avail of such rights and such access can only intend to steal a march
on the rule of law. This should not be allowed to happen.
© 2002 Irish High Court
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