Business

Judge finds ‘Mexican standoff’ over pub licence for Dublin premises

In pre-trial decision, it was found the tenant unlawfully held the publican’s licence to prevent re-letting of premises

A High Court judge has found that a pub lessee with alleged arrears of €441,948 engaged in a 'Mexican standoff' to prevent the landlord reletting the Dublin premises.

Ellen O'Riordan
Tue Jun 18 2024 - 16:35

A High Court judge has found that a pub lessee with alleged arrears of €441,948 engaged in a “Mexican standoff” and unlawfully held the publican’s licence to prevent the landlord from reletting the Dublin premises.

In a ruling on Tuesday, Mr Justice David Nolan said Lindat Limited, the owner and landlord of the Dublin 13 pub premises, has a strong case, yet to be argued at a full trial, that it validly served a forfeiture notice on the tenant.

He was satisfied Lindat made out a strong case at this pre-trial stage that he should grant an order for the tenant, The PW Plaza Cafébar Limited, to return the publican’s licence to it.

He said PW Plaza Cafébar began leasing the premises of the pub, called the Donaghmede Inn, in a shopping centre in Grange, Baldoyle, in September 2020, when pubs could not trade due to Covid-19 restrictions. The premises was at that point vacant and in need of refurbishment, he said.

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It is part of the large property company Harcourt Development Group, which Lindat was also part of until July 2023, when its shares were transferred to a new company called Marisola Ltd.

Under new ownership, Lindat served a notice of forfeiture on PW Plaza Cafébar in August 2023 when arrears of rent, service charges and insurance premiums allegedly totalled €441,948, said the judge.

The tenant alleged the notice was invalid due to a September 2020 side letter to the lease which, it said, suspended payments until the pub was furnished and trading.

It claimed it spent more than €255,000 upgrading the premises and that it is still willing to pay rent once Lindat permits it to open. It alleged the landlord has been preventing it from operating.

The judge said the lease, drawn up when the two firms were still part of the same group, recited that the rent was for the premises in a “shell and core” state.

A clause suspended the rent during Covid-19 restrictions, and a side letter was written by Lindat to PW Plaza Cafébar stating that the rent would be abated for the first two years.

A second side letter — which Lindat alleges is invalid — waived the obligation to pay rent, service charges, insurance and other outgoings, with a 50 per cent cut to initial rent even if the business started to trade, the judge said.

After serving a notice of forfeiture, Lindat re-entered and took possession of the pub premises on August 29th, 2023, said the judge. The following day it asked the lessee to transfer and deliver the publican’s licences and restaurant certificates.

It applied to the District Court in September 2023 to transfer the licence into its name but, unbeknown to it, the next day PW Plaza Cafébar applied to the Revenue Commissioners for the licence to be renewed in its name. In November 2023, the District Court certified that Lindat was entitled to receive the licence.

Lindat issued its High Court proceedings last January seeking orders for the licence transfer.

In his ruling, the judge dealt with Lindat’s pre-trial request for a temporary injunction — requiring the return of the licence — pending the determination of the full dispute.

The judge said he was “troubled” by the creation of the second side letter, which seems to have come into existence by subterfuge.

He said it appears to have been an attempt to bind any new owners of the shares of Lindat with an agreement not to seek rent, rates or other charges for an indefinite period in circumstances where a lender’s permission was required but not obtained.

He was persuaded that, even if it transpires that Lindat is unsuccessful following a full trial of the issues, PW Plaza Cafébar will be able to seek damages.

He found there is a “Mexican standoff” with PW Plaza Cafébar unlawfully holding the licence to prevent Lindat from reletting the premises. In those circumstances, the least risk of harm rested with granting the orders sought.

Ellen O'Riordan

Ellen O'Riordan

Ellen O'Riordan is High Court Reporter with The Irish Times

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