A legal action in which the company operating Dublin’s Morrison Hotel is being sued for €3.7 million in alleged unpaid rent has been adjourned by the Commercial Court following “useful” discussions between the sides.
On the basis of the progress made in talks, Mr Justice Frank Clarke today agreed to adjourn the proceedings by Martin Ferris, the receiver appointed by Anglo-Irish Bank to businessman Hugh O’Regan’s Thomas Read Holdings, against The Morrison Hotel Ltd (MHL).
The case was due to come before the court again tomorrow via an application by the receiver for summary judgment for €3.7 million against MHL but Rossa Fanning, for Mr Ferris, said today he wanted an adjournment given the useful progress made in discussions.
While the talks had not reached a concluding point, they had gone beyond issues in the application for summary judgment and it was hoped, if the matter was adjourned for a period, it would not ultimately trouble the court, counsel said. The judge agreed to adjourn the case to next month.
In his application, Mr Ferris had alleged arguments on behalf of MHL that it was entitled to offset money spent on renovations of the property against rent were “contrived” and that MHL had no bona fide defence to the rent claim. MHL denied “contriving” a defence.
In an affidavit, Mr Ferris said he was appointed by Anglo last July as receiver of the landlords interest in the hotel, operated by MHL whose directors are Mr O’Regan, Martin Conroy and Dolores Barry. The shareholder of MHL is Thomas Read Holdings, in liquidation, and Mr Ferris said he is also receiver over an asset of THL.
The hotel is owned by Mr O’Regan, Patrick Kelly and Patrick Dunning and MHL in October 2006 entered into two leases with the landlords relating to the hotel and what was known as the Morrison Hotel Extension. Under those leases, MHL was to pay €1.4 million rent per annum quarterly to Mr O’Regan for the Morrison Hotel and a further sum under the extension lease.
Mr Ferris said his solicitors wrote to MHL on July 30th last advising all future rent should be paid to him as receiver. He was informed by MHL’s solicitors on August 12th last they were instructed rent has been discharged “to date”.
Mr Ferris said MHL’s solicitors later stated it was not liable for rent because of agreements entered into with Mr O’Regan in July 2008 and sometime during or after April 2009. He was also told MHL and Mr O’Regan had agreed to offer credit against rent for works carried out by MHL of some €2 million and for leasing costs of €800,000.
If those alleged credits were in fact agreed at that time, MHL would not have been liable to pay rent after that but it had paid rent of €855,616 in July 2008, Mr Ferris said.
A draft report of April 2009 prepared for Anglo following financial due diligence of MHL had recommended rent payable would have to be renegotiated with a view to a substantial rent reduction and also stated a rent free period was required for the remainder of the year and until there was a “substantial pick up” in trading.
This was a recommendation and could not have been implemented unilaterally by MHL and Mr O’Regan without Anglo’s consent, which was not provided, Mr Ferris claimed.
