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High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Mandalay Ltd. v. Dublin Corporation [1988] IEHC 6 (10 October 1988)
URL: http://www.bailii.org/ie/cases/IEHC/1988/6.html
Cite as: [1988] IEHC 6
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BETWEEN
APPLICANT
RESPONDENTS
Judgment of Mr. Justice Murphy delivered the 10th day of October 1988
This is a claim for compensation for malicious injury under the Malicious Injuries Act 1981. The claim arises out of damage to and indeed the destruction of the premises 29 Merchant's Quay, Dublin 2. It is conceeded that the damage was caused maliciously and the issue on this appeal is the entitlement of the lessee of the premises to compensation for the loss alleged to have been sustained by them in respect of improvements which they carried out to the premises.
The claim arises in this way. The premises were demised by Edmar Estates Limited to Sean Dent by an indenture of lease made in the year 1981 for a term of 35 years from
the 31st day of August 1960 subject to a yearly rent of £8,500 reviewable (upwards but not downwards) at five yearly intervals and subject to the various convenants and conditions therein contained.
The repairing convenant on the part of the lessee was expressed in the following terms:
" To put in tenantable order and condition the upper floors of No. 29 Merchant's Quay not later than 31st day of December 1982 and subject thereto to keep the demised premises in good and tenantable care and in clean condition and excluding damage by or in consequence by fire .......".
The covenant to yield up is in the following terms:
" To yield up the said premises with the fixtures in addition thereto (except such fixtures as should belong to the lessee) at the determination of the tenancy in good and tenantable repair and condition in accordance with the covenants hereinbefore contained and in addition will paint out and remove the name and other writing on the doors of the said premises and will repair re-paint and make good the said door thereof".
In fact the only covenant by the lessee in relation to fire damage is expressed in the following terms:
" To notify the lessors forthwith in writing of any damage by a fire that maybe occasioned to the said premises or to any property of the lessors in the said premises".
The lessor's repairing covenant is to be found in paragraph 3(b) as follows:
" That the lessors will keep the main exterior walls and structures of 30 Merchant's Quay and the common areas in good order repair and condition save as in Clause 2C hereinbefore provided for. The lessors, in particular, shall seal off the existing entrance to the upper floors of 29 Merchant's Quay and the ground floor entrance to the rear of 25-29 Merchant's Quay in plastered block construction".
Having regard to the terms of these covenants it was agreed by both parties that neither the lessor nor the lessee was obliged to repair or reinstate the premises following on their destruction by fire.
It is common case that the lessee expended a sum in the order of £40,000 in making improvements to the demised premises. These improvements did not constitute tenant fixtures but were fixtures which effectively passed to the lessor on their annexation to the freehold. The improvements were in part decorative and in part structural. It is not suggested that there were any circumstances in which the lessee would have been entitled as a matter of law or indeed could as a matter of fact have transferred the benefit of these improvements to some other premises. The clear and simple case made on behalf of the lessee is that he had the right and the opportunity to enjoy and benefit from these improvements during the continuance of the term granted by the lease and any statutory renewal thereof to which he was entitled. Accordingly, it is said when the premises were destroyed by fire that the lessee was the person who, in the words of Section 5 of the Malicious Injuries Act 1981 "suffers the damage" irrespectively of who owned the buildings and the accretions or improvements thereto.
That the premises were destroyed maliciously is not in dispute. Indeed the lessor has already obtained a decree for compensation as a result of the damage done. Moreover it is agreed that the total amount claimed by the lessor and awarded by the Court represented the full value of the premises less the value of the improvements made by the lessee. Indeed the corporation fairly concedes that if the claim for the full amount, that is to say, the value of the premises plus the cost of the improvements had been sought by the lessor that there could have been no effective answer to that claim. What the corporation say here is that the lessee is not the owner of the premises or any part thereof and that the goods damaged were not his property. On their behalf it is said that the loss or inconvenience which the lessee suffers is as a consequence of the damage to the lessor's property and being of a consequential nature is not recoverable under the Malicious Injuries Acts. Again it is said on behalf of the Corporation that as a matter of practise and of law a lessee is entitled to compensation only where the terms of the lease impose upon him the obligation to make good the damage caused by the malicious injury.
Attractive though the lessee's argument is, it seems to me that it is not well founded. It is not possible in these circumstances to divorce the right to enjoy goods from the rights of ownership or at any rate the legal responsibility to maintain the goods. By virtue of the lease under which the premises were held and indeed the various Landlord and Tenants Acts both the lessee and the lessor enjoy numerous rights and undertake various obligations. The most obvious duty imposed upon the lessee is the duty to pay the variable rent but he does have the important right under Section 40 of Deasy's Act to surrender the premises and to relieve himself of further liability in respect thereof. I assume that it was by reference to this section or having regard to its existence that the lease was in fact brought to an end so that the right of the lessee to have any interest in the demised premises terminated as a result of his decision or an agreement made with his approval. Of course it is true that the premises had already been damaged prior to the termination of the lease but the fact remains that if the lessee lost the benefit of the improvements which he made he also rid himself of the liability for the rent and it is reasonable to infer that the rent represented the value of the premises to the tenant taking into account all of the rights and duties of both parties in relation to their respective interests therein and their duties in respect thereof.
What is effectively a rule of thumb operated by the local authority to the effect that compensation for malicious injuries is only paid to a lessee where there is an express obligation to repair may not be valid in every case but it seems to me that the application of such a rule would be more helpful in identifying the person who "suffers the damage" within the meaning of Section 5 of the Malicious Injuries Act 1981 than by ascertaining who was entitled to enjoy the particular improvements during the continuance or renewal of a lease under which the property and its additions were held at the time the damage occurred.
In the circumstances it seems to me that the claim by the lessee/applicant should be dismissed.