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Cite as: [2002] IEHC 14, [2003] 4 IR 1

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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.

15. Section 28 of The Landlord and Tenant (Amendment) Act, 1980 reads:-

“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.