THE COMPANY in charge of the Crescent Shopping Centre has won its case at the Supreme Court, to charge one of their tenants rent of €309,500 a year.
In a long running case, which was previously taken to the High Court the dispute centres over the terms of its 25 year lease to Carraig Donn, which commenced in 2001.
The Supreme Court, in its judgment handed down, noted that “the background to these proceedings is the difficulty faced by many tenants, at the height of the financial crisis, in paying the rent due under leases, where that rent that been fixed at the height of the boom.”
“In common with many such cases an attempt was made by the parties to these proceedings to negotiate a temporary reduction in rent,” stated Mr Justice Clarke.
Under the terms of the lease in 2001 it was agreed that an annual rent of £120,00 would be paid subject to a rent review every five years for the duration of the term.
On that basis, on September 7, 2006, a rent review was conducted with the annual rent being set at €309,500 thereafter.
Carraig Donn succeeded in the High Court in 2010, and at the Circuit Court was granted a new lease under the 1980 Act, with an annual rent set at €230,000. But Stapleyside argued that the High Court incorrectly concluded that the lease in question had been terminated.
In early 2009, Carraig Donn encountered some financial difficulties and contacted Stapleyside with a view to negotiating a reduction in rent. Stapleyside sent an email to Carraig Donn in April 2009, communicating two options for a reduction.
While there was no formal written acceptance of either option, a cheque for €207,365 - or 67% of the full 2009 rent - was sent to the company, under the second option set out. A month later, the company emailed a written contract to Carraig Donn to formalise their position, but neither party signed that contract.
In November of that year, Stapleyside sent Carraig Donn a notice of termination, stating that it was their intention to terminate the lease on February 16, 2010.
In conclusion, Mr Justice Clarke said he was satisfied that the lease remains in existence, and it follows that Carraig Donn should pay rent to the value of €309,500.
“It likewise follows that, the lease not having terminated at all, there could have been no question of a valid application to the Circuit Court for a new lease under the terms of the 1980 Act.”
The directors of Stapleyside are its manager John Davitt, and Conor and Kevin Kenny, each of whom are also directors of its parent company Clancourt.
According to the REI Shopping Centre Review 2015, the Crescent’s profitability status was listed as the sixth highest in the country.