High Court of Ireland Decisions

1. There are two applications before me, namely an application for Judgment in the sum of £588,605.41 together with interest thereon, and, in relation to the Defendants counterclaim, an application for Further and Better Discovery. I propose to deal with them individually.

2. This is a most unusual application in that a substantial part of this case has been heard as long ago as April, 1996. The Plaintiff is the Lessor and the Defendant is the Lessee of certain premises in Morehampton Road, in the City of Dublin known as Sachs Hotel, and the original claim in these proceedings was for possession of those premises and for arrears of rent payable under the lease. This claim was met by a counterclaim on the part of the Defendant for damages including exemplary or aggrivated or punitive damages for injurious falsehood, negligent misstatement, defamation and wrongful interference with the economic interests of the Defendant. The counterclaim is made on the basis of allegations that a series of telephone calls were made by or on behalf of the Plaintiff to certain police authorities in the United Kingdom and that these calls were malicious and defamatory to the Defendant. It was originally claimed that the calls were made between January, 1993 and November, 1994.

3. The hearing of the case commenced in April, 1996 and after it had been at hearing for about 4 days an application was made on the part of the Plaintiff for the issue of letters of request to the Courts of the United Kingdom to enable the Defendant to adduce evidence from police officers in that jurisdiction. I agreed to this request and adjourned the further hearing of the matter on certain conditions which at the time I considered were fair to both parties. These were that the Defendant should pay all gales of rent in full as they fell due pending the determination of the action, and further should pay the sum of £100,000 within 28 days in part payment of the arrears of rent and would pay the sum of £3,900 per month by way of interest on the balance. The Defendant, in fact appealed to the Supreme Court against these conditions but they were upheld by the Supreme Court.

4. It was realised at the time that there would be some considerable delay, but it was never envisaged either by the Court or the parties that the case would still be probably twelve months from a final hearing in the middle of the year 2001. There were serious delays in relation to the letters of request, which were not the fault of any of the parties, and ultimately the Defendant rather ingeniously brought proceedings in the United Kingdom under the Norwich Pharmaceuticals principal for discovery of documents against the relevant police officers. This resulted in an agreement on the part of the United Kingdom authorities that certain police officers would give evidence on commission, and that evidence has been duly taken. It emerged from that evidence that the relevant telephone calls were made in the year 1992 and not within the dates as pleaded by the Defendant in the counterclaim.

5. The Defendant than applied to me to amend the counterclaim to include events which occurred in 1992 and I refused to allow such amendment. However, on appeal, the Supreme Court has allowed the amendments and those amendments have given rise to the motion for Further and Better Discovery which I will refer to later.

6. There is one other very relevant factor, namely that the lease of the premises expires on 31st July of this year. The Defendant contends that it will be entitled to a new lease on the basis of the business use of the premises, while the Plaintiff contends that, because of the arrears of rent and behaviour of the Defendant, no Court would grant a new lease. I do not intend to embark on this interesting point, but of course the fact that the lease is about to expire does change the nature of these proceedings and indeed of the terms upon which I adjourn the case.

7. Having decided originally that it would be unjust to grant a decree on foot of the Plaintiff’s claim while the counterclaim was outstanding, and taking into account the fact that the delays which have occurred were quite unforeseen and were not the fault of either of the parties, I would be extremely reluctant to alter the position at this stage of the proceedings. While the Plaintiff may be without its money, it is recovering a high rate of interest, well above what would be commercially available to it. The Plaintiff has made the case that the Defendant is insolvent, and would be unable to meet any decree which I might grant. While the Defendant has not conceded this point, it is probably correct if no new leave of the premises is granted to the Defendant. It seems to me that the Plaintiff’s prospects of recovery on any decree will be no better in 12 or 18 months time it is now, and in the meantime the Plaintiff is recovering substantial interest on a capital sum which it may never receive. This being so, I do not think the Plaintiff has made out a case that it would be greatly prejudiced if the present terms are continued.

8. I say this in the realisation that the premises in Morehampton Road are extremely valuable, and that the issue of whether the Defendant is entitled to a new lease may well determine who benefits from the value of the premises. However, I think the reality must be that it is unlikely that any Court would determine the right to a new lease while the present proceedings are pending.

9. On balance, therefore, in view of the history of these proceedings, the extent to which the case has already been heard and the lack of real prejudice to the Plaintiff, I will refuse this motion for Judgment on terms that the Defendant continues to pay all gales of rent in full as they fall due and continues to pay the sum of £3,900 per month as interest on the arrears. As the lease is about to expire, I will direct that the rent which is to be payable is the rent which is payable during the current year of the lease and that it should be payable on the same gale days as in the present year.

10. The amendment of the pleadings allowed by the Supreme Court has undoubtedly widened the scope of this action by extending it to cover the matters which took place in 1992. There is clearly going to be an issue as to whether the Plaintiff’s claim for damages for slander in relation to the 1992 events is statute barred. In this regard, the question of the date of the Defendant’s first knowledge of the matters complained of may become relevant and to that extent I think the Plaintiff is entitled to revisit the question of discovery. On this basis, I think the Plaintiff is entitled to an order that the Defendant make further and better discovery in relation to the classes of documents at paragraph D(1)(ii) of the Notice of Motion herein. I should say, however, that of course this will not affect the Defendant’s right to plead privilege in relation to any such documents.

11. The third class of documents sought are those in relation to the sale of Mr. Philip Smyth’s interest in the Defendant. While there is no doubt that Mr. Smyth was the controlling influence in the Defendant during the relevant times, the fact remains that this is not an action taken by Mr. Smyth, but by the Defendant Company. The Plaintiff has sought to put forward an inference that Mr. Smyth has some champertous interest in these proceedings but there is no evidence whatever before me in that regard. In my view Mr. Smyth’s sale of his shares in the Defendant Company is not relevant to these proceedings and I will refuse an Order for Further and Better Discovery in relation to the item at paragraph D(iii) of the Notice of Motion.