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GAZETTE
JULY AUGUST 1981
Patrick Joseph Maye v. Patrick
Merriman
— High Court (per
Hamilton J.) - 13 February 1980 -
unreported.
LANDLORD AND TENANT
Whether forfeiture of Lease on
Liquidation could take place — effect
of Conveyancing Act 1892 — relief
against forfeiture.
An Foras Tionscal, the predecessor
in functions and title to the
Defendants, developed an industrial
estate in Galway on which it had
erected factory premises. It leased
one of these factories to the Plaintiffs
for a term of 25 years from 1969.
The aim of the Defendants was to
attract suitable industrial activity for
the creation of employment in an
under-developed area and the rents
reserved by such leases (including the
lease in issue) were below market
rents. The lease to the Plaintiffs
contained a covenant restricting the
use of the premises to the
manufacture of copper cylinders and
calorifiers.
The lease contained the following
provision :-
"33.1 If the lessee being a
company shall go into liquidation
(other than a voluntary liquidation
for the purpose of amalgamation
or reconstruction) or being an
individual shall be adjudicated a
bankrupt or take the benefit of any
Act for the relief of debtors or if
an order is made or an effective
resolution passed for the winding-
up of the lessee's business or if a
receiver is appointed over the
property of the lessee, then and in
any of the cases it shall be lawful
for An Foras Tionscal to
terminate this lease by serving a
notice of termination on the lessee.
On the service of such notice this
lease shall absolutely cease and
determine without prejudice to any
claim of An Foras Tionscal
against the lessee arising out of
any antecedent breach or of any
condition of this lease".
The Plaintiff went into liquidation
pursuant to a resolution of 8
November 1977. By letter of 15
November 1977 the Defendants
purported to terminate the lease by
serving a notice under clause 33.1.
The Plaintiffs claimed that by
virtue of Section
2 of the
Conveyancing
Act
1892
the
Defendants were not entitled to rely
on the provisions of the clause.
Section 14 of the Conveyancing
Act 1881 which gave relief against
re-entry or forfeiture did not apply to
"a condition for forfeiture on the
bankruptcy
of
the
lessee";
"bankruptcy" under the provisions
of Section 2 of the 1881 Act
including
"liquidation
by
arrangement".
However,
the
combined effect of Sections 2 (2) and
(3)(e) of the Conveyancing Act 1892
was to provide that the exclusion of
the relief given by Section 14 of the
1881 Act in the event of bankruptcy
was only to apply "after the
expiration of one year from the date
of the bankruptcy" except in the case
of the lease of:-
"any property with respect to
which the personal qualifications
of the tenant are of importance,
for the preservation of the prop-
erty or on the ground of
neighbourhood, to the lessor, or to
any person holding under him".
Held(
per O'Higgins C.J. with Kenny
J. concurring):
(1) That it was difficult to
associate the words "personal
qualifications" with a company. It
was necessary that the Plaintiff
company have power to accept the
lease and to engage in the
industrial activity envisaged but it
was straining language to suggest
that the possession of such powers
related to "personal qualifi-
cations".
(2) That the lease in issue, and
others granted by An Foras
Tionscal and the Defendants, were
made solely for commercial
purposes; that the character of the
property was that of a factory and
the lease provided that it could
only be used as such; that the
neighbourhood was an industrial
estate; and that in relation to
neither the value nor the character
of
the premises nor
the
neighbourhood could the personal
qualifications of the selected
tenant
be regarded
as of
importance; and that if the
Defendants'
contention
was
correct that the relief provided by
the 1892 Act would never apply
to leases made by the Defendants
or An Foras Tionscal; and that if
that were to be so it would require
very express words in a statute to
bring about such a result. The
Plaintiffs were therefore entitled to
relief against forfeiture.
Griffin J.
while concurring in the
result expressly reserved for decision
in an appropriate case the question as
to whether the words "personal
qualifications of the tenant" in
Section 2 (3) (e) of the 1892 Act were
capable of applying where the tenant
is a limited company.
MCB
(Galway)
Limited
(In
liquidation)
v.
Industrial
Development Authority
— Supreme
Court (per O'Higgins C.J. with
Griffin and Kenny JJ.) - 21 May
1981 unreported.
SALE OF LAND
Liability of Purchaser to pay interest
when delay in closing — closing
postponed as a result of adverse act
on search.
The Plaintiffs agreed on 30 March
1979 to sell premises in Dublin for
£130,000 to the Defendant. The
parties used the Law Society
Standard Conditions of Sale (1978
Edition). The closing date was fixed
for 18 May 1979 with provision for
the payment of interest on the
balance of the purchase price in the
event of the sale not being closed on
that day, in certain circumstances.
The Plaintiffs solicitors sent copy
title documents to vouch the title
contracted for to the Defendant's
solicitors on 19 April. There was a.
postal strike in progress and both
firms of solicitors had made
arrangements for delivery of letters
by hand. The documents were to
reach the Defendant's solicitors on
20 April. The conditions provided
that requisitions on title were to be
delivered within ten days, time being
of the essence. It was not until 3
May, because of the complexity of
the title, that the Defendant's
solicitors were in a position to send
their requisitions. A letter enclosing
the requisitions was written and
signed on 3 May but for some
unexplained reason did not reach the
Plaintiffs' solicitors' office until 16
May.
The Plaintiffs' solicitors replied to
the requisitions on 17 May and on 22
May informed the Defendant's
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