The Gazette 1975

erroneously included a particular area in the property demised, does such denial of the landlord's title in effect work a forfeiture of the lease? From the evidence submitted, the Court held that, even if the defend?nt's conduct amounted to a disclaimer of the lessor's title, it would not have worked a forfeiture of the lease, as there is no provision in the lease to support this con- tention. Obviously in such a case a tenant is estopped from disclaiming his landlord's title. If the relationship of landlord and tenant is repudiated, then the tenrnt cannot insist on the necessity for a notice to quit. In any event the disclaimer, if any, must be of the land- lord's whole title as landlord. Here there was in fact an affirmation of th?t relationship, coupled with a proviso as to an error in the area demised. It is clear from the authorities that, if the defendant's conduct had in fact produced a forfeiture, it would have been a forfeiture of the lease in toto. Many of these author- ities were not cited in the High Court. The defendant's appeal is accordingly allowed by the Supreme Court. (O'Reilly v Gleeson — Supreme Court (O'Higgins C. J., Henchy and Griffin JJ.) per Henchy J. — un- reported — 20 January, 1975.) Tenant, who, having signed new business lease, cannot be put into occupation by the landlord, is entitled to full damages for loss of profits. Dam- ages are not restricted to costs of investigating title. The question whether tax is to be deducted is reserved. Negotiations relating to a new lease of the Gaiety Theatre premises took place between representatives of the plaintiffs and the defendants in March 1972. At the time the defendants had the theatre leased to Eamonn Andrews Productions for 3 years to expire on 23rd September 1972. On I June, Andrews Productions applied to the Cir- cuit Court for a new tenancy of the theatre, under the Landlord and Tenant Act 1931; this was duly granted on 12 July 1972, and affirmed on appeal by the High Court on 26 April 1973. The result of this application by Andrews Produc- tions was that the tenancy granted to the plaintiff had never been able to come into effect. As a lease was actually granted, the plaintiff's cause of action arises from a breach of the covenants in the lease, which, if observed, would have provided for the plaintiff's quiet e njoyment of the premises. Wh en the lease was granted to plaintiffs in March 1972, the defendants were the freehold owners, and no ' e gal question could arise as to their granting this lease u pon the expiration of the Andrews lease. It w?s not due to a defect in title that the defendants could not honour this lerse, but to the orders of the Circuit Court and of the High Court granting a new tenancy of the theatre to Andrews Productions. Mayne and McGregor on Damages, 12th Edn., p.422 states "Breaches of contract by a lessor, fall into two categories corresponding to the division of the trans- action into two categories relating to the agreement of

lease and the execution of the lease. Thus, breach hv failure to execute the lease and breach by delay in doing so, fall within the first category, while into the second fall breaches of the covenants in the lease as executed. The distinction has great practical as well as analytical importance, since solely to the first category". It follows that the Rule in Bain v Fothergill, (1874) by which damages are alleged to be restricted to the cost of investigating title and preparing the lease, does not apply to this case. The normal measure of damages where a tenant fails to get possession, is the value of the unexpired term. This does not mean however that, in a proper case, consequential losses cannot be recovered. In appro- priate circumstances, a tenant might recover loss of profits in a business which the landlord knew he was to carry on upon the premises. This sum has already been determined to amount to £29,500, and the profits lost by the breach are clearly recoverable as part of the damage. The question whether in awarding this sum, account should be taken of income tax or of Corporation Tax was raised. It was contended that the plaintiff earned the estimated profits included in the damages. Reliance was placed on British Transport Commission v Gourley — 1956 Ac. which decided this in England, and which Kenny J. approved of in Glover v BLN (No. 2 )—( 1973 IR 432 but its application to this case has been ad- journed for further discussion. Irish Leisure Industries Ltd., v Gaiety Theatre Enterprises Ltd., — H i gh Co u rt ( O ' H i g g i ns J.) u n r e p o r t ed — 1 2 th F e b r u a ry 1975. ALL IRELAND PROFESSIONAL VALUATION and NEGOTIATION SERVICE ALL PURPOSE PROFESSIONAL PROPERTY VALUATION SERVICE Osborne King &Megran Dublin 760251 Cork 21371 Galway 65261 also at Belfast and London inmniiMiimroiiiMiwmBMHWBnBmHiii^ RENT REVIEWS

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