Wednesday 21 August 2019

Landlord prevented taking possession of Dame Street hotel in dispute over rent


Tim Healy

The High Court has granted an injunction preventing the new landlord of a Dublin city centre hotel from taking possession of the premises in a dispute over rent.

JJ Red Holdings Ltd obtained the interim order against Henciti Ltd, landlord of the Dame Street premises which has operated as the 30-bedroom Dublin Citi Hotel since 2007. 

Henciti is seeking just over €1m which it says is owed in rent arrears. 

JJ Red Holdings says it is not due because it had agreed rent reductions with the previous landlord.

Mr Justice Paul Gilligan granted an injunction restraining the defendant from interfering with JJ Red Holdings enjoyment of the premises pending determination of the proceedings.   The application was made by Hugh Mohan SC, for JJ Red Holdings, on an ex-parte (one side only represented) basis.

Emmet McDermott, a director of JJ Red Holdings, said in an affidavit the hotel, which employs 50 and has a restaurant and public bar, obtained a rent reduction following the economic downturn not long after the lease was signed in 2007.   The original €520,000 per annum rent was reduced to €390,000pa and in 2011 to €260,000pa, initially for three years.

The reductions were made in agreement with the previous landlord and the rent, which worked out at €5,000 per week, was paid and continues to be paid.

The previous landlord's business went into receivership and the receiver sold the hotel premises to Henciti, Mr McDermott said.

On October 5 last, Henciti's solicitors wrote seeking €1,062,500 for rent arrears since July 2011.

JJ Red Holdings replied there were no arrears outstanding.

On October 21, Henciti's lawyer sent a forfeiture notice saying failure to discharge the €1m within 14 days would result in the landlord taking possession.  The defendant also said there was no evidence of two rent reduction agreements, as claimed, and it was "clear" there were arrears of €1m.

Mr McDermott said given the rent reduction agreements, his company is not in default.  He fears the defendant may seek to gain entry to the premises which is likely to have catastrophic consequences for the business.

Mr Mohan SC, for JJ Red Holdings, said as the 14-day forfeiture notice was due to expire Wednesday (Nov 4), he was seeking an interim order preventing interference with the property.

This was in circumstances where his side had written to the defendant asking no action be taken pending resolution of the dispute but there was no reply to this letter, counsel said.

Mr Justice Gilligan said he was satisfied to grant to interim injunction and made the matter returnable to next week.

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