Specialist
A Commercial Court decision, relating to the Café en Seine premises on Dawson Street in Dublin, changes the landscape for landlords wishing to refuse applications for consent to assign/change use.
In Perfect Pies Limited (in receivership) and Pearse Farrell v Chupn Limited [2015] a landlord was held to have unreasonably withheld consent to a tenant’s application for consent to assign its lease on the basis of ulterior motive.
It had been the position that a landlord could provide valid reasons in Court for refusing consent where it had previously failed to provide a reason or it had previously given an invalid reason. In this case the Court held:
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The Landlord could not rely on otherwise justifiable reasons if it refused consent for improper motive.
The Court decided that the landlord’s stated reasons for refusal of consent, namely non-repair and lack of consent to licensees were spurious and not bona fide objections. The ulterior motive was the landlord’s own desire to obtain possession of the premises. Because of this action, the landlord could not rely on financial strength reasons, which might otherwise have been deemed acceptable reasons to withhold consent.
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The Landlord could not rely on an otherwise justifiable reason if it produced such justifiable reason "like a rabbit out of the hat" having up to that point failed to provide such valid reason to the tenant
The landlord could not rely on financial strength reasons, which might otherwise have been deemed acceptable reasons to withhold consent, as they did not advise the tenant of such reasons, instead relying on "spurious reasons".
The findings of the Court should instruct landlords' behaviour in consent applications. Landlords should now ensure that:
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Their motives in refusing consent cannot be said to be improper
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The tenant is advised of their reasons for refusal in a timely manner
by Tara Rush of William Fry.