In a recent verdict, Mr Justice David Nolan of the High Court has recognised that the tenant of a pub in Dublin initiated an unlawful “Mexican standoff” by retaining the publican’s licence in an attempt to stop their landlord from reletting the establishment, due to a disputed debt of €441,948.
Giving his judgement on Tuesday, Nolan concluded that Lindat Limited, the proprietor and landlord of the pub situated in Dublin’s 13th district, has a strong case in asserting that a legal forfeiture notice was properly issued to the tenant. This matter requires further elaboration at a complete trial.
At this preliminary stage, Nolan was satisfied Lindat presented compelling evidence to warrant an order instructing the tenant, The PW Plaza Cafébar Limited, to surrender the publican’s licence.
He commented that the pub, known as the Donaghmede Inn, began renting from PW Plaza Cafébar within a Grange, Baldoyle shopping centre in September 2020 amidst the trading prohibition imposed by Covid-19 restrictions. The establishment was conspicuously empty and desperately needed a complete overhaul, he added.
Harcourt Development Group, a colossal property organization, included both Lindat and the pub as subsidiaries until July 2023 when Lindat’s shares were transferred to a new entity, Marisola Ltd.
Operating under a new proprietorship, Lindat issued a forfeiture notice to PW Plaza Cafébar in August 2023, citing overdue rental payments, service charges and insurance fees adding up to an alleged total of €441,948, disclosed Nolan.
Despite these accusations, the tenant argued that the notice was negated by a sideline letter, issued in September 2020 altering the lease agreement, which maintained that payments were put on hold until the refurbishment was completed and the pub began trading. PW Plaza Cafébar contended it had invested over €255,000 in the property’s improvement and expressed willingness to resume rent payments once given the green light by Lindat, accusing the landlord of obstructing their business operations.
Nolan pointed out that the original lease agreement, enacted when both companies were under the umbrella of the same group, stated that rent was agreed upon for the property in its basic and central condition.
A condition included in the lease allowed for rent to be waived during Covid-19 enforced restrictions, with a letter from Lindat to PW Plaza Cafébar outlining that rent would be reduced for the initial two years.
According to the judge, a second side letter that Lindat claims is not valid was said to waive the rent, service charges, insurance and other expenses, with an initial rent reduction of 50% even if the business started operating.
On the 29th of August 2023, Lindat served a notice of forfeiture, re-entered, and took over the pub premises. The next day, it requested the tenant to transfer and deliver the publican’s licenses and restaurant certificates.
In its request to the District Court in September 2023 to have the license transferred to its name, Lindat was unaware that PW Plaza Cafébar had applied to the Revenue Commissioners the next day to have the license renewed in its name. In November 2023, the District Court certified that Lindat should receive the license.
The start of this year saw Lindat start its High Court proceedings, looking for orders for the licence transfer.
Dealing with Lindat’s pretrial application for a temporary injunction- seeking the return of the license pending the final resolution of the dispute- was Mr Justice Nolan. He voiced his concern about the creation of the second side letter, which appeared to be a product of deceit.
According to him, it seemed like a bid to bind any new Lindat shareholders with a pledge not to claim rent, rates or other charges indefinitely, in a situation where a lender’s approval was necessary but not secured.
In the judge’s view, even if Lindat fails after a full trial, PW Plaza Cafébar has the potential to claim damages. He noticed a “Mexican standoff” with PW Plaza Cafébar illegally possessing the license to stop Lindat from re-renting the place. Under these circumstances, he believed the least risk was to give the requested orders.