Causeway Capital Railway Square LTD v Sam McCauley Chemist (Waterford) (Approved) [2021] IEHC 688 (01 November 2021)

THE HIGH COURT

[2021] IEHC 688

[2019 No. 4274 P]

BETWEEN

P CAUSEWAY CAPITAL RAILWAY SQUARE LTD

PLAINTIFF

AND

SAM MCCAULEY CHEMIST [WATERFORD]

DEFENDANT

EX TEMPORE JUDGMENT OF Mr. Justice Twomey delivered on the 1st day of  November, 2021

1.       This is an application for discovery by the plaintiff in a dispute between, the plaintiff, a landlord, and the first defendant, a tenant, on the expiry of the a lease dated on or about 24th November 2002 between the parties (the “Lease”) regarding a premises in Broad Street, Waterford, and the entry of the parties into a licence towards the end of 2018 regarding the same premises (the “Licence”).

2.       The primary defence to the Landlord’s claim for damages on the termination of the Lease is that the Tenant’s obligation to yield up the premises in accordance with the terms of the Lease was never engaged because of, inter alia, the terms of the Licence, because the Landlord waived the obligation to yield up the premises, because the Landlord prohibited the Tenant from so doing and because the Landlord is thereby estopped from relying upon any dilapidations on the date of surrender of the premises.

3.       The categories in dispute are:

4.      Category One

          “All documents relating to the plea that the yield up provisions of the Lease were not engaged on or about 14 October 2018.”

i.        The Tenant objects to having to comply with this application for discovery on the grounds that what is between the parties is a legal issue as to whether the yield up terms in the Licence took precedence over the yield up terms in the lease.

ii.       However it seems to this Court that there may be more to this issue than simply legal issues since in the defence the Tenant claims that the Tenant offered to return the premises to the Landlord but the Landlord expressly prohibited same.

iii.      The Tenant also claims that this issue between the parties can be determined solely on the basis of the Lease, the Licence and the inter-partes correspondence and so this category of discovery is unnecessary.

iv.      Of course, if the Tenant is correct that the Licence superseded the Lease in October 2018, then this Court understands completely the point being made by the Tenant. However, it is disputed by the Landlord that the Licence superseded the Lease in October 2018, since the Landlord claims that the Tenant over held on the Lease between October 2018 and December 2018, and that the Licence was not executed until December 2018.

v.       This court cannot assume that the Tenant is correct in its claims and that the Landlord is incorrect, so as to agree with the Tenant’s conclusion that the dispute can be determined solely on the basis of the Lease, the Licence and the inter-partes correspondence.

vi.      Indeed if the Tenant is correct, then the swearing of an affidavit of discovery should be a relatively straightforward matter, since there would be no other documents relevant to this issue. However, the Landlord is entitled to have this confirmation.

vii.     Accordingly, in all these circumstances this Court orders the discovery in the terms of category one.

viii.    This is further justified in this Court’s view, since if there are, in fact, any documents in the Tenant’s possession which have the potential to directly or indirectly advance the Landlord’s case or damage the Tenant’s case, then these should be disclosed to avoid a situation in which the Landlord is taken by surprise at the hearing of the action.

5.      Category Two

          “All documents relating to the plea the plaintiff waived, or is estopped from enforcing, its rights under the “Yield Up” provisions of the Lease.”

i.        The Tenant objects to having to comply with this application for discovery on the same grounds as for the first category.

ii.       For the same reasons set out in Category One, this Court orders the discovery in the terms of category two.

6.      Category Three

           “All documents evidencing the fit-out works, the installation of the air conditioning system and the fixtures and fittings at the Premises undertaken by or on behalf of the Defendant.”

i.        This category is agreed between the parties and so will be so ordered in those terms.

7.      Category Four

          “All documents relating to the First and/or Second Schedule of Dilapidations served in respect of the Yield Up provisions under the Lease.”

i.        The Schedule of Dilapidations is the document which was prepared by the Landlord and given to the Tenant.

ii.       For this reason, it can first be observed that it is unusual, though perhaps not unheard of, that a plaintiff be looking for discovery in relation to a document which was prepared by it and sent to the Defendant.

iii.      As regards whether and how the Tenant would have documents which related to this Schedule, the only possibility raised in submissions was that there could be emails on the part of the Tenant in which, upon receipt of this Schedule, it acknowledged that certain works would have to be done.

iv.      However, this litigation between the parties is concerned with the entitlement, primarily as a matter of law, of the Landlord to serve the Schedule of Dilapidations on the Tenant under the terms of the Lease.

v.       In this regard the subjective views of the Tenant upon receipt of that document from the Landlord are not relevant to this issue, in this Court’s view.

vi.      Therefore no order will be made in respect of this category of discovery.

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