There has been a landmark court decision today where a High Court judge has ruled that the rent payable by Bewley’s Oriental Café in Grafton Street, Dublin, to its landlord, must be allowed to fall in line with the currently depressed open market rate.
The decision will have far-reaching consequences for landlords.
The restaurant’s landlord, Ickendel Limited, which is owned by Johnny Ronan’s Treasury Holdings Group, had claimed it was entitled to a five-yearly upwards only rent review.
The decision of Mr Justice Peter Charleton will be widely welcomed by hard pressed shop tenants.
Judge Charleton said that to proceed towards ever-increasing sums in rent every five years, while deflation had decreased, was to substitute an unreal figure for the rent.
He said the existing lease between Bewley’s and Ickendel clearly stipulated that the rent was never to fall below the initial agreement of 1987.
However, an open market clause in the agreement could only reasonably be construed so as to allow for a fall in rent which had increased to €1.5m because of upwards only reviews since 1987.