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Consultation Paper on the General Law of the Landlord and Tenant

Consultation Paper on the General Law of the Landlord and Tenant

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perfectly c<strong>on</strong>sistent with <strong>the</strong> relati<strong>on</strong> <strong>of</strong> l<strong>and</strong>lord <strong>and</strong> tenant that <strong>the</strong>tenant should hold rent free.” 90 However, that case involved al<strong>and</strong>owner seeking to maintain an acti<strong>on</strong> for use <strong>and</strong> occupati<strong>on</strong>against a purchaser who remained in possessi<strong>on</strong> after an abortive sale.Such an acti<strong>on</strong> proceeds <strong>on</strong> <strong>the</strong> basis that <strong>the</strong>re is an impliedagreement that <strong>the</strong> occupier should pay a reas<strong>on</strong>able sum equivalentto rent. 91 The court ruled that no such implied agreement existed in<strong>the</strong> circumstances <strong>of</strong> that case <strong>and</strong> that <strong>the</strong> overholding abortivepurchaser was really a licensee. 921.22 More recently <strong>the</strong> issue arose in Irish Shell & BP Ltd vCostello Ltd, 93 which c<strong>on</strong>cerned whe<strong>the</strong>r <strong>the</strong> licence agreement underwhich a petrol stati<strong>on</strong> was operated c<strong>on</strong>stituted a tenancy. Under thisagreement <strong>the</strong> operator (described as “<strong>the</strong> Hirer”) paid hiring fees foruse <strong>of</strong> petrol tanks <strong>and</strong> pumps, machinery <strong>and</strong> o<strong>the</strong>r items suppliedwith <strong>the</strong> premises. It was argued that since <strong>the</strong>re was no payment <strong>of</strong>“rent”, <strong>the</strong>re could be no tenancy within secti<strong>on</strong> 3 <strong>of</strong> Deasy’s Act.The majority <strong>of</strong> <strong>the</strong> Supreme Court held that <strong>the</strong> fees were insubstance rent <strong>and</strong> that <strong>the</strong> agreement did create <strong>the</strong> relati<strong>on</strong>ship <strong>of</strong>l<strong>and</strong>lord <strong>and</strong> tenant. 94 However, Kenny J dissented <strong>on</strong> this view <strong>of</strong> <strong>the</strong>fees <strong>and</strong>, holding <strong>the</strong>y were not rent, ruled that no such relati<strong>on</strong>shiphad been created because <strong>of</strong> secti<strong>on</strong> 3 <strong>of</strong> Deasy’s Act. Quoting bothsecti<strong>on</strong>s 1 95 <strong>and</strong> 3 <strong>of</strong> <strong>the</strong> Act he stated quite firmly: “But <strong>the</strong> payment<strong>of</strong> rent is, in Irel<strong>and</strong>, an essential for <strong>the</strong> creati<strong>on</strong> <strong>of</strong> <strong>the</strong> relati<strong>on</strong>ship <strong>of</strong>909192939495Corrigan v Woods (1867) IR 1 CL 73, 75.This comm<strong>on</strong> law rule was given statutory recogniti<strong>on</strong> in secti<strong>on</strong> 46 <strong>of</strong> <strong>the</strong>Deasy’s Act: Wylie op cit paragraph 12.13. See also paragraph 8.15below.Pigot CB stated: “If it was a licence to hold without rent, no acti<strong>on</strong> lies:<strong>and</strong> is not what is d<strong>on</strong>e when a pers<strong>on</strong> is let into possessi<strong>on</strong> under anabortive sale a licence to hold without rent?” Ibid.[1981] ILRM 66.Per Griffin J op cit at 71 (O’Higgins CJ c<strong>on</strong>curring). Note that Griffin Jexpressly referred to <strong>the</strong> Deasy’s Act argument <strong>and</strong> did not dispute itsvalidity in principle; his decisi<strong>on</strong> was based <strong>on</strong> a different view <strong>of</strong> <strong>the</strong>nature <strong>of</strong> <strong>the</strong> fees (ie, that <strong>the</strong>y were in substance rent).The definiti<strong>on</strong> <strong>of</strong> both “rent” (see paragraph 1.21 above) <strong>and</strong> “lease” (ie“any instrument in writing, whe<strong>the</strong>r under seal or not, c<strong>on</strong>taining a c<strong>on</strong>tract<strong>of</strong> tenancy in respect <strong>of</strong> any l<strong>and</strong>s in c<strong>on</strong>siderati<strong>on</strong> <strong>of</strong> a rent or return.”).21

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