Fund sues over alleged €3.3m rent arrears

The case relates to a claim by Dengrove DAC for alleged rent arrears under a lease dated December 2003 assigned to a number of solicitors with the law firm Byrne Wallace in October 2012.

The solicitors, who are being sued as lessees of the premises from which Byrne Wallace operates,say there has been full compliance with rent obligations.

It is claimed says a rent restructuring agreement was agreed with the landlord to pay from January 2014 an annual rent of €1.3m and, from November 2018, to pay a "market rent" of not less than €1.75m as distinct from an upwards only rent of €2.21m.

The defendants also say they had previously written to Dengrove stating NAMA was informed of the agreed rent variation and NAMA did not deny or dispute that agreement.

The row arose after Dengrove bought from a NAMA company various loan facilities and related securities of Nesco Properties Ltd, landlord or lessor of the premises at 87/88 Harcourt Street.

Dengrove claims Nesco had in early 2017 defaulted in complying with its obligations to the fund, as a result of which the fund appointed Luke Charleton and Andrew Dolliver as joint receivers over Nesco's secured assets, including the lease on the Harcourt Street premises.

The fund claims the premises were demised under the lease for 25 years from November 2003 with an initial annual reserved upwards only rent of some €2.191m and rent reviews every five years. The open market rent of the property was determined in March 2010 as €2.21m following a rent review, it claims.

As a result of alleged default by the then lessees of the premises, Nesco took High Court proceedings which were later compromised on agreed terms, it is claimed.

The terms, with prior written consent of the NAMA company, involved the then lessees assigning their interest under the lease to the defendant, it is claimed.

The fund contends the assignment provided the defence would pay, between January 2012 and June 2014, a reduced annual rent of €1.105m but that it was obliged to pay an annual rent of €2.21m from July 2014.

The fund claims the lessees had from late 2013 sought to renegotiate the rent payable under the lease and had claimed, as a result of negotiations with Nesco, an agreement was reached in the terms alleged by the lessees.

The fund disputes that claim and says Nesco has denied it reached any agreement with the defendants in the terms of a draft deed of variation of lease.

It is claimed the receivers only learned after their appointment in April 2017 the defence was not paying the upwards only rent of €2.21m.

The fund says it later decided to pursue recovery of rent arrears via court proceedings in circumstances where the lessees continue to claim rent arrears are not owed and there was no obligation to recommence from July 2014 payment of annual rent of €2.21m.

When the proceedings came before Mr Justice Brian McGOvern on Monday, he was told by Mark Sanfey SC, for the fund and receivers, there was consent to have the case admitted to the Commercial Court. The judge transferred the case and approved a timetable which will see it return to court in July.