High Court grants a landlord judgment in the amount of €109,840.84 against two guarantors of the tenant company who failed to pay the agreed rent, on the grounds that the court was not satisfied that there was a fair and reasonable probability that the guarantors had a real and bona fide defence.
Summary summons – landlord seeks judgment on foot of a summary summons in the amount of €109,840.84 in respect of a lease of premises - lease provided that the liability of the tenant be guaranteed by three directors of the tenant company - specific term of the lease that the guarantors waive any right to require the landlord to proceed against the tenant or to pursue any other remedy whatsoever which may be available to the landlord before proceeding against the guarantor - The term was for a period of nine years - €70,000 per annum - weekly rent was reduced to €600 - terms and conditions of this reduction are not agreed between the parties - letter was sent by the landlord to all three guarantors claiming that the arrears of rent then due were in the sum of €109,840.84, and pointing out that the arrears had been steadily increasing and the fact of their liability as guarantors jointly and severally for the entire amount - a demand was made for the full monthly rent as well as concrete and binding proposals to reduce the arrears - letters were sent to the three guarantors placing them on notice that unless a substantial payment was received together with a firm proposal for monthly reduction of outstanding arrears by the 14th December 2010, such action as might be advised would be taken - further letters were sent to the three guarantors on 22nd December 2010 notifying them that proceedings would be issued - premises were handed back to the plaintiff - no response to the correspondence - summary summons issued against the three guarantors - arising from a misunderstanding relating to letters of demand, the landlord was advised that a notice of discontinuance should be issued against two of the guarantors and that she should proceed solely against one - judgment for the sum of €109,840.84 was granted by the Master of the High Court – a fresh letter of demand was sent to these two defendants - no response was received to that letter - new summary summons was issued – guarantors raised a possible defence to the claim for summary judgment – argued that the landlord acted in breach of the terms and conditions of the lease by entering into and taking possession of part of the demised premises causing considerable logistical difficulties in the daily operation of the business – fin or about early March 2008, they argued that the landlord, unilaterally and without permission, entered the demised premises and took possession of the business telephone and fax machine which were an integral aspect of the business - alleged interference with the trading reputation and goodwill of Wood’s Flowerpot with a view to diverting customers to rival businesses - exhibited a promotional leaflet for Mother’s Day which involved another flower shop in the local area – landlord argued that this was a promotion for her restaurant in tandem with a local flower shop rather than any attempt to interfere with the guarantor’s business – argued that such promotions were available to the defendants but were declined - test which must be applied by the court in summary summons proceedings - whether looking at the whole situation, the defendant had satisfied the court that there was a fair and reasonable probability that they have a real and bona fide defence - no dispute about the sum due on foot of the agreed rent but the guarantors are seeking to set off against such sum an as yet unquantified sum arising from alleged breaches by the landlord of the tenancy agreement - the law is clear that a party is entitled to a set off in equity in relation to any cross-claim arising out of the same contract - problem for the guarantors is that while they were both directors of the tenant company, they are not sued in that capacity - come before the court as guarantors of the tenant’s liability to pay the rent - they have no entitlement to a set off of alleged breaches of the tenancy agreement.