A US-based investment solutions firm claims an attempt is being made to force it to remain on as a tenant of its Citywest Dublin offices despite the fact that it was entitled to break the lease last year.
FISC-Ireland Ltd, part of the Fidelity group, says real estate firm Breezeglade Ireland Ltd, landlord of the Citywest building, has failed to comply with an agreement extending the tenancy a short period beyond the May 2021 break date so that FISC could carry out reinstatement works required by the landlord before handing back the premises.
FISC says Breezeglade also totally ignored the fact that works were delayed by the Covid lockdowns.
Breezeglade denies the claims and has counterclaimed against FISC.
The case opened before Mr Justice Michael Twomey on Tuesday.
James Doherty SC, for FISC, told the judge there had been mediation in the case but it was unsuccessful.
Counsel said that in 2008 his client entered into a 25-year lease with a “break option” provision allowing FISC to end it in the 13th year on payment of a penalty of €405,000. The lease also provided that the premises should be returned to the state they were in when first leased, other than any fittings or fixtures the landlord may wish to keep.
FISC duly served notice of the break option in 2020 and offered to pay Breezeglade a sum in lieu of the reinstatement requirement, but Breezeglade insisted FISC carry out the necessary works.
Due to the Covid lockdown, it was not possible to begin the work until the lockdown was lifted in May 2021. As a result, counsel said it was agreed between the parties in February 2021 that a new break date of September 2021 would be set.
The agreement was that there would be an extension of time on the basis that rent and services would continue to be paid.
However, shortly after the agreement, Breezeglade decided it was not going to execute the deed of variation extending the break date.
Counsel said his client was shocked at this decision. “It was offensive to any sense of fair dealing between the parties, and unconscionable,” he said.
It appeared Breezeglade wanted the lease to remain in place until the next break date in 2028, he said. During that period the rent will be stepped back up, and the cost to FISC before “repopulating the premises is over a million a year”, he said.
“The landlord saw an opportunity to take this position that would be massively in its favour,” counsel said.
FISC had the necessary reinstatement works carried out to a very high standard as required and yet Breezeglade refused to enter or inspect the premises, he said.
The €405,000 penalty payment for the lease break was paid but the payment was returned and, in its counterclaim, Breezeglade is seeking rent and service charges for ongoing lease obligations along with damages.
“The landlord’s position is not simply opportunistic but unconscionably opportunistic,” counsel said.
The case continues.
