O’Brien moves to stop BT Communications exiting 25-year lease
The lease contains an upward only rent review clause and more than €35m could fall due for rent over the 25-year term, the businessman claims.
The lease began in April 2001 and BT served 12 months’ notice in May last year of its intention to exercise an option to surrender it. Mr O’Brien claims that option has not been validly exercised.
On the application of Paul Sreenan SC, for Mr O’Brien, the proceedings were transferred to the Commercial Court yesterday by Mr Justice Peter Kelly.
In an affidavit, Richard Strappe, investment director for Mr O’Brien, said the lease on the property at No 1, Grand Canal Quay, to BT was for a 25-year term beginning Apr 2001 and included a clause allowing BT exercise an option to surrender the lease.
BT had to serve at least one year’s written notice of any intention to exercise the option, he said. Having served that notice, he said, BT also had to perform and observe all the lease covenants and, on the date of exercising the option, to pay six months’ rent by way of liquidated damages.
BT purported to serve a notice to exercise the option on May 16, 2011, but, on the date of exercising the option, failed to pay six months liquidated damages as required and rather paid €1,178,927 on May 25, 2011, which was €5,000 less than the equivalent of six months rent. Mr O’Brien’s agent later received a cheque for that €5,000 sum on July 6, 2011, he said.
Mr Strappe claimed, having served notice exercising the surrender option, BT failed to substantially perform and observe all the covenants up to the date of determination, including those related to repair, painting, and decoration.
BT had on May 29 last returned the lease to his client, purporting to having properly complied with its provisions, he said. Mr O’Brien did not accept the option to surrender the lease had been validly exercised.
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