Kilquane Ltd, landlord of the City Quarter building at Lapp’s Quay, Cork, will next month apply to the Commercial Court for injunctions restraining Irish Examiner Ltd (IEL) occupying offices governed by leases between Kilquane and Examiner Publications Cork Ltd (in receivership).
Kilquane claims Examiner Publications Cork Ltd (EPL) entered in 2008 into 20-year leases, dating from 2006, with Kilquane to occupy parts of the building over three floors and was not entitled to assign leases to IEL as part of the TCH restructuring.
That restructuring incl-uded EPL and various TCH companies being placed in receivership last month.
Kilquane also claims default for more than two years on rent payments with €900,000 in outstanding arrears. Separate proceedings have been taken over the rent issues.
Michael Howard SC, for Kilquane, told Mr Justice Peter Kelly yesterday that his client was not interested in mediation as IEL was trespassing on the premises and rent payments had been “unilaterally halved” for some two years.
The lease was between Kilquane and TCH and could not and should not have been assigned without Kilquane’s consent, he said. The court heard that IEL’s solicitors wrote to Kilquane last month stating it wished to agree a new tenancy and was willing to pay, as an interim measure, some 50% of rent due under the leases.
Kilquane refused to meet and said it would not accept a cheque from IEL for €100,000 to cover rent from March to May 2013.
IEL was prepared to ignore the leases and sought to pressurise Kilquane into granting new leases at much reduced rent “by blithely entering into possession of the premises” and using them for its own commercial purposes “in blatant disregard” of Kilquane’s property rights and commercial interests, Kilquane claimed.
Una Tighe, counsel for IEL, urged mediation of the dispute, stressing that 550 jobs are involved and a business continues to operate from the premises.
The new company operating the Irish Examiner is a highly regarded business achieving significant cost savings and it expects to be profitable by the end of this year, she said.
It was in both sides’ interests that any transfer of the property should be effected in an orderly fashion, she said.
Ms Tighe said her client was in possession of the building with the agreement of the tenant although there was an issue with the landlord. There should be mediation, the dispute should be resolved and no indication had been given that any other tenant was lined up, she added.
Mr Justice Kelly said that while restructurings are commonplace in this climate, none allow the laws of landlord and tenant and constitutional property rights to be set aside.
While he personally wasa strong supporter of mediation, both sides had to agree to enter that process, he said. If one side would not engage, it was pointless.
He made orders for the fast-tracking of the proceedings in the commercial court and listed the injunction application for hearing on May 8. Issues related to the rent arrears were also adjourned to that date.