Tenant finds there is no frustration during Covid

A very recent High Court judgement in the case of Kenneth Treacy v. Lee James Menswear Limited and James O’Regan followed on from a 2021 High Court decision in the case of Footlocker Retail Ireland Limited v. Percy Nominees Limited. Essentially, Covid 19 Regulations imposed a legal requirement on (most) retail tenants not to trade between March 2020 and May 2021. Each tenant (and indeed the guarantor under the lease in the Lee James case) claimed that there was a “partial frustration” of the provisions of their lease whereby the obligations to pay rent and other amounts should be temporarily suspended during lock-down, although the lease itself and the other rights and obligations thereunder would continue.

Both judges confirmed that the concept of “partial frustration” is not applicable in Irish law.

A further context in the Lee James case was a claim for summary judgement by the plaintiff owner of the building for recovery of significant unpaid rent and insurance contributions. The judge determined that the defence put forward by the tenant and guarantor could not be advanced further at a hearing, as the facts (rent and insurance being due but unpaid) were not in dispute.

Note the bigger picture in Ireland that the Government recommended that commercial landlords and tenants engage with a view to finding the best way forward during the Covid lockdowns. Government and tenants may have hoped that this would lead to a reduction or suspension of outgoings payable under commercial leases, but such an outcome was not mandatory or required.