Leave-to-Appeal Cannot Be Used to Pivot to New Grounds: s.16(2)(f) Applies to All Subleases (Residential and Commercial)

1) Introduction

Crowley & Anor v Sheehan & Anor ([2026] IESC 6) is a Supreme Court appeal concerning the statutory right of long leaseholders to acquire the fee simple under the Landlord and Tenant (Ground Rents) legislation, and in particular the restriction on sub-lessees contained in s. 16(2)(f) of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 (as inserted by the Registration of Deeds and Title Act 2006).

The respondents (Charles Crowley and Raymond Crowley) held a long residential sub-lease of a Cork dwelling under a 1940 lease. The first appellant (Barry Sheehan) acquired the superior leasehold interest under an 1893 head lease. The respondents served a notice of intention to acquire the fee simple. The appellant opposed, initially arguing that because the 1893 head lease contained no covenant to build, the respondents were barred by s. 16(2)(f). The High Court accepted a different argument: that s. 16(2)(f) should be confined to commercial/supermarket-type situations. The appellant obtained leave for a direct appeal to the Supreme Court on the interpretation of s. 16(2)(f).

The Supreme Court (Dunne J.) held that the High Court’s “commercial-only” interpretation was incorrect, but nonetheless dismissed the appeal and affirmed the High Court order, principally because the appellant sought to abandon the case run throughout and to advance a materially different argument at the final stage, after obtaining leave on a public-importance issue.

Key issues

  • Scope of s. 16(2)(f) (1978 Act): does it apply only to commercial/supermarket contexts or generally (including residential)?
  • “Building covenant” misconception: does absence of a covenant to erect buildings in a head lease prevent qualification?
  • Appellate procedure and fairness: can an appellant, having obtained leave on a point of public importance, concede/abandon that point and pivot to a new fact-dependent ground not previously litigated?

2) Summary of the Judgment

  • Statutory interpretation: The Court stated that s. 16(2)(f) contains no textual basis to limit its operation to commercial/supermarket premises; its plain wording applies to subleases generally.
  • No “building covenant” prerequisite: The appellant’s longstanding contention that the head lease must contain a covenant to build was misconceived. A lease may qualify without such a covenant; qualification depends on satisfying ss. 9 and 10, subject to restrictions in s. 16.
  • Disposition of the appeal (procedural): Despite rejecting the High Court’s “commercial-only” rationale, the Supreme Court dismissed the appeal and affirmed the High Court order, because:
    • the appeal came to the Supreme Court on a public-importance issue which “disappeared” once both sides accepted the High Court’s interpretation was wrong; and
    • the appellant then sought to succeed on an essentially new ground (lack of evidence that the head lease qualified under s. 10), a ground not properly litigated below.
  • Constitutionality: No constitutional ruling was made; the Court accepted it was neither necessary nor appropriate to determine constitutionality in the absence of a pleaded challenge.

3) Analysis

3.1 Precedents Cited

Wanze Properties (Ireland) Ltd v. Mastertron Ltd [1992] ILRM 746

The Law Reform Commission’s concern—sparked by obiter comments in Wanze Properties (Ireland) Ltd v. Mastertron Ltd [1992] ILRM 746— was that a non-qualifying lessee might grant a qualifying sublease so the sublessee could acquire the fee simple, undermining the superior landlord’s design. That history explained why s. 16(2)(f) was enacted.

Influence on this judgment: The Supreme Court accepted the historical impetus but stressed that legislative history cannot justify rewriting an unqualified statutory text. The history illuminated the problem targeted, but did not confine the provision’s scope to commercial premises.

Heather Hill Management Company CLG v. An Bord Pleanála and Others [2022] IESC 43, [2024] 2 I.R. 222

The High Court relied heavily on Heather Hill Management Company CLG v. An Bord Pleanála and Others [2022] IESC 43, [2024] 2 I.R. 222 to support purposive construction and use of the Interpretation Act 2005 to avoid “absurdity”.

Influence on this judgment: While the Supreme Court did not undertake an extended restatement of Heather Hill, it aligned with the principle that statutory context matters, yet held the High Court’s commercial-only construction could not be reconciled with the wording of s. 16(2)(f). In effect, the Supreme Court treated the High Court’s invocation of “mischief” and “changing circumstances” as an impermissible narrowing of clear statutory language.

DPP v. Brown [2018] IESC 67, [2019] 2 I.R. 1

The appellant invoked DPP v. Brown [2018] IESC 67, [2019] 2 I.R. 1 (via the quotation of interpretive principles endorsed by Murray J. in Heather Hill), emphasising that the “first and most important port of call” is the statutory text.

Influence on this judgment: The Supreme Court’s rejection of the High Court’s implied commercial limitation is consistent with the primacy of text where no ambiguity exists.

Shirley v. O'Gorman [2012] IESC 5, [2012] 2 I.R. 170

The appellant referred to Shirley v. O'Gorman [2012] IESC 5, [2012] 2 I.R. 170 for the presumption of constitutionality and the “double construction” approach.

Influence on this judgment: The Supreme Court did not decide constitutionality, but the case framed the appellant’s submission that restrictions should be read to protect property rights. The Court ultimately resolved the matter on procedural fairness and the permissible scope of an appeal, rather than a constitutional balancing exercise.

Salaja v Minister for Justice, Equality and Law Reform [2011] IEHC 51; Lofinmakin v Minister for Justice [2013] IESC 49, [2013] 4 I.R. 274; Blehein v Murphy [2000] 2 I.R. 231

These authorities were cited (primarily by the Attorney General) to support restraint: courts should not provide “gratuitous advice” on constitutionality and should not decide constitutional issues not properly raised and argued in the High Court.

Influence on this judgment: They reinforced the Court’s decision not to reach constitutional questions in this appeal.

ESB v. Good & Ors [2025] IESC 27

Cited by the Attorney General for the general proposition that uncompensated expropriation of private property rights is usually unconstitutional absent exceptional circumstances.

Influence on this judgment: It contextualised the Attorney General’s defence of s. 16(2)(f) as a measure preventing “artificial” creation of rights, but the Supreme Court did not have to adjudicate this point.

3.2 Legal Reasoning

(A) Correct interpretation of s. 16(2)(f): no commercial-only limitation

The Supreme Court held that although the legislative history (including the Law Reform Commission’s 1998 Report and Wanze) explains why s. 16(2)(f) was enacted, the statutory language contains no carve-out for residential premises. Any such limitation would have to be explicit. Accordingly, the High Court’s approach—treating the “mischief” as uniquely commercial—could not stand as a matter of interpretation.

(B) “Building covenant” is not a condition of qualification

The Court stated that the appellant’s long-running contention that a head lease must contain a covenant to build was misconceived. Qualification is governed by ss. 9 and 10 (permanent buildings, ancillary land, and satisfaction of one of the s. 10 conditions), subject to restrictions in s. 16. A lease can qualify without a covenant to build, provided the statutory conditions are met.

(C) The decisive ratio: limits on changing a case on appeal (and on what the Supreme Court will entertain under a public-importance leave)

The most consequential aspect of the judgment is procedural. Once the parties accepted that s. 16(2)(f) applies generally, the appellant attempted to win on a different ground: that the respondents had failed to prove the 1893 head lease satisfied s. 10 (notably Condition 2 on rateable valuation). That issue was not tried as the central issue in the lower courts, because the appellant had insisted instead on the “building covenant” argument.

The Court refused to allow the appellant to succeed by effectively changing tack at the final stage:

  • Fairness to the opposing party: the respondents had litigated the case they were met with; it would be “extremely unfair” to allow the appellant to pivot and succeed on a new basis.
  • Integrity of the appellate process: the Supreme Court is not a forum for reconstituting a case with new dispositive points not properly pursued below.
  • Jurisdictional discipline under the constitutional leave regime: leave had been granted on a question of general public importance (interpretation of s. 16(2)(f)); it was impermissible to concede that point and then proceed on a different, fact-bound issue that would not itself have justified Supreme Court leave.

(D) Consequence: order affirmed despite erroneous reasoning below

The Court took the unusual step of declaring the High Court’s interpretation incorrect but nonetheless affirming the High Court’s order (dismissing the appeal). This reflects a pragmatic appellate remedy: correcting the legal proposition for future cases while preventing procedural unfairness in the individual case.

3.3 Impact

(A) Ground rents law: clarity on s. 16(2)(f)

  • Uniform application: s. 16(2)(f) is not confined to commercial or supermarket developments; it can apply to residential subleases.
  • Text over “mischief” where language is clear: legislative history may explain enactment, but cannot justify adding limitations not found in the text.

(B) Litigation practice: discipline in running a case

  • No late-stage pivots: a party who has litigated on one theory (and obtained leave on that theory) cannot discard it and attempt to win on another at the final appellate stage.
  • Supreme Court leave as a constraint: the decision signals that the Court will protect the public-importance leave filter from being used as a vehicle to re-litigate non-qualifying issues.

(C) Practical effect on future ground rent applications

Parties can expect closer attention to evidential proofs relevant to the head lease (especially where s. 16(2)(f) is in play), including the rateable valuation evidence required for s. 10(1)(ii). This judgment also indicates that where a case is misframed below, an appellate court may refuse to facilitate a tactical re-framing.

4) Complex Concepts Simplified

  • Fee simple: the closest thing to outright ownership of land; not limited by a lease term.
  • Leasehold / ground rent: long occupation rights for a term of years, usually with an annual rent (often nominal) payable to a landlord.
  • Head lease vs sublease: a head lease is the superior lease; a sublease is granted out of it. The sublessee’s title is “under” the head lease.
  • “A tenant cannot have a better title than his landlord”: a basic property principle reflected in s. 16(2)(f): if the head lessee cannot buy out, the sublessee generally cannot either.
  • Qualifying criteria (ss. 9 and 10, 1978 Act): statutory conditions that determine whether the leaseholder may acquire the fee simple (e.g., permanent buildings, and at least one of the listed s. 10 conditions).
  • Rateable valuation (s. 10(1)(ii)): a statutory valuation used as a comparator; the condition (in simplified form) asks whether the rent is less than the valuation at the relevant date, subject to stated requirements and presumptions.
  • Interpretation Act 2005, s. 5: allows departure from literal meaning only where wording is ambiguous/obscure or would produce absurdity or defeat the Act’s plain intention. The Supreme Court’s approach indicates it was not open to use s. 5 to insert a commercial-only limitation into clear wording.
  • Leave to appeal on public importance: the Supreme Court’s permission gateway. This case confirms it also constrains the scope of what can properly be argued once the appeal is before the Court.

5) Conclusion

Crowley & Anor v Sheehan & Anor clarifies that s. 16(2)(f) of the 1978 Act is not confined to commercial leases and that the absence of a “covenant to build” in a head lease is not, of itself, disqualifying under the ground rents code. However, the judgment’s enduring precedent lies in appellate discipline: a party cannot obtain Supreme Court leave on a public-importance issue, abandon that issue, and seek to win on a different point not properly litigated below. The Supreme Court corrected the High Court’s statutory interpretation, yet upheld the outcome to prevent procedural unfairness and to protect the integrity of the leave-to-appeal regime.