Gradual Investments v Grant (Approved)

Factual and Procedural Background

These proceedings commenced by way of Summary Summons in August 2020 concerning a landlord and tenant relationship between the Plaintiff and Defendant. The substantive claim relates to an alleged breach of an abatement agreement dated February 2016, which provided for an abated rent on a sliding scale until July 2019. The Plaintiff, landlord of premises located at 3, The Village, Stepaside, Dublin 18, sought summary judgment for unpaid rent, interest, service charges, and indemnified expenses. Summary judgment was refused, and the matter was directed to plenary hearing. In October 2023, the Defendant sought interlocutory relief by way of an injunction restraining the Plaintiff from entering the Healthcare Clinic premises to execute forfeiture of the lease agreement dated September 2009. The Defendant received multiple Notices of Forfeiture citing breaches including rent payment schedule, rent shortfall, unpaid service charges, and unauthorized subtenants. The Defendant contends ongoing rent payments and disputes the validity of the forfeiture attempt, emphasizing the serious impact on her medical practice and patients. The Plaintiff opposes the injunction and argues the issues raised are not properly before the court for interlocutory relief.

Legal Issues Presented

1. Whether the Court should grant an interlocutory injunction restraining the Plaintiff from re-entering the premises to execute forfeiture of the lease pending trial.
2. Whether damages would be an adequate remedy in the event of forfeiture prior to trial.
3. The extent to which the interlocutory relief sought is connected to the substantive claims in the proceedings.
4. The appropriate duration and terms of any interlocutory injunction granted.

Arguments of the Parties

Defendant's Arguments

• The Court has jurisdiction under sections 27(7) and 28(8) of the Supreme Court of Judicature (Ireland) Act 1877 to grant interlocutory orders to avoid multiplicity of actions and preserve the status quo.
• The Defendant seeks interlocutory relief only to maintain the status quo pending trial, not to challenge the validity of the forfeiture notice itself.
• Reliance on established case law and legal commentary supports the Court’s flexibility in granting interlocutory injunctions to maintain the status quo pending determination of substantive issues.
• Damages would not be an adequate remedy if forfeiture proceeded, given the disruption to medical services and potential harm to patients and reputation.
• The issues raised in the Notice of Forfeiture substantially overlap with the claims in the plenary proceedings, including rent arrears, service charges, and subtenants.
• The Defendant continues to pay rent and has offered an undertaking in damages.

Plaintiff's Arguments

• The injunction sought does not relate to the issues properly before the Court in these proceedings, as the validity of the Notice of Forfeiture is not challenged in the pleadings.
• No fair issue to be tried arises from the Defendant’s application because no counterclaim challenges the forfeiture notice.
• The Defendant’s application is not in aid of the relief ultimately sought at trial and thus is inappropriate interlocutory relief.
• There are undisputed breaches, including underpayment of rent and unpaid service charges, undermining the Defendant’s position.
• The Defendant’s conduct in seeking the injunction is unreasonable, particularly given the Plaintiff’s offer of an undertaking which could have avoided the need for the injunction application.
• The Defendant has alternative remedies available beyond litigation.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court recognized that the interlocutory injunction sought is intended to maintain the status quo by preventing the Plaintiff from re-entering the premises to execute forfeiture pending trial. Although the validity of the Notice of Forfeiture is not directly challenged in these proceedings, the Court found that the substantive claims will likely determine many of the issues underlying the forfeiture notice, such as rent arrears, service charges, and unauthorized subtenants. The Court emphasized the serious disruption that forfeiture would cause to the Defendant’s medical practice and patients, which damages alone would not adequately remedy.

The Plaintiff’s suggestion to amend pleadings to include a counterclaim challenging the forfeiture was declined by the Defendant due to concerns about delay and timing. The Court noted the Plaintiff’s late issuance of the Notice of Forfeiture shortly before trial and found this timing unreasonable, supporting the need to maintain the status quo.

The Court applied the traditional injunction test as refined by subsequent jurisprudence, particularly the eight-stage analysis from Merck Sharp & Dohme, focusing on whether a permanent injunction might be granted and the flexibility of interlocutory relief. The Court concluded that an interlocutory injunction up to the trial date was appropriate, balancing the interests of justice and avoiding irreparable harm to the Defendant and third parties (patients).

The Court acknowledged the unusual circumstance that the interlocutory relief sought could not be granted permanently at trial but justified the flexibility of equity to provide a just solution pending final determination. The Court rejected the Plaintiff’s contention that the offer of an undertaking negated the need for an injunction, noting no agreement had been reached on terms.

Holding and Implications

The Court granted an interlocutory injunction in the following terms:

An Order restricting the Plaintiff, its servants and/or agents, and/or any other person with notice of this Order from entering and/or re-entering the Healthcare Clinic at 3 The Village, Stepaside, Dublin 18 for the purposes of executing forfeiture of the lease agreement dated 14^th September 2009 as between Richmond Properties Ireland Limited (predecessor to the Plaintiff) and the Defendant pending the trial of the action in the within proceedings or such further order as may be made.

This injunction is granted only until the trial of the substantive proceedings.

The direct effect of this decision is to preserve the Defendant’s possession of the premises and allow continuation of medical services pending trial, thereby preventing potentially irreparable harm. No permanent determination on the legality of the forfeiture notice was made, and no new precedent was established beyond the application of established equitable principles to the unusual facts of the case.