4 Year 11 Month Leases – A Thing of the Past?
One of the most far-reaching changes to commercial landlord and tenant law in the last 15 years has recently come into force.
Since 20 July 2008, all commercial tenants (and not just office tenants as before) can opt out of their statutory entitlement to renew their leases. The opt out (or contracting out) provision applies to all tenants of business premises provided the tenant has obtained independent legal advice and signed a deed of renunciation.
This change, coupled with the new VAT regime (which has removed the prohibitive VAT consequences to landlords of granting leases of between ten and twenty years in length) will facilitate the grant of leases of more than five years duration. Previously, the only means of preventing renewal rights accruing for retail and industrial tenants was to ensure that a tenancy was for less than five years duration. The lack of a contracting out procedure for retail and industrial users created a high degree of inflexibility and made subletting other than for short terms particularly problematic.
One of the several advantages to landlords of this new development is that concession and franchise arrangements, which are popular in the retail sector, will no longer carry a risk to the landlord of being deemed tenancies provided the lease is structured correctly. This will also benefit department store tenants and large multiples who frequently grant concessions.
The new opt out provision also means that developers who have short to medium term plans to re-develop or refurbish outdated schemes will have the certainty of obtaining vacant possession when they need it, and can continue to let premises following the expiration of existing arrangements during the planning application and pre-construction periods, thus securing valuable additional income. Tenants will also have longer periods to make alternative arrangements.
An interesting aspect of the new contracting out procedure is that the renunciation is not required to be effected prior to the commencement of the tenancy (as was the case with office tenants).
Redundancy during Maternity Leave
A recent decision of the Employment Appeals Tribunal, however, shows that it is permissible to address termination issues with employees during pregnancy related leave, or even during maternity leave itself. The case is Gleeson v L’Oreal.
In September 2006, the employee was on leave due to a pregnancy related illness when she was told that the viability of her position was being reviewed. Following a meeting in November 2006, and, notably, while still on pregnancy related leave, she was informed that she would be made redundant. She was offered the choice of a redundancy package or alternative employment, but was told that she would not have to make her decision until her return from maternity leave.
Her maternity leave commenced in January 2007, and her employer wrote to her on 30 January 2007 to discuss her “options for the future”. No reply was received.
The employee contacted her employer on 3 September 2007 ahead of her return to work date of 7 October 2007, saying that she did not want to return to work, but wanted to discuss the redundancy package. Her employer provided details of the redundancy package, which was in excess of her statutory entitlements. On 9 October 2007, she contacted L’Oreal’s HR department to say that the redundancy package was insufficient, and that she did not accept that a valid redundancy situation existed.
The employee took a claim for unfair dismissal arguing that she had been made redundant because of her decision to start a family and that the alternative position offered to her was a demotion.
Following a review of the background circumstances, the Tribunal held that her redundancy was fair, reasonable and genuine, that she had been offered suitable alternative employment, and that her redundancy was in no way related to her maternity leave.
The failure of this employee’s claim indicates that, although the Maternity Protection Acts render void any attempt by an employer to terminate an employee’s contract of employment while they are on maternity leave, discussion of such issues with an employee whilst they are on maternity leave is permissible.
This is provided, of course, that the reason for the redundancy is not linked to the fact that the employee has exercised her rights under the maternity legislation. However, the notice period for termination of employment cannot start to run until maternity leave has ended.
New Circuit Court Rules for Family Law Proceedings
New Circuit Court Rules which will entirely affect the practice of family law in the Circuit Court were introduced on 12th September, 2008 (Statutory Instrument No 358 of 2008 – Circuit Court Rules (Case Progression in Family Law Proceedings) 2008).
These Rules will come into operation on 1st October, 2008 and will apply to all Circuit Family Court proceedings commenced after that date. Proceedings instituted prior to 1st October, 2008 will continue to be dealt with under the pre-existing Rules.
The new Rules provide inter alia for the following changes:
Motions for Judgment in Default of Appearance or Defence will be returnable initially before the County Registrar, save in the case of Motions returnable to the Dublin Circuit.
The Rules now also provide that it is necessary for both parties to fully vouch their Affidavit of Means within 28 days of filing their Affidavit of Means, or 21 days before a “case progression hearing”, whichever is the earlier. The Rules also set out a comprehensive list of vouching documentation required in Circuit Family Court cases. Failure to provide, or to properly vouch, an Affidavit of Means can lead to various Orders being made either by the County Registrar in the course of case progression or by the Court.
One of the most significant changes is the introduction of “case progression” in Circuit Family Court practice. The Rules state that the purpose of case progression “is to ensure that proceedings are prepared for trial in a manner which is just, expeditious and likely to minimise the costs of the proceedings and that the time and other resources of the Court are employed optimally.”
The Rules provide that “case progression” will apply to all proceedings in which relief is being sought under any of the Family Law Acts, i.e. they will apply to all Circuit Family Court proceedings. The Rules provide that the first case progression hearing will take place not later than 70 days after the filing of the Defence, Affidavit of Means and, where required, Affidavit of Welfare, on the part of the Respondent. The Rules also provide for a “case progression questionnaire” which must be completed by both parties prior to the case progression hearing. Under the Rules, the County Registrar will also deal with contested Motions for Judgment in Default of Appearance and/or Defence through case progression hearings. It is also possible for either party to the proceedings to apply to the County Registrar for case progression where necessary and appropriate.
The County Registrar will have wide-ranging powers to make appropriate directions to advance proceedings, to include the provision of vouching documentation, fixing a timetable for the completion of the case, and the time and mode of trial. The Rules also provide that the County Registrar must advise the Court in a formal report if he or she concludes that there has been undue delay or default in complying with any order made.
At all case progression hearings, the Rules provide that the solicitors on both sides must be in attendance and the County Registrar may also direct that the parties to the proceedings should also personally attend. The Rules also provide that counsel may attend, but that counsel’s fees will only be allowed in the taxation of costs where the County Registrar has so certified. The County Registrar may also award costs incurred in connection with the case progression hearings as between party and party.
Finally, the new Rules have amended several existing Circuit Family Court Forms, in addition to introducing new Forms necessitated by the introduction of case progression.
Arbitration Bill 2008
The publication of the Arbitration Bill 2008 coincided with the International Council for Commercial Arbitration (ICCA) conference, which took place in Dublin in June. The legislation will apply the UNCITRAL Model Law on International Commercial Arbitration (as amended in 2006) to all arbitrations which take place in Ireland. At the moment the Model Law applies only to international commercial arbitrations.
The Bill proposes to repeal and replace the existing Irish Arbitration Acts 1954 to 1998 with a single piece of legislation, while preserving Ireland's obligations under the New York Convention, the Geneva Protocol and the Geneva Convention. The High Court will be the court specified under Article 6 of the Model Law for arbitration assistance and supervision, and the Irish courts will be able to assist in taking evidence in aid of foreign arbitral proceedings. The Bill will apply to an arbitration under an arbitration agreement to which a State authority is a party.
It is hoped that the Bill will streamline Irish arbitration law and procedures for both domestic and international commercial arbitration, as well as facilitating the continued growth of international commercial arbitration in Ireland.
Punitive Damages Awarded for Breach of Privacy
The thorny question of whether privacy rights are actionable against a private entity has now been answered firmly by the Irish High Court in a decision which shows that the Irish courts have no hesitation in awarding punitive damages in respect of an egregious breach of privacy.
In Herrity -v- Associated Newspapers (Unreported, 18 July 2008) the High Court awarded €90,000 in damages against a newspaper following the publication of private material about a woman's marriage and her relationship with a Catholic priest. The newspaper had published family photographs and extracts from transcripts of the plaintiff's private conversations, which had been obtained after her home telephone was unlawfully 'tapped' by a private detective hired by her estranged husband. The newspaper had published the material in three successive editions.
The Irish courts have long recognised the right to privacy as protected right under the Irish Constitution and awards of damages against State entities for breach of privacy are not unusual and often exceed €50,000. In this case Associated Newspapers argued that damages for breach of privacy could not be awarded against a private entity.
Ms Justice Dunne's decision confirms that privacy rights are actionable against non-State entities, such as media organisations. The test developed by the Irish courts bears noticeable similarity to that adopted in the UK, as applied in the recent Mosley decision. The right to privacy is weighed in the balance as against competing rights, such as freedom of expression. The cause of action may derive from the private nature of the information or from how it was obtained.
In Herrity the court rejected the newspaper's argument that the publication was justified on grounds of freedom of expression, including that of the ex-husband, and on grounds of public interest in the priest's misconduct.
Concluding that the right to freedom of expression is important but not unqualified, the court found that privacy rights can trump freedom of expression, although such cases might be rare. The publication of family photographs and details of the plaintiff's family circumstances was unjustified and was a "conscious and deliberate and unjustified breach of the plaintiff's right to privacy", with much of the private information obtained by unlawful means. The newspaper might well have been justified in publishing the woman's identity but much of the material had no bearing on the public interest.
The court awarded €60,000 in general and aggravated damages, plus €30,000 in punitive damages to mark the court's disapproval of the "blatant use of unlawfully obtained transcripts of telephone conversations".
The case is another reminder to the press that in Ireland it is not only celebrities and public figures that will benefit from the increased recognition of privacy rights.
