Ms Justice Butler of the High Court has declined to grant a winding up petition taken by a landlord against a commercial tenant.
Non-payment of rent
The dispute related to non-payment of rent on a premises located in Charlestown Shopping Centre. The landlord served a formal demand for unpaid rent in the sum of €153,000 under section 570 of the Companies Act 2014. When the matter was first before the Court, the landlord alleged that €338,000 was due in unpaid rent and service charges. By the time the matter came again before the Court, the landlord alleged that the rent had not been paid for over one year.
The tenant-company disputed liability to pay rent at all during the public health restrictions due to a rent suspension clause in the lease.
Section 570 of the Companies Act 2014
Section 570 of the Companies Act 2014 provides the circumstances whereby the High Court can determine that a company is unable to pay its debts. A creditor can apply to have the company wound up, where it is determined that it is unable to pay its debts, so that it may obtain repayment of the sums owing.
Bona fide dispute
In her judgment, Ms Justice Butler set out the circumstances where she could order the winding up of a company. She stated that where there was a bona fide dispute between the parties as to whether the debt was actually due, then a winding up order would not be an appropriate remedy. She stated that a winding up order was not a legitimate means of enforcing a debt where there was such a bona fide dispute between the parties. The tenant-company was disputing that the debt was owing and relying upon the terms of the lease. The judge did not need to determine the substantive dispute between the parties but refused the application for the winding up of the company.
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