The Supreme Court of Ireland handed down judgment in the case of Meagher and Another v Luke J. Healy Pharmacy Limited [2010] IESC 40. The case concerned the consent to assignment by a lessor and whether an action for damages arises where such consent is deemed to be unreasonably withheld.

The parties had signed a lease the pertinent parts of which provided for preservation and maintenance of the property, and for assignment and change of use only with the written consent of the lessor.

Proceedings were commenced by the appellant lessors to obtain an injunction enforcing compliance with the repairing covenant. A counterclaim was launched by the respondents who sought to reassign the lease. The application for reassignment relevant to the appeal was a request for consent for a reassignment to Cellular World Limited. Consent to assign the lease was sought on 30th June 1998; protracted correspondence failed to produce a result and a declaration made on 23rd October 1998 sought reassignment without the consent of the appellants. Repairing works were carried out in 1999. Various further re-assignment attempts were made, consent being given to a reassignment to Esat Digifone Limited in 2000.

The trial judge found that the appellants had acted unreasonably in refusing consent and granted the respondent’s damages measured at rent and rates costs, from 20th October 1998, the expiration date of a completion served by Cellular World Limited, until these costs were assumed by Esat Digifone Limited.

Before the Supreme Court the issue was framed as whether a right of action for damages could arise. Only consequent upon an answer in the affirmative would the issue of whether consent was unreasonably withheld fall to be considered.

Considering whether a right existed, the court considered the case of Kelly v Cussen and Cussen 88 I.L.T.R. 97 put forward in argument on behalf of the respondent. Finding that the case provided for a right of action for damages, the case nonetheless differed in its application and was not directly analogous to the present issue. The case of Treloar v Bigge L.R. 9 Exch. 151, found to be authoritative in the case of Rendall v Roberts and Stacey Limited [1960] EGD 161 relied on for the respondents, was held to represent the current law of Ireland, subject to s. 66 of the Landlord and Tenant (Amendment) Act 1980 (the Act).

Holding that provision of a right of action for damages by legislation would have been expressly set out in clear wording, the court found that no such action was provided for by the Act. The question of whether the appellants had acted unreasonably was therefore not considered.

Allowing the appeal, the court set aside the order of the High Court.