Why High Court Costs Were Awarded Against Gemma O’Doherty and John Waters in Covid-19 Constitutional Challenge

Gemma O’Doherty and John Waters applied to the High Court for leave by way of judicial review to challenge the constitutionality of certain measures taken by the State to deal with the Covid 19 pandemic. The measures being challenged were legislation and regulations enacted by the Oireachtais.

The High Court refused this application in May 2020 and held that they had failed to provide any expert evidence or facts to support their view that the laws challenged were disproportionate or unconstitutional. The High Court in that decision also noted that O’Doherty and Waters had

no medical or scientific qualifications or expertise, relied on their own unsubstantiated views, gave speeches, engaged in empty rhetoric and sought to draw parallel to Nazi Germany which is both absurd and offensive”.

Unsubstantiated opinions, speeches, empty rhetoric and a bogus historical parallel are not a substitute for facts,

High Court, May 2020

Read the full decision of 13th May 2020 here.

O’Doherty and Waters went back to the High Court to avoid the costs of the judicial review application being awarded against them. The grounds on which they resisted orders for costs against them included

  1. They should have been allowed to proceed on an ex parte basis and the respondents and notice parties should not have been put on notice of their application
  2. The Oireachtais did not have to be separately represented
  3. Their application was in the public interest
  4. They were entitled to a “protective costs order”

The High Court recognised that the principal ground that was contended for by O’Doherty and Waters was that they brought the proceedings “in the public interest” and they should not be penalised for having done so.

The High Court held that “this contention does not stand up to much scrutiny” and that they failed to engage with the case being made by Ireland, the Attorney General, and the Minister for Health.

The High Court determined that the issues raised by the widespread restrictions and the legislation and regulations introduced where important matters of public interest.

There is no doubt but that issues raised by the widespread restrictions imposed by the legislation and regulations in question are important matters of public interest.

However, the manner in which the applicants conducted their proceedings, their failure to consider or answer the case being made against them and to only have regard to their own opinions meant that these proceedings were very far from being in the public interest.

High Court, June 2020

For this reason Mr. Justice Meenan determined that there no grounds for the Court to depart from the general rule that “costs follow the event”. He granted the respondents (the Minister for Health, Ireland and the Attorney General) and the notice parties (Dail Eireann, Seanad Eireann and an Ceann Comhairle) their costs and dismissed the application of O’Doherty and Waters.

Read the full decision of 4th June 2020 here.

Business and Company Law

Commercial Leases and the COVID-19/Coronavirus-the Fallout for Small Business Owners

rent-review-commercial leases

I was contacted last week by a couple of clients whose business has gone through the floor or evaporated entirely as a consequence of COVID-19.

One of the first concerns they had was the difficulty they were inevitably going to encounter in trying to continue to pay the rent on their commercial premises. Here are some questions that spring to mind.

Must I keep paying rent?

It is almost certain that there would be no entitlement to cease paying rent. From a legal perspective the lease will contain an obligation to pay rent and you will be in breach of that covenant if you fail or refuse to do so.

If you did stop, you are leaving yourself open to the landlord taking matters further. Courses of action open to her would include commencing legal proceedings to recover the arrears and/or to forfeit the lease and recover possession of the premises. If you had paid a rent deposit this would obviously at risk and if there was a guarantee for the rent, the guarantor could expect to hear from the landlord who will try to enforce his guarantee.

Can I terminate the lease or just hand it back?

No, you could only do so with the consent of the landlord. This assumes that there is no break clause option in the lease.

Fundamentally, once you enlist you must soldier-that is to say, when you signed up to the lease you signed up to various terms and conditions and covenants and it is unlikely that the COVID-19 catastrophe will allow you to walk away from those obligations.

A force majeure event may allow this to happen, but COVID-19 is almost certainly not going to be held to be such an event.

Can I claim off my insurance policy?

You need to review the terms and cover provided by your policy. It may be possible to claim for losses arising from COVID-19 but, quite frankly, when you are scouring through an insurance policy looking for a term or condition to favour you it will probably be a futile exercise.

Can the landlord close my premises?

This is a tricky one and will depend on the premises and where it is located. If, for example, the premises were in a shopping centre and the landlord decided to close the whole centre you may be able to argue that the landlord has torn up the lease.

You would have a harder time with that argument, however, if the landlord was following directions of the government or medical advice.

Can I suspend payment of rent?

There may be provision in the lease for the suspension of rent, but this is likely to apply if the building was destroyed or damaged by lightning or some such similar catastrophe. Otherwise it is unlikely that the normal rent suspension provisions which might be found in a commercial lease would apply.

The bottom line

The terms, covenants, and conditions in your commercial lease apply from day 1 and even though COVID-19 is an appalling vista for any small business owner the law will not come to your rescue and you are stuck with the provisions of the lease. You are reliant on the generosity, decency, and common sense of your landlord.