Citi Hotel gets injunction in row over rent

THE High Court has granted an injunction preventing the new landlord of a Dublin city centre hotel taking possession of the premises in a dispute over rent.

JJ Red Holdings Ltd, which has operated as the 30-bedroom Dublin Citi Hotel since 2007, obtained the interim order against Henciti Ltd, landlord of the Dame Street premises. Henciti is seeking just over €1 million which it alleges is owed in rent arrears.

JJ Red Holdings denies that sum is due on grounds including that it had agreed rent reductions with the previous landlord.

Mr Justice Paul Gilligan granted an injunction restraining the defendant interfering with JJ Red Holdings enjoyment of the premises pending determination of the proceedings.

The injunction was sought by Hugh Mohan SC, for JJ Red Holdings, on an ex-parte (one side only represented) basis.

Emmet McDermott, a director of JJ Red Holdings, said in an affidavit the hotel, which employs 50 people and has a restaurant and public bar, obtained a rent reduction following the economic downturn not long after the lease was signed in 2007.

The original €520,000 per annum rent was reduced to €390,000 and was further reduced in 2011 to €260,000 annually, initially for three years.

The reductions were made in agreement with the previous landlord and the rent, which worked out at €5,000 per week, was paid and continues to be paid, he said.

The previous landlord’s business went into receivership and the receiver sold the hotel premises to Henciti, Mr McDermott said.

On October 5th last, Henciti’s solicitors wrote seeking €1,062,500 for rent arrears since July 2011 and JJ Red Holdings replied there were no arrears outstanding.

On October 21st last, Henciti’s lawyers sent a forfeiture notice stating failure to discharge the €1 million within 14 days would result in the landlord taking possession. The defendant also said there was no evidence of two rent reduction agreements, as claimed, and it was “clear” there were arrears of €1 million.

Mr McDermott said, given the rent reduction agreements, his company is not in default. He fears the defendant may seek to gain entry to the premises and said any such move was likely to have catastrophic consequences for the business.

Mr Mohan said the 14-day forfeiture notice was due to expire on Wednesday and he was seeking an interim order preventing interference with the property. This was in circumstances where his side had written to the defendant asking that no action be taken pending resolution of the dispute but there was no reply to this letter, counsel said.

Mr Justice Gilligan said he would grant an interim injunction as sought and returned the matter to next week.