Crowley & anor v Sheehan & ors

AN CHÚIRT UACHTARACH THE SUPREME COURT S:AP:IE:2025:000028 [2026] IESC 16 O’Donnell C.J. Dunne J. Woulfe J. Murray J. Donnelly J. IN THE MATTER OF SECTION 22(1) OF THE LANDLORD AND TENANT (GROUND RENTS) ACTS 1967 – 2019 AND IN THE MATTER OF PART II OF THE LANDLORD AND TENANT (GROUND RENTS) (NO.2) ACT 1978 AND IN THE MATTER OF AN APPLICATION BY RAYMOND CROWLEY AND CHARLES CROWLEY AND IN THE MATTER OF PROPERTY SITUATE AT AND KNOWN AS 1B, “ANNEVILLE”, COOLGARTEN PARK, MAGAZINE ROAD, IN THE CITY OF CORK BETWEEN/ CHARLES CROWLEY AND RAYMOND CROWLEY Respondents AND 1 BARRY SHEEHAN AND ALL UNKNOWN AND UNASCERTAINED OWNER OR OWNERS Appellants AND THE ATTORNEY GENERAL Notice Party Ruling of the Court delivered on the 18th day of February 2026 1. This ruling relates to the costs of this appeal following the delivery of judgment herein on the 5th February, 2026 ([2026] IESC 6). It concerns an appeal on the interpretation and application of the restriction on a sub-lessee’s right to purchase the fee simple in a property, as contained in s. 16(2)(f) of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 (the “1978 Act”). 2. The respondent sub-lessee was seeking to purchase the fee simple; the appellant head lessee opposed this on the grounds that the head lease is not a qualifying lease under the 1978 Act and thus contended that the respondent could not purchase the fee simple. Following a hearing before the County Registrar, the respondents were granted permission to purchase the fee simple. This decision was upheld by the Circuit Court and, in turn, its decision was subsequently affirmed by Nolan J. in the High Court ([2024] IEHC 695). 3. Leave to appeal to this Court was granted in the light of the finding by the High Court that s. 16(2)(f) was limited in its application to commercial leases. Just prior to the hearing, in a significant volte face, both parties resiled from arguments which they had relied on throughout the proceedings. In this respect, the respondents abandoned their submission that s. 16(2)(f) did not apply to residential leases and the appellants conceded that a lease did not have to contain a covenant to erect permanent buildings to be a qualifying lease under the 1978 Act. 2 4. Having considered the arguments of the parties, it was concluded that it would not be appropriate to allow the appeal and set aside the judgments of the lower courts. This would have the effect of allowing one party to change an argument that they had maintained throughout proceedings when they reach the final appellate court and thereby to achieve a successful outcome. It was noted that this would be extremely unfair to the other party and could never be an appropriate way to conduct litigation. It is not permissible for a party to obtain leave to appeal on a point of general public importance, abandon that point, and thereafter advance an argument which does not engage any issue of general public importance. 5. The Court invited the parties to furnish submissions in relation to the issue of costs. The appellant has submitted that the appropriate order to make is no order for costs. It is suggested that while the ultimate decision of the Court favours the respondents, their interpretation of s. 16(2)(f) was not accepted. As pointed out previously, the respondents conceded immediately before the hearing that their interpretation of the section was not correct. 6. The respondents have submitted that they have been “entirely successful” in their appeal. It is true that the order of the Court, in dismissing the appeal, favours the respondents. In the ordinary course of events, it would normally follow that they would be entitled to their costs. However, but for the fact that the High Court was persuaded by the respondents to conclude that s. 16(2)(f) only applied to commercial leases, a point they conceded before this Court was wrong, the appellant would not have obtained leave to appeal to this Court. The Court in its judgment expressed its unhappiness at the way in which this appeal came before the Court with both parties significantly changing their positions at the last minute. 3 7. The Court has a discretion in relation to the question of costs. In this case, having regard to the unusual way in which this appeal was conducted by both parties, the Court is satisfied that no order for costs should be made in favour of the respondents. 8. In those circumstances, the Court is satisfied that the normal rule that costs follow the event should not apply. Accordingly, although the appeal of the appellant has been dismissed, no order for costs in respect of the appeal should be made against the appellant. 4