Facts
The Behan* case arose against a history of family disputes between the Behan siblings regarding their late mother's will. This dispute concerned a settlement agreement between the siblings signed in 2006, which included the lease of a quarry agreed between the siblings. The tenant had agreed to lease a quarry from the landlords for an initial annual rent of more than €400,000. When the tenant defaulted on the rent payments, the landlords brought an application for judgment for the arrears of rent.
The ambitious defence of mistake
In its defence, the tenant argued that the lease was negotiated when the construction industry was "booming" and when there was a huge demand for infill facilities provided by quarries. The tenant pointed to the fact that, shortly after the lease was entered into, the construction industry collapsed rendering the rent levels which had been agreed completely unrealistic. The tenant sought to set aside the lease based on a shared mistake that: (1) the market for infill space would not collapse; and (2) there would be a relationship between the income generated from the quarry (as an infill facility) and the rent to be paid.
The Judge's decision - the economic downturn could not be a defence.
The Judge said that he did not believe that there was any common mistake as to any fact existing at the time the lease was executed. The Judge noted that: "it is true that the parties may have been disappointed and in the case of the defendants in particular, seriously disappointed by the downturn in the Irish economy and in particular in the construction industry. However, I cannot conceive how that could provide a basis for setting aside an agreement that both parties entered into with advice".
The Judge concluded that "there is simply no credible basis for suggesting that parties can be relieved of obligations freely entered into because an economy has experienced a downturn, even one as severe as would fit the economy of this State".
*Noeleen Behan and Michael Henretty v Behan Land Restoration Limited and John Behan
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