Business Irish

Thursday 27 October 2016

Dunnes is blasted by High Court in store case

Published 26/11/2015 | 02:30

Dunnes Stores came in for criticism.
Dunnes Stores came in for criticism.

Dunnes Stores has been blasted by the High Court for engaging in an "abuse of process" in trying to overturn retention permission granted by An Bord Pleanala for elements of the Ferrybank shopping centre in Kilkenny.

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"If truth be told, they have nothing to do with planning law and everything to do with Dunnes securing advantage for itself in a long-running contractual dispute with Deerland and National Asset Loan Management," said Justice Max Barrett, who has dismissed the proceedings by Dunnes.

The retailer has consistently attempted to avoid its contractual obligation to open its anchor store at the Ferrybank in Kilkenny.

In 2012, the High Court had also ordered Dunnes to pay a €21m debt to a company behind the shopping centre development.

"The retention permission authorises five alterations, which individually and collectively, are minor and cosmetic in nature," noted Mr Barrett.

"In a twist worth of Lewis Carroll, Dunnes in fact has no issue with the alterations," he added.

In June 2007, Dunnes entered into a development agreement with a Deerland company called Holtglen, and agreed to pay €37.5m for the construction of the anchor store at Ferrybank.

In 2009, Holtglen said practical completion of the store had been achieved and Dunnes then had 20 weeks to fit it out.

But the retailer, headed by Margaret Heffernan and Frank Dunne, disputed the claim that completion had been achieved.

As the disagreement continued, in 2012 the High Court upheld an arbitrator's decision that Holtglen was entitled to a €20m payment from Dunnes.

The retailer failed to pay, and in 2012 Holtglen issued proceedings to have Dunnes wound up.

Dunnes paid the amount due on the eve of the court hearing to hear that petition.

But the spat between Dunnes and Deerland, which is owned by businessman Derry McPhilips, rumbled on. Deerland's and Holtglen's loans are held by NAMA.

In 2013, Deerland applied to Kilkenny County Council for retention of six items including four windows that are part of the anchor store at Ferrybank and which were installed at the request of Dunnes.

The retailer then declined to consent to the inclusion of the four windows.

While the council approved retention, Dunnes appealed that, but An Bord Plenala upheld the decision.

In February this year, Dunnes then began a judicial review of the An Bord Pleanala decision.

"This is a judicial review of the granting of retention permission where the party that has brought the application (Dunnes) has no issue with the substance of the adjustments to which that permission relates," said Justice Barrett.

"That must be something of a first, so far as planning-related judicial review applications are concerned."

He said that Dunnes' true aim in bringing the proceedings was to enable it to "delay or avoid compliance with its contractual obligations" at the Ferrybank store.

Justice Barrett dismissed the proceedings by Dunnes as involving an abuse of process.

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