Tuesday 21 November 2017

Dunnes Stores loses two High Court actions over its anchor tenancies in major shopping centres

Dunnes Stores
Dunnes Stores

Tim Healy

Dunnes Stores has lost two High Court actions it was involved in and won one in relation to three of its anchor tenancies in major shopping centres in Dublin and Galway.

A company managing the Square Shopping Centre in Tallaght, Dublin, won its case over the supermarket chain's objections to a 200,000 square foot €30m extension on an existing 289-space surface northern car park.

A firm running the Edward Square Shopping Centre in Galway won orders restraining Dunnes from disabling automatic doors into the centre from William Street in what had been the culmination of a rent dispute.

Dunnes won their own case against Dublin City Council and the owners of Harry's Bar on South King Street, Dublin, over the erection of front awnings outside the bar. Dunnes claimed the awnings blocked the display window of their Stephen's Green store and the court found they were unauthorised.

Mr Justice Max Barrett heard all three separate actions and on Thursday he delivered judgment in all three.

In the Tallaght case, the Square Management Ltd, National Asset Property Management Ltd (which owns the car park area) and the extension developers Indego, sought declarations in relation to Dunne's claimed legal rights to the car park area.

Dunnes said that, apart from inconvenience to its shoppers, it had acquired certain rights to the car park by virtue of "easement by prescription" which allows the supermarket use it without having to own the property; That claim was denied.

Mr Justice Barrett found the lease for the centre entitled the landlord to carry out development on the northern car park and Dunnes did not enjoy an irrevocable right for its customers to park there.

Dunnes also did not have an easement of right of way over the car park area.

The judge declined to grant reliefs sought by Dunnes but granted a number sought by the plaintiff companies including that it (Dunnes) did not have a right to use the land, for car parking or otherwise, beyond what was stated in the lease.

In the Galway case, the Edward Square Shopping Centre owners, Camiveo Ltd, sought injunctions ordering Dunnes to reopen the William Street doors.

Mr Justice Barrett granted Camiveo its orders and also said he would be awarding damages, including aggravated and exemplary damages, against Dunnes for breach of contract and unlawful interference with Camiveo's economic interests, these will be decided later.

The judge said the entrance in question affords (to shoppers) an attractive means of accessing the Eyre Square Centre and vice versa.

After Camiveo bought the Edward  Square centre in 2013, a dispute over Dunnes rent and service payments developed. It resulted in the Supreme Court ordering Dunnes to pay Camiveo €1.13m in rent and interest due.

With some €384,00 still to be paid after the Supreme Court decision, Camiveo sought to take further legal steps against Dunnes in June 2015.  That same day, Dunnes ordered the front doors to its Edward Square unit to be closed.

Mr Justice Barrett said Dunnes gave no reason for this.  But it could not but be seen as a tactical response by Dunnes to the new legal steps and a continuation of its "ongoing campaign to cause economic difficulties" for Camiveo, he said.

It was also an attempt to deter Camiveo from exercising its lawful rights, he said.

In finding Camiveo was entitled to damages, Mr Justice Barrett said Dunnes had acted in a manner that was "high-handed and cavalier" and to some extent "economically strange" in that it appeared to have adversely affected its own level of trading. 

Its "retaliation and infliction of injury on Camiveo" was done to dissuade Camiveo from insisting on its proper legal entitlement. It was also involved "so many transgressions of the lease arrangements" that the court did not believe Dunnes did not know itself, from early on, it was acting entirely in breach of contract.

In relation to the Stephen's Green/Harry's Bar case, Mr Justice Barrett said Dunnes was entitled to an order quashing the city council's decision that overhead awnings could be used in connection with the bar's street furniture licence.

In light of that finding, the judge said a separate order that the council had erred in law in deciding the awnings did not contravene the licence conditions was not required.

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