The High Court ruled that Superquinn remained bound by a lease obligation to reopen its Dundalk supermarket, after finding that alleged failures in the management of Carroll Village Shopping Centre did not justify closing the store. The court also found that the lease did not require the store to trade under the Superquinn name.
Mr Justice Clarke delivered judgment on 8 October 2010 in proceedings brought by Parol Limited and Carroll Village (Retail) Management Services Limited against Friends First Pension Funds Limited, with Superquinn joined as a third party. The case was heard as a liability-only first stage. The court said damages and related issues would be left for a further hearing, and that the precise orders still had to be discussed with counsel.
Superquinn had closed the store in February 2009. It argued that failures by the shopping-centre landlord and management company, including complaints about access, lighting, toilets and vacant units, entitled it to be excused from the keep-open obligation. The plaintiffs said the closure breached the lease and disputed Superquinn’s account of the centre’s decline.
The judge found that the Dundalk store had been loss-making for several years and that Superquinn’s decision to close it followed trading difficulties. He was not satisfied that complaints about the centre played a significant role in that decision or that the alleged failings substantially deprived Superquinn of the benefit of the lease. Some complaints barely established any breach; in any event, the evidence did not meet the threshold that would justify treating the lease as repudiated.
The judgment identified one landlord-side breach: Mr Maguire had offered tenants who complained about the centre the option of leaving their leases. No tenant accepted. The judge found there were no practical consequences from the offers and they did not materially affect the assessment. He also said Mr Maguire’s agreement to release the McDonald’s franchisee from its lease in return for €500,000 raised a covenant issue, but found the circumstances were not a significant factor in Superquinn’s closure decision.
The judge concluded that Superquinn was still subject to the keep-open clause. He did not decide the novel legal question of whether a tenant could keep a lease while being excused from that clause, because he found the factual basis for Superquinn’s case had not been made out. He further found no implied obligation to use the Superquinn trading name, provided the store operated within the lease’s use requirements. An earlier indication from the court was that Superquinn intended to reopen from 1 December 2010; the judgment itself left the precise orders to be settled.