The High Court dismissed Foot Locker Retail Ireland Limited’s claims for relief from rent under its lease of a Grafton Street shop during Covid-19 restrictions, ruling that the form of “partial frustration” it advanced does not exist in Irish law.
Mr Justice Brian O’Moore delivered judgment on 30 November 2021 in proceedings against the landlord, Percy Nominees Limited. The court said Foot Locker sought to remain in occupation while paying no rent for periods when it could not trade normally. That, the judge said, would leave the tenant with the benefit of occupation while releasing it from rent obligations, contrary to the principles of frustration.
Foot Locker had closed its Irish stores on 17 March 2020. Non-essential retail was legally required to close from 24 March. The company argued that the lease’s permitted-use and keep-open clauses, considered alongside its duty to comply with laws and regulations, supported relief from rent while restrictions prevented ordinary trading. Its position changed during the case: it initially sought to have the lease treated as frustrated and at an end, but by trial argued for partial frustration during closure periods.
The landlord opposed the claim, arguing that partial frustration was not a recognised legal concept and that the lease had not been frustrated. The judgment reviewed Irish authorities holding that frustration ends a contract, while partial discharge may apply only to obligations that can be severed. The rent obligation was an integral part of the lease, the judge said.
The court also said it would have ruled against Foot Locker on whether the lease was frustrated altogether. It considered that the lease required compliance with legal requirements and limited the keep-open obligation to reasonable times during usual business hours. It did not require the shop to open when doing so was illegal or would endanger public health. The lease contained no rent-suspension provision for such an emergency, although it provided for suspension in certain cases of damage or destruction.
The judge confined that alternative conclusion to the evidence and facts of this case. He dismissed Foot Locker’s claims and listed the action for mention on 2 December 2021 to address outstanding matters, including Percy Nominees’ counterclaim for rent said to be due since March 2020, unpaid insurance premiums and interest. The judgment did not determine that counterclaim; the judge said he did not anticipate significant dispute about the order to be made on it.