The High Court has struck out Dublin Cinema Group Limited’s application to prevent development of the former Screen Cinema site in Dublin as an entertainment venue, ruling that the covenant relied on restricted use of the property, not its construction or development.
Mr Justice Twomey delivered the judgment on 6 November 2019 in Commercial Court proceedings brought against Balark Trading GP Limited and Balark Investments Limited. The remaining issue on the strike-out motion was whether Dublin Cinema Group could obtain an injunction stopping implementation of planning permission for the venue.
Dublin Cinema Group sold its leasehold interest in the Townsend Street property to Balark Investments in February 2016 for €30 million. A covenant restricted use of the property, including the adjoining College House, as a cinema or theatre venue for 20 years. Planning permission granted in July 2018 provided for a roughly 500-seat entertainment venue.
Dublin Cinema Group argued that using the venue as an entertainment space would necessarily involve using it as a cinema or theatre, contrary to the covenant. It also argued that planning law could prevent the defendants from leaving the cinema or theatre use inactive. The judge said no legal authority had been provided to support that planning-law argument, and found no requirement in the permission that the venue include a cinema or theatre.
Before the motion proceeded, the parties agreed that the covenant bound successors in title and benefited Dublin Cinema Group’s successors. The defendants and College Square 3 Limited Partnership, which had acquired title to the property, agreed to give undertakings to the court not to use it as a cinema or theatre until 15 February 2036. They also agreed to procure equivalent written undertakings from any successor or assignee within 21 days of a transfer. The partnership was to be added as a defendant, and the arrangements recorded in the court order.
The judge said the covenant did not restrict building or development. Planning permission did not itself authorise development in breach of private rights, and actual use of the property as a cinema or theatre could breach the covenant. But construction of an entertainment venue, even one capable of cinema or theatre use, was not the same as using it that way.
The court therefore struck out the injunction application as bound to fail. The ruling addressed the bid to block implementation of the planning permission; it did not find that the property had been used as a cinema or theatre. The judge described any future breach as hypothetical while the agreed undertakings remained in place.