The High Court made no order as to costs after Dublin Cinema Group Limited and two Balark companies each succeeded on one of the two main issues in a dispute over a restrictive covenant affecting the former Screen Cinema property.
The costs judgment, delivered by Mr Justice Twomey on 20 November 2019, followed a separate ruling striking out Dublin Cinema Group’s substantive proceedings as bound to fail. The company owns the nearby Savoy Cinema. It had sought to enforce a covenant that the Balark property would not be used as a cinema or theatre for 20 years after its sale.
At the start of the two-day strike-out hearing, Dublin Cinema Group withdrew two claims: a declaration and an injunction preventing cinema or theatre use. The withdrawal followed confirmations and undertakings from the defendants concerning the covenant and future owners. The companies accepted that the covenant ran with the land and bound successors in title. They and College Square 3 Limited Partnership, to which title had been transferred, agreed to give undertakings against cinema or theatre use for 20 years and to seek equivalent written undertakings from any later successor within 21 days of a transfer.
The remaining claim sought to prevent implementation of planning permission for the property while it provided for an entertainment space, cinema or theatre. The defendants succeeded in striking out that claim. The judge said costs for that part should go to the defendants because they had won it.
The court treated the first two claims differently. The defendants’ earlier undertaking had not resolved whether future owners would be bound, and their pleadings had disputed that the covenant ran with the land. The judge found that the later confirmations and undertakings, given in response to the proceedings, made those claims moot. On that issue, Dublin Cinema Group had succeeded.
The parties had attempted mediation, but it was unsuccessful. The judge said there was no evidence that either party had failed to act in good faith or make genuine efforts to compromise, so the mediation carried no costs consequence.
Taking the proceedings as a whole, the court identified two key issues: whether construction of a cinema or theatre would breach the covenant, on which Dublin Cinema Group lost, and whether the covenant bound future purchasers, on which it succeeded through the defendants’ concessions. As each side prevailed on one issue, the court declined to award costs to either side and made no order as to costs.