The High Court has refused to temporarily prevent Brown Thomas from ending Relax Food Corporation Limited’s restaurant concession in its Grafton Street department store.
Relax Food operated the Kitchen Café on the third floor of the Dublin store. It sought an injunction keeping the arrangement in place until a full trial could decide whether Brown Thomas was entitled to terminate it on three months’ notice.
The dispute arose from arrangements negotiated in 2004. Relax Food said the Kitchen Café concession was intended to run until March 5, 2010 and could only be terminated for cause. Brown Thomas disputed that. It said a five-year agreement had been reached on substantially the same terms as an earlier concession agreement, including a right to terminate on three months’ written notice.
Brown Thomas informed Relax Food in January 2009 that it had chosen another operator for an expanded third-floor restaurant operation. It subsequently confirmed that the concession would terminate in April 2009.
Ms Justice Laffoy held that Relax Food had established a fair issue to be tried about what termination terms the parties had agreed. That factual dispute remains for the substantive proceedings.
However, she found that damages would be an adequate remedy if Relax Food later proved that Brown Thomas had acted in breach of contract. On Relax Food’s own case, the concession had only about 11 months left to run. The resulting trading loss could therefore be calculated from its accounts and, if appropriate, the performance of the replacement concession.
The court also considered the company’s evidence that losing the concession could lead to liquidation. Laffoy J held that this did not make damages inadequate, because any valid claim could still be pursued by a liquidator.
She further considered that forcing the parties to continue a closely connected trading relationship during an active dispute would create greater inconvenience for Brown Thomas.
The application for an interlocutory injunction was therefore dismissed.