The High Court has rejected a supermarket company’s claim for specific performance of an alleged agreement to occupy part of a redeveloped Tuam property, but found that the company had not surrendered its existing lease interest there.
Cosmoline Trading Limited sought to enforce terms it said were agreed with landlords D.H. Burke & Son Limited and DHB Holdings Limited for a new supermarket unit at Abbey Trinity, Tuam. The alleged arrangement included a unit of about 7,500 square feet, storage and office space, and specified rents. The company said it had moved within the old premises and later to the landlords’ Bontex building while redevelopment took place.
The defendants denied that a binding agreement had been made. They said the company had agreed to surrender its Abbey Trinity interest and move to a separate development nearby. They sought a declaration that the lease interest had been surrendered.
President Finnegan delivered judgment on 8 February 2006. He found that the parties’ discussions and the letter relied on by Cosmoline had not produced a complete contract. Essential terms remained unsettled, including the lease term, the rent arrangements, and the precise area to be occupied. The evidence also showed disagreement over whether a coffee shop area was included and where storage would be located. The court therefore dismissed the claim for specific performance.
The judge separately considered whether Cosmoline had surrendered its existing interest by its conduct. No deed or signed written surrender was alleged, so the question was whether a surrender had occurred by operation of law. The court found that Cosmoline’s moves from the premises to the rear of the old building and then to Bontex did not show an intention to surrender. The defendants had not understood those moves at the time as a surrender either.
The court also found that, despite circumstances that led Kevin Burke to believe Cosmoline intended to leave, the company had not intended to give up its interest unless and until the proposed terms were incorporated into a completed agreement. The defendants’ counterclaim for a declaration of surrender therefore failed.
The judgment states that Cosmoline retains an interest in the part of the redeveloped Abbey Trinity premises corresponding to the space covered by its original lease. The judge’s comments that compensation might resolve the parties’ difficulties, and the factors that could be considered in assessing it, were expressly obiter: no compensation order was made in this judgment.