The High Court awarded Parol Limited €560,000 in damages after finding that the closure of a Superquinn anchor store at Carroll Village Shopping Centre in Dundalk breached keep-open covenants. Friends First Pension Funds Limited, the defendant, was ordered to pay Parol, with an indemnity for the full amount against Superquinn, the third party.
The award followed an earlier judgment in which the court found that closing the store in February 2009 breached provisions in the lease and sub-lease. In October 2010, the court had also ordered Superquinn to reopen the store as a “high end supermarket” by 10 December 2010. It reopened as Carroll Village Supermarket. Parol’s claim that the reopened store’s offering was inadequate was not pursued at the damages hearing, so the assessment covered losses attributed to the closure, not to the store’s offering after reopening.
Parol claimed lost rent from five units that remained open when the supermarket closed, lost opportunities to let other units, and future rental losses. The judge rejected most of the claim for prospective tenants. He found that their interest waned because they were dissatisfied with the offering at the reopened supermarket, rather than because the store had been closed. But he awarded €10,000 for the small lost opportunity to secure tenants during the closure.
For the five existing units, Parol said it had received €249,487 in rent over about two years, compared with almost €700,000 due under the leases. The judge accepted that Parol had made reasonable concessions to keep tenants in business and had collected as much as could reasonably be expected. He estimated that, even without the supermarket’s closure, poor trading conditions would have forced concessions. On that basis, he assessed the rent that might have been collected at €450,000 and awarded €200,000 for past losses.
For future losses, the judge considered the shopping centre vulnerable and at risk of closing even if the supermarket had stayed open. He also accepted expert evidence that two years without a supermarket had worsened the centre’s prospects. Estimating that Parol could now expect €125,000 a year in rent, against somewhat less than €200,000 a year absent the breach, he discounted the projected loss for uncertainty and the time value of money. He awarded €350,000 as the present value of future losses over eight years.
The total award was €560,000 against Friends First, which was entitled to an indemnity for the full sum from Superquinn. The judgment did not assess any damages for the quality or product range of the reopened supermarket.