Camiveo Ltd v Dunnes Stores

• Jurisdiction: Ireland
• Judge: Mr Justice Max Barrett
• Judgment Date: 02 March 2017
• Neutral Citation: [2017] IEHC 147
• Court: High Court
• Docket Number: [2015 No.5742P]
• Date: 02 March 2017

BETWEEN

CAMIVEO LIMITED

PLAINTIFF

– AND –

DUNNES STORES

DEFENDANT

[2017] IEHC 147

Barrett J.

[2015 No.5742P]

THE HIGH COURT

Land & Conveyancing – Non-payment of rent – Summary judgment – Non-compliance with order of Supreme Court – Penal endorsements – Closure of automatic doors of the premises – Injunction – Contractual interpretation – Contravention of planning permission

Facts: The plaintiff sought an order restraining the defendant from disabling the automatic opening mechanism of the relevant store during the opening hours of the specified shopping centre. The plaintiff also sought various other ancillary reliefs. The plaintiff alleged that since the defendant had failed to comply with the orders of the Supreme Court in making the payment of the rent due, the defendant being the anchor tenant had adopted the tactic in order to cause financial loss to the plaintiff who was the owner of that shopping centre.

Mr. Justice Max Barrett granted the injunctive relief to the plaintiff. The Court held that the defendant, by its conduct, had demonstrated utmost irresponsibility and caused irreparable damages. The Court granted an order restraining the defendant from disabling the automatic opening mechanism of the doors of the shopping centre during the opening hours. The Court also held that the defendant would be liable to pay the aggravated exemplary damages to the plaintiff for the financial losses and granted an order to the defendant to comply with the relevant clauses of the tenants' covenant. The Court held that the defendant, by its action for closing the entry of the shopping centre by unlawful means, had exposed the plaintiff to the possibility of planning enforcement proceedings.

JUDGMENT of Mr Justice Max Barrett delivered on 2nd March, 2017.

I. Overview

1 At the top of Castle Street in Galway City Centre is the entrance to a retail department store operated by Dunnes Stores (“Dunnes”). The store sits at the far end of a one-time builder's yard that has been converted into an enclave of retail stores known as Edward Square Shopping Centre. The Dunnes unit also opens internally into the larger Eyre Square shopping centre. Part of the lure of cutting up to Dunnes via Castle Street appears to be that it affords an attractive means of accessing the Eyre Square Centre; likewise visitors to the Eyre Square Centre who wish to access the Edward Square stores, or perhaps continue on to William Street, another of Galway's shopping streets, can do so by entering Dunnes from the Eyre Square Centre and exiting into Edward Square and continuing along Castle Street.

2 Pursuant to a Deed of Assurance of 7th May, 2013, Camiveo Limited is the legal owner of the Edward Square Shopping Centre. In particular, the landlord's interest in a lease agreement dated 3rd April, 2000, of a property known as the Anchor Unit, Edward Square Shopping Centre, Galway (the “Anchor Lease”), together with linked properties known as the Bastion Area, Eyre Square Centre (held under “the Bastion Lease”) and Unit 107, Eyre Square Centre (held under “the Unit 107 Lease”) is vested in Camiveo Limited pursuant to the Deed of Assurance. The tenant's interest under the Deed was transferred to Dunnes on foot of a deed of assignment dated 11th February, 2002.

II. A Fractious History

3 Following the purchase of the Edward Square Shopping Centre by Camiveo, Dunnes stopped paying rent and service charges in respect of the Anchor Unit, necessitating the bringing of summary proceedings by Camiveo to secure payment of the sums due and owing. These proceedings were successful and on 14th July, 2014, the High Court gave judgment for Camiveo in the amount of €1,134,392.32. Dunnes appealed this decision to the Supreme court. It also requested of the Supreme Court that it grant a stay on the order of the High Court, effectively allowing Dunnes to continue to refuse to pay the outstanding rent, service charges and interest, until the appeal was heard. At the hearing of the application to stay the High Court judgment, the Supreme Court invited Dunnes to make some immediate payment on foot of the High Court judgment. In response, Dunnes paid a sum of €750,000 to Camiveo and gave an undertaking to pay service charges as they fell due on an ongoing basis. After hearing the appeal, the Supreme Court rejected all of Dunnes' arguments and dismissed the appeal.

4 Dunnes did not pay any rent arising while the High Court and Supreme Court proceedings were ongoing. As a result, by the time judgment was delivered by the Supreme Court, substantial additional arrears of rent had accrued. On 15th May, 2015, a formal demand was made by Camiveo for payment of €748,979.75, being the outstanding rent and interest accrued from 1st July, 2014. No payment was made by Dunnes in respect of rent and interest following the making of this demand. There was also a significant delay on the part of Dunnes in making payment, on foot of the judgment of the Supreme Court, of the remaining rent and interest on the sum included in the summary proceedings. As of 15th May, 2015, the sum of €384,392.32 was due and owing, representing the balance due pursuant to the summary judgment, together with interest in the amount of €29,477.19. Further demand letters were issued for payment of this amount.

5 On 16th June, 2015, Camiveo's solicitors served copies of the High Court and Supreme Court orders with penal endorsements on Dunnes' registered office at 12:10. Fifty minutes later, at 13:00, a senior executive within Dunnes ordered that the front doors to its Edward Square unit (hereafter generally referred to as the Edward Square doors) be closed. Dunnes gave no reason or rationale for the closure of these doors. However, and the court considers the detail of matters later below, it cannot but be seen as (i) a tactical response by Dunnes to the service of the Supreme Court order upon it, (ii) a continuation of Dunnes' ongoing campaign to cause economic difficulties for Camiveo, and (iii) an attempt by Dunnes to deter Camiveo from exercising its lawful rights, this last-mentioned objective being an aspect of matters that any court of law would naturally find concerning.

6 The closure of the Edward Square doors on 16th June, 2015, was effected by disabling the automatic opening mechanism of the doors. As will be seen hereafter, this closure of the front-doors breached various lease covenants, including the planning covenants in the anchor unit lease. Following the closure of the doors, Galway City Council, in its guise as planning authority, issued a warning letter under the Planning and Development Act 2000, as amended, on the basis that the closure of the Edward Square doors constituted a breach of the planning permission under which Edward Square Shopping Centre was constructed. Notably, the closure of the doors caused loss to Camiveo, difficulties in its relations with its other tenants, and prompted insurance-related concerns.

7 Dunnes finally paid the sum of €342,392.32, due under the Supreme Court order, on 22nd June, 2015. However, Dunnes failed to pay interest on the judgment due and Camiveo's solicitors wrote to Dunnes' solicitors on 25th June, 2015, notifying them that interest of €32,594.45 was payable. Dunnes eventually paid the said interest on 3rd July, 2015. Camiveo then instituted the within proceedings by way of plenary summons on 16th July, 2015, and brought a motion seeking interlocutory injunctive relief. And it issued a motion seeking entry into the Commercial List. On the morning of the application for entry into the Commercial List, Dunnes paid to Camiveo the sum of €1,154,223.00 being the further rent, service charges and interest which had accrued during the summary proceedings and were outstanding as of 15th July, 2015. This was done in an apparent and unsuccessful attempt to reduce the value of the amount in dispute between the parties below the threshold applicable to Commercial List matters so as to frustrate the entry of the within matter into the Commercial List. On 9th September, 2015, the High Court granted Camiveo interlocutory injunctive relief requiring Dunnes to re-open its doors the following day. The doors were re-opened at 10:45 on that date and remain open to this time pursuant to that court order.

8 It is perhaps unsurprising, given the above facts, that relations between Camiveo and Dunnes have been and are somewhat strained. It may be because of this that reference was made at the hearing of the within application to Dunnes' being a “serial litigant”. The court is not entirely sure what this phrase is intended to convey, though it seems noteworthy in this regard that the within proceedings have been brought against Dunnes, not by it. Regardless, the court notes in passing that Dunnes enjoys the same right of access to the courts as any other person and is entitled to commence as many proceedings as it considers appropriate to vindicate what it considers are its legal entitlements and rights. It may win such cases, it may lose such cases; it will always get a fair hearing.

III. A Brief Survey of the Anchor Lease

9 As mentioned, three leases are the particular focus of the within proceedings. These are referred to hereafter as the Anchor Lease, the Bastion Lease and the Unit 107 Lease. The Anchor Lease was the primary but not sole focus at the hearing of the within application. Clauses of especial interest in the Anchor Lease include the following:

‘4. TENANT'S COVENANTS

The Tenant to the intent that the obligations may continue throughout the Term HEREBY COVENANTS with the Landlord as follows:

4.1 Rents Service Charge and Insurance Premium

4.1.1 To pay to the Landlord the rents or increase rents reserved by this Lease and referred to at Clauses 3.1 and 3.2;

4.1.2 To pay by way of rent to the Landlord the Service Charge referred to at Clause 3.3;

4.1.3 To pay by...