LANDLORD AND TENANT

LANDLORD & TENANT

Restrictive Covenants     

The landlord of the Barrow Valley Retail Park had two leases with its anchor tenant, Dunnes Stores. In each of the two leases there was a restrictive covenant from the landlord in favour of Dunnes Stores which was binding on every lease the landlord entered into within the retail park.  These covenants, in effect, prevented any shop from selling any goods that Dunnes Stores sold in their anchor store. 

In November 2020, the manager of the Dunnes Stores visited shop unit No. 4 trading under the Mr. Price name and found an array of products for sale which he considered to be ‘food, food products and groceries’ contrary to the restrictive covenants that each of the Retail Park lessees had signed up to.

In the initial High Court case, Dunnes Stores applied for an injunction. The injunction was sought to prevent the shop occupying Unit 4 from selling products in breach of the covenants and the court granted the injunction. The appellants had claimed that the enforcement of the restrictive covenants would damage their trade to the extent that they would not have a viable business in the shopping center. The High Court judge found no evidence to support this. This decision was appealed to the Appeal Court.

The Appeal Court pointed out that the restrictive covenants in the leases were not of a general nature nor vague but in fact, listed out the products which were the subject matter of the covenants.

The Court of Appeal dismissed the appeal though it allowed the appeal on a lesser matter where there would be a declaration in the covenant to include the wording ‘provided that such items are non-durable’ for the sake of clarity. As the appeal was dismissed in most parts, the court ordered that 90% of the costs be awarded to Dunnes Stores.

Dunnes Stores Unlimited Company & Anor v. Dafora Unlimited & Others [2024] IECA 37