Enforcement of Restrictive Covenant in Retail Lease – the 'Price' of Doing Business
Retail landlord and tenants, particularly those occupying shopping centres and retail parks, will be interested in the outcome of Dunnes Stores Unlimited Company & Anor v Dafora Unlimited & Ors [2] where the defendant was unsuccessful in its appeal against the High Court's decision to enforce a restrictive covenant in a lease preventing the sale of certain 'food, food products or groceries'.
The case is good news for landlords and anchor tenants as it illustrates that exclusivities and restrictive covenants in leases will be enforced by the courts. For tenants, the case emphasises the importance of careful drafting of restrictive covenants and defined terms in retail leases given the significant implications for tenants on what they can and cannot sell where another tenant (usually an anchor tenant) benefits from an exclusivity in relation to the sale of certain products which is implemented by way of restrictive covenant in the other tenants' leases. Our briefing on the case is here.
[2] [2024] IECA 37.
Court orders specific performance of Agreement for Lease
In Ace Autobody Limited v Motorpark Ltd [3] the Court of Appeal overturned the High Court's decision not to grant specific performance of an agreement for lease. The case is a reminder that acts of part performance can constitute evidence of an intention to be bound.
The Court of Appeal, in proceedings whereby the High Court dismissed a claim for specific performance of an alleged agreement between the plaintiff and defendants to grant it a ten-year lease of a body shop unit, allowed the plaintiff's appeal and found that the plaintiff was entitled to a decree of specific performance, on the grounds, amongst others, that the trial judge overlooked material aspects of the evidence and erred when overlooking or downplaying actions by the plaintiff which constituted sufficient acts of part performance.
[3] [2024] IECA 6.
Landlord can reasonably withhold consent to assignment on the ground of good estate management
In Cambervale Ltd v Westside Shopping Centre Ltd [4], a Circuit Appeal, Simons J allowed the appeal by the landlord of a shopping centre against the Circuit Court's declaration that it had unreasonably withheld consent to the assignment by the tenant of a unit held under a 500-year lease (with a permitted user as a licensed premises) to a company proposing to use the unit as a community centre.
The court held that the withholding of consent was not informed by an ulterior motive and was consistent with good estate management. The proposed use as a community centre was deemed unsuitable for the shopping centre. The court accepted the expert evidence provided by the landlord and the tenant failed to provide contrary evidence.
[4] [2024] IEHC 61.
No Lease Frustration by Covid-19
In Foot Locker Retail Ireland v Percy Nominees [5], the Court of Appeal held that the concept of "partial" or "temporary" frustration of a lease does not exist in Irish law.
The High Court had dismissed Foot Locker's claim that it was entitled to not pay rent between March and June 2020 when its store was closed on the basis that the lease was partially frustrated by Covid-19 restrictions.
[5] [2024] IECA 65.
Wind Turbine Noise Amounts to Nuisance
The High Court has found that wind turbine noise amounted to a nuisance and that local residents were entitled to damages.
The High Court found that wind turbine noise levels amounted to an "unreasonable interference" with the enjoyment of local residents' property. The Court found that two particular features of the noise rendered it an "unreasonable interference". First, there were frequent and sustained periods of noise widely acknowledged to be associated with high levels of annoyance. Even on the most conservative analysis, audio recordings and time domain graphs showed that noise at the plaintiffs' homes exhibited amplitude modulation values in excess of 5 or 6dBA (which, if audible at a sufficient level, suggest an unreasonable impact). Second, the noise exhibited "thump amplitude modulation", which is a characteristic "known to lead to adverse reaction in the community."
In line with the law of nuisance, the court found that having a planning permission does not immunise developers from a claim of nuisance although it accepted that compliance with noise levels in a planning permission can be a factor in determining if there is a nuisance or not.
The plaintiffs' complaints were found to be objectively justified and the court found they are entitled to damages (the amount of which will be determined at a later date).
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.