A dispute about Dunnes Stores’s alleged failure to reopen one of its anchor shops after the repeal of Covid-19 rules directing the closure of non-essential retail outlets may be resolved later this month, the Commercial Court heard on Monday.
The owner of Merchant’s Quay Shopping Centre in Cork, Phyluma Ltd, has sued Dunnes Stores (Georges Street) Unlimited Co claiming it is in breach of a “keep-open” clause in its anchor tenancy for a Dunnes clothing outlet at the centre. Dunnes denies it is in breach of the agreement.
Phyluma claims that notwithstanding the permanent lifting in May 2021 of the Covid era prohibitions on non-essential outlets, Dunnes has “failed without meaningful explanation” to reopen Merchant’s Quay.
It also says Dunnes removed all of its stock from the unit and this has left it in “an obviously vacant state which is unattractive” for customers and the smaller tenants in the centre.
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Tony Leonard, director of Phyluma, said in an affidavit he has spent over a year making “unyielding efforts” to get the store reopened, including through numerous communications and meetings with Dunnes’s senior representative, Anne Heffernan.
When Mr Leonard negotiated with another retailer to take up the lease on half of the anchor unit, he said that Ms Heffernan changed her mind about supporting this proposal.
He said Ms Heffernan then said Dunnes was considering an “alternative offering” for its Merchant’s Quay unit but she did not give any details of the alternative.
When Phyluma threatened legal action, Dunnes gave no time frame for the reopening of the anchor unit.
Mr Leonard said Dunnes also denied Phyluma’s claims that the reduction in footfall at the centre, which led to tenants of other smaller units leaving, was due to the closure of Dunnes.
Dunnes also claimed there was a failure by Phyluma to invest in the centre for a significant period of time.
On Monday, Micheál D O’Connell SC, for Phyluma, applied to Mr Justice Denis McDonald for admission of the case into the High Court’s fast-track commercial division.
However, he said he was seeking an adjournment in circumstances where Dunnes has indicated it will reopen after October 27th of this year.
Martin Hayden SC, for Dunnes, said there was a significant issue concerning the delay in bringing the case. His client also “took exception” to a number of the claims made by Phyluma.
The judge adjourned the case to next month.
