Supermac’s boss Pat McDonagh and two of his companies have been ordered to pay the larger part of the legal costs arising out of a dispute over planning with a couple who formerly ran a Supermac’s restaurant in Limerick.
Mr Justice Garrett Simons made the order in the case which was brought by former Supermac’s franchisees John and Mary Lyons who now operate The Hungry Lyons restaurant next door to Mr McDonagh’s Funworld bowling centre on the Ennis Road.
The Lyons case was against Mr McDonagh and two of his companies, Supermac’s Ireland Ltd and Funworld (Ireland) Ltd.
Their Hungry Lyons restaurant came into existence when the Supermacs franchise ceased in 2019 due to what Mr Lyons said was “commercial pressure” placed on them by the McDonagh respondents.
They claimed Mr McDonagh decided to go into direct competition with them by operating a restaurant from the bowling alley premises, which forms part of the same building as the Lyons restaurant.
They said this was in breach of their lease agreement which includes a non-compete clause that the landlord cannot assign or sublet any part of the premises for a fast-food restaurant or delicatessen.
After works were carried out to provide a restaurant in Funworld, including the closure of an interconnecting door, the Lyons sought an injunction from the Circuit Court declaring they were unauthorised.
The Circuit Court dismissed the application and the McDonagh respondents then applied to Limerick City and County Council for retention of the works.
The Lyons lodged an appeal with the High Court and in the meantime, the council told the respondents that planning permission was not needed for the interconnecting door.
The appeal was due to be heard on March 7th last when the Lyons’s lawyer said it was being withdrawn but complained his side had only been informed of the council decision that the work was exempt a couple of days before the appeal was due to take place. The Lyons sought their costs in the case.
Counsel for the respondents, in opposing the costs application, said they assumed the Lyons already knew about the council decision and that the council would have informed them so as objectors.
There followed short hearings in which Mr McDonagh swore an affidavit strongly disputing the Lyons’s side’s claim that they did not know about the council decision.
He said their architect knew about it last October and it was disingenuous for the Lyons to say otherwise.
The judge said that even though the case was being withdrawn he would give his decision on costs.
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On Wednesday, he said Lyons’s pursuit of a planning enforcement issue had been reasonable and their stance was vindicated in that the respondents had to apply for retention planning permission.
However, regarding the withdrawal of their appeal, he said the explanation offered by them did not safeguard them concerning the costs of the case.
The fact that the Lyons pursued and then withdrew the case would be reflected in the costs order by ordering that the respondents pay only two-thirds of the costs which would otherwise have been recoverable on taxation.
This was only in relation to costs up to February 29th last, that date when the grant of retention planning permission was issued, he said.
After March 7th, when the case was withdrawn, it was unreasonable for the respondents to have pursued the issue as to the “date of knowledge” about the planning decision to the extent that they did, said the judge.
The issue was largely irrelevant to the incidence of the costs of the proceedings.
In the event, having regard to the state of the evidence, the issue has been resolved in favour of the Lyons, he said.
It was only fair that the respondents should be responsible for these additional costs from March 7th last, he said.
He would entertain later this year any application to confine the costs order to the corporate respondents who appear to own and operate the premises in question, he said.
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