Bewley’s wants taxpayer to foot rent bill, landlord tells court

A company connected with property developer Johnny Ronan claims the operator of Bewley's Café in Dublin's Grafton Street wants the taxpayer to foot its rent obligations by suggesting that it will donate the Harry Clarke stained glass windows in the premises to the Irish people.

Donation of a heritage item to the State attracts a tax credit of 80 per cent of its value, which means Bewley’s would be getting the taxpayer to fund its rent obligations, RGRE Grafton Ltd, landlord of the premises, has claimed.

RGRE has also rejected a proposal by Bewley’s to offset the value of the windows in lieu of rent by selling the windows to RGRE.

RGRE has told Bewley’s Café Grafton Street Ltd and Bewley’s Ltd they “can’t try to sell us what we already own”. The six windows, located on the ground floor, are estimated to be worth more than €1 million, according to RGRE.

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However, Bewleys argues the windows were never part of the property and have from time to time, subject to statutory requirements, been moved freely within the premises. They have been treated as ornamental decorative panels and have always remained in Bewley’s ownership, the company says.

On Monday, Mr Justice David Barniville admitted proceedings by RGRE Grafton against the Bewley's group of companies, whose principal is Paddy Campbell, to the fast-track Commercial Court list. The case comes back in June.

Affidavit

In an affidavit seeking admission to the commercial list, RGRE Grafton chief executive Rory Williams said the stained glass panels are believed to have been installed in 1929, having been commissioned by Ernest Bewley, and have "formed part of the premises ever since".

The windows form part of the fabric and structure of the premises and are not “merely ornamental moveable chattels”.

As tenant, Bewley’s is required to pay RGRE more than €1.4 million per year, a figure it has on a number of occasions unsuccessfully challenged, he said.

Last year, a dispute over non-payment of rent, due to Covid-19 closures,led to RGRE taking proceedings. These were settled following mediation, with Bewley’s paying some €749,000 due in rent, he said.

However, last December, John Cahill, director of Bewley's Café Grafton Street Ltd, wrote seeking the waiver of rent until next March and a reduction for the rest of the lease term of €300,000 per annum or 10 per cent of annual café sales if higher.

He also offered to sell the stained glass windows to RGRE to cover that rent until the end of the lease in August 2022. Mr Williams, who is also a solicitor, replied that Bewley’s “can’t sell what we already own”. He also said RGRE “would not dream” of removing the glass panels.

Predecessors

Bewley’s insisted the windows were never part of the 1987 sale of the building by Bewley’s to one of the predecessors in title to the premises, which was subsequently bought by RGRE.

Mr Williams also said Bewley's had expressed its intention to donate the windows to the people of Ireland, a move that would entitle Bewley's to a tax credit of 80 per cent of the value of the heritage item. This "seemingly altruistic gesture appears in fact to be a further mechanism" to ensure that a third party – the taxpayer – discharges Bewley's rent obligation, he said.

Following requests of documentation to prove the ownership claim, which was not forthcoming, RGRE instituted proceedings.

It seeks orders and declarations, including that the windows form part of the premises, are owned by RGRE and any purported transfer of ownership by Bewley’s is null and void.