Dunnes Stores fails to overturn award in legal dispute at Galway shopping centre

Heffernan instructed staff to close the doors at store minutes after receiving legal proceedings from centre’s operator

Dunnes Stores has failed to overturn a €45,000 award against it.

Dunnes Stores has failed to overturn a €45,000 award against it.

 

Dunnes Stores has failed to overturn a €45,000 award against it over its closure of doors which provided an important public walk through between two Galway city shopping centres.

The Court of Appeal (CoA) rejected the chain store’s appeal over the closure which occurred when Dunnes’ boss, Margaret Heffernan, instructed staff to close them.

She gave the instruction some 11 minutes after her company was served with potential sequestration of assets/jailing of directors proceedings over its failure to comply with a Supreme Court order to pay a €384,000 judgment against it.

The CoA agreed with the High Court that the door closure was an extraordinarily swift “retaliatory measure” against Camiveo Ltd, operators of Edward Square Shopping Centre where Dunnes had the anchor tenancy. Camiveo had brought the original proceedings seeking judgment against Dunnes in a dispute over rent payments and service charges.

In her judgment on behalf of the three-judge CoA, Ms Justice Caroline Costello said at 12.49pm on June 16th, 2015, a Dunnes’ in-house solicitor emailed Mrs Heffernan that they had just received proceedings from Camiveo seeking to penally endorse the Supreme Court order in relation to the outstanding €384,000 judgment. It meant an application could be brought to sequester the firm’s assets and/or attach and commit directors to prison.

Heffernan email

Eleven minutes later, at 1pm, Mrs Heffernan emailed a senior member of staff, John McNiffe, telling him to “arrange for the door from Shop Street to be closed asap”. She said a fixture of ladieswear should be put in front of the doors.

When Mr McNiffe replied he would do so but would need to double check if the doors were required to be used as a fire exit, Mrs Heffernan emailed back: “Why should we have as a fire exit? You can check anyway! What I mean is just put rails across the door so people know it is closed and use it as part of the dept display.”

Mrs Heffernan also said there was a “need to look at other things we can do like is the car park a walk-through”.

Ms Justice Costello said the Galway chief fire officer had recommended the doors be re-opened in the interests of safety on the day they were closed but Dunnes refused to comply with this.

While Mr McNiffe said the doors were closed for “operational reasons”, this was directly contradicted be the emails between himself and Mrs Heffernan, the judge said.

Breaches

The planning permission for Edward Square Shopping Centre, properly construed, required the doors to be open during the hours the Dunnes anchor unit was open to facilitate linkage between the two shopping centres, the judge said. The closure breached that permission.

It also breached certain covenants contained in the lease agreement between Dunnes and Camiveo, she said. Dunnes had “no intention” of re-opening the doors and Camiveo was entitled to an injunction restraining closure as the High Court found.

However, the High Court erred in finding the closure caused the HMV store in the centre to cease paying its rent. There was no evidence to support the finding that the Dunnes’ action caused financial loss to Camiveo through the withholding of rent by other tenants. An award of €10,000 by the High Court in relation to this must therefore be set aside.

There was ample evidence which entitled the High Court to conclude it was appropriate to award €45,000 in aggravated damages because of Dunnes’ conduct, she said.