COLIN Keane of Dublin solicitors McCann Fitzgerald points bout that a recent House of Lords decision in England could have a knock-on effect here. He writes:

Co-operative Insurance Society Limited v Argyll Stores (holdings) Limited involved the closure by Argyll of its Safeway Supermarket in the Hillsborough Shopping Centre in Sheffield. Safeway was the largest shop in the centre and the major attraction. As with most anchor tenants, there was a covenant by Argyll to keep the premises open for retail trade. In clear breach of this covenant, Argyll made a decision to close a number of Safeway Stores because they were losing money.

In the Court of Appeal, the judges said Argyll had acted "with gross commercial cynicism" and therefore granted an injunction ordering Argyll to trade in the premises until the lease expired nearly 20 years later or until an earlier assignment or sub-letting.

The House of Lords overruled this decision and held that the settled practice not to grant a mandatory injunction requiring the carrying on of a business was based on sound sense and should only be departed from in exceptional circumstances.

The basis for the decision was that an injunction should not be granted where damages would be an adequate remedy; it would not be in the public interest for the courts to require someone to carry on business at a loss if there was any plausible alternative by which the other party could be given compensation. Also, an order compelling someone to carry on a business would require constant supervision by the court and there was a recognition that the covenant to remain open could not possibly be regarded as sufficiently precise to be capable of specific performance, as there would be ample room for argument over whether Argyll were doing enough to comply with it.

While the Irish Courts are not bound by this decision, it would have persuasive authority and is likely to be followed here.