Court rejects Foot Locker claim over Grafton Street store lease

The High Court has rejected a claim by the operator of a Grafton Street footwear and clothing store that its lease was partially frustrated as a result of having to close due to the Covid-19 lockdowns.

The Foot Locker store operators had asked the court to find it had liability for only part of the rent last year due to some 253 days of pandemic-ordered closures.

The landlord, Percy Nominees Ltd, claimed there was no basis for such a claim and sought payment of the full rent.

Foot Locker accepted the rent for the Dublin store was only partially paid to Percy Nominees Ltd for the lockdown days but said the landlord should share “some of the pain” caused by the closures because the lease had been partially frustrated.

Percy Nominees contended that partial frustration of a lease was unknown in law or known not to exist. It argued the lease had not, on the facts, been frustrated in any way.

Counterclaim

It also brought a counterclaim against Foot Locker for judgment for rent arrears of just over €1 million.

Rejecting the Foot Locker case, Mr Justice Brian O’Moore agreed the concept of partial frustration was not one which exists in Irish law.

The parties had clearly provided for compliance by the tenant with all legal requirements governing the operation of the shop, he said.

The obligation to keep the store open was one which was caveated by reference to normal trading hours and reasonable times, he said.

While a pandemic was hardly considered a possibility when the original lease for the premises was first executed (between a different landlord and tenant) in 1990, there were the ongoing campaigns of violence in Northern Ireland at that time which had brought bombs to the centre of Dublin, the judge said. The lease was later between Percy Nominees and Foot Locker.

Emergency situations

In agreeing that the tenant would comply with the lease, the parties can be taken to have contemplated the possibility that the shop would be closed in emergency situations, he said.

There was no provision in the lease, in those situations, for a suspension of rent unlike, for example, if the premises were destroyed or damaged, he said.

The judge did not think that any fair reading of the lease required the tenant to keep the store open for business when it was illegal to do so or would constitute a danger to public health to do so.

He would therefore have concluded that the forced closure of the store did not constitute a frustration of the lease. That decision would have been made on the limited evidence before him and confined to the facts of this case, he said.

Therefore he dismissed the claims made by Foot Locker.

On Thursday, the judge granted judgment for outstanding rent of just over €1 million to Percy Nominees.

He also awarded costs to Percy Nominees to include costs of the counterclaim.