Dunnes Stores has won alegalbattle with a discounter in which a High Court judge was asked to define which items should be classified as groceries.
In his judgment, Judge Mark Sanfey said the term "grocery" contained in the lease agreement at the heart of the dispute between Dunnes Stores and the operator of the Mr Price store "goes beyond food or food products".
The judge also held that the term "grocery" included "frequently purchased non-durable consumer goods."
Other items considered by the judge to be groceries include health products, household and cleaning products; pet care and pet food; bathroom toiletries; hair care products, dish soap; laundry detergent; cleaning products; shampoos; toothbrushes; toothpaste; kitchens Towels and toilet paper.
The case involved a store opened by Mr. Price in the Barrow Valley Retail Park on the Khalo-Laos border, where Dunn & Co was the owner of the 65,000-square-foot (46,000-square-foot) storefront. main tenant.
Dunnes claims that as part of its deal to become a core tenant, exclusivity clauses were included in lease agreements with owners of other units on the campus to prevent them from competing with the supermarket chain.
As the Mr Price store opens in 2020, Dunnes and retail park landlord Camgill Property A Sé Ltd have filed a lawsuit against Dafora Unlimited Company and Corajio Unlimited Trading for Mr Price branded specials.
Dunnes alleges Mr Price had been in breach of the terms of the lease by selling items at the retail park that he was not authorized to sell, namely groceries.
The company, represented by Martin Hayden SC, is seeking a permanent injunction to stop Mr Price from distributing certain goods.
Dunnes alleges that the restrictive clause contained in the lease prevents any other leaseholder on the park from operating a supermarket, hypermarket, grocery store, discount food store, frozen food store, mini-market, convenience store, or any other facility that sells any food, Similar establishments for food products or groceries.
Dunnes also said other apartment tenants could not sell any food, groceries or groceries, or wine, beer or spirits.
It alleges Mr Price breached the restrictive terms by selling items including biscuits, cakes, sauces, bakery products, chips, nuts, noodles, confectionery, beverages, milk, bread, soup and cereal.
It also sells groceries, including laundry detergent, cleaning products and materials, body wash, deodorant, shampoo, makeup, toothbrushes and toothpaste, kitchen towels and toilet paper.
Dunn said the company sought to add the restrictive clause 15 years ago to leases for other units on the campus as a condition of the chain opening a store on the campus.
The defendants denied the allegation and refused to accept Dunn's proposed assortment of groceries.
They claim that Dunn's definition of groceries is "selfish, arbitrary, overbroad and constitutes a haphazard extension of the use of the term 'grocery' to include the many types of products sold in supermarkets, beyond Dunn's lease. Definition of the term groceries in China."
They claim that the terms groceries and food are often understood as a separate category from confectionery, toiletries, makeup, fragrances and household items.
The defendants allege that the general purpose of the lease terms was to prohibit a competing supermarket from operating next to the Dunnes Stores storefront.
They also argued that the term "grocery" constituted such an ambiguous term that it invalidated the restrictive terms of the lease.
Justice Sangfi sided with Dunn in his judgment, saying the word "grocery" was familiar to everyone.
He said most people would use the word naturally, and if asked, would readily admit that it was familiar and assumed they understood what it meant.
A cursory search of the Irish supermarket's website will reveal that almost all supermarkets offer a sale and/or delivery service for "grocery" or "grocery items".
There is no doubt that the term is widely used by retailers large and small, with words like "grocery" or "grocery" being used constantly in a variety of contexts.
"But what exactly does the word 'grocery' mean?" the judge asked.
That, he said, was at the heart of the case.
While the term "food or food product" was hardly controversial, he said the trial had taken some time, involving multiple witnesses, including several expert witnesses, and the submission of complex and lengthy legal opinions. .
He noted that the court had been urged that the outcome of the case would have a material impact on the leases of other malls, which are the company's main tenant, and used similar wording.
The judge added that, in fact, both sides had vigorously argued over their respective interpretations of the term "grocery."
Judge Sanfi said he was satisfied that Mr Price was a variety discount store and that its presence in the park did not breach the restrictive terms.
However, the judge said the restrictions contained in the lease were very clear to anyone seeking a deal at the park.
The judge said he was satisfied that the term grocery went beyond food products.
The court was satisfied that the prohibited sale of groceries in the lease included non-durable consumables.
However, the use of the term groceries creates difficulties because there is not a single definition of the term in rentals.
After a lengthy hearing, the judge said certain definitions in the lease would be beneficial.
The judge said he accepted the evidence presented by Dunn and said justice in the case required that it would have the effect of enforcing a restrictive covenant.
He said the defendants "almost admitted" that the lease prevented the company from selling food.
However, the judge said that the term "grocery" included in the provision does not apply to consumer durables, in addition to food products.
He said if Mr Price removed all food and groceries based on his classification, it would, in the court's view, be in line with the restrictive covenant.
He said it would remove the competitive threat from retail parks, which restrictive clauses in leases were designed to address.
The judge added that he was confident the parties could reach a business-as-usual arrangement on any disputed matter, rather than resorting to further legal action.
The incident will return to court at a later date, when a final order will be made in the proceedings.
