Court backs Dunnes Stores over definition of groceries
Posted on 14th June 2022 at 21:17
Supermarket wins legal dispute with discount store in Carlow retail park over sale of non-food items
Dunnes Stores has won a legal dispute against a discount store in an action where a High Court judge was asked to define what goods should be classified as groceries.
In his judgment Mr Justice Mark Sanfey said that the term “groceries” as contained in a lease agreement at the centre of a dispute between Dunnes Stores and the operator of a Mr Price store “extends beyond food or food products”.
The judge held that the term “groceries” includes “non-durable consumable household items which are purchased frequently”.
On that basis, other items deemed to be groceries by the judge include healthcare and personal care products, including shampoo, toothpaste and toiletries; household and cleaning products; pet care and pet food; detergents, washing powder, kitchen towels and toilet rolls.
The case concerned the opening of a Mr Price store in the Barrow Valley Retail Park on the Carlow/Laois border where Dunnes is the anchor tenant in its 65,000sq ft premises.
Dunnes claimed that, as part of the deal for it to become the anchor tenant, lease agreements with the holders of other units in the park contained an exclusivity clause to prevent them from being in competition with the supermarket chain.
Dunnes and the retail park landlords, Camgill Property A Sé Ltd, brought proceedings against Dafora Unlimited Company and Corajio Unlimited trading as Mr Price Branded Bargains following the opening of the Mr Price store in 2020.
Dunnes claimed that in breach of the terms of its lease the operators Mr Price had been selling items from its outlet, namely groceries, in the retail park that it was not entitled to sell. Represented by Martin Hayden SC it had sought a permanent injunction to prevent a Mr Price outlet selling certain items.
Dunnes said that it had sought the insertion of the restrictive clause in leases for other units in the park as a condition of the chain putting one of its stores in the park over 15 years ago.
The defendants denied the claims and rejected the categorisation of groceries advanced by Dunnes. They claimed Dunnes’ definition of groceries was “self-serving, arbitrary and over-broad”, constituting a casual expansion of the use of the term groceries to encompass many product types sold in a supermarket which go beyond the meaning of the word groceries as defined in the Dunnes lease.
The defendants claimed that the overall purpose of the clause of the lease was intended to operate to prohibit a competing supermarket to operate alongside the Dunnes Stores premises.
It was also pleaded that the word “groceries” constitutes a term which is vague and ambiguous to the degree that it voided the restrictive clause of the lease.
In his judgment in favour of Dunnes, Mr Justice Sanfey said the restrictions contained in the lease were quite clear to anyone seeking to trade in the park. He was satisfied that the term groceries extended beyond food products. The court was satisfied that the prohibition of the sale of groceries contained in the lease includes non-durable consumable items.
The matter will return before the court at a later date when final orders will be made in the action.
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