Dunnes wins legal dispute over definition of "food".

Dunnes wins legal dispute over definition of “food”.

Dunnes Stores has won a legal dispute against a discount store in an action in which a High Court judge was asked to define which goods are to be classified as groceries.

I sin dom sa Mr. Justice Mark Sanfey that the term “food” contained in a lease at the center of a dispute between Dunnes Stores and the operator of a Mr Price store “extends beyond food or food products.”

The judge also considered that the term “food” includes “unsustainable consumables that are frequently purchased.”

Other items considered to be food by the judge include health care products, household and cleaning products; care of pets and pet food; toiletries for bathrooms; hair care products, detergents; detergent; cleaning products; shampoo; toothbrushes; toothpaste; kitchen towels and toilet rolls.

The case concerned the opening of a Mr Price store in Barrow Valley Retail Park on the border between Carlow and Laois, where Dunnes is an anchor tenant in its 65,000 square meter premises.

Dunnes claimed that as part of the deal to become an anchor tenant, there was an exclusivity clause in the lease agreement with the owners of other units in the park to prevent them from competing with the supermarket chain.

Due to the opening of the Mr Price store in 2020, Dunnes and the store owners, Camgill Property A Sé Ltd, brought an action against Dafora Unlimited Company and Corajio Unlimited Trading as Mr Price Branded Bargains.

Dunnes claimed that the operators Mr Price, in breach of the terms of the lease, had sold goods from its store, namely groceries, in the retail park which it was not entitled to sell.

Represented by Martin Hayden SC, it requested a permanent injunction to prevent the Mr Price store from selling certain items.

The restrictive clause in the lease, Dunnes claimed, prevented any other leaseholder in the park from operating as a supermarket, supermarket, grocery store, discount store, freezer, convenience store, convenience store or similar premises for the sale of any food, groceries or groceries.

The tenants of the other units could not sell any food, groceries or groceries or sell wine, beer or spirits, Dunnes also claimed.

It claimed that Mr Price, in breach of the restrictive clause, had offered goods for sale including biscuits, cakes, sauces, baked goods, chips, nuts, noodles, sweets, beverages, milk, bread, soup and cereals.

It had also offered for sale groceries including detergents, cleaning products and materials, shower gels, deodorants, shampoos, cosmetics, toothbrushes and toothpaste, kitchen towels and toilet paper.

Dunnes said they had sought the introduction of the restrictive clause in leases for other units in the park as a condition for the chain to put one of its stores in the park over 15 years ago.

The defendants denied the allegations and rejected the categorization of foodstuffs put forward by Dunnes.

They argued that Dunne’s definition of food was “self-serving, arbitrary and too broad, which meant a temporary expansion of the use of the term” food to include many product types sold in a supermarket that go beyond the meaning of the word food defined in Dunne’s lease.

They argued that the terms grocery stores and groceries are generally perceived as separate and distinct categories from confectionery, toiletries, cosmetics, perfumes and household accessories.

The defendants argued that the overall purpose of the lease clause was to act to prohibit a competing supermarket from operating next to Dunnes Store’s premises.

It was also argued that the word “food” is a vague and ambiguous term to the extent that it annulled the restrictive clause in the lease.

In his ruling in favor of Dunnes, Judge Sanfey said the word “food” is something everyone is familiar with.

He said that most people would feel comfortable using the word and, if asked, would easily acknowledge its familiarity and consider themselves to understand its meaning.

The most comprehensive search of supermarket websites operating in Ireland shows that almost all offer “food” or “food” sales and / or supply.

There is no doubt about the widespread use of the term by small and large retailers, and the words “food” or “food” are constantly used in a variety of contexts.

“But what does the word ‘food’ really mean?”, The judge asked.

This, he said, was the central issue in the case.

While the term “food or food products” gave rise to some controversy, he said the case had taken some time to be heard and involved several witnesses, including several expert witnesses, making complex and lengthy legal submissions.

The court had been asked that the outcome of the case would have major consequences for leases in other shopping centers where there is an anchor tenant, and for which similar wording is used, he noted.

Both sides really fought for their respective interpretations of the word “food”, the judge added.

Mr Justice Sanfey said he was pleased that Mr Price was a discount store and that its presence in the park did not contravene the restrictive clause.

However, the judge said that the restrictions in the lease were quite clear to anyone who wanted to shop in the park.

The judge said he was pleased that the term food extended beyond food products.

The court was convinced that the ban on the sale of groceries included in the lease covers non-durable consumables.

However, the use of the term groceries gives rise to difficulties due to the lack of a definition of the terms in the lease.

After a long negotiation, the judge said that any definition in the lease would have been beneficial.

The judge said he accepted the evidence from Dunnes and said that justice in the case required that it would have the effect of upholding the restrictive agreement.

The defendants, he said, had “all but agreed” that the lease prevented them from selling food products.

However, the judge said that as well as food products, the term grocery stores included in the clause also applied to no sustainable consumables for household items.

He said that if Mr Price removes all food products and foods in accordance with his categorization, it will be in the court’s view in accordance with the restrictive agreement.

This would eliminate the threat of competition in the retail park, which the restrictive clause in the lease was intended to address, he said.

The judge added that he was confident that the parties could reach a business-like agreement on all issues where there is a dispute, rather than resorting to further legal action.

The case will return to the court at a later time when final decisions will be made in the action.


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