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Foot Locker claim over Grafton Street rent during Covid lockdown rejected by appeal court

Store operator accepted rent had been only partly paid during lockdown but that the landlord should share ‘some of the pain’

The Foot Locker outlet on Grafton Street in Dublin. Photograph: Brenda Fitzsimons

Fri Mar 22 2024 - 17:18

The Court of Appeal (CoA) has rejected a claim by the operator of Foot Locker on Dublin’s Grafton Street that its lease had been partially frustrated as a result of having to close due to pandemic lockdowns.

In December 2021 the High Court rejected the claim by the footwear and clothing store that it had liability for only part of the 2020 rent due to some 253 days of pandemic-ordered closures.

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

The High Court found the concept of partial frustration of a lease was not one which exists in Irish law.

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In its action, Foot Locker accepted the rent had been only partly paid 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. It also brought a counterclaim against Foot Locker.

The High Court, as well as rejecting the Foot Locker case, also granted the landlord judgment for rent arrears of just over €1 million.

Foot Locker appealed claiming the High Court had erred in its decision on several grounds. Percy Nominees opposed the appeal.

On Friday, Mr Justice David Barniville, the president of the High Court sitting as a member of the three-judge CoA, found the High Court had identified and applied the correct legal principles and had reached the correct conclusion.

He said he entirely agreed with the High Court judge that there does not exist, as a matter of Irish law, a concept of “partial” or “temporary” frustration of the lease as contended for by Foot Locker.

“Such a concept is contrary to principle and authority,” he said.

As a matter of principle it was impossible to see how a contract could be frustrated for a period and then revived or resurrected when that period was over, he said.

That was conceptually impossible as a matter of principle and, in the words of the High Court judge, “does violence to the fundamentals of the doctrine” of frustration, he said.

It was also entirely contrary to well-founded authority, including decisions of a number of High Court judges and case law from other jurisdictions, he said.

He said he was also declining Foot Locker’s invitation to the court to “make new law” in this area.

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