A legal action by a company behind the redevelopment of the former Clerys department store building in Dublin’s O'Connell Street over the alleged wrongful termination of a lease by a clothing and fashion company has been admitted to the High Court’s fast track commercial division.
The reopening of the iconic building with retail stores and rooftop hospitality facilities is scheduled before Christmas.
On Monday, Mr Justice Denis McDonald admitted Oces Property Holdings Ltd’s case against Heatons Ltd (trading as Flannels) to the Commercial Court on consent between the parties.
He adjourned the matter to December after being told mediation was to take place to resolve the dispute. He gave liberty to the parties to apply to have the case brought back before December if the mediation is successful.
Oces director Derek McGrath said in an affidavit the company began redeveloping the Clerys building in 2018 and that it will contribute considerably to the regeneration of O’Connell Street.
In November 2021, it entered into an agreement with Heatons and Sportsdirect.com Retail, which was the guarantor, to take the lease on the ground floor and basement area of the building covering some 30,000 square feet.
The annual rent in the lease was specified at in excess of €1 million and Oces says it has incurred significant cost in undertaking works requested by Heatons.
Mr McGrath said a joint inspection of the premises by architects for each party took place in January in anticipation of the issuing of the landlord’s certificate of practical completion.
Oces’ architect subsequently engaged with Heatons' architect in relation to a snag list, he said. A proposed second inspection did not go ahead.
In June, Oces notified Heatons’ solicitors the certificate of completion had issued, and the response was that the certificate “has not been and could not be” validly issued because Heatons had not received the required 15 days notice of the pre-certificate joint inspection.
The Heatons side disputed this and said the inspection had already taken place in January, items on the snag list had been addressed and there was no requirement under the lease to issue a second notice. However, it added the invitation to inspect the premises still remained open.
Mr McGrath said Heatons solicitors wrote on July 14th purporting to terminate the lease agreement claiming there had been a breach by the landlord.
Oces was seeking declaratory orders from the court in relation to the validity of the certificate of practical completion and the invalidity of the purported termination notice.
It is also seeking specific performance of the defendant’s obligations under the lease agreement as well as damages.
