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2026 IEHC 276

THE HIGH COURT [2026] IEHC 276 [Record No. HP 2026/415] BETWEEN TESCO IRELAND LIMITED PLAINTIFF AND MULTI-HOME RETAIL LIMITED T/A CHOICE STORES DEFENDANT JUDGMENT of Ms Justice Marguerite Bolger dated the 1st day of May 2026

  1. This is the plaintiff's application for interlocutory injunctive relief against the defendant. For the reasons set out below, I am refusing this application. Background
  2. The plaintiff runs a supermarket from its premises at Bath Street in County Waterford. In 2023, it commenced negotiations with the defendant. On 4 April 2024, the plaintiff entered a licence agreement with the defendant for the defendant to run a homeware store for a period of 10 years in an area of some 13,000 ft.², comprising nearly half of the plaintiff’s premises. Some months later on 12 August 2024, the parties entered into an agreement by way of side letter whereby the defendant was permitted to break the ten-year licence period after a period of five years.
  3. The following are some of the relevant terms of the written agreements between the parties: Period of the licence (as amended by the side letter) 2.1 The Licensee may terminate the Licence Agreement at the expiration of the fifth (5 th) year of the Term only (the “Break Option Date”) strictly subject to the following terms and conditions that: 2 2.1.1 The Licensee exercising the option to terminate the Licence Agreement under this clause 2 shall serve not less that

(3)calendar months’ prior written notice on the Company of its intention to terminate the Licence Agreement (the “Break Notice”) and in this regard time, shall be of the essence. Requirement to stay open 5.1.3 To keep the Designated Area open for the Permitted Use and to actively trade at all times during the Operating Hours. Requirement to indemnify the Company 5.1.7 to make good all Losses sustained by the Company in consequence of any breach of the Licensee of any condition or covenant herein contained; 5.1.8 to indemnify the Company against: (
  1. a)the breach or non-observance by the Licensee of any of the covenants or conditions contained in the Licence. Requirement to comply with the Licensee’s covenants 5.1.9 to comply with the Licensee’s covenants contained in this Agreement and to indemnify the Company against any costs, loss or damage which it may suffer as a result of the failure of the Licensee to comply with the within Licensee covenants. Signage requirements 5.1.15 not to exhibit any signboard poster or advertising matter or any flag or banner outside the Designated Area or in the windows or doors thereof, but this sub-clause shall not prevent the Licensee from placing in the Designated Area a sign of a type and of dimensions to be approved in writing by the Company and in compliance with the Planning Acts and in a position to be similarly approved by the Company AND the Company hereby confirms that the signage more particularly described in the Annex 3 to this Licence is approved and may be erected by the Licensee. 3 Stock requirements 5.1.30 ensure that high standards of displays and merchandising to the reasonable satisfaction of the Company are maintained within the Designated Area. Display of goods in piles, on undecorated pallets is not permitted. Requirement to remain open 5.1.31 as a minimum, keep the Designated Area open for business in accordance with the Licence except if prevented by laws, governmental authorities of competent jurisdiction, or any reasons beyond Licensee’s reasonable control. Security requirements 7.1.4 The operation, maintenance, repair and replacement of: (
  2. c)The provision of security arrangements for the safety of occupiers and customers of the Centre; (
  3. d)The engagement of security officers and services. Entire agreement clause 9.7 The Licensee acknowledges that this Agreement contains the whole agreement between the parties as to the subject matter hereof and the Licensees has not relied upon any oral or written representations made to it by the Company or its employees or agents and has made its own independent investigations into all matters relevant. 4. Prior to the parties entering the licence agreement, there were pre-contract discussions about, inter alia, the defendant's requirements for signage. After the parties entered the licence agreement and the side letter, there were further discussions and numerous emails about signage, security and the pace at which other tenants were opening businesses in the centre. The issues discussed between the parties were not addressed in the licence agreement or the side letter or any other written agreement, beyond the references to signage and security set out in the express terms of the licence set out above. 5. The defendant opened its homeware store on 29 September 2024. By email on 8 December 2025, the plaintiff advised the defendant that it had completed a commercial review of their business and had decided to close their store based on the commercial performance of the location. Further 4 correspondence followed over the following weeks in which the plaintiff maintained that they were entitled to terminate the licence. This correspondence did not mention any of the issues that had been the subject of numerous emails between the parties over the previous months viz-a-viz signage, security and other tenants in the centre. Neither was there any suggestion in the defendant's correspondence suggesting that they viewed the contract they had with the plaintiff to have been repudiated. The first time there was any mention of repudiation of contract was in the defendant’s replying affidavits. 6. It is common case between the parties that the defendant’s business at this location has been running at a loss for some time. The defendant's accounting expert, Mr Kiernan has concluded in his report that the shop is not financially viable and is being subsidised by the defendant's other stores around the country, all of which are financially viable and successful. Mr Kiernan has quantified the losses as expected to reach a specified figure by the end of 2028, which is the year in which the defendants would have been entitled to break their licence agreement in accordance with the side letter of August 2024. 7. Mr Kiernan also concluded that the homeware store is structurally loss-making and projected to remain loss-making. The loss has recurred consistently throughout the trading period, which the defendant says demonstrates that the losses are ongoing and structural rather than losses related to the start-up of trading in a new store. The defendant believes there is no potential for success as the losses arise because the revenue is structurally insufficient for the cost base. The defendants also contend that beyond the financial loss being suffered, the defendant’s reputation is being damaged by being associated with the conditions in the centre. History of the proceedings 8. The plaintiff made an application for an interim order on 22 January 2026 which was refused, but they were granted short service to 29 January 2026. At that time, the defendant was still trading, although it had reduced its stock considerably. On 29 January 2026, the defendant gave an undertaking that it would comply with the terms of its licence agreement. In accordance with that undertaking, the defendant has continued to operate its business from the plaintiff’s premises to date without difficulty, save that the business is operating at a loss and is one which the defendant does not wish to continue to operate from these premises. Discussion 9. In accordance with the approach set out by the Supreme Court in Merck Sharp & Dohme, the court should first consider whether, if the plaintiff succeeded at trial, a permanent injunction 5 might be granted. It should then consider if it had been established that there is a fair question to be tried. If there is, the court should consider the balance of convenience and the balance of justice and the most important element of which is in most cases the question of adequacy of damages. If all other matters are equally balanced, then the court should attempt to preserve the status quo (Gary Keville Transport Ltd v MSC (Mediterranean shipping Company) Ltd [2022] IEHC 130). Fair issue to be tried 10. The plaintiff says it has an unanswerable case in breach of contract and that the burden of proof is on the defendant to prove that the breach was justified. The defendant says they will prove that at trial by reference to what they say is the plaintiff’s repudiation of their contract. 11. At this stage in the proceedings, I have not been satisfied that the defendant's stated difficulties with signage, security and the absence or quality of other tenants establishes evidence, or sufficient evidence, of the substantial interference with their business that is clearly required by the case law to demonstrate a repudiation of contract. The plaintiff relies on the decision of Clarke J (as he as then) in Parol Ltd & Caroll Village (Retail) Management Services Ltd v Friends First Pension Funds Ltd & Superquinn [2010] IEHC 498. The defendant says the facts therein are not comparable to this case. Whether that is so or not, the legal analysis therein is applicable. Clarke J found that a lessee bound by a ‘keep open’ clause may treat a landlord’s actions as repudiatory where those actions “substantially deprive the tenant of the benefit of the lease” (at para. 4.7). That test of substantial deprivation is repeated in the case law on which Clarke J relied including Chartered Trust Plc v Davies [1997] 2 EGLR 83 and Moulton Buildings Ltd v Westminster [1975] 30 P&CR 182 and others. 12. The evidence before this Court of the defendant repeatedly raising issues with the plaintiff about signage, security and other tenants does not, at this stage, satisfy that test of substantial deprivation. Whether or not the evidence adduced at trial will satisfy the test is for the trial and not for this Court. 13. I therefore conclude that, at this stage, the plaintiff has raised a fair question that the defendant was in breach of their contractual obligations under the licence. The issues, set out above, the defendant says they experienced, are not sufficient to establish a repudiation of those contractual obligations. The likelihood of permanent injunctions at trial 6 14. The defendant relies heavily on the requirement of the Supreme Court in Merck Sharp & Dohme, set out as the first of the principles identified by O'Donnell J (as he was then), at para. 64, that: "The court should consider whether, if the plaintiff succeeded at the trial, a permanent injunction might be granted. If not, then it is extremely unlikely that an interlocutory injunction seeking the same relief upon ending the trial could be granted." 15. The defendant said the strong case standard of Maha Lingam v Health Services Executive [2005] IESC 89 applies here because the plaintiff seeks mandatory relief. Counsel for the plaintiff said he did not accept this but, in any event, claimed he satisfied the strong case test. He referred to reserving his position if the matter went elsewhere. I do not entirely understand that as the Court can only consider submissions that are actually made to it. 16. The plaintiff must establish a strong case that they are likely to secure a permanent injunction at trial requiring the defendant to keep their store open in the plaintiff's premises for the remainder of the non-break period of the licence agreement, i.e. up to 2028, five years after they entered the contract. Not only is the relief sought to require them to keep the store open and to actively trade during the operating hours but also to maintain stock, appearance, fixtures or fittings at the premises. 17. This was the approach adopted in Thomas Thompson Holdings Ltd v Musgrave Group Plc [2016] IEHC 28, at para. 7, where Hedigan J states: “In terms of the criteria concerning the likelihood of success at trial versus a serious issue to be tried, the court must first ascertain the nature of the order sought. This is because where a prohibitory order is sought, the question for the court is simply whether the plaintiff raises a fair, serious or bona fide question to be tried. This is a relatively low hurdle. On the other hand, where the order sought is a mandatory one, then the court must refrain from acting unless the plaintiff has established ‘a strong case that is likely to succeed at the hearing’. (See Maha Lingham v. HSE [2006] 17 ELR 137 at 140. In order to do that, the court must examine the substance of the case.” I adopt that approach here also. 18. Even if the plaintiff succeeds in its claim, I am not satisfied that there is a strong chance that the specific performance of the entire licence agreement and the side letter they seek will be granted at trial. That appears to be acknowledged by the plaintiff's own Plenary Summons that, at para. 5, seeks damages in lieu of specific performance and then seeks, separately at para. 6, an order for damages. The Plenary Summons also seeks declaratory reliefs at paras. 3 and 4. The 7 orders for specific performance that are sought at paras. 1 and 2 are general in seeking specific performance of the licence agreement (at para. 1) and of the side letter of 12 August 2028 (at para. 2), rather than the specific keep open clauses and other clauses that the plaintiff seeks to enforce of this interlocutory stage. 19. There is limited jurisdiction on the enforceability of a keep open clause of the type that the plaintiff seeks to enforce. The clearest case on interlocutory injunctions to compel a loss-making business to continue to trade against their wishes in circumstances where they have made what appears to be an express contractual commitment to do so is the UK House of Lords decision in CoOperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1. That decision is, of course, not binding on this Court, but I have found it to be persuasive and helpful given the clear similarity between its facts and those that arise here. Counsel for the plaintiff submits that the decision is not good law in this jurisdiction because of the flexibility of the remedy of an interlocutory injunction, as provided for by the Supreme Court in Merck Sharp & Dohme. However, I see nothing inflexible in the Court endorsing the approach of the House of Lords in Argyll. I find the discussion therein around the need to consider the particular circumstances of an individual case, the possibility of exceptional circumstances arising that might give rise to a different outcome and the emphasis placed on public interest in not requiring a business to continue trading at a loss, to be consistent with the approach of the Supreme Court in Merck Sharp & Dohme and the emphasis the Court placed on adopting a flexible approach. 20. In Argyll, the defendant entered a 35-year lease in 1979 to operate a supermarket in the plaintiff's shopping centre. In 1994, the defendant decided to close it and other loss-making shops. The plaintiff sought specific performance on a summons for summary judgment which was granted by the Court of Appeal but overturned on appeal. The House of Lords referred to the "settled practice" of not granting a mandatory injunction requiring the carrying on of a business which Lord Hoffmann said was not "entirely dependent upon damages being an adequate remedy" (at p. 12) but was also due to the constant court supervision that such an order would require. Lord Hoffman stated: “The prospect of committal or even a fine, with the damage to commercial reputation which will be caused by a finding of contempt of court, is likely to have at least two undesirable consequences. First, the defendant, who ex hypothesis did not think that it was in his economic interest to run the business at all, now has to make decisions under a sword of 8 Damocles which may descend if the way the business is run does not conform to the terms of the order. This is, as one might say, no way to run a business.” Lord Hoffmann distinguished between orders requiring a defendant to carry on an activity and orders which required them to achieve a result which he said, "explains why the courts have in appropriate circumstances ordered specific performance of building contracts and repairing covenants". He also cited the imposition in the terms of such an order, giving rise to the possibility of an increase in "wasteful litigation over compliance". Perhaps not dissimilar to the views of the plaintiff here, Lord Hoffmann referred to the defendant having, by his own breach of contract, put himself in an unfortunate position, but he went on to say: "From a wider perspective, it cannot be in the public interest for the courts to require someone to carry on business at a loss if there is any plausible alternative by which the other party can be given compensation. It is not only a waste of resources but yokes the parties together in a continuing hostile relationship." 21. The decision in Argyll was applied in this jurisdiction by Hedigan J in Thompson where the effect claimed by the plaintiff of losing the defendant’s supermarket from its shopping centre seems to have been claimed to have been even greater than what Tesco claims here, referred to in the judgment at para. 5 as an existential crisis to the continuation the plaintiff’s business badly affecting the entire shopping centre. Hedigan J cited the decision in Argyll with approval, including the dicta in relation to public interests that I have set out above. He took a similar view of the undesirability of requiring a business to comply with a keep open clause and in refusing the injunction, he observed at para. 21: “This Court would have grave doubts over the wisdom of forcing companies that are trading at a loss to continue to do so. It seems a proposition that flies in the face of commercial standards of conduct. It seems to be something futile and impractical fraught with all manner of consequential difficulties.” 22. Hedigan J also referred to the decision of Costello P in Wanze Properties (Ireland) Ltd v Five Star Supermarket & Tesco (Ireland) Ltd [1997] JILL-HC 102401 which counsel for the plaintiff cited to this Court as adopting a different approach to Argyll or Thompson. I do not agree that a different approach was adopted. Costello P allowed the injunction sought, expressly on the basis that the decision in Argyll "indicated a rule of law which should be applied other than in exceptional circumstances". The exceptional circumstances that Costello P found in Wanze was that the business was not running at a loss but was being closed by the defendant, in breach of their contractual 9 obligations, as part of “a deliberate commercial decision that it would expand its business in a different area close by, 400 yards away, in a different shopping centre which was then being developed". He describes this as “a different factor” to that in Argyll. 23. The plaintiff also sought to rely on the decision of Clarke J in Parol where a supermarket was closed by the defendant in breach of a ‘keep open’ clause. Clarke J found it unnecessary to deal with what he described as "obligations of an onerous variety under the lease such as the keep open clause in question in these proceedings" (at para. 4.10). 24. I see no inconsistency in the approach of the House of Lords in Argyll, as endorsed and applied by Hedigan J in Thompson, with the analysis of the Supreme Court in Merck Sharp & Dohme on the approach a court should adopt in considering an application for interlocutory injunctive relief. Argyll and Thompson both demonstrate the court’s engagement with the particular facts of the case and, in Wanze, with the possibility of exceptional circumstances arising that might justify a different approach to the rule that should be applied. I find the analysis of the public interest in terms of the undesirability of forcing a business to trade at a loss against its wishes (a view that the defendant's expert witness Mr Kiernan endorses in terms of the directors acting in the best interest of the company) to be sensible and reflective of the flexibility of the remedy of interlocutory injunction. For the avoidance of doubt, I do not consider a similar public interest necessarily applies in compelling an employer to reinstate the employment of an employee against their wishes as the employment relationship attracts very different rights, obligations and considerations than a purely commercial relationship between a business that has entered a contract to allow another business to operate from its premises. 25. For those reasons, the plaintiff has not satisfied the strong case test that they will secure the reliefs of specific performance of their licence agreement and the side letter of August 2024 at trial and I, therefore, in accordance with Merck Sharp & Dohme, refuse to grant an interlocutory injunction for the same relief. Balance of Justice 26. If I am wrong in relation to the above, I move to consider the balance of convenience, a key component of which is the adequacy of damages as per Merck Sharp & Dohme. 27. Counsel for the defendant submitted that it was difficult to find a better case where damages would be an adequate remedy. However, counsel for the plaintiff said it was a two-way analysis and relied on factor
(7)at para. 64 of Merck Sharp & Dohme, where O’Donnell J stated: 10 “While the adequacy of damages is the most important component of any assessment of the balance of convenience or balance of justice, a number of other factors may come into play and may properly be considered and weighed in the balance in considering how matters are to be held most fairly pending a trial and recognising the possibility that there may be no trial”. I do not consider there to be any real possibility that the matter will not proceed to trial and, indeed, counsel for the plaintiff was adamant that there would be a trial. Counsel for the plaintiff relied on the ability of the defendant's expert to quantify damages in a specific amount up to
  1. There is no suggestion that the plaintiff is unable to honour its undertaking as to damages, nor any suggestion that the defendant will be unable to meet any award for damages that may be made against it at trial.
  2. In contending that damages could never place the plaintiff in the position they would have been in had the defendant complied with its contractual obligations the plaintiff claims that they have suffered a reputational damage incapable of precise quantification. They referred to customers frequenting their store being met with a swathe of abandoned aisles and shelves in the heart of the store and an overall impression of a sudden collapse in business. They cited the effect on their capacity to attract future tenants in place of the defendant. In explaining their inability to quantify the value of this reputation damage, the plaintiff relied on the decision of the Court of Appeal in Betty Martin Financial Services Ltd v EBS DAC [2019] IECA 327 in relation to long-standing customer connection and trading identity.
  3. In my decision in Somnus GMC Waterford Limited & Anor v Flynn & Anor [2025] IEHC 676, at para. 26, I distinguished Betty Martin on the facts as set out at paras. 73 and 75 and the particular regulatory context to which that decision related. I also found at para. 28, that the damages suffered by a plaintiff arising from the operation of a retail premises are quantifiable, by reference to figures relating to turnover, outgoings, and profits, and can be calculated by comparing the period during which the plaintiff benefited from the relevant matters with the period following their determination. I apply the same reasoning here. The plaintiff is running a business with the aim of generating profit which it can then distribute to its shareholders. Any damages the plaintiff suffers to its reputation which it proves at trial and which it establishes led to a loss of footfall and result in a reduction in profits can be calculated, particularly as the plaintiff already has had a lengthy period of time since April 2024 with the benefit of the defendant's presence in its premises and should therefore be able to compare before and after figures of turnover and profit. 11
  4. Finally, the plaintiff submits that permitting the defendant to unilaterally abandon its contractual obligations would create a serious risk of a damaging precedent. If a licensee were allowed to renege on its contractual obligations in this manner, even on an interim basis pending a full hearing, it would establish a highly detrimental precedent. The plaintiff says it runs a significant risk of emboldening its other licensees to similarly disregard their obligations and cease trading without consequence. The plaintiff does not go any further in assisting the Court in understanding why its other licensees may wish to cease trading. Once again, I apply the scepticism as advised by O’Donnell J, at para. 64
(5)of his decision in Merck Sharp & Dohme, to any claim in commercial cases where breach of contract is claimed, that damages are not an adequate remedy. If the plaintiff's concerns about other licence holders being emboldened to disregard their obligations proves well placed (in spite of the plaintiff's decision to institute the within proceedings against the defendant and its stated intention to proceed to trial as quickly as it can), any effect on the plaintiff's business can be quantified in the same way as the effect that the defendant's conduct on the plaintiff's business, as I have set out above.
  1. In any event, I see no reason why other licensees might take such a step unless they are, like the defendant, trading at a loss and if they are, then they may (depending on the circumstances) fall into the category of the rule as developed and applied in Argyll and in Thompson in potentially being able to resist an interlocutory injunction compelling them to continue to run their loss-making business against their wishes and possibly against the best interests of the company. I have found that to be the correct state of the law and if that has application for the plaintiff's business model, then so be it. Status quo
  2. Insofar as the preservation of the status quo is a balance of convenience consideration independent of the adequacy of damages, I have not been satisfied that the balance of convenience or interests of justice therein, favours or requires compelling this defendant to continue to trade in the plaintiff's premises against their wishes. I follow Argyll and Thompson in finding that it would be against the public interest, unwise and would fly in the face of commercial standards of conduct to require the defendant to do so between now and the trial of the action. Costs
  3. This is a case where a different picture may emerge at trial once the evidence has been fully put before the Court. This raises the possibility of reserving costs to the trial judge in accordance with the decision of the Court of Appeal in Yoplait Ireland Ltd v Nutricia Ireland Ltd [2025] IECA 12
  4. In addition, whether or not the injunction sought at the interlocutory stage would be granted on a permanent basis at trial will be revisited at trial. However, the issue on which I have decided in part against the plaintiff in part, namely the adequacy of damages, will not be revisited and, therefore, even if the plaintiff succeeds in securing permanent injunctions, then it seems they would still have failed to secure an interlocutory injunction for that reason. In those circumstances, it seems to me that this case comes within the same category as McLoughlin & Anor v Fennell & Ors [2024] IEHC 178 where Simons J held at para. 35 "The issue on which I decided the application for interlocutory injunction will not be revisited".
  5. In those circumstances, my indicative view on costs is that I should, in accordance with decision in Somnus GMC Waterford Limited & Anor v Flynn & Anor [2025] IEHC 60 on costs is that the defendant should be allowed their costs rather than having them reserved to the trial.
  6. I will put the matter in before me at 10.00am on 13 May next in order to hear such further submissions that the parties may wish to make in relation to costs. If either party wishes to file written submissions, they should be with the Court at least 48 hours in advance of that date. Counsel for the plaintiff: Andrew Fitzpatrick SC, Sinead Drinan BL Counsel for the defendant: Joe Jeffers SC, John Freeman BL

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