Eddie Rockets, trading as Grace Kelly Ltd, sought an injunction preventing Jolly’s, Naas Eatery Ltd, from selling hamburgers in its restaurant, Naas Circuit Civil Court heard last week.
The directors of the 1950s-style diner claimed the Jolly restaurant was in breach of a verbal agreement and a user clause with their mutual landlord, JF Dunne Group Ltd, and that Eddie Rockets was entitled to relief as a result.
Both restaurants occupy the same building on North Main Street in Naas and both have 20-year leases with the landlord, JF Dunne Group Ltd.
The two restaurants have invested hugely in renovating the premises and both employ more than 20 staff each.
Jolly’s hamburger has a retail price of E9.90 plus chips and sauteed onions. Eddie Rockets sells a range of hamburgers from E6.75 to E8.50.
Counsel for Eddie Rockets, barrister Mr Vincent Nolan BL claimed there was a commitment by the owner of Jolly not to sell hamburgers. In her affidavit, Ms. Grace, of Grace Kelly Ltd, said a verbal conversation took place in early June last year where that commitment was made. “The owner Mr. Mark Condron said he would not sell hamburgers,” she insisted.
Mr. Nolan said hamburgers were a central feature to the Eddie Rocket franchise, where in its menu, it has two pages devoted to a variety of hamburgers. In addition, he claimed Jolly was in breach of a user clause in its lease with their mutual landlord.
“By engaging in the sale of hamburgers, Jolly was breaching an obligation under its lease where the user clause stated it would not do anything that would conflict with the ethos and nature of Eddie Rockets,” Mr Nolan stated.
Counsel for Jolly, Mr. Nathan Reilly, said the injunction, if approved, would be a “mockery of the law”.
“It is not possible for a third party to enforce a restrictive covenant. And claims of an extraordinary oral agreement are so far-fetched ... What comes next? Jolly’s will not be allowed sell chips, coffee, ice-cream?”
Owner of Jolly’s Mark Condron described his restaurant as fine dining, similar to his other restaurant Zest in Clane. Asked if he agreed in a conversation with Grace Kelly Ltd last June Jolly’s would not sell hamburgers, he said that claim was not true.
He said his restaurant was not in competition with the Eddie Rocket franchise and described his menu as “sophisticated” and “high-end”, and it was his opinion Eddie Rockets was a different experience.
“It would be difficult for staff to explain to customers why we cannot sell burgers. It’s a popular item on the menu, not the most, but popular. I cannot refocus my menu by not having the burger there. It has to be there,” Mr Condron concluded.
The court heard the restaurants mutual landlord, JF Dunne Group Ltd, attempted to settle the matter with both his tenants.
Mr Dunne said it was his understanding that the user clause on the lease was a compromise and acceptable to both parties.
The lease itself was negotiated from February last year and was signed in September 2012. Jolly’s began trading in early December. The restaurant is now six weeks in operation.
He said that he appreciated fully the concerns of Eddie Rockets, hence why he alerted them to the new tenant and the user clause. “The lease was signed and everything was fine, or so I thought.”
Barrister for Mr Dunne, Ms Siobhan Gaffney BL, said he had a business for 28 years on that site and described it as one of the best sites in Naas. He said it took him four years to get full tenants into the building.
“To be honest, I don’t know much about burgers I just eat them,” Mr Dunne told the court.
Judge Barry Hickson asked the landlord, did he not think that two restaurants in the same building would inevitably get into difficulties?
“Not really. I thought they’d feed off each other. I thought it would be good for both businesses. It is a strong area in Naas, and both are good tenants,” Mr Dunne replied.
In his ruling, Judge Hickson observed: “Everybody has their 15 minutes of fame, and this, it seems is the era of the hamburger for Naas, but for the parties concerned, it is a very serious matter.
“Ms Grace and Mr Condron are two impressive young businesspeople, both with successful businesses in a difficult economic world. That is refreshing, and both provide local employment and both are successful tenants.”
He said Mr Dunne the landlord was polite and concerned enough to consult Eddie Rockets about the new tenant and a user clause was hammered out, which he said was the kernel of this case.
“If it was intended for the third-party defendant not to sell hamburgers, one would have thought it would have been included in the lease under the user clause,” he said.
He added that it would be difficult to draft something in such a restrictive manner limiting one’s own business.
He said if it was agreed between the parties, it should have been expressly included and the reason it was not because there was no such arrangement.
“In those circumstances the plaintiff is not entitled to an injunction or declaration, and I refuse relief sought on both counts.”
Eddie Rockets, Grace Kelly Ltd, have 14 days to appeal the decision.