Costa operator wins Court order

The operators of Costa Coffee cafés in Ireland have been granted a High Court order preventing the landlord of its Dundrum Town Centre outlet applying to wind up the firm.

MBCC Foods (Ireland) Ltd sought the injunction restraining Campbell Catering Ltd, trading as Aramark Food Services Ireland, from presenting a petition to wind up MBCC pending determination of a dispute over rents during Covid.

The court heard MBCC, which employs 2,000 in its 155 outlets in the Republic and Northern Ireland, and also operates 12 KFC restaurants, has had a lease since 2018 with Aramark in Dundrum Town Centre at an annual rent of €200,000. Its café is in the food hall on level three of the centre.

There had been significant disruption of its business over the last 15-16 months due to Government restrictions and guidelines, it says.

MBCC director Michael Conway said in an affidavit that since March 2020 Aramark had blocked access to the food hall, save for a brief period before Christmas.

That blocking off was "wholly in excess of any reasonable system of control which might have been required" under Government guidelines, he said.

Even though dine-in services were permitted by the Government last August, the food hall remained blocked off, he said. In a letter to MBCC the previous month, Aramark demanded payment of rent and that MBCC comply with a "keep open" clause in the lease, something which was "discordant and illogical", he said.

Gary McCarthy SC – for MBCC, in a one-side only represented application to Mr Justice Senan Allen – said earlier this month Aramark stated unless it was paid €367,000 in rent by tomorrow – July 22 – it would seek an order from the court for the winding up of MBCC. Proceedings were brought seeking to restrain that move.

MBCC was not an insolvent company and was in a position to pay its rent which was accepted by Aramark, counsel said. The money is in an escrow account pending resolution of the matter.

Mr Justice Allen said he was not immediately convinced by the argument that every lease in the country was frustrated by the lockdown. He would place great weight on the fact however that MBCC is able to pay its rent and had also given an undertaking as to damages in the context of the injunction application.