Ambiguity in legal drafting: insights from Dunnes Stores High Court decision

The importance of ensuring that defined terms are drafted clearly and without ambiguity in legal documents cannot be understated. This was evident in a recent ruling by the Irish High Court in the ongoing dispute between Point Village and Dunnes Stores. In this briefing, our Real Estate team examine key learnings from this case, focusing on the challenges created by unclear legal drafting, especially regarding fit-out obligations for anchor tenants.

Background to the dispute  

In February 2008, Dunnes Stores Unlimited Company (Dunnes) entered into agreements with Point Village Development Limited (Point Village), including a lease and development agreement (the Agreement), for the construction and related fit out works for a retail unit at the development known as Point Village in Dublin.

Dunnes first raised concerns about the standard of architecture in the Point Village development in 2008 and refused to commence its fit-out works and open its store. In 2010, a settlement was reached between the parties in relation to this matter (the Settlement Agreement). Under the terms of the Settlement Agreement, Dunnes were obliged to complete their fit-out works of the retail unit by March 2016.

In 2013, receivers were appointed over Point Village (the Receivers). Despite attempts to engage on the outstanding matters under the Development Agreement and the Settlement Agreement, the dispute returned to court in 2016. The Receivers issued proceedings against Dunnes, alleging that Point Village had carried out their obligations under the Settlement Agreement but claimed that Dunnes had continued to breach certain provisions, including the fit-out of the anchor store. The Receivers sought a ruling in the Irish Court of Appeal against Dunnes for specific performance under the Development Agreement and Settlement Agreement to carry out their fit-out obligations.

In his ruling, it was held by Mr. Justice David Barniville that:

• Dunnes was under a contractual obligation to take the various steps in connection with the fit-out of the retail unit

• Dunnes had failed to take those steps

• the court should make an order directing Dunnes to take those steps

An order was made dated 30 July 2019 (the Court Order) which compelled Dunnes to prepare and submit to the Receivers fit-out plans, which had a specific definition in accordance with the Development Agreement.

In March 2022, Dunnes delivered their fit-out plans to Point Village but proposed to fit-out just 2.9% of its allocated retail unit, arguing that this would meet their fit-out obligations. This prompted Point Village to take further legal action, bringing another case before the Irish Commercial Court. In this case, Point Village claimed that Dunnes was classed under its Development Agreement as an anchor tenant and that the proposed fit-out works of only 2.9% of its allocated retail unit was an action of contempt of the Court Order. Point Village asserted that Dunnes should be financially penalised for breaching their obligations under the Development Agreement and the Court Order. Point Village argued that both required Dunnes to fit-out the entirety of the allocated unit.

Dunnes argued that the Court Order itself and the drafting in the Development Agreement were too ambiguous in relation to the Dunnes obligations to fit-out the "entirety" of the unit. Dunnes claimed that neither contained express terms requiring the entirety of the unit to be fitted-out. It was noted that the terms "anchor unit" and "anchor store" in particular were not defined in the Development Agreement.

Dunnes argued successfully that their proposals to fit out only 2.9% of the unit met their fit-out works obligations in accordance with their obligations under the Development Agreement and Court Order.

The court recognised Dunnes’ position that there is no clear express term in the Development Agreement which required Dunnes to fit out the entire unit at any point in time. The court also acknowledged that there could be a broad spectrum of interpretations regarding what would constitute compliance with the Development Agreement and Court Order. This ambiguity meant that it could not be proven beyond a reasonable doubt that Dunnes were in contempt of the Court Order for the alleged breach.

Key takeaways

In its recent 2025 judgment, the Irish Commercial Court ruled in favour of Dunnes, dismissing the application that they were in contempt of the Court Order. It was held that the undefined nature of the terms of "anchor unit" and "anchor tenant" proved especially persuasive.

This case specifically highlighted the importance of drafting clear and unambiguous defined terms throughout legal documents as well as expressly setting out clear and detailed obligations and responsibilities for a tenant, especially when dealing with anchor units.

How Ogier can help

Ogier’s Real Estate team in Ireland specialise in navigating complex commercial property matters, for more information contact one of our team via their contact details below.

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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