High Court Judge Criticizes Supermac’s Owner Over Unpaid Rent

A High Court judge has ruled against the fast-food chain Supermac’s, ordering the payment of €124,502 plus interest to businessman Richard Duggan following a legal dispute over unpaid rent for a premises on High Street in Kilkenny.

Judge Sean Gillane, presiding over the case, described the conduct of Supermac’s owner Pat McDonagh as less than satisfactory after the businessman gave evidence during a three-day hearing.

While the judge found against the fast-food chain, he determined that the behavior of McDonagh did not justify the awarding of aggravated damages, despite suggestions that such an award should be made against the Galway businessman.

Origins of the Rent Dispute

The legal conflict centers on a property on Kilkenny’s High Street. Richard Duggan acquired the premises in March 2008, at which time it was already being rented by Supermac’s. In December 2008, an arbitration process established the annual rent for the premises at €186,754, to be paid in monthly instalments.

The financial arrangements regarding the property became complex when Duggan used the premises, along with several other properties, as security for financial agreements with AIB. Following a default by Duggan, the debt was eventually assigned to Everyday Finance.

In 2020, Everyday Finance appointed a receiver over the charged properties, which were subsequently put up for sale.

Impact of the Covid Pandemic

The dispute intensified during the Covid pandemic. Throughout 2020 and 2021, Supermac’s failed to maintain full rent payments. According to the judgment, the chain at times failed to pay the monthly rent entirely or paid only 50 per cent of the amount due.

During this period, Supermac’s contacted Madden Property Consultants, the agents acting for the receiver, to request a 50 per cent reduction in rent. The judgment noted that this request was not acceded to.

Court Findings and Evidence

During the three-day hearing, the court examined the reasons provided by Pat McDonagh for the non-payment of rent. It was submitted during the proceedings that McDonagh’s testimony was inconsistent with earlier claims he had made, specifically assertions that the rent was not due or owing.

This inconsistency contributed to Judge Gillane’s assessment of McDonagh’s conduct as less than satisfactory.

Previous Legal Proceedings

The current ruling follows an earlier attempt by Duggan to resolve the matter via summary judgment. On November 11, 2022, Ms. Justice Marguerite Bolger refused a request to enter judgment against Supermac’s for alleged unpaid rents totaling €135,000.

At that time, Ms. Justice Bolger stated that the court must be satisfied that no defense exists before entering a summary judgment. She concluded that Supermac’s Ireland Limited had just about done enough to persuade the court that the matter had merit and should proceed to a full hearing.

The 2022 proceedings established that Duggan had sold the Kilkenny property in March 2021, with proceeds going to Everyday Finance to discharge his liabilities. A settlement allowed Duggan to pursue Supermac’s for the rent arrears that had accumulated since the appointment of the receiver, although Supermac’s was not a party to that specific settlement.

Supermac’s had previously disputed the debt and challenged Duggan’s standing to claim the funds, arguing that any failure by the receiver to recover rent was a matter solely between the chain and the receiver.