Savoy owners fear Screen building buyers will breach cinema/theatre restriction

The owners of Dublin's Savoy Cinema fear a company which bought the Screen Cinema from it intends to use it as a cinema/theatre in breach of a sale undertaking that it would not be used for this purpose for 20 years.

The Dublin Cinema Group (DCG) is seeking a High Court injunction preventing Balark Trading GP and Balark Investments from using the Screen building and the neighbouring College House, just off D'Olier Street, as a cinema/theatre. The Savoy, as a competitor cinema, is just down the road in O'Connell Street.

DCG says when it sold its leasehold interest to Balark in 2016 in these two buildings, there was a restrictive covenant in the sale agreement that they would not be used as a cinema/theatre for 20 years afterwards.

In 2018, planning permission was granted for a redevelopment to include a 500-seat "entertainment venue". The previous year, Balark Investments transferred its interest in the properties to Balark Trading.

DCG sought undertakings from Balark that the use would not be for a cinema or theatre of any kind and that the planning permission would not be implemented as long as the "entertainment venue" aspect was part of it.

Balark Trading was prepared to undertake not to use it for a cinema/theatre but refused not to proceed with its permission. It also disputed that it was bound by the restrictive covenant given the sale contract was with a separate company, Balark Investments.

As of January 2018, Balark's solicitors indicated the firm had not finalised its intended use for the properties.

DCG didn't believe it didn't intend to use them for cinema/theatre.

DCG brought proceedings seeking to prevent such a use for the 20 years under the sale agreement.

Lorcan Ward, a DCG director, said in an affidavit last January that while Balark said a decision on use had not yet been made, "surrounding evidence" indicated that 18 months earlier negotiations were at an advanced staged with Paddy McKillen Jnr's Press Up Entertainment leisure and hospitality group over use.

Arising out of this dispute, both parties asked the High Court to order discovery of documents so there could be a fair hearing of the dispute between them.

Mr Justice Michael Twomey refused both parties' applications.

In relation to DCG's discovery application for all documents relating to the design or intended use as a 500-seat entertainment venue, Mr Justice Twomey said documents about the past intentions of Balark were not necessary for a fair disposal of the case.

In relation to Balark's discovery application, he said the documents it sought were not relevant and necessary for fair disposal of the dispute.