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Cooperative Insurance Society V. Argyll Stores Notes

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COOPERATIVE INSURANCE SOCIETY V. ARGYLL STORES FACTS The appellant defendants, Argyll Stores (Holdings) Ltd. ('Argyll'), decided in May 1995 to close their Safeway supermarket in the Hillsborough Shopping Centre in Sheffield because it was losing money. This was a breach of a covenant in their lease, which contained in clause 4(19) a positive obligation to keep the premises open for retail trade during the usual hours of business. Argyll admitted the breach and, in an action by the landlord, Co-operative Insurance Society Ltd. ('C.I.S.') consented to an order for damages to be assessed. But the Court of Appeal
[1996] Ch. 286, reversing the trial judge, ordered that the covenant be specifically performed. It made a final injunction ordering Argyll to trade on the premises during the remainder of the term (which will expire on 3 August 2014) or until an earlier subletting or assignment. The Court of Appeal suspended its order for three months to allow time for Argyll to complete an assignment which by that time had been agreed. Clause 4(19) was the positive covenant enforced in this case: "To keep the demised premises open for retail trade during the usual hours of business in the locality and the display windows properly dressed in a suitable manner in keeping with a good class parade of shops." Competition in the supermarket business is fierce and in 1994 Argyll undertook a major review of its business and decided to reduce the scale of its operations. The management was to be reorganised, 27 loss-making or less profitable supermarkets closed and thousands of employees made redundant. Hillsborough, which according to Argyll's management accounts had made a loss of about £70,000 in the previous year, was on the list for closure. On 22 May 1995 C.I.S. issued a writ claiming specific performance of the covenant to keep open and damages. HOLDING LORD HOFFMANN Conventional View There is no dispute about the existence of the settled practice to which the judge referred. It sufficient for this purpose to refer to Braddon Towers Ltd. v. International Stores Ltd. [1987] 1 E.G.L.R. 209, 213, where Slade J. said: "Whether or not this may be properly described as a rule of law, I do not doubt that for many years practitioners have

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