The landlords have claimed that Fresh, Insomnia and BWG Foods – as guarantor under the lease – had “conspired” to install the cafe in the Co Dublin supermarket despite knowing it was not permissible under the lease, according to court documents.
The landlords – brothers Peter and Alan Woods – have lodged a non-party discovery request against BWG Foods as part of their defence in a court case. They have claimed that Fresh broke the terms of its lease at the Belarmine Plaza development in Stepaside, where they own 16 commercial units.
In 2021, after a failure to resolve the dispute, security staff operating on behalf of the landlords had sought possession of the Fresh store and briefly took control of it.
An Insomnia coffee dock
Fresh, owned by businessman Noel Smith alongside BWG and other shareholders, alleged damage was caused in the incident. This is denied by the landlords but Fresh Opportunities Stepaside Ltd took legal action for damages against the Woods brothers in May 2021 in a case that is ongoing. BWG is not a party to the case.
The row goes back to 2019 when, according to court files, the landlords claim they made an agreement with Insomnia to take a lease on an empty unit. But, they have claimed, Insomnia later pulled out of that deal and set up an operation inside the adjacent Fresh supermarket.
The landlord has claimed that the Insomnia cafe in the Fresh store is a franchise operation and that this amounts to a breach of the terms of the lease and damages the landlords’ ability to offer exclusivity to other coffee chains.
They have claimed to have files where Noel Smith of Fresh was referred to as “an Insomnia Franchisee” by agents engaged by Insomnia.
But Smith has argued that the Insomnia operation is not a franchise operation and therefore not a breach of its obligations under the lease. He had “provided a four-line letter from Harry O’Kelly [CEO] of Insomnia describing the relationship between Fresh and Insomnia as merely a “trading arrangement”, court documents stated.
Everything is simply premised on a four-line communication from the CEO of Insomnia
In an affidavit lodged with the High Court as part of the landlord’s discovery motion, Jean Hourigan of James Wall Solicitors, said it was “inconceivable that an enterprise like Insomnia which has over 175 coffee shops/cafes throughout Ireland and the UK” would enter an arrangement with Fresh “where there is no agreement governing day-to-day operations” and that “everything is simply premised on a four-line communication from the CEO of Insomnia”.
The document claimed Insomnia “maintains a high-level franchise” with BWG and that a large proportion of its cafes were run through this franchise partnership with BWG. This “enabled Insomnia’s rapid expansion over the past decade” and meant it “does not have the exposure to capital costs” for fitting out new cafés”.
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