Court puts plans on ice for Foodco at GameComment on this story
Masstores has been temporarily prohibited by the North Gauteng High Court from opening or operating a FoodCo outlet within the Game store at the Liberty Midlands Mall in Pietermaritzburg, until arbitration proceedings on this issue are finalised.
The arbitration proceedings are to be instituted by Pick n Pay Stores by June 18.
Judge Dawie Roux yesterday also prohibited Masstores, a Massmart subsidiary trading as Game, from interfering in the contractual relationship between Pick n Pay Stores and Liberty Group Properties until the arbitration is finalised.
Liberty Group Properties was prohibited from acting in breach of contractual obligations to Pick n Pay by permitting, consenting to and/or allowing Masstores to operate a FoodCo within the existing Game store in Midlands Mall.
The owners of Midlands Mall also have to preserve the status quo and the Game store as it was before the introduction of FoodCo.
Pick n Pay’s lease agreement stipulates that Liberty Group Properties will not permit a hypermarket or supermarket, a fruit and vegetable shop exceeding 200m2, or a grocery, fresh fish shop, butchery, bakery, fruit and vegetable shop and deli to operate in a particular portion of the mall without Pick n Pay Stores’s written consent.
Pick n Pay said Masstores intended to expand its business by selling an extensive range of perishable and non-perishable food items under the FoodCo brand within the existing Game store, which if permitted, would make the Game store a supermarket in violation of its right to exclusivity.
Judge Roux said Masstores intended to expand its business in the mall to such an extent that it could be regarded as a supermarket.
Masstores said it had acted with the knowledge and consent of Liberty Group Properties and even if the Game store was a supermarket, it did not act unlawfully and intentionally by interfering with Pick n Pay’s contractual rights.
Judge Roux said it was not necessary to determine whether or not permission was given to Masstores to introduce a FoodCo, as suggested by Masstores, because there was evidence its representatives were made aware during April of the existence of Pick n Pay’s exclusivity clause in its lease and its objection to the Game FoodCo.
Introducing a FoodCo under these circumstances would constitute at least an attempt to unlawfully and intentionally interfere with the contractual relationship between Pick n Pay Stores and Liberty Group Properties, he said.
Judge Roux said interference of this nature would probably have the effect that Pick n Pay Stores would not obtain the performance it was entitled to enjoy from the right of exclusivity and sufficient to constitute harm.
Pick n Pay Stores said it would suffer unquantifiable and, therefore, irreparable damages once a FoodCo had been incorporated into the Game store in the mall.
Judge Roux said an award for damages in due course would therefore not be a suitable remedy.
The costs of the application were reserved.