The Court of Appeal has cleared the way for construction of a 200,000sq ft extension to the Square Shopping Centre in Tallaght, Dublin.

Dunnes Stores, one of its anchor tenants, had appealed a High Court decision in favour of the owners and operators of the centre who want to build the extension.

On Friday, a three-judge appeal court upheld the High Court finding permitting it to be built.

The case was adjourned to allow Dunnes consider whether they wish to seek permission for a further appeal to the Supreme Court on a point of public importance and for the issue of costs.

The Square was Ireland’s first large shopping centre and Dunnes had argued the €30 million extension plan on what is currently the northern car park would inconvenience its shoppers who would have to travel further to get to its store.

The Square Management Ltd (SML), which manages and operates the freehold of the centre’s units, along with National Asset Property Management Ltd (NAPML), which owns lands used for car parking at the centre, and the extension developers, Indego Ltd, went to court seeking court declarations that Dunnes have no estate, interest or claim over the car park.

They argued the supermarket chain has no right to use the lands for anything, be it car parking or otherwise, beyond a lease it entered into in 1990. It is also claimed Dunnes trying to frustrate the development that would see 850 new car park spaces in a multistorey unit, replacing the 289 surface spaces currently there.

Dunnes opposed the application. It claimed to have acquired certain rights to the car park by virtue of “easement by prescription” which allows the supermarket use it without having to own the property, counsel said. That claim was denied.

Last March, the High Court found in favour of the Square plaintiffs.

Right of way

Mr Justice Max Barrett found the lease for the centre entitled the landlord to carry out development on the northern car park and Dunnes did not enjoy an irrevocable right for its customers to park there.

Dunnes also did not have an easement of right of way over the car park area, he said.

Dunnes appealed and the plaintiffs also lodged a cross-appeal.

In her judgment on behalf of the appeal court, Ms Justice Máire Whelan found, while Dunnes had certain rights arising under a certain lease, a licence created under that lease did not create any proprietary rights in favour of the retailer.

She dismissed the claims by Dunnes, saying the High Court erred in law and also dismissed the cross-appeal.