BEWLEY’S cafe has secured a landmark victory to stop its landlord hiking the rent again.

The famous Grafton Street restaurant sought to prevent any increase on the €1.5m a year imposed at the peak of the property bubble in January 2007.

Mr Justice Peter Charleton ruled that the rent must be allowed to drop to a level to reflect the state of the market.

It is estimated to be half of what it was set at five years ago.

The Dublin building is owned by Ickendel Limited, a property company controlled by the developer Johnny Ronan.

Bewley's claimed it was losing €700,000 because of grossly excessive rents and that 25 jobs had been lost in the cafe since 2007.

The firm said losses were being covered from other parts of the group with profits down by 68pc to €500,000 in 2011.

No senior management from Bewley's were available for comment on the court victory but it is understood chief executive John Cahill wants time to consider the result.

"Bewley's has welcomed the decision of the High Court and is delighted with this outcome," a spokesman said.

Ronan's Ickendel, which has had its loans transferred to Nama, challenged Bewley's through the High Court to accept a rent increase.

The market rent will now be established by an arbitrator.

Judge Charleton said it was no surprise that Bewley's wanted the rent cut.

"It is not in accordance with business sense that a rent appropriate to five years previously should govern a hospitality market markedly changed for the worse," he said.

Rent on the four-storey building, traditionally known as Bewley's Oriental Cafe, has gone from €213,000 in 1987 when the lease was first signed to €1.46m in 2007.

The case heard that Grafton Street rents are said to be down 52% from the peak if a tenant gives up a lease and a landlord seeks a new occupier.

Online Editors