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Cite as: [1993] IECA 113

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The Park S.C. Ltd/ Peter Wong [1993] IECA 113 (13th October, 1993)

COMPETITION AUTHORITY

Competition Authority Decision of 13 October 1993 relating to a proceeding under Section 4 of the Competition Act, 1991.

Notification No CA/103/92 - The Park Shopping Centre Ltd./Peter Wong.

Decision No: 113

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Notification No CA/103/92 - The Park Shopping Centre Ltd/Peter Wong

Decision No. 113

Introduction

1. Notification was made by Peter Wong on 24 September, l992 with a request for a certificate under Section 4(4) of the Competition Act, l99l or, in the event of a refusal by the Competition Authority to issue a Certificate a licence under Section 4(2) in respect of a lease between The Park Shopping Centre Ltd and Peter Wong.

The Facts

(a) The subject of the notification

2. The notification concerns the lease of shop Unit 2, The Park Shopping Centre, Prussia St., Dublin 7, between The Park Shopping Centre Limited as Landlord and Peter Wong as tenant.

(b) The parties involved

3. The Park Shopping Centre Limited, is the landlord and lessor of shop units at the Park Shopping Centre. Peter Wong trades as a retail pharmacy at Unit 2 of the Shopping Centre.

(c) The notified arrangements

4. The notified shopping centre lease was executed on 3 October, l99l for a period of 35 years from 4 December, l987 between The Park Shopping Centre Limited as Landlord and Peter Wong as tenant. The restricted user clauses in the lease are as follows:-

(a) Under clause 4.26 the tenant covenants with the landlord

"Not without the prior consent in writing of the Landlord or its agent thereunto lawfully authorised which consent shall not be unreasonably withheld to use or to permit or suffer or allow the Demised Unit or any part or parts thereof to be used for any purpose other than as set forth in Part II of the First Schedule hereto and for no other purpose or purposes whatsoever .....

Part II of the First Schedule under the heading "permitted User" reads

"Pharmaceutical Chemist Shop for the preparation, sale and dispensing of all kinds of patent pharmaceutical medicines and medicated preparations. The Tenant would also be allowed to use the premises as a retail sales outlet for the sale of cosmetics, toiletries, soaps, perfumes, baby foods, baby products, photographic equipment and related photographic products, costume jewellery and gifts and general health care products. The premises may also be used by the Tenant as a acupuncture clinic."

(b) Under clause 4.25 the tenant covenants

"Not to assign transfer or underlet or part with possession or occupation..... of the Demised Unit or any part thereof..... BUT SO THAT NOTWITHSTANDING the foregoing the Landlord shall......not unreasonably withold its consent to an assignment......"

(c) Under a supplemental agreement dated 3 October, l99l the Landlord agreed that

"....the Tenant may use the Unit wholly and exclusively as a Pharmaceutical Chemist Shop as outlined in the user clause set out in Part 2 of the first Schedule to the Lease and the Landlord will not allow any other chemist in the centre or in the planned extensions thereto...."

In addition, there are a number of other standard restrictive

covenants and obligations in the lease.

Assessment - The applicability of Section 4 (1)

5. The Authority considers that The Park Shopping Centre Ltd and Peter Wong are undertakings and that the notified lease is an agreement between undertakings. The agreement has effect within the State.

6. The Authority considers that the notified agreement, and its restricted and exclusive user clauses and the other standard restrictive clauses and obligations, does not have the object or effect of preventing, restricting or distorting competition in trade in any goods or services in the State or in any part of the State, for the reasons given in the Notice of the Authority of 2 September 1993 in respect of shopping centre leases (Iris Oifigiuil 10 September 1993, pp.665-667). The Authority therefore considers that the notified agreement between The Park Shopping Centre Limited and Peter Wong does not offend against Section 4 (1) of the Competition Act l99l.

The Certificate

7. The Competition Authority has issued the following certificate.

The Competition Authority certifies that in its opinion, on the basis of the facts in its possession, the agreement between The Park Shopping Centre Limited and Peter Wong in relation to the lease of the premises at Unit 2, The Park Shopping Centre, Prussia Street, Dublin 7 notified under Section 7 on 24 September 1992 (notification no. CA/103/92E), does not offend against section 4 (1) of the competition Act, l99l.

For the Competition Authority

Des Wall

Member

13 October 1993