Irish Competition Authority Decisions

1. Notification was made by Royal Liver Trustees Ltd on 30 September 1992 with a request for a certificate under Section 4(4) of the Competition Act 1991 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 Royal Liver Trustees Ltd and Deanstown Investments Ltd.

2. The notification concerns the lease of Unit 4, Royal Liver Assurance Retail Park, Naas Road, Dublin 12 between Royal Liver Trustees Ltd as Landlord and Deanstown Investments Ltd as tenant.

3. Royal Liver Trustees Ltd is the corporate trustee of the Royal Liver Friendly Society, whose registered office is in Liverpool, and it is involved in the investment of funds and in the letting of commercial properties. Deanstown Investments Ltd is the property holding company for Rocca Tiles Ltd which is engaged in the retail sale of tiles.

4. The notified shop lease was executed on 15 October 1990 for a term of 35 years from 24 September 1990. The restricted user clauses in the lease are as follows:-

(i) Under clause 2 (3) (a) the tenant covenants "not without the prior consent in writing of the Landlord or its agents...to use or to permit or suffer or allow the premises or any part or part thereof to be used for any other purpose other than as set forth in Part II of the First Schedule hereto and for no other purpose or purposes whatsoever....... PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that upon application.......the Landlord shall not unreasonably withhold its consent to such proposed change of user but in considering the matter full account will be taken of....the fact that the premises form part of an estate in which it is necessary and desirable....that the nature of the businesses carried on...should be.....as diverse as possible and of the proper balance of quality and user in a Retail Park.....".

Part II of the First Schedule reads under the heading Permitted User "The retail sale of household/industrial/commercial tiles together with directly related goods and accessories in relation to the retail business."

(ii) Under clause 2(4) the tenant covenants

(a) Not to assign licence franchise underlet part with or sublet or share possession or occupation of part only of the premises.

(b) Not without the prior consent of the Landlord (such consent not to be unreasonably withheld but which may be subject to reasonable conditions) to assign underlet or part with or sub-let or share possession or occupation of the whole of the Premises."

In addition, there are a number of other standard restrictive covenants and obligations in the lease.

5. The Authority considers that Royal Liver Trustees Ltd and Deanstown Investments Ltd are undertakings and that the notified lease is an agreement between undertakings. The agreement has effect within the State.

6. In its Notice of 2 September 1993 on Shopping Centre Leases (Iris Oifigiuil 10 September 1993, pp.665-667) the Authority stated its view that such lease agreements and their restricted and exclusive user clauses and the other standard restrictive clauses and obligations, do not generally 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. The Naas Rd retail park is to a degree dissimilar to the normal shopping centre because of its emphasis on retail warehousing and because of Planning Act requirements for a retail park which may limit the diversity of the trading activities that might be carried on. Nevertheless the Authority would take the view that this reduction in diversity is compensated for by the concentration of retail activities of a generic kind, i.e. DIY/Home Improvements/Furnishings, at the retail park which leads to enhanced competition. The Authority therefore considers that the notified agreement between Royal Liver Trustees Ltd and Deanstown Investments Ltd does not offend against Section 4 (1) of the Competition Act 1991.

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 Royal Liver Trustees Ltd and Deanstown Investments Ltd in relation to the lease of the premises at Unit 4 Royal Liver Assurance Retail Park, Naas Rd., Dublin 12 notified under Section 7 on 30 September 1992 (notification no. CA/546/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

3 December 1993