Irish Competition Authority Decisions

1. Notification was made by Glenberg 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 Conveyance Agreement between H.Williams and Company Ltd and Glenberg.

2. The notification concerns the conveyance agreement relating to the sale of Unit 4, at Shankill Shopping Centre, Shankill, Co. Dublin between H.Williams and Company Ltd as vendor and Glenberg as purchaser.

3. H. Williams and Company Ltd traded as a supermarket and was engaged in the letting of units at shopping centres. Glenberg is the property holding company for the Peter Mark chain of hairdressing saloons. Peter Mark, an unlimited company, which operates the hairdressing business, is a subsidiary of Glenberg.

4. The notified conveyance agreement was executed on 10 September 1984. The vendor indicated in the agreement was H. Williams and Company Ltd "which expression shall include and be deemed to include ...its successors and assigns" while the purchaser indicated was Glenberg Ltd "which expression shall include and be deemed to include ....his executors, administrators and assigns". The restrictive user clause in the agreement is as follows:-

(a) Under clause D (b) of the agreement "The Purchaser hereby covenants with the Vendor to perform and observe the covenants conditions and stipulations set out in the Fourth Schedule hereto to the intent that the burden of such of the same covenants.....shall run with and bind the sold land....."

The Fourth Schedule includes a covenant by the purchaser "Not to use the sold land for any purpose other than as a Hairdressing Salon provided always that the Vendor shall not unreasonably withhold its consent to change of use where no other portion of the retained property is at that time being used for that use."

(b) Under clause D (d) "the Vendor hereby covenants with the purchaser to the effect that the covenants will be a burden on the retained property for the benefit of the sold land and not to permit any part of the retained property to be used as a Hairdressing Salon."

The "retained property" is defined as so much of the estate (i.e. the area of Shankill Shopping Centre shown on the plan annexed to the agreement) that does not comprise the sold land.

The agreement also required the purchaser to comply with other covenants related to the upkeep of the premises and its environs together with a requirement on the lessee to contribute towards the common facilities in the Shopping Centre and its management.

5. The Authority considers that at the time the agreement was executed H.Williams and Company Ltd and Glenberg Ltd were undertakings and that the notified agreement is an agreement between undertakings. The agreement has effect within the State.

6. The sale agreement contains a permitted user clause whereby the purchaser is restricted to using the premises for the purpose of a hairdressing salon while the vendor covenanted not to allow the remaining area of the shopping centre to be used for a similar purpose. In its Notice on Shopping Centre Leases which was published in Iris Oifigiuil on 10 September 1993 (pp.665-667) the Authority expressed its conclusion that such restricted user clauses do not generally offend against Section 4(1) of the Competition Act 1991 for the reasons stated in that notice. The Authority would also take the view that the inclusion of similar covenants in agreements for the sale or transfer of landlord or lessee interests in shopping centre leases similarly do 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. The Authority therefore considers that the notified agreement between H. Williams and Company Ltd and Glenberg 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 H. Williams and Company Ltd and Glenberg in relation to the sale of unit 4, Shankill Shopping Centre, Shankill, Co. Dublin notified under Section 7 on 30 September 1992 (notification no. CA/1004/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

3 December 1993