Irish Competition Authority Decisions

1. Notification was made by Guardian Assurance plc on 30 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 Square Management Ltd, L&C Properties Ltd, Guardian Assurance plc and Heatons Ltd.

2. The notification concerns the lease relating to unit 108 in The Square Towncentre, Tallaght, Dublin 24 between The Square Management Ltd, as Freeholder, L&C Properties Ltd, as landlord, Guardian Assurance plc which holds the lessee interest in the Head lease and Heatons Ltd as tenant.

3. The Square Management Ltd is the Freeholder (and owner) of The Square Towncentre, Tallaght, Dublin 24. Guardian Assurance plc is engaged in the business of assurance and the investment of funds. L&C Properties Ltd is landlord of units at the centre. Heatons Ltd trades as a retail draper at The Square Towncentre.

4. The shopping centre lease notified in draft form contains the following restricted user clauses viz.

(a) Under clause 3.2(3) the tenant covenants with the landlord and the freeholder "Not, without the prior consent in writing of the Landlord or its agent thereunto lawfully authorised, to use or permit or suffer to allow the Demised Premises or any part thereof, to be used for any purpose other than for the sale of children's wear, toys, sports equipment, menswear, ladieswear, footwear, household textiles, wool, hardware, handbags, costume jewellery, accessories and leisurewear ................. PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that upon any application by the Tenant, or any Undertenant of the Tenant, for liberty to alter or change the aforesaid permitted use of the Demised Premises the Landlord and the Freeholder shall not unreasonably withhold their consent..."

(b) Under clause 3.2(5) the tenant covenants with the landlord and the freeholder "Not to assign, transfer, underlet, mortgage, charge or part with the possession or occupation of the Demised Premises or any part thereof or suffer any person to occupy the Demised Premises or any part thereof as a licensee or concessionaire except with the previous consent in writing of the Landlord and the Freeholder BUT SO THAT NOTWITHSTANDING the foregoing the Landlord and the Freeholder shall not unreasonably withhold its consent..."

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

5. By way of side letter dated 16 August 1990 the landlord confirmed "...that the Landlord will not on a first letting basis, excluding existing lettings agreed prior to todays date, and excluding the majors grant an exclusive household and textile user for an area greater than 800 square feet." and also "....on a first request only for change of user to household textiles the Landlord shall refuse consent to such change."

6. The Authority considers that The Square Management Ltd, L&C Properties Ltd, Guardian Assurance plc and Heatons Ltd are undertakings and that the notified lease is an agreement between undertakings. The agreement has effect within the State.

7. 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, l993 in respect of shopping centre leases (Iris Oifigiuil of l0 September, l993, pp. 665-667). In fact, in this case, the arrangements provide for the location of competing outlets in the centre so no question of a restriction on competition arises. The Authority therefore considers that the notified agreement between The Square Management Ltd, L&C Properties Ltd, Guardian Assurance plc and Heatons Ltd does not offend against section 4(1) of the Competition Act, l99l.

8. 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 Square Management Ltd, L&C Properties Ltd, Guardian Assurance plc and Heatons Ltd in relation to the lease of premises at The Square Towncentre, Tallaght, Dublin 24, notified under Section 7 on 30 September, l992 (notification no. CA/542/92), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993