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Cite as: [1993] IECA 214

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L&C Properties Ltd and others/The Square Management Ltd/Tenants of the Square Towncentre, Tallaght [1993] IECA 214 (3rd December, 1993)

Notification No: CA/929/92E - L & C Properties Limited and others/The Square Management Ltd/Tenants of The Square, Towncentre, Tallaght.

Decision No: 214.

Introduction

1. Notification was made by L & C Properties Ltd., Noel Smyth, Colman Bermingham and Ronan Hanningan, Pauline Fox, Aviette Ltd and Dankinter Ltd 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 leases between L & C Properties and others, The Square Management Ltd and their tenants.

The Facts

(a) Subject of the notification

2. The notification concerns the leases relating to 56 shop units in The Square, Towncentre, Tallaght, Dublin 24 between The Square Management Ltd as Freeholder, L & C Properties Ltd and others as landlords and their tenants.

(b) The parties involved

3. The Square Management Ltd is the Freeholder (and owner) of The Square, Towncentre, Tallaght, Dublin 24. L & C Properties Ltd is the landlord and owner of 44 units in The Square. Noel Smyth is the landlord and owner of units 228 and 229/230 in The Square. Colman Bermingham and Ronan Hannigan are the landlords and owners of unit 257 in The Square. Pauline Fox is the landlord and owner of unit 317A in The Square. Aviette Ltd is the landlord and owner of units 130, 220/221, 305/305A and 311. Dankinter Ltd is the landlord and owner of unit 109.

(c) The notified arrangements

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

(a) Under clause 3.2(3) the tenant covenants with the Freeholder and the landlord "Not without the prior consent in writing of the Landlord and the Freeholder or their respective Agents 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 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 freeholder and the landlord "Not to assign transfer, mortgage, charge or part with the possession or occupation of the Demised Premises or and 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. The Landlords have supplied details of the permitted user under clause 3.2(3) attaching to each lease whereby the tenant is restricted to particular specified retail or service activities. In addition particulars of exclusive user attaching to 7 tenancies have been supplied.

Assessment - The Applicability of Section 4(1)

6. The Authority considers that L & C Properties Ltd and others, The Square Management Ltd and the tenants are undertakings and that the notified leases are agreements between undertakings. The agreements have effect within the State.

7. The Authority considers that the notified agreements, and their restricted and exclusive user clauses and the other standard restrictive clauses and obligations, 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 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 agreements between The Square Management Ltd, L & C Properties Ltd, Noel Smyth, C. Bermingham/R. Hannigan, Pauline Fox, Aviette Ltd and Dankinter Ltd and the tenants do not offend against section 4(1) of the Competition Act, l99l.

The Certificate

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 agreements between The Square Management Ltd, and L & C Properties Ltd, Noel Smyth, C.Bermingham/R.Hannigan, Pauline Fox, Aviette Ltd, Dankinter Ltd and their tenants 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/929/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993