Irish Competition Authority Decisions

1. Notification was made by Cassandra Collins 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 sale agreement between Eugenie T. Stokes and Anthony Patterson and Cassandra Collins in relation to premises at Unit 7 Celbridge Shopping Centre, Celbridge, Co. Kildare.

2. The notification concerns the agreement governing the sale, by way of sub-fee farm grant, of the interest of the lessor in a shop unit, Unit 7, at Celbridge Shopping Centre, Celbridge, Co. Kildare between Eugenie T. Stokes as grantor and Anthony Patterson and Cassandra Collins as grantees.

3. Eugenie T. Stokes was the landlord of Celbridge Shopping Centre. Anthony Patterson and Cassandra Collins were proprietors of the newsagents shop at unit 7.

4. The Agreement notified was an indenture executed on 22 June 1988 whereby the lessor interest in the property was sold by way of a sub-fee Farm Grant. Under this agreement the grantees covenant to perform and observe covenants and conditions contained in the original Fee Farm grant (dated 9 September 1983) which related to all the property in Folio 11802F and in an indenture of lease (dated 15 May 1986) which related to that part of Folio 11802F known as unit 7. The restricted user clause in the agreement notified is as follows:-

"AND THE Grantor hereby covenants with the Grantees that:- .............................

(c) the Grantor shall not demise to a newsagent or permit to be used for the business of a newsagent any of the premises comprised in the Fee Farm Grant not hereby transferred and hereby appoints the Grantees her attorneys to issue proceedings (at their cost and expense) against third parties for the enforcement of this covenant......

5. The Authority considers that Eugenie T. Stokes and Anthony Patterson and Cassandra Collins were undertakings at the time the agreement was made and that the notified agreement is an agreement between undertakings. The agreement has effect within the State.

6. The Agreement for the sale of the premises predated the coming into force of the Competition Act and the sale was completed prior to the Act. In the Authority's view, the prohibition in Section 4(1) only applies to a current or continuing contractual commitment subsequent to the coming into force of the Act. As the sale element was discharged prior to the commencement of the Act that aspect of the arrangements does not come within the scope of Section 4(1).

7. The sale agreement contains an exclusive user clause whereby the Landlord of the shopping centre covenants not to allow any of the remaining units to be used for the purpose of a newsagency. 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 in shopping centre leases 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 would similarly not have the effect of preventing, restricting or distorting competition in trade in any goods or services in the State or in any part of the State. The Authority therefore considers that the notified agreement between Eugenie T. Stokes and Anthony Patterson and Cassandra Collins does not offend against Section 4 (1) of the Competition Act 1991.

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 Eugenie T. Stokes and Anthony Patterson and Cassandra Collins, for the sale of premises at Celbridge Shopping Centre, Celbridge, Co. Kildare notified under Section 7 on 30 September 1992 (notification no. CA/1096/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

15 December 1993