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Cite as: [1993] IECA 256

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Dunnes Properties Ltd, Castlebrook Investments Ltd, Westport Contractors Ltd and Westport Developments Ltd/Tenants of Ballina S. Centre [1993] IECA 256 (15th December, 1993)

Notification No: CA/876/92E - Dunnes Properties Limited, Castlebrook Investments Limited, Westport Contractors Limited and Westport Developments Limited/Tenants of Ballina Shopping Centre

Decision No: 256

Introduction

1. Notification was made by Dunnes Properties Limited, Castlebrook Investments Limited, Westport Contractors Limited and Westport Developments Limited 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 leases between Dunnes Properties Limited, Castlebrook Investments Limited, Westport Contractors Limited, Westport Developments Limited and their tenants at Ballina Shopping Centre.

The Facts

(a) Subject of the notification

2. The notification concerns the leases relating to 9 units in the Ballina Shopping Centre, Ballina, Co Mayo between Dunnes Properties Limited, Castlebrook Investments Limited, Westport Contractors Limited and Westport Developments Limited as landlords and the tenants.

(b) The parties involved

3. Dunnes Properties Limited, Castlebrook Investments Limited, Westport Contractors Limited and Westport Developments Limited are stated to be the owners and landlords of the Ballina Shopping Centre. The tenants are engaged in various retail and service activities at the shopping centre.

(c) The notified arrangements

4. The standard shopping centre leases notified show Westport Developments as the landlord of 8 units and Westport Contractors as landlord for 1 unit. The restricted user clauses in the lease are as follows:

(i) Under clause 3.16 the tenant covenants with the landlord:

"(a) Not to assign underlet or part with the possession control or occupation of nor to franchise the use of part only of the demised premises.

(b) Not to assign underlet or part with the possession or control or occupation of nor to franchise the use of the whole of the demised premises without the consent in writing of the Landlord first obtained which consent shall not be unreasonably withheld ......."

(ii) Under clause 3.19 the tenant covenants with the landlord "Not to use or occupy the demised or any part thereof or permit the same to be used or occupied for any other purpose than nor in any manner inconsistent with such user or occupation except with the consent in writing of the Landlord (such consent not to be unreasonably withheld) ....."

(iii) Under clause 3.35 the tenant covenants as follows

"(a) The Lessee hereby covenants with the Lessor not to use or permit to be used the demised premises or any part thereof for the sale of food or foods PROVIDED HOWEVER that this Covenant shall not restrict or limit the use by the Lessee of a net floor sales area in the Shopping Centre (including the demised premises) up to 800 sq. ft. inclusive of aisles and check-out space for such purpose.

(b) This Covenant is intended to be for the benefit of and enforceable by either the Lessor or the owner or occupier for the time being of the Supermarket forming part of The Shopping Centre presently owned by Dunnes Properties Limited and every part thereof."

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

5. The Applicants have furnished details of the Permitted User attaching under clause 3.19 to each lease whereby the tenant is restricted to particular specified retail or service activities. In addition details of exclusive user granted in relation to a hairdressing salon has been notified.

Assessment - The Applicability of Section 4(1)

6. The Authority considers that Dunnes Properties Limited, Castlebrook Investments Limited, Westport Contractors Limited, Westport Developments Limited 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, 1993 in respect of shopping centre leases (Iris Oifigiuil of 10 September, 1993, pp. 665-667). The Authority therefore considers that the notified agreements between Dunnes Properties Limited, Castlebrook Investments Limited, Westport Contractors Limited, Westport Developments Limited and their 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 Dunnes Properties Limited, Castlebrook Investments Limited, Westport Contractors Limited, Westport Developments Limited and their tenants in relation to the lease of the premises at Ballina Shopping Centre, notified under Section 7 on 30 September, 1992 (notification no. CA/876/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993