Irish Competition Authority Decisions

1. Notification was made by Wanze Properties (Ireland) 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 Wanze Properties (Ireland) Limited and the tenants at Navan Shopping Centre.

2. The notification concerns the standard lease relating to the shop units in the Navan Shopping Centre, Navan, Co. Meath between Wanze Properties (Ireland) Limited as successor in title, the landlord and 35 separate tenants.

3. Wanze Properties (Ireland) Limited is a limited liability company carrying on business as property owners and it is the owner and landlord of the Navan Shopping Centre. The tenants are engaged in various retail and service activities at the shopping centre.

4. It has been indicated that 26 leases have a term of 10,000 years and 10 leases have terms of 35 years each. The standard shopping centre lease notified in draft form contains the following restricted user clauses viz.

(a) Under clause 3.2(3) of Section III the tenant covenants with the landlord "To keep the demised premises for the purpose of PROVIDED ALWAYS that the premises or any part thereof shall not be used for the sale, vending, consumption or otherwise of any type of food stuffs on the said premises for human or animal consumption only and not without the Landlord's consent in writing which shall not be unreasonably withheld to use or permit or suffer the same or any part thereof to be used for any other purpose."

(b) Under clause 3.2(5) the tenant covenants with the landlord "Not to assign or underlet the whole of the demised Unit except with the previous consent in writing of the Landlord such consent not to be unreasonably withheld or delayed provided that such consent shall not be granted where the proposed assignee, sub-Lessee or sub-Tenant may in the reasonable contemplation of the Landlord be in the process of acquiring more than one Unit or an area in the Navan Shopping Centre with a view to establishing a retail shopping outlet comprising in the aggregate more than three thousand square feet and that no holding or a combination of Units used as a Retail Shopping Outlet by a Tenant sub-Tenant, Lessee, sub-Lessee or any Assignee or Licensee of any Tenant, sub-Tenant, Lessee or sub-Lessee comprising an area in excess of Three Thousand Square Feet without the express consent in writing of the Landlord in that behalf shall be a lawful holding so that the landlord shall be entitled on becoming aware of such a holding to exercise all the powers and sanctions exercisable by the Landlord on breach of covenant by the Tenant".

(c) Under clause 3.2(6) the tenant covenants with the landlord "Not to sell nor permit or suffer the sale of groceries, food or food products or other items sold in a supermarket in an area exceeding three thousand square feet in any one unit whether by itself or its successors in title any holding company, subsidiary company or associate company or by any of its Tenants, sub-Tenants or occupants in the Centre or otherwise".

(d) Under clause 3.2(7) the tenant covenants with the landlord "Not to assign transfer or underlet 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 BUT SO THAT NOTWITHSTANDING the foregoing the Landlord shall not unreasonably withhold its consent....."

(e) Under clause 14 of the Third Schedule the tenant covenants with the landlord "Not without the written consent of the Landlord to use permit or suffer the demised premises to be used in any way whatsoever for the sale or supplying of beer wine spirituous liquors or other intoxicating liquor whether the same are sold or supplied for consumption on or off the demised premises".

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

5. Wanze Properties have supplied details of the permitted user attaching to each lease whereby the tenant is restricted to particular specified trading or service activities.

6. The Authority considers that Wanze Properties (Ireland) 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 Wanze Properties (Ireland) Limited and its tenants do 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 Wanze Properties (Ireland) Limited and its tenants in relation to the lease of the premises at Navan Shopping Centre, notified under Section 7 on 30 September, 1992 (notification no. CA/912/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993