Irish Competition Authority Decisions

1. Notification was made by Aviette Trust Company Limited 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 Aviette Trust Company Ltd and its tenants at Firhouse Shopping Centre.

2. The notification concerns the leases in respect of shop units in the Firhouse Shopping Centre, Tallaght, Dublin 24 between Aviette Trust Company Ltd as landlord and 14 tenants.

3. Aviette Trust Company Ltd is the owner and landlord of the Firhouse Shopping Centre, Tallaght, Dublin 24. The tenants are engaged in various retail and service activities at the shopping centre.

4. 6 standard shopping centre leases were notified viz

(i) The standard lease relating to l, lA, 8 and l5 has the following restricted user clauses viz.

(a) Under clause 3.2(3) the tenant covenants with the landlord "To keep the Demised Premises for the use 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 prior 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 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 licencee BUT SO THAT NOTWITHSTANDING the foregoing the Landlord shall not unreasonably withhold its consent to an assignment of the entire or a suitable portion thereof (hereinafter called "a portion") or underletting of the entire or a portion of the demised premises..."

(c) Under clause 3.10 the tenant covenants "Subject to the provisions of 3.2(3) hereof, the tenant ......hereby covenants with the Landlord not to use or permit to be used the Demised Premises or any part thereof for the sale of food or food products."

(ii) The lease notified for unit 4 has a term of 35 years. The restricted user clauses in the lease are as follows:

(a) Under clause 12(a) the tenant covenants with the landlord:

"...and not to use or permit the premises hereby demised to be used for any purpose other than for the sale and hire of videos and ancillary electrical goods specifically related to videos and excluding televisions and radios..."

(b) Under clause 30 the tenant covenants with the landlord

(a) Not to assign, underlet or part with or share the possession of any part of the demised premises.

(b) Not, without the consent of the Lessor, to assign, underlet or part with or share the possession of the whole of the demised premises except to a suitable and solvent Lessee ......

(iii) The lease notified for unit 13 has a term of 35 years. The restricted user clauses in the lease are as follows:

(a) Under clause 12 the tenant covenants with the landlord "...and not to use or permit the premises hereby demised to be used for any purpose other than a Dry Cleaning Service

(b) Under clause 30 the tenant covenants with the landlord not to assign, underlet or part with or share the possession of any part of the demised premises.

not to assign, underlet or part with or share the possession of the whole of the demised premises except to a suitable and solvent tenant and subject to the consent of the Lessor Provided Always ....

(iv) The lease notified for units 5/6 has a term of 10,000 years. The restricted user clauses in the lease are as follows:

(a) Under clause l2 the tenant covenants with the landlord "...and not without the prior written consent of the Lessor which consent shall not be unreasonably refused or withheld to use or permit the premises hereby demised to be used for any purpose other than for the sale of haberdashery, soft furnishings, linens, household linens, furniture, carpets, curtain rails, wallpaper and paint.

(b) Under clause 31 the tenant covenants with the landlord "Not to assign, underlet or part with or share the possession of all or any part of the demised premises without the consent of the Lessor which shall not be unreasonably refused or withheld."

(v) The lease notified in respect of the supermarket unit has a term of 9,980 years from l December, l99l. The restricted user clauses in the lease are as follows:

(a) Under clause 3.2(2) the tenant covenants with the landlord "Not without the prior consent in writing of the Landlord or its agent thereunto lawfully authorised, to use or to permit or suffer or allow the Demised Premises or any part thereof, to be used for any purpose other than as a general supermarket and ancilliary goods or services or other retail trades or businesses which do not require planning permission for change of use... PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that upon any application by the Tenant or any under-tenant of the Tenant for liberty to alter or change the aforesaid permitted use of the Demised Premises the Landlord shall not unreasonably withhold its consent to such proposed change of user."

(b) In a supplementary letter to the lease the landlord confirmed to the tenant subject to the existing uses granted in the Centre ........"that you, your successors and assigns shall have the exclusive right from the date hereof to use the entire of the Demised Premises as a General Supermarket and we hereby undertake not to let or sell any other unit in the Centre for a period of 21 years which would entitle the occupant to use same for the business of a General Supermarket or unit for the sale of Liquor, Wines or Spirits off the premises subject to the proviso herein contained and we will not permit any Tenant occupying any unit in the Centre or any Assignee of the Tenant within the Centre to use any unit or part thereof for such purposes ............"

(vii) The standard lease notified in respect of units 2, 3, 7, 9, l0/ll, 12 and l4 contains the following restricted user clauses viz.

(a) Under clause 12 the tenant covenants with the landlord "...and not to use or permit the premises hereby demised to be used for any purpose other than ."

(b) Under clause 30 the tenant covenants with the landlord

Not to assign, underlet or part with or share the possession of any part of the demised premises

Not, without the consent of the Lessor, to assign, underlet or part with or share the possession of the whole of the demised premises..."

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

5. Aviette has supplied details of the permitted user attaching to each tenancy whereby the tenant is restricted to particular specified retail or service activities. In addition details of exclusive user granted in respect of Unit 12 as a Sports/Leisure/Hobby shop has been supplied.

6. The Authority considers that Aviette Trust Company Ltd and its 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). The Authority therefore considers that the notified agreements between Aviette Trust Company Ltd and its tenants 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 agreements between Aviette Trust Company Ltd and its tenants in relation to the lease of premises at Firhouse Shopping Centre, Tallaght, Dublin 24, notified under Section 7 on 30 September, l992 (notification no. CA/871/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993