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Cite as: [1993] IECA 30

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Murray/O'Connell [1993] IECA 30 (9th September, 1993)

Competition Authority Decision of 9 September, 1993 relating to a proceeding under Section 4 of the Competition Act, 1991.

Notification No. CA/27/93. J. Murray/L. and J. O'Connell.

Decision No. 30

Introduction

1. Notification was made by James Murray, Main Street, Baltinglass, Co Wicklow on 2 July 1993 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 tenancy agreement and proposed lease with Len and John O'Connell.

The Facts

(a) The subject of the notification.

2. The notification concerns the lease of a premises at Main Street, Baltinglass, Co. Wicklow between James Murray, landlord, and Len O'Connell and John O'Connell, tenants. The premises consists of a lock-up shop, with a residence overhead.

(b) The parties involved.

3. James Murray owns the premises at Main Street, Baltinglass, and he also operates a grocery shop in the town. Len and John O'Connell are in the business of providing services as insurance brokers, investment brokers and financial advisors.

(c) The notified arrangements.

4. The notified agreement for the letting of a business premises was made on 17 June 1993 for a period of 6 months from 18 June 1993. This was accompanies by a draft lease in respect of the same premises for 35 years from 14 June 1993, provided that planning permission was received for the development. The agreement for letting contains the following restricted user clause:

'2. The tenant agrees with the landlord as follows:-

(g) Not to use or occupy the premises or permit the same to be used or occupied otherwise than for the purpose of the Tenant's business as Insurance Brokers, Investment Brokers and Financial Advisors.....'

Under the draft lease, the tenant covenants with the landlord:

'3.16 Not to use or permit the demised premises or any part thereof to be used for any purpose other than:-

3.16.1 Insurance Broker, Investment Broker and Financial Advisors without the landlord's consent in writing to the change of use of the premises, which said consent shall not be unreasonably withheld'.

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

Assessment - The Applicability of Section 4(1).

5. The Authority considers that James Murray is an undertaking within the meaning of Section3 of the Competition Act, by virtue of providing suitable accommodation in which persons can carry on a business in return for rental payments, and because he operates a grocery shop. Len and John O'Connell provide certain services for gain, and they also are undertakings. The notified agreement for letting and the draft lease are agreements between undertakings. The agreements have effect within a part of the State.

6. The Authority considers that the notified agreements, and their restricted 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 services in the State or in any part of the State. The restricted user clause prevents the premises being used by the tenants for any purpose other than that specified. The object of the restriction is for good estate management. The tenants, should they wish to engage in any other line of business, could do so in many other premises, both in the vicinity and throughout the State, and so the effect of the agreements is not anti-competitive. Similarly, the agreements do not prevent any other person engaging in any form of business activity in any part of the State. In addition, ther can be a change of user for the premises, for which the landlord's consent mey not be unreasonably withheld. The Authority therefore considers that the notified agreements between James Murray and Len and John O'Connell do not offend against Section 4(1) of the Competition Act, 1991.

The Certificate

7. The Competition Authority has issued the following certificate:

The Competition Authority certifies thatin its opinion, on the basis of the facts in its possession, the agreements between James Murray and Len and John O'Connell in relation to the tenancy agreement and draft lease of the premises at Main Street, Baltinglass, Co Wicklow, (notification no. CA/27/93), notified on 2 July 1993 under Section 7, do not offend against Section 4(1) of the Competition Act, 1991.

For the Competition Authority.

Patrick M Lyons

Chairman

9 September, 1993.