Notification No. CA/256/92E ‑ H.Williams (Tallaght) Ltd /Town and County Investments plc

Decision No. 152

Introduction

1.	Notification was made by Town and County Investments plc 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 transfer agreement between H.Williams (Tallaght) Ltd and Town and County Investments plc in relation to premises at Ballybrack Shopping Centre, Ballybrack, Co. Dublin.

The Facts

(a)	The subject of the notification

2.	The notification concerns covenants in the transfer agreement relating to the sale of shop units at Ballybrack Shopping Centre, Ballybrack, Co. Dublin by H.Williams (Tallaght) Ltd as vendor to Mallgate Ltd (now Town and County Investments plc) as purchaser.

(b)	The parties involved

3.	H.Williams (Tallaght) Ltd was engaged in the business of supermarkets with outlets throughout the State. Its successor in title, Quinnsworth, is similarly engaged. Mallgate Ltd and its successor in title in relation to the Ballybrack Shopping Centre,Town and County Investments plc are engaged in the letting of commercial property in shopping centres.

(c)	The notified arrangements

4.	The Agreement notified was a sale/transfer agreement relating to shop units at a number of shopping centres executed on 9 August 1986 between H.Williams (Tallaght) Ltd as vendor and Mallgate Ltd as purchaser. The agreement provides for the sale of shop units at the shopping centres, but excluding retained properties (which means the Supermarket in each centre), subject to a number of conditions. These conditions include a covenant by the purchaser to comply with various obligations relating to the shopping centre, covenants by the vendor to provide central services and the following user clause applicable to the vendor viz.

clause 5 (d)  "The Vendor further covenants with the Purchaser and its assigns not to permit the Supermarkets.....on the retained property to be used for any other purpose other than as Supermarkets."

clause 5 (e)  " The Vendor hereby covenants with the Purchaser and assigns to the effect that the foregoing covenants will be a burden on the retained property...."

Assessment ‑ The Applicability of Section 4(1)

5.	The Authority considers that H.Williams (Tallaght) Ltd and  Mallgate Ltd were undertakings at the time the agreement was made and that the notified agreement was 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 completed prior to the commencement of the Act that aspect of the arrangements does not come within the scope of Section 4(1).

7.	While the transfer agreement relates to the sale of units in a number of shopping centres, the notification relates only to the sale of units at Ballybrack. Under the restricted user clause 5 as it continues to apply to Ballybrack Shopping Centre the vendor and its successor in title, Quinnsworth, is restricted from using the supermarket unit for any purpose other than a supermarket. The Authority has already decided that the restricted and exclusive user clauses applying to tenancies of the other shop units at Ballybrack Shopping Centre do not offend against Section 4(1) of the Competition Act, 1991 (vide Decision 90 ) for the reasons given in the Notice of the Authority of 2 September 1993 (Iris Oifigiuil 10 September 1993, pp. 665‑667). The Authority considers that for similar reasons the restricted user clause relating to the supermarket unit also does not offend against Section 4(1).

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 agreement between H.Williams (Tallaght) Ltd (now Quinnsworth)and  Mallgate Ltd (now Town and County Investments plc)for the sale of a   premises at Ballybrack Shopping Centre, Ballybrack, Co. Dublin notified under Section 7 on 30 September 1992 (notification no. CA/256/92E), does not offend against Section 4(1) of the Competition Act, 1991.

For the Competition Authority

Des Wall
Member
3 December 1993