COMPETITION AUTHORITY

Competition Authority Decision of 5 October 1993 relating to a proceeding under Section 4 of the Competition Act, l99l.

Notification No:  CA/875/92E ‑ G.D. Investments (Galway) Ltd/ Tenants at Westside Shopping Centre.

Decision No: 68

						

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Notification No:  CA/875/92E ‑ G.D. Investments (Galway) Ltd/ Tenants at Westside Shopping Centre.

Decision No:  68

Introduction 

1.	Notification was made by G.D. Investments (Galway) Ltd 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 G.D. Investments (Galway) Ltd and the tenants at Westside Shopping Centre.

The Facts

(a)	The subject of the Notification

2.	The notification concerns the leases of shop units in the Westside Shopping Centre, also known as Seamus Quirke Shopping Centre, Rahoon, Galway between G.D. Investments (Galway) Ltd. as landlord and 15 tenants.

(b)	The parties involved

3.	G.D. Investments (Galway) Ltd., is engaged in the letting of shop units at Westside Shopping Centre.  The tenants are engaged in various trading activities at the shopping centre.

(c)	The notified arrangements

4.	3 sample shopping centre leases were notified containing restricted user clauses outlined under viz.

I.	The sample lease relating to the tenancies of Units 1, 1A, 2, 3, 4, 5, 7, and 13 contains the following:‑
 
(a)	Under clause 3.2 (3) the tenant covenants "To keep the Demised premises for the use of                 "

(b)	Under clause 3.2 (5) the tenant covenants " Not to assign transfer underlet or part with the possession or occupation of the demised premises or any part thereof.......

II.	The sample lease relating to the tenancies of units 6, 8, 9, 10A, 10B, 11, and 12 contain the following:‑

(a)	Under clause 12 the lessee covenants ".....not to use or offer to be used the said premises or any part thereof for any purpose other than that of (                 ) but shall in any event exclude the sale of (as per 5th Schedule)....... "

(b)	Under clause 15 the lessee covenants "Not to assign charge or underlet or part with the possession of the premises or any part thereof.....without the previous written consent of the Lessor ......"

(c)	The 5th Schedule to the lease lists a number of specific trading activities.

(d)	The 6th Schedule reads "it is hereby further agreed that the lessee shall have the exclusive uses as set out in Clause 12......

G.D. Investments has advised that the exclusivity above applies to businesses of Hairdressing, Pharmacy, Victualler, Launderette, Dry Cleaners and Newsagent/Post office.

III.	The lease notified relates to Unit 15 and has a term of 500 years from 15 November 1982.  The lease contains the following:‑

(a)	Under clause B12 the lessee covenants ".....not to use or offer to be used the said premises or any part or any part thereof for any purposes other than that of Licensed Premises ........but shall in any event exclude the sale (goods and services provided by all those traders listed in the Fourth Schedule hereto)........" .

The 4th Schedule lists 14 separate retail activities.

(b)	Under clause B15 the lessee covenants "Not to assign charge or underlet or....without the previous written consent of the Lessor......"

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

G.D.Investments have supplied details of the specific trading activities that each tenant is restricted to under the permitted user clauses shown at I (a) and II (a) above. 

Assessment ‑ The Applicability of Section 4(1)

5.	The Authority considers that G.D. Investments (Galway) Ltd and the tenants of the Westside Shopping Centre are undertakings and that the notified lease is an agreement between undertakings.  The agreement has effect within the State.

6.	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 10 September 1993, pp. 665‑667).  The Authority therefore considers that the notified agreements between G.D. Investments (Galway) Ltd and its 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 G.D. Investments (Galway) Ltd and the tenants in relation to the lease of premises at Westside Shopping Centre, Rahoon, Galway notified under Section 7 on 30 September 1992 (notification no. CA/875/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority.

Des Wall
Member
5 October 1993