COMPETITION AUTHORITY

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

Notification No:  CA/1018/92E ‑ Merchant's Quay Developments Ltd/Peter Mark     

Decision No: 62

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Notification No:  CA/1018/92E ‑ Merchant's Quay Developments Ltd/Peter Mark

Decision No:  62

Introduction

1.	Notification was made by Peter Mark 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 lease between Merchant's Quay Developments Limited and Peter Mark.

The Facts

(a)	Subject of the notification

2.	The notification concerns the lease of unit F in the Merchant's Quay Shopping Centre, Cork between Merchant's Quay Developments Limited as Landlord and Peter Mark as tenant.

(b)	The parties involved

3.	Peter Mark is an unlimited company carrying on the business of hairdressing with approximately 48 salons in the State.  Merchant's Quay Developments Limited is the owner and landlord of the Merchant's Quay Shopping Centre.

(c)	The notified arrangements

4.	The notified lease is in draft form and covers a term of 25 years from 1 May, 1989.  The restricted user clauses in the lease are as follows:

(a)	Clause 1(7) of the lease defines the permitted business as

"The retail trade or business of ladies and mens hairdressers and the sale of wigs, beauty treatment, waxing and sun treatment and ancillary thereto, fashion."

(b)	Under clause 4(10)(b) the tenant covenants with the landlord:

"Not without the prior consent in writing of the Landlord or its Agents thereunto lawfully authorised to use or to permit or suffer or allow the Demised Premises or any part or parts thereof to be used for any purpose other than as a retail shop for the Permitted Business and for no other purpose or purposes whatsoever ..... provided always and it is hereby agreed and declared that upon any application by the Tenant or any authorised under‑tenant of the Tenant for liberty to alter or change the aforesaid Permitted Business the Landlord shall not unreasonably withhold its consent ......."

(c)	Under clause 4(24)(a) the tenant covenants with the landlord
"Not to assign, transfer, underlet, charge, .....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 or as concessionaire But So That Notwithstanding the foregoing the Landlord shall not unreasonably withhold its consent ......."

(d)	Under clause 5(5) the landlord covenants with the tenant:

".....that the Tenant shall have the exclusive right within the Centre to use the demised premises for male and female hairdressing and the sale of wigs which rights shall be personal to the Tenant ..... and the Landlord further undertakes with the Tenant to use its best endeavours not to permit any Tenant within the centre or any Assignee of a Tenant within the centre to use any unit or part thereof for the previously mentioned use ......."

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

Assessment ‑ The Applicability of Section 4(1)

5.	The Authority considers that Peter Mark and Merchant's Quay Developments Limited 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 agreement, and its restricted and exclusive user clauses and the other standard restrictive clauses and obligations, does 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 agreement between Merchant's Quay Developments Limited and Peter Mark does not offend against section 4(1) of the Competition Act, l99l.

The Certificate

7.	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 Merchant's Quay Developments Limited and Peter Mark in relation to the lease of the premises at Merchant's Quay Shopping Centre, notified under Section 7 on 30 September 1992 (notification no. CA/1018/92E), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall
5 October 1993