Leeds City Council v Watkins and another

Claimant authority possessing ancient market franchise — Defendant running unlicensed car boot sales within franchise area — Claimant seeking injunction — Defendant claiming protection of Competition Act 1998 — Whether claimant’s policy calculated to distort market — Injunction granted The claimant council had a right (the franchise) to hold markets in the area of Leeds derived from three charters granted in the 17th century. They acquired additional regulatory powers under provisions, subsequently to be re-enacted, of the Leeds Corporation (Consolidation) Act 1905. Markets held under the franchise included Granary Wharf, which was operated by the owner of that property under a licence granted by the council. In August 1998, the council obtained an interlocutory injunction restraining the defendant from running car boot sales at Drighlington, some five-and-a-half miles from Granary Wharf. In defence to proceedings instituted by the council for a final injunction, the defendant contended, inter alia, that the council’s policy ran counter to the provisions of the Competition Act 1998*. He relied, in particular, upon: (i) section 2, which prohibited agreements or concerted practices having as their object or effect the prevention, restriction or distortion of competition within the UK; and (ii) section 18, prohibiting conduct, likely to affect trade within the UK, that amounted to the abuse of a dominant position. Held: The injunction was granted. When statutory markets are established all the incidents of the common law market are preserved save as otherwise provided: see Birmingham City Corporation v Perry Barr Stadium [1972] 1 All ER 725. Such incidents include the right to bring an action for disturbance against a person establishing a new market within the common law limit of six-and-two-thirds miles, regardless of whether the rival market fell outside the area administered by the claimant local authority: see Halton Borough Council v Cawley [1985] 1 WLR 15. A car boot sale is a market, in that there is provision of facilities for a concourse of buyers and sellers: see Newcastle City Council v Noble [1991] 89 LGR 618. The grant of an injunction is the natural form of relief for a same-day market: see Sevenoaks District Council v Pattullo [1984] 1 Ch 211. On the evidence before the court, the council had had legitimate traffic concerns to justify refusal of a car boot sale licence in respect of Drighlington. The policy was not one of protecting their own markets by a pretended operation of the regulatory statutory regime. The concerted practice and market distortion complained of could not be spelled out of the council’s participation in the activities of the National Association of British Market Authorities (NABMA) as there was no evidence of a policy restricting the market for car boot sales for parties other than local authorities. Thus, even if the council did have a dominant position in the relevant market area, there was nothing to show that they had abused that position: Hoefner v Macrotron GmbH [1991] ECR 1-1979 considered. Moreover, the expert called by the defendant had failed to apply, adequately or at all, the various tests required for ascertaining the distortion, if any, of the relevant market. *Editors note: Adapting for UK purposes the provisions of Articles 81 and 82 of the Treaty of Rome (also relied on by the defendant). Stuart Isaacs and Edward Cousins (instructed by the solicitor to Leeds City Council) appeared for the claimants; B Clive Freedman QC and Hugh Mercer (instructed by Levi & Co, of Leeds) appeared for the first defendant; the second defendant did not appear and was not represented. Alan Cooklin, barrister