Leeds City Council v Watkins & Anor

IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION Case No: CH 1998 L No 4288 CH 1998 L No 4289 Neutral Citation No: [2003] EWHC 598 (Ch) Royal Courts of Justice Strand, London, WC2A 2LL Date: 25 March 2003 Before : THE HONOURABLE MR JUSTICE PETER SMITH - - - - - - - - - - - - - - - - - - - - - Between : Leeds City Council Claimant - and - (1) James Stuart Watkins Defendants (2) Derek Whiteley - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Mr Stuart Isaacs QC and Mr Edward Cousins (instructed by Leeds City Council) for the Claimant Mr Clive Freedman QC and Mr Hugh Mercer (instructed by Levi & Co) for the Defendants Hearing dates : 18 to 21 February 2003 and 24, 25 and 28 February 2003 and 3 March - - - - - - - - - - - - - - - - - - - - - Approved Judgment Mr Justice Peter Smith: INTRODUCTION 2. 1. This is a trial of consolidated actions brought by Leeds City Council ("the Council") against Mr Watkins ("Mr Watkins") and Mr Whiteley ("D2"). The Council seeks final injunctions to restrain these from holding a Sunday Market (Car Boot Sale) without its licence or consent in breach of the Councils Charter and Statutory Market Rights. D2 has played no part in the action. In action 4288 the market operated by Mr Watkins is at a site at Drighlington; and in action 4289 the market is one operated by Defendants at a site in Morley. In this Judgment I shall call the site at Drighlington, the Drighlington Site, the site at Morley, the Morley Site. There are other sites that feature in this action. The main one is one owned by the Council and I shall call this site the Pontefract Lane Market (in part of the documentation it is called Cross Green). The other relevant site from the Council’s point of view is one at Granary Wharf Leeds, sometimes also referred to as Canal Side. There are other sites of lesser significance to which I shall make reference in this Judgment. Interlocutory injunctions were granted by Park J on 6 August 1998. Neither Defendant chose to challenge the granting of those injunctions, which were supported by the usual cross undertaking in damages. 3. 4. Mr Watkins contests the Councils market rights in four ways. First, they put in issue as regards the Drighlington Site any power on the part of the Council to sue. Second, they submit that in the circumstances of this case even if the rights are established the granting of an injunction is not appropriate. In addition they raise substantive defences under the Competition Act 1998 ("the 1998 Act"), which came into force on 1 March 2000 after the commencement of the proceedings, but it is not suggested that the provisions do not have potential retrospective effect as regards the Council’s entitlement. Finally, they raise defences under article 81 and 82 of the EC Treaty. I will deal with these matters raised by the Defendants in grater detail further in this Judgment. 5. FACTUAL BACKGROUND 6. The Council’s power to pursue enforcement proceedings derived from the resolutions of the Councils City Centre Committee dated 12 November 1997 and 4 September 1998. Mr Watkins concedes that prior to the granting of the interlocutory injunction he operated seasonal Sunday car boot sales at the Drighlington Site and that the Defendants operated Sunday car boot sales at the Morley Site. 7. The Drighlington Site is within the common law distance of 6 ⅔ miles from Granary Wharf. The Council alleges it has licenced the owner of Granary Wharf to carry on a Sunday market there and that can be used as a basis for enforcement as against the Drighlington Site. The Council initially alleged that Drighlington was within 6 ⅔ miles of the Pontefract Lane Market and that was its stance until shortly before the trial. However, in the second witness statement of Mr Telford dated 11 February 2003, served on behalf of the Council he conceded that his statement in his first affidavit of 3 August 1998, to the effect that the Drighlington Site was within 6 ⅔ miles of the Pontefract Lane Site was incorrect. He now acknowledges that the distance is 7 miles, just outside the area. He gives unchallenged evidence however, to the effect that the Drighlington Site is within approximately 5.46 miles of Granary Wharf. THE COUNCIL’S RIGHTS 8. The Pontefract Lane Market was established by the Council as a Sunday market by resolution of the Municipal Services Committee dated 12 October 1989. It is extremely successful. 9. The right for the owner of the Granary Wharf site to hold a Sunday market is somewhat obscurely established but I am satisfied on the evidence that the Council has granted a licence for use of that site for a Sunday market. On 14 July 1988 the Municipal Services Committee passed a resolution (item 31) concerning a proposed craft market at Granary Wharf. It resolved in principle to the proposed establishment of the craft market subject to the satisfactory outcome of further negotiations to be brought to a future meeting of the committee. 10. On 23 February 1989 the same Committee (item 154) considered a report by the Director of Municipal Services regarding the licence fee negotiated in respect of Granary Wharf and resolved that the £60.00 licence fee be applied to both market days, but only where there was an excess of five traders and that the fee be reviewed in conjunction with any future proposals regarding the private market licence fees. 11. No licence document has been produced. It is by no means clear whether any licence document ever came into being, or whether the parties acted on the resolution itself. Further documents were produced somewhat belatedly, as a result of an order that I made during the course of the trial. They were obtained from a Mr Davies who is the controller of the Company that operates Granary Wharf. It operates a Sunday market, i.e. on the same day as Drighlington market was held before the injunction was granted. Somewhat self-servingly Mr Davies says in the attached fax that he would not have committed himself to an expensive application without having been notified that a licence would be granted. The planning permission is dated 8 August 1988 (application number 88/20/00279) and grants an application to regularise the use of arches for retail and craft workshops and to use parts of the external areas as a craft fair and outdoor events. The permission was granted. 12. Mr Clive Freedman QC, who with Mr Hugh Mercer appears for Mr Watkins, submitted that the use of Granary Wharf when originally commenced might have been unlawful as it would have contravened the Sunday trading provisions then enshrined in the Shops Act 1950. That might have been a point worthy of consideration in 1988/9 and assuming that the Council (as to which I had no evidence) had a policy of enforcing the Shops Act, but it has no significance by the time of the commencement of the proceedings and the trial as those provision have been repealed. Whatever the historical legality of the Granary Wharf Market it is plainly a legal market now, and is being carried on in my view under the terms of a licence agreed between the Council and the operator. The terms are not relevant, but I find on a balance of probabilities that the licence was agreed on the evidence before me and that the right extended to a Sunday market use. THE DEFENDANTS ACTIONS 13. Mr Watkins operated the Morley Car Boot Sale seasonally on Sundays in 1997 and 1998 from the Morley Site. Mr Telford attended at the premises initially to ascertain whether or not an event was taking place as no prior written notice had been given to the Council as required by section 37 of the Local Government (Miscellaneous Provisions) Act 1982. Mr Watkins was summonsed under the provisions of section 37(5) of the Act. The hearing was initially due to take place on 21 November 1997 but the matter was not heard until 22 June 1998 when he was found guilty after a contested trial and was fined £1,000.00 and ordered to pay legal costs of £766.66. He admitted that he was the organiser of the market, but contended it was a fund raising event for the Leeds General Infirmary, which was not accepted by the Court. As the market was seasonal, it ceased between November 1997, but restarted in about March 1998. Mr Watkins therefore carried on the market trading when there was an outstanding summons, which was adjourned as I have set out above. The Council claim that there are traffic difficulties about this site to which I shall make reference further in this Judgment. 14. The Drighlington Site first came to the attention of Mr Telford on or about 26 June 1998 when he saw an advertisement in the Yorkshire Evening Post. He visited the site and observed the car boot sale taking place. There was a repeat event on 26 July 1998. 15. Once again the Council contends there are traffic problems relating to this site to which I shall make reference again further in this Judgment. 16. Although Mr Watkins in his evidence stated that he did not realise he needed a licence (hence the conviction), the magistrates rejected that defence. In his evidence before me he gave evidence of other devices which he had discussed with the Council Officers and on which he had had advice, such as forming a club, acting on behalf of a school thus making it allegedly a charity event and forming a special club whereby he purchased all of the goods to be sold and then resold them. None of these had any credibility and I reject Mr Watkins’ evidence that the car boot sale he carried on at Allerton High School was carried on on behalf of the school. This to my mind was an after the event justification by him to show that he was acting lawfully. It seems to me quite clear that these were things thought up by him to avoid the obvious conclusion, namely that subject to his defences based on EC and domestic Competition Law which were not raised at the time, he knew the activity was unlawful and he was going to carry on regardless unless the Council took further action. That remained his position as set out in his defence and I was unimpressed by his statement only in re-examination that he would only wish to carry on if it was lawfully possible so to do. THE COUNCIL’S RIGHTS 17. The Council’s right to hold markets in Leeds derive from Charters granted in 1626, 1661 and 1684. The Charter Rights provided for markets to be held on Tuesdays and Saturdays in each week. 18. The Council’s statutory rights derive from the Leeds Corporation (Consolidation) Act 1905. In particular section 114 provides for the continuance of Corporation markets subject to the provisions of the Act. By section 114(i) the Council can alter the days on which the markets are or may be held in order to establish and hold new markets. Originally section 115 defined the limits of the markets and fairs as being in the City of Leeds, but by the provisions of the Local Government Act 1972 Section 1 and schedule 1 part 1 the County Borough of Leeds was extended to incorporate inter alia the old Borough of Morley. 19. Under the provisions of article 17 (Franchise and Prescriptive Rights) of the Local Authorities etc. (Miscellaneous Provisions) Order 1974, certain matters formerly exercisable by or attaching to the former Borough of Morley were transferred to the Council. Those matters include any powers to maintain markets and fairs, and any rights to take tolls and any rights to liabilities formerly exercisable by or attaching to the Borough of Morley. 20. The Council thereafter had the same powers in relation thereto as were exercisable by the Borough of Morley prior to the commencement date of 1 April 1974. 21. On 1 October 1980 the West Yorkshire Act 1980 came into force. By section 19 any market carried on by a District Council within its District which was not established or acquired under section 49 of the Food Act 1955 (now section 50 Food Act 1984) should be deemed to have been acquired by the District Council under that section. Thus any market in existence on that date was deemed to have been acquired by the enlarged Council and thus a franchise market. Further, although the whole of the 1905 Act was repealed by schedule 1 part 1 of the 1980 Act, the provisions of section 114, 116, 122 and 126 were expressly preserved by schedule 5 part 2 of the 1980 Act. 22. The Council currently holds franchise and statutory markets on every day each week including Sundays at various locations within its area. It also licences other persons to operate markets and car boot sales. 23. I should say something about the Defendant’s submissions in relation to section 116 of the 1905 Act. That section provides:- "116. If any person shall without the licence of the Corporation on any land belonging or reputed to belong to or occupied by him in any part of the City hold or permit to be held any market he shall be liable to a penalty not exceeding £50.00 and to a daily penalty not exceeding £5.00." 24. Mr Freedman QC submitted on behalf of the Mr Watkins that this section created a separate regulatory regime. Thus he said that the Council did not need its market rights which were property rights and not regulatory to control rival markets within the requisite area; it could merely prosecute someone if that person operated a market without its consent under section 116. 25. I do not accept that is a correct analysis of the section. It is plain to my mind that the relevant provisions in the 1905 Act were a modification of the existing proprietorial rights vested in the Council as regards markets. I do not see that section 116 has the free standing status contended for it. It merely provided a criminal penalty for infringement. One has to recall that in 1905 such a sanction might well have been sufficient; disobedience of the law was not quite so deliberate in those days as it is now. Equally, it is extremely unlikely that at that time it would have been contemplated that compliance with the law would have been enforced by way of an injunction (for example under section 222 of the Local Government Act 1972). It is doubtful whether a Council would have had such power at that time. It would have enforced its rights by asserting its property rights and seeking an injunction to protect them. 26. I therefore reject the Mr Watkins’ contention that the property rights of the Council are not necessary for it to regulate the operation of markets. Indeed, the opposite would be the case. The right of holding a market or fair is an incorporeal hereditament, being one of those which are called franchises, the essential feature of which was a granting of the sole and exclusive right of holding markets within a common law distance of 6 ⅔ miles. The common law distance has still formed the basis for the action for infringement in the rights but with one difference. Under the 1905 Act and repeated in the successor legislation the right to hold markets was within the whole of the County. The infringement is within that area only, but must still be within 6 ⅔ miles of an existing market. 27. Market rights are private rights, which are capable of conveyance or transfer like any other incorporeal hereditament. The owner of a market right can deal with them as he thinks fit. Thus he can sell them, mortgage them, lease then and bargain for a relaxation of his exclusive rights. That is the underlying principle behind the reservation in section 116 as regards a person holding a market without the licence. 28. Neglect to enforce the rights might lead to an owner of a franchise from losing the ability to enforce by way of injunction. Non-use itself, does not extinguish the market rights see generally Pease & Chitty’s Law of Markets and Fairs pages 103/105. 29. Nevertheless, the result is that the Council needs the private rights in order to be able to procure regulation of markets within the area of its exclusive franchise. Without the franchise it can do nothing. 30. The preservation of the 6 ⅔ miles area for the purposes of enforcement of statutory markets as opposed to being within the area of the authority is established by the decision of Sir Nicolas Browne-Wilkinson VC (as he then was) in Birmingham City Council –v- Anvil Fairs [1989] 1 WLR 312. 31. A private individual can deal with the market franchise that he owns in any way like any other piece of property. He can thus bargain for licences and charge what he likes or he can decide not to charge for his rights. Mr Freedman QC submitted that the Council is in the same position. Mr Isaacs QC who with Mr Edward Cousins appeared for the Council conceded that the ways in which the Council dealt with its market rights were susceptible to Judicial Review. He was right to make that concession in view of the decisions of the Court in R –v- Birmingham City Council ex parte Dredger [1993] 91 LGR 832 at page 539 as followed in R –v- Bristol County Council ex parte Aztec Marketing (International) Ltd [unreported] 23 April 1993. This disposes of Mr Freedman QC’s submission that I should refuse to grant an injunction if the Council’s rights were otherwise established and the Defendants’ defences failed because there was an apprehension of potential abuse, which would thus be illegal. He made reference to an extract from Spry "Equitable Remedies" (fifth edition) page 146. There the learned author suggests that specific performance might be refused if there is a substantial risk that performance would involve the commission of an illegality, even though the probable commission of illegality has not been so clearly established that proceedings for damages would fail. The authorities relied upon in note 3 Johnson –v- Shrewsbury Birmingham Railway Co. 3 De G. M.& G. 914 at 923 and Pottinger –v- George [1967] 116 C. L. R. 328 at page 337, do not to my mind provide a justification for the submission he makes. Mr Isaacs QC submitted (and I agree with him) that I should decide the case on the evidence. If the Council’s case is successful in establishing that there is no illegality then it ought to have the appropriate relief. If the defence is successful in establishing there is an illegality, the Council’s case fails. I cannot see that it can be appropriate to allow the Defendants to resist relief on some hypothesis of establishing illegality in some other way other than at the trial. 32. It is clearly a discretionary matter in any event and if I am wrong as regards the effect of the decisions I would not consider it appropriate in a case like this to allow the Defendant after a full trial a further opportunity to investigate matters in the hope that something might turn up. The proceedings are already nearly five years old and there must be some termination to the investigative process. It is not proportionate nor is it fair to the Council to deny it relief if it establishes its case. I am therefore satisfied that the Council has established market rights in relation to the whole of the areas as extended by the statutory provisions. I am equally satisfied that it has granted a licence to Granary Wharf to carry on such a market at its site. I am also satisfied that the Defendants’ activities would be a breach of those rights and that it is not appropriate to decline to grant (for example) injunctive relief on the basis of some supposed apprehension of illegality in the event that the Defendants fail to establish such illegality. 33. I have accepted that the operation of the Council’s market rights is susceptible to challenge by Judicial Review and it is plain to me that one of the incidents of the ownership of the franchise (subject to that possible challenge) is its ability to licence the operation of markets within the area of its exclusive franchise. 34. I have rejected the argument that there is a separate existing freestanding regulatory procedure by virtue of section 116 of the 1905 Act. 35. The right to challenge the Drighlington market arises out of the grant of a licence to Granary Wharf. There is no legal authority, which covers this situation. If the Council opened a market at Granary Wharf itself, it plainly would be entitled to challenge the rights. I observe that its powers are given over the whole of its area and it has a power to open and move markets. I do not see as a matter of principle why it should make any difference merely because it licences somebody else to do what it otherwise could do. The Granary Wharf market would itself have infringed the Council’s market rights. If one looked at the position of licensor it would be in the interests of the City Council as Licensor to ensure that rival markets could not open to the detriment of its licensee. I am of the opinion that the Council can enforce rights within 6 ⅔ miles of any market that it licences within the area of its exclusive franchise. I therefore determine that it can enforce the rights against the car boot sale that was operated at the Drighlington Site. MARKET RIGHTS 36. The following propositions of law are settled law:- i. A market franchise gives the holder the sole and exclusive right to hold markets within certain limits. As a necessary incident of its franchise rights the holder of a market franchise enjoys a right of protection from disturbance by a rival market within 6 ⅔ miles. If the disturbance is likely to continue it may be restrained by injunction, see Pease & Chitty pp3, 15, 69 - 71. ii. When statutory markets have been established under the 1905 Act all the instances of the common law market are incidents of a statutory market except in so far as they may be varied or taken away by the relevant statute, see Birmingham City Corporation –v- Perry Barr Stadium [1972] 1 All ER 725 at page 728G. The common law distance for an action of disturbance is to establish a new one within 6 ⅔ miles of the owner’s existing market see Pease & Chitty pages 69-72. iii. v. iv. Where a local authority is the market owner it is entitled to seek to restrain a rival market outside its own area provided that such rival market operates within the common law distance, see Halton BC –v- Cawley [1985] 1 WLR 15 at 19E and 21B. A car boot sale is a market, in that there is a provision of facilities for a concourse of buyers and sellers, see Newcastle City Council –v- Noble [1991] 89 LGR 618. There is an irrebuttable presumption of damage in the case of a same day rival market, within the common law distance; and that the new market is a nuisance to the old and no proof of damage is required, see Sevenoaks District Council –v-Pattullo [1984] 1Ch 211. vi. 37. As the Sevenoaks case establishes, the grant of an injunction is the natural form of relief for a same day market. For the reasons that I have set out earlier in this Judgment the markets infringed in both case are same day markets. 38. It follows therefore, I accept prima facie the Council has rights which are infringed and which ought prima facie be entitled to injunctions. OBJECTION TO RELIEF 39. The objections to relief as I have said fall into four categories. 40. First, it is denied that the Council has any right to enforce markets especially as regards the Drighlington Site. I have rejected that argument. 41. Second, it is submitted that the Council’s conduct is a bar to it seeking relief. The first part of the objection I have disposed of in respect of an apprehension of infringement of the 1998 Act when none is established. The second matter involves a submission that the Council is seeking injunctive relief for collateral improper reasons. This is based on an analysis of the Council’s evidence, which was provided by way of affidavit in support of the application for the interlocutory injunction when compared with the evidence put forward substantively for the trial. The evidence of the Council in support of the application for the injunction Mr Freedman QC contends (and I accept) concentrated on the levying of a rival market, which might cause damage to the Councils market rights. On a true reading of the affidavits and having seen Miss O’Shea the Council’s Solicitor and Mr Sanderson the Councils head of market services, the only conclusion that can be drawn to my mind from consideration of the affidavits when compared with the witness statements of the Council, is that the Council sought injunctive relief to protect a market right, whereas now its case is to regulate markets within its District, not for any profit purpose. 42. It is true to say that before the change of policy in March 1999, to which I shall refer later in this Judgment, the Council’s policy was only to allow six car boot sales a year and not to grant permission for any commercial car boot activities. That process for the reasons that I have already set out would itself have been capable of challenge by Judicial Review. No such action was taken. It is plain that the Council did not intend to grant licences as regards the Morley and Drighlington Sites. The reasons to my mind were twofold. First, was a desire to protect the value of the market franchise in its hands. That is no longer a motivation for the Council. Second, the Council had concerns as to the suitability of the sites for car boot sales because of traffic problems. I will deal with this evidence later, but it does seem to me, having analysed that evidence, that the Council in both cases had legitimate traffic concerns to justify refusal of a granting of a licence on both sites until those traffic issues were addressed by the would be holders of the car boot sale. 43. I do not accept Mr Freedman QC’s submission that the Council cannot change the reasons for it seeking to enforce the market rights. That is not a collateral purpose to my mind. It is the reason why it wishes to enforce the rights. There is nothing wrong with a Council seeking to enforce rights purely to create a regulatory structure which itself would be subject to Judicial Review. It is difficult to see how such a motivated policy can be criticised. If the Council, for example chose not to grant any licences or granted licences which were not properly granted in the circumstances their decisions would be reviewable. Subject to that it makes sense for the Council to be in a position to regulate car boot sales bearing in mind the wide consultation procedures it has put in place to which I shall make reference below. Indeed, Mr Freedman QC’s argument puts the Council in something of a dilemma. If it seeks to enforce because of financial interest, Mr Freedman QC objects because that is a financial private right, which is anti-competitive. So if the Council responds to that and abandons that he says it cannot do that because that is seeking to enforce rights for a different purpose. I do not see what is wrong in the Council re-evaluating its stance during the course of the case. It must be borne in mind, for example that the 1998 Act issues could not have been raised before 1 March 2000; nearly eighteen months after the proceedings were commenced. It would have been right for the Council to address its procedures in that light and I do not see how they can be criticised for so doing. 44. Thus whilst the evidence of the Council clearly shows changes and whilst the Council witnesses can properly be criticised as Mr Freedman QC did for suggesting the changes were not changes at all, this has no effect on the result. The Council granted licences before; the Council is empowered to grant licences as an incident of its ownership of franchises and it is entitled to grant licences in accordance with an established regulatory procedure as opposed to a capricious procedure based on its own financial interest. It follows that there is nothing in the arguments raised by the Defendant based on the change of stance of the Council. 45. It follows therefore that there are no reasons to disallow the Council’s entitlement to an injunction to protect an infringement of its same day market rights. The only matter therefore, which are capable of being raised by the Defendants are the competition law defences. THE COMPETITION LAW DEFENCES 46. The First Defendant advances by way of defence allegations that the Council in exercising its market rights is in breach of chapters 1 and 2 of the 1998 Act and articles 81 and 82 of the EC Treaty. 47. There were inconsistencies between the way in which the Mr Watkins pleaded the issues and the submissions provided, which led to an amendment of the Defence and Counterclaim so that the Defence and Counterclaim clearly identified the arguments relied upon. 48. The EC defences are based on articles 81 and 82 of the Treaty Establishing the European Community (Treaty of Rome). They provide as follows:- "Article 81 1. The following shall be prohibited as incompatible with the Common Market: all agreements between undertakings, decisions by association of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention restriction or distortion of competition within the Common Market and in particular those which (a) Directly or indirectly fix purchase or selling prices or any other trading conditions; (b) Limit or control production, markets, technical development or investment; (c) Share markets or sources of supply; (d) Apply dissimilar conditions to equivalent transactions with other trading parties thereby placing them at a competitive disadvantage; (e) Make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations, which by their nature, or according to commercial usage have no connection with the subject of such contracts Article 82 Any abuse by one or more undertakings of a dominant position within the Common Market or any substantial part of it shall be prohibited as incompatible with the Common Market in so far as it may affect trade between Member States. Such abuse may, in particular, consist in:- (a) Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) Limiting production, markets or technical development to the prejudice of consumers (c) Applying dissimilar conditions to equivalent transactions with other trading parties thereby placing them at a competitive disadvantage (d) Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial use have no connection with the subject of such contracts " 49. The relevant provisions under the Competition Act are as follows:- "2. Agreements etc preventing restricting or distorting competition (1) Subject to section 3 agreements between undertakings decisions by associations of undertakings or concerted practices which:- (a) May affect trade within the United Kingdom, and (b) Have as their object or effect the prevention restriction or distortion of competition within the United Kingdom are prohibited… (2) Subsection (1) applies in particular to agreements decisions or practices which (a) Directly or indirectly fix purchase or selling prices or any other trading conditions (b) Limit or control production markets technical developments or investment (c) Share markets or source of supply (d) Apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage (e) Make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the subject of such contracts ". 50. This is known as the "Chapter I Prohibition". 51. The other relevant prohibition is that in section 18 ("Chapter II Prohibition") which provides:- "18 Abuse of dominant position (1) Subject to section 19 any conduct on the parts of one or more undertakings, which amounts to the abuse of a dominant position in a market is prohibited if it may affect trade within the United Kingdom. (2) Conduct may in particular constitute such abuse if it consists in (a) Directly or indirectly imposing unfair purchase or selling price or other unfair trading conditions; (b) Limiting production in markets or technical development to the prejudice of consumers (c) Applying dissimilar conditions to equivalent transactions with other trading parties thereby placing them at a competitive disadvantage (d) Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by there nature or according to commercial usage have no connection with the subject of the contracts" 52. Dominant position means, "a dominant position within the United Kingdom; and the United Kingdom means the United Kingdom or any part of it". 53. I will analyse these respective provisions further in this Judgment when I come to consider the evidence. REVIEW OF COUNCIL’S APPROACH 54. I have already observed earlier in the Judgment that the Council’s policy was limited to six car boot sales a year on a site and then only for non-commercial ones. I have already observed in my Judgment their approach to the proceedings. It seems to me that their actions were reasonable in the light of Mr Watkins’ approach to his activities i.e. it was plain that he would continue holding the car boot sales unless the Council took injunction proceedings which it did. 55. The policy was clearly enforced in a vigorous way, initially by a Mr Veigas. By July 1998 the supervisory role was that of Mr Sanderson, he having joined the Council in March of that year. It is clear from Miss O’Shea’s file note of 8 July 1998 that was revealed during the course of the trial, that Mr Sanderson wanted the Council to issue proceedings for an injunction. This was in line with the instructions given to him by Members. The affidavit sworn in support of the application can only be seriously explained on that basis. There is a clear emphasis in the affidavit on the need to protect the franchise rights from the point of view of finance. There is no significant reference to any traffic problems. That is not of course to say that traffic problems did not exist. 56. Having seen Mr Sanderson I found him to be a credible witness. He came new to the post in March 1998 and I accept his evidence that he was not concerned with the monetary aspects of the car boot operations. After the injunction proceedings he was involved in the set up of the licensing regime, which emanated as a result of his report to the Council on 16 March 1999. Whilst that report does refer to revenue receipts it is clear that the purpose of the report was to widen the ability of commercial organisations to hold commercial markets and to ensure that such operations are properly reviewed by the Council on a regulatory basis. Advice was received from Counsel as to how the charges could operate and I am satisfied on Mr Sanderson’s evidence that the fees that are charged are as he says an estimate of the likely cost of processing applications. Although the fees do appear large when measured against the actual cost of visiting the site there is the other aspect which is not covered by prepaid fees, namely the consideration of applications, the consultation with the relevant statutory bodies and the processing of such applications. Unlike planning applications for example where fees are charged no fees are charged for dealing with an application. Mr Watkins’ case is that the fees are exorbitant, but there was no evidence of a clear nature adduced to support such a contention. On the evidence before me I conclude that in broad terms the Council’s fees structure was designed to cover the costs of processing the exercise of granting licences. It is true that the fee structure was banded, and that that can cause anomalies at the edges, but such banding regularly occurs in regimes like this such as for example, Council Tax or Stamp Duty. It enables a broad approach to be taken to numbers rather than raise a fee, which would be assessed on an event by event basis by reference to the numbers. I can well see difficulties without that and it is not unheard of for the operators I would have thought to be pessimistic about the gate numbers to lower the fee. Equally, there was nothing wrong in Council officials doing their own spot checks without telling the licencees that that was what they were doing. 57. The Council does not require its own operations to be part of the licensing process. It also does not charge fees in effect to itself. That does not seem to me to be challengeable, although in an ideal world the Council ought to ensure that their systems are also licensed and fees charged. As they do not apply for licences themselves, those operations do not throw a burden on the administrative system, which is covered by those who do pay licence fees. There is therefore nothing in that point in my opinion raised by Mr Watkins. 58. If anybody is dissatisfied with any decision made in the licensing procedure it is open to them to challenge by Judicial Review. The process of regulation is therefore subject to independent scrutiny. 59. One point raised was the question of conflict of interest. The conflict arises form the fact that Mr Sanderson as head of marketing, in that role has an interest in maximising the income that the Council receives from its own operations. He is also responsible for the regulation of licencees that might become competitors. Mr Sanderson and the other witness for the Council were at pains to stress that they considered every application on the merits without regard to possible financial implications. I accept their evidence and there is no evidence against that in any event. Any matters that they have raised in relation to the Defendants’ sites and other sites seem to me to be perfectly proper matters of concern, as I shall set out further in this Judgment. 60. I am quite satisfied having seen Mr Sanderson and the other Council witnesses that they did not operate a policy designed to protect the Council’s own markets by a pretended operation of the statutory regime. In any event, as I have already said, if any body suspected such an arrangement the regime was open to challenge by Judicial Review. 61. For appearance’s sake the Council ought to consider divorcing the regulatory regime from Mr Sanderson’s role and also ought to consider charging notionally for its operations and ensuring that the regime is applied to their operations as well. I should stress however, that the fact that those things do not happen in this case do not give rise to any conflict. It is a matter of best practice. 62. The evidence brought by the Council showed that applications were considered on a case by case basis. Some were rejected, some were withdrawn, but there is no evidence to show that there was a policy of blocking market applications. As regards the Defendants’ sites it is clear that both sites had traffic problems. I refer to Mr Telford’s evidence as regards Drighlington. In relation to the Morley Site the First Defendant was invited to apply for a licence in respect of Morley on 31 July 2001, which was repeated on 25 September 2001. Ultimately he applied on 24 June 2002. It is clear from the ensuing correspondence that the Council had legitimate traffic concerns. The First Defendant disputes this, and suggests that this is a smoke screen. In fact his solicitors wrote on 30 September 2002 saying the application had been "unsurprisingly turned down". That is not correct. The application has still not been determined because the Council’s stance is that more traffic information is required in particular a report from a traffic consultant to deal with the need for separate ingress and egress accesses to the site. 63. Mr Watkins has adduced no evidence of any nature challenging the views expressed as a result to the consultation exercise by the Council. He professes to be unable to finance the costs of a traffic consultation report. That might be right, but there is no duty on the part of the Council to assist an applicant in that regard; it is up to him to ensure that he had proper material if he wishes an application to be successful. Mr Watkins exaggerated his evidence as to the cost of a traffic consultation scheme in his third witness statement where he said "the cost of obtaining a report could be anything up to £5000.00 plus VAT". It is quite clear that Singleton Clamp and Partners as set out in their letter of 3 January 2003, were prepared to provide an initial report for £500.00 plus VAT. They are a well known firm of transport engineers. Mr Watkins has not even sought such a preliminary report. I can see no justification for Mr Watkins not obtaining even such a preliminary report. There is clear evidence adduced by the Council raising legitimate traffic concerns and if he wished to challenge those as being in effect a sham, the easy way to do so would be to produce appropriate independent evidence. In my view the reason why he has not done that is because he knows that there are legitimate concerns that the Council has raised. 64. Similarly, in the correspondence in relation to the Morley Site the Council raised the possibility of a number of traffic consultants who provide their work for nothing on a preliminary basis. It is unfortunate that the Council declined to produce the names when requested. I have had no explanation for that and it would have been better had they provided the names. Nevertheless, Mr Watkins has been provided with names, but he has not chosen to contemplate such a consultant either. 65. My conclusions as regards the two sites is that the consideration of licences for both of them raises traffic implications, which the Council can legitimately raise. I see no improper basis for the licences not being granted at the moment. 66. A similar situation occurred in relation to a site at Yeadon. A Mr Palmer gave evidence in relation to this site. He has some loose association with the First Defendant. He was at school with Mr Palmer and towards 1996 had discussions with both Mr Palmer and a Jerome O’Malley about setting up a joint venture to operate car boot sales. The first ones they operated were at Allerton High School field. I have already referred to Mr Watkins’ attempts to justify the mode of operation of car boot sales at that school site. It is tellingly revealed for example in the note of the conversation that took place between him and a Mr Rimmer on 6 May 1997 where Mr Watkins raised various legal arguments about operating a car boot sale. This too was demonstrative of his willingness to resort to any device possible to justify carrying on car boot sales. 67. Mr Palmer in his evidence suggests that the Council operated a policy of obstruction, but it is not actually borne out by the facts. First, he obtained a number of licences at Yeadon. He suggested that Mr Telford misled him by a suggestion that an Inspector at the Weetwood Police Station in Leeds had informed the Council that the event would in the future only take place with two police constables on duty at a site cost of £700.00 per event. This requirement was not actually imposed. Mr Telford wrote to Mr Palmer on 29 April 2000 recounting a conversation he had with Mr Palmer’s mother who processed matters on his behalf (for example she was consulted by Mr Sanderson and the Council in 1998/1999 about the proposed new licensing regime). The letter does recount that the Inspector would only be willing to support the application if two police officers were provided. That letter was faxed to the Inspector (an Inspector Albrow) by Mr Palmer’s mother. Inspector Albrow gave evidence before me. He says that he made three suggestions to Mr Telford, but Mr Telford only apparently communicated one. In his witness statement he gave the impression that Mr Telford misled Mr Palmer because he (Inspector Albrow) had given a number of alternatives to deal with the traffic problem. To my mind Inspector Albrow’s recollection (hardly surprisingly bearing in mind that he was being asked to recall an isolated event that took place some three years earlier) is not quite accurate. Mr Telford produced notes, which he took at the same time. I am satisfied that those notes accurately reflect conversations that took place. The reality is that Inspector Albrow did make a suggestion of police cover of two officers at £700.00. The note also records that the site was a cause for concern and Inspector Albrow confirmed that to me in his evidence. By 2 May 2002, Mrs Palmer had telephoned and said she was unhappy about the letter. It is clear that a lesser requirement was made and that reflected a change of heart of Inspector Albrow. With the passage of time I do not accept his recollection that he initially made three alternative proposals. Significantly, Mr Telford’s note records him as saying "they are not happy about the event high risk black spot". Inspector Albrow confirmed that that was indeed his view (and remained his view) about the site. Once again I am not persuaded that the Council acted in any way other than the correct way in dealing with Mr Palmer’s application. 68. It should be noted that the concerns were raised first with Mr Palmer the previous year as set out in Mr Dews’ letter to him dated 23 September 1999. Mr Palmer took that up on her son’s behalf with Mr Sanderson in a letter dated 2 November 1999. Far from complaining about the attitude of the Council she thanked them for their help and cooperation. The matter proceeded that year as a result of the difficulties being addressed adequate signage and marshalling as set out in Mr Telford’s letter to Mr Palmer of 15 November 1999. 69. Mr Palmer makes complaints about the structure of the pricing policy, but I do not consider that his complaints are justified. There is no reason why the Council cannot fix the fee structure as they have done. Although the licence documentation says no refunds are applicable the Council in 2002 to 2003 were willing to discuss repayments where an event did not take place due to rain. Equally, in that correspondence they showed a willingness to assist Mr Palmer’s cash flow by taking stage payments as set out in Mr Wolstenholme’s letter to Mr Palmer. Such actions are not consistent with a suggestion that the Council were determined to stop any rival markets taking place. 70. Mr Watkins called as a witness a Mr Crabtree who was an owner of Rake Hill Farm, Barwick-in-Elmet, Leeds. He recounted telephone conversations, which he had with Mr Wolstenholme and expressed a view that Mr Wolstenholme was very arrogant towards him on the telephone. Mr Wolstenholme denied that. Mr Isaacs QC did not cross examine Mr Crabtree but formally put Mr Wolstenholme’s version as set out in his witness statement dated 12 February 2003. This is a peripheral matter indeed and whichever is the right version has no impact on the overall case. It is not necessary for me to come to a conclusion as to which version is to be believed. Some people sound arrogant when they do not mean to be, but I do not see that this evidence is any evidence to support Mr Watkins’ contention that the Council adopted an obstructive policy. CONCLUSIONS AS REGARDS THE EVIDENCE 71. On the evidence before me I am of the view that the Council did not adopt an obstructive policy. They introduced a licensing scheme as the result of legal advice they had, and that licensing scheme is not a charade. The Council officers operate a scheme according to its requirements and do not create obstacles in a disguise way to protect the existing markets of the Council. Nor do they take into account a possible impact on the Council’s own operations of an application. They consider applications on the merits and if they are meritorious they are granted. Where there were legitimate concerns they were raised. I reject Mr Watkins’ contentions therefore that the practices of the Council are objectionable. NABMA 72. NABMA is an acronym for the "National Association of British Market Authorities". It was founded in 1919. The Council is a member. Eligibility for membership is conferred on any local or public authority possessing market rights and powers and control of markets, fairs, abattoirs or cold stores. 73. Its objects are to facilitate communication between members and others and between the association and the Departments of the Government and other public bodies on matters of common interest affecting the administration of markets, fairs, abattoirs or cold stores and to take such action as may be deemed desirable in the public interest in promoting or opposing new legislation and amending existing legislation. In addition, the objects extend to protecting the interests rights and privileges of members by agreed or common action, to promote and encourage a high standard of administration and market undertakings and to obtain and circulate to members such information as may appear conducive to the advancement of the objects of the association. 74. It is administered by a NABMA council. It has an executive board and various committees. 75. It has an honorary legal adviser a Mr Wilson who is an employee of Wakefield Council. He attended the trial as an observer, which is hardly surprising given the importance of the decision for a large number of the members of NABMA. At one stage Mr Freedman QC applied for disclosure of a communication, which apparently passed between Mr Wilson and Mr Cousins the Council’s junior. I rejected the application. It also should be borne in mind that the Defendants had failed in an application for third party disclosure against NABMA. They chose not to issue any witness summons either to Mr Wilson or any other officers of NABMA to attend Court. It is fair to say that the Association has not been wholly cooperative with the Defendants. Given the allegations made in the action against NABMA by the Defendants (see below) this is hardly surprising. 76. Equally, whilst the officers who gave evidence for the Council (Mr Sanderson in particular) were concerned to portray a picture that the Council had little or no involvement with NABMA this picture was not wholly accurate as Mr Freedman QC demonstrated in cross examination. Thus for example on 4 September 1991 a conference session took place where Miss Newall the markets manager at the time of the Council delivered a report, which made extensive reference to the Pontefract Lane market and how successful it was. It also highlighted traffic problems, which the Defendants fastened upon. It may well be that Pontefract Lane has traffic problems. I was shown some videos, which suggested that there maybe some localised traffic problems. It may be that the traffic problems there are more serious than at Morley or at Drighlington. The reality is however, is that once again I have not had any expert evidence on any of this and it would be quite wrong to make any conclusion based on anecdotal evidence and the sight of videos taken on certain days. Even if Pontefract Lane has traffic problems there are proper remedies open to concerned individuals to have the matter investigated. What is quite clear is that the traffic problems at Pontefract Lane can have no relevance as regards clearly arguable traffic problems at the Morley and Drighlington Sites. I reject Mr Freedman QC’s submission that the Council was not operating an evenhanded policy as regards those sites and its own. 77. Reference was made in Miss Newall’s paper to the seventh conference of NABMA that the Council had obtained injunctions against rival car boot operators. It is clear that Miss Newall thought the establishment of a car boot sale by a market authority gives of course an excellent basis for pursuing an action for disturbance against privately operated car boot sales. If a car boot sale is held in the common law distance it can be actionable. She also expressed the view (see paragraph 14 of her paper) that it was very important that car boot sales are regulated and that the market authority was in the best position to perform this responsibility and that the authorities should decide on what policies each authority wishes to pursue with a warning that if a policy is not adopted it is likely market rights would be infringed and would have a prejudicial effect on the authorities’ own markets. 78. She also in the question and answer section, identified the problems they have about a lack of regulation and emphasised that the Pontefract Lane operation was not done solely for money but as a service for the public who wished to dispose of their unwanted goods and a facility for people who wished to buy used goods at reasonable prices. She did not see it as any form of exploitation, she saw that as what local authority market services were about. Providing markets for the public and car boot sales as a future operation for all market authorities. 79. Now all this seems to me to be very commendable. Provided the regime is properly operated (as I have found earlier in my Judgment) I can see nothing wrong with the policies proposed by Miss Newall as long ago as 1991. Equally, I can see nothing wrong with Mr Wilson (as he apparently did in his letter of 10 September 1997 to Mr Veigas) giving advice of a general nature as to legal issues concerning markets. Nor can I see anything wrong in the Council attending a meeting to consider the proposed Competition Act (which took place on 3 April 1998) and having advice from Mr Wilson about the possible impact of the parallel provisions to those found in the EC. Even if the lobbying by the association is to strengthen the position I do not see that there is anything wrong in that either. It is clear that the association did lobby about the competition aspects see their briefing paper dated 21 October 1998. 80. Mr Sanderson’s evidence was that he had no interest or consideration of NABMA. He regarded it as a province of the elected members and save in respect of one in Manchester arising out of the IRA bomb there and the rebuilding arrangements, consequent upon that bombing, he said he took no part in any NABMA meetings. He gave evidence to the effect that he rarely saw any documents and never considered them. I accept that evidence, although I accept Mr Watkins’ contentions that there was more of a role than he would wish to concede. Thus on 18 September 1998 (shortly after the injunction proceedings) Councillor Lorna Cohen wrote to Councillor Judith Blake setting out a summary of what took place at the conference in Oxford on 7 September 1998. The letter was copied to Mr Sanderson. He could not recall it. Although it suggests contact with Mr Wilson, his evidence was that he did not think it was very important. This letter shows that Leeds occupied a role on the executive council board of the organisation and that too is contrary to the low key evidence given by Mr Sanderson. I conclude that the Council did have an interest in NABMA and participated in the events when it was considered appropriate so to do. Whether this is significant or not is however a different point. I do not consider it is significant. THE DEFENDANTS CONTENTIONS ABOUT NABMA 81. In paragraph 8 and following of the Amended Defence and Counterclaim the Defendant alleged that the Council and/or NABMA took decisions and/or engaged in agreements/concerted practices which affect trade within the United Kingdom and/or between Member States to prevent restrict and distort competition within the United Kingdom and/or the EU. 82. For that to be effective, that is to say an argument based on collusion the collusion must be between undertakings. There is no clear evidence which shows that NABMA is an undertaking for the purposes of the EC Treaty or the 1998 Act nor that all the members of NABMA are undertakings for the purposes of those provisions. That is enough to dispose of this allegation, but I shall deal with all the allegations in case my conclusion in that regard is challenged. 83. The particulars of the allegation that NABMA is an association are set out in paragraph 10 of the Amended Defence to Counterclaim and in summary those are allegations that NABMA presents itself as a representative of approximately one hundred and fifty local authorities, it advised its members about a questionnaire that the First Defendant’s solicitors sent to it in February 1999, it lobbied actively in 1988 in support of legislative change to increase councils market rights, was involved actively in 1994 in lobbing against the then proposed deregulation of the market franchise and apparently confirmed that it could not supply any information which might be used to the detriment of local authority members of NABMA. A questionnaire submitted by Mr Watkins’ solicitors to various local authorities was not answered by any of them. 84. In paragraph 11 of the Amended Defence to Counterclaim it is asserted (inter alia) that NABMA answering for its members "acted and continued to act in accordance with the stated policy of NABMA to restrict car boot sales as far as possible (which policy itself constitutes a decision of an association of undertakings and/or an agreement and/or conservative practices insofar as it is followed by the Claimant) insofar as their common behaviour influences the market for car boot sales in the sense of restricting the access to the market for parties other than local authorities". The particulars are those repeated under paragraph 10 and in addition the lobbying campaigns referred to in paragraph 11. 85. There is no evidence, which shows NABMA acted in this way. There is no evidence to show that the individual members of NABMA acted in this way and there is no evidence which shows that the Council acted in this way, either through its membership of NABMA or otherwise. These were assertions made by Mr Watkins without any evidence to sustain them. 86. Interestingly, Mr Watkins’ expert Dr Rosewell in her evidence suggested that membership of the Association alone would be a valid basis for alleging an infringement of the EC provisions and/or the 1998 Act. As a matter of fact I find there was no concerted practice as alleged. I will deal with this further when I come to deal with the Competition aspects in that section of my Judgment. 87. Dr Rosewell in her expert report (section 5) commented extensively on NABMA and the evidence she saw led her to conclude that NABMA and its members defend the operation of market franchise rights that is monopoly rights (paragraph 5.23) and further she concluded that within each authority there was a dominant position. As I have said above in this Judgment, I do not accept that there is any evidence which justifies any conclusion that the activities of NABMA and individual authorities by virtue of their association with or membership of NABMA is capable of being criticised under the EC provisions or the 1998 Act. I will elaborate upon this when I come to deal with expert reports to which I will now turn, THE EXPERT EVIDENCE GENERALLY 88. Both experts attracted a degree of justified criticism as regards their reports. By far the larger criticism however, was levied at Dr Rosewell and her evidence was justifiably criticised for a number of reasons. 89. First her original report did not comply with the declaration as to expert evidence required by CPR 35 PD 2.4 although it was added later when she signed or possibly resigned her witness statement on 5 June 2002. 90. Second, she failed to give any clear indication as to the material that she had seen in preparing the report. In cross examination it was elicited that she had not seen the Council’s evidence until shortly before the trial. This was despite the fact that the evidence was clearly important. 91. There were significant failures in respect of the material that should have been given to her as required by CPR 35.22. She was not provided with the Council’s witness statements as I have said. She believed that she was not provided with the pleadings, although in re-examination a letter was produced which suggested that she might have had the pleadings. She certainly did not consider the pleadings in any detail because under cross examination it was shown that her report was contrary to a number of paragraphs to the pleadings, which she herself could not support. She had no comment on that and no attempt was ever made to address the inconsistency between the pleaded case and her evidence. 92. She never requested clarification of the material that was provided, although she must have thought it was plainly inadequate. She has the power to do that under CPR 35.2 (paragraph 12). 93. Although she said in cross examination that her reports were not changed having seen the evidence later this is unsatisfactory. Having seen the evidence shortly before the trial it seems to me that her objectivity must have been affected. She never offered a qualification to her report as set out in PD 35.25 (d). 94. When it came to her substantive evidence she was to my mind comprehensively destroyed as a credible witness by Mr Isaacs QC in cross examination. Thus her evidence as to market area was extremely imprecise and was without any evidential basis. Initially she said that the market area was bigger than Leeds, but provided no justification of any credible nature as to why she chose particular areas. 95. She was forced to acknowledge that her evidence was at variance with paragraph 22 of the Amended Defence and Counterclaim. She was unable to explain that difference despite having acknowledged that she saw the pleading. 96. Another example was her reference in paragraph 3.2.2 to the Mintel research carried out in 1986. She adopted this evidence without qualification despite acknowledging in cross examination that the research in 1986 would be of little assistance in looking at the customer mix in 2003. Even then her conclusion at 3.2.7 that the retail offer to the consumer in markets is distinct from that available in shop premises was unsupported by that report and unsupported by any evidence. She suggested in cross examination that it was common sense to appreciate that people have a distinctly different approach as regards shop premises as from market premises. Instinct can be a very dangerous thing. In fact, if one looked at the Mintel Report said (at page 106) "One of the most common stalls at any market is the fruit and vegetable stall. A stall is ideal for handling bulky dirty commodities of this type and there is practically no difference between the way they are sold in a shop and the way they are sold in the market. Further more the public perceives that because of the nature of the markets i.e. that they do not appear to have the facility to stock goods produce is likely to be extremely fresh". According to the Mintel Report analysis of turn over in table 3, food and agricultural products accounted for 35% of products. 97. Further on page 107 of the report it said "although Mintel’s consumer research confirms that people believe they can buy identical goods from the market more cheaply than from the shops, it is also true that customer accept cheaper brands that may not be well known brands or labels. In some cases the customer is perfectly willing to buy seconds from a market stall at a very much cheaper price. Market traders also sell surplus stock and bankrupt stock from manufacturers. High street shops which operate on a much higher cost are less inclined to sell unknown brands and seconds (unless they specialise in them) because profitability would be adversely affected by such low margins and it would be out of line with there normal position (being somewhat upmarket of the market stall)". 98. Whether such conclusions are correct in 2003 is a matter of debate. It is no part of my function to fill the gaps of evidence and it would be quite wrong of me to do so. It is clear that the assertions made by Dr Roswell in this part of her report are not supported by the only evidence that she has adduced, the Mintel Report. 99. This criticism is applicable to virtually the entirety of her report. Thus she had conducted no analysis of the actual markets, the subject matter of the disputes; indeed she never visited them. There is no attempt to compare for example the operation of local authority markets where enforcement of market rights does not take place with that where enforcement of market rights does. There has been no analysis of the type and location of premises that would be market operators would seek. There has been no analysis of the customer purchases of customers, nor any analysis of the areas from which customers are drawn. There is probably a very good reason for this, namely that markets are not homogeneous. Mr Freedman QC attempted to rely upon a statement by Mr Sanderson, that in his opinion 75% of the Leeds clientele came from within 10 miles of the Leeds markets. However, the basis for that was not established. There was no evidence to show that Mr Sanderson had conducted any research as to that and I found his statement inconclusive. He proffered an opinion in response to questions put in cross examination, but in my opinion, he had no basis for the proffered opinion. 100. Instinct might lead to a conclusion that for example shops are different because they have greater overheads, greater long term obligations and therefore need to make higher prices. However, instinct tells me that the market is blurring and sometimes it is very difficult to tell the difference between an arcade with stalls in and a market and equally it is difficult to say that shops always maintain higher prices because of the competition in the retail market which is there nowadays. I am not saying that any of these conclusions is correct, because there is no evidence adduced by the Defendants dealing with any of these potential analyses. 101. Equally, her response to Dr Bishop’s reference to the "SSNIP" test was unconvincing. The SSNIP test is an economic test whereby a hypothetical monopolist in a market is assessed. It asks whether a Small but Significant and Non-transitory Increase in Price would be profitable. If it is not profitable it shows that there is no true monopoly. Dr Bishop made reference to this in paragraph 4.2 of his report. 102. 103. Dr Rosewell in her supplemental report dated 11 December 2002 (paragraph 4.2) observed that clearly Leeds can raise its price for a licence. The argument here is that if it does markets will move elsewhere and stall holders will go elsewhere. The test is "neat first year economics (no doubt why lawyers and competition authorities like it) but hard to a SNIPP test" (she said). In fact the Commission Notice 97/C372/03 (paragraph 15 and following, identifies the SSNIP test as a good basis for checking whether or not there are competitive restraints. I accept as set out in paragraph 1.5 of the Introduction these are guide lines and not to be mechanically applied, but it is quite wrong of Dr Rosewell to dismiss it as being a test that is good for first year students and competition authorities. She never did any testing on these lines. Nor did she do any other market testing on various lines put to her by Mr Isaacs QC in cross examination. There were various analyses that could have been considered such as a shock analysis, a diversion ratio analysis, a price correlation analysis, a margin concentration analysis and a comparative analysis. She did none of these exercises. Her evidence consisted entirely of conclusions draw from academic reports that are not specific to the issues before me in respect of Leeds. 104. Equally, her evidence in relation to the situation of conflict faced by Mr Sanderson allegedly in relation to his market duties and his regulatory duties was confused. Initially in cross examination she said the existence of the conflict per se did not constitute an abuse. She amplified that by later saying there might be an abuse but it was up to the local authority to make sure that it does not arise, if it were all done correctly there would not be an abuse. She finally said that if the marketing division of the Council made sure it consulted with other bodies and the police it would be conducting itself in a proper manner. 105. As I have already found the Council does precisely that. That is the end of her evidence in relation to the conflict issue. 106. Another example was in respect of the effect on trade between Member States, which is a requisite for Articles 81 and 82. She acknowledged in cross examination that the effect on trade must be more than significant and that she did not support any suggestion that there would be such an impact on trade between Member States. She expressed the view that it was unlikely and she conceded that that was the end of any claim under Article 81 and 82. I accept the submission of Mr Freedman QC that the issue is not solely an issue for Dr Rosewell as there is a question of law involved (which I will deal with below) as to the potential for an adverse effect on trade. Nevertheless it does seem to me that there must be an evidential basis for a potential as opposed to an actual adverse impact. There is no evidence, which shows that the matters complained of could have the potential to have an impact on trade between member states. COLLUSION 107. When Dr Rosewell was questioned on collusion she acknowledged it was a question of fact for the Court and that it was necessary to establish either groups of local authorities or NABMA as being the medium for collusion. She did not accept that collusion necessarily involved intent suggesting that it would be enough if there was collective dominance of a group which had the relevant effect, for example if it affected trade within the United Kingdom or had as its object or effect the prevention or restriction or distortion of competition within the United Kingdom. Nevertheless she also acknowledged that if the Council did not participate the existence of collusion with other parties had no relevance. Regretfully she was not aware at the time of her reports of the witness statements of the Council (Mr Sanderson and Miss O’Shea) to the effect that it had no participatory role in NABMA and had no contacts with other authorities but merely decided its own policies. She said that there could be tacit collusion as set out in paragraph 6.4 of her report, but for my part there is no evidence to show that there is any such tacit or indeed express collusion as alleged by Mr Watkins in this case. I do not see any of the matters identified in paragraph 5 of her report upon which she replied is evidence of any such matters. Her report is tentative in the extreme, thus in paragraph 6.1 she refers to the possibility of collusion. It is not borne out by the evidence of the Council and the evidence that was put before me in respect of the activities of NABMA. 108. She acknowledged in her report that not all members of NABMA were franchise holders. She also acknowledged in cross examination that she had no evidence as to the policies of licensing of any of the other authorities. At best there was the vague evidence of Mr Watkins that he had difficulty obtaining licences from other authorities. This is hardly sufficient evidence to found an allegation of breach of articles 81 and 82 or chapters 1 and 2 of the Competition Act. Equally, with regard to the SSNIP test she acknowledged that she did not apply the test, but her reasons for not doing so, namely the data was not available and the test was not appropriate, were unconvincing. The impression I had was that the avoidance of the SSNIP test was because she did not have the material to carry it out. The same thing applied to the comparative analysis which she conceded would be an obvious thing to do, but she had not done it. In essence her report as regards these various matters was mere supposition and assertion unsupported by any credible factual analyses of any kind. THE MARKETS 109. Dr Rosewell accepted that there were two aspects relevant to the market, the geographical market and the product market. 110. In relation to her evidence as to the Geographical Market she was wholly unclear. The Geographical Market she said was greater than the area of Leeds City Council and was a nebulous area described as "surrounding area". This reflected the changes in the Defence. Initially the Geographical Area had been described as the North of England and/or England. On cross examination she indicated that she had included Leeds, Wakefield and Kirklees. She included Bradford although she had no evidence of a licensing system in Bradford. She excluded Calderdale, Harrogate and Selby. She had no evidence of the population area of Calderdale. She said that Leeds and the surrounding areas she defined gave Leeds a population area of 726,000 out of approximately 1.6 million, which she said was about 48% of the total population. She acknowledged that there might be other ways of ascertaining share of markets, such as gate receipts but she had no evidence of that in relation to Bradford, Kirklees, Harrogate or Selby. She acknowledged that those matters were not irrelevant. This again in my judgment is not sufficient material to enable a clear market to be discerned (see United Brands –v- Commission [1978] ECR 207 para. 44, cited in Bellamy & Child para. 9-031) for any conclusion to be drawn. 111. For Dr Rosewell the Product Market as summarised in paragraph 2.4 of her report was the provision of markets and involved three things. First it involved the provision of the management of a site, second the discovery and management of its occupiers and third the discovery and management to the visiting public. She rejected the suggestion that the market could also extend to shop based retailing. I have already observed on the unsatisfactory nature of her reasoning for this as it was based largely on subjective instinct, as opposed to hard evidence. Thus for example, it is by no means clear that the Mintel Report to which she made reference and the report of Gregson and Crewe (and Longstaff) necessarily supported her subjective observations. I do not accept the evidence of Mr Burnett and Mrs Hobday which was limited solely to their experience has any evidential significance at all. 112. Given the weakness of her evidence it is impossible to come to any conclusion that the Council is in a dominant position in such a vague area. A dominant position is "a position of economic strength which enables it to hinder the maintenance of effective competition on the relevant market by allowing it to behave to an appreciable extent independently of its competitors and customers and ultimately of consumers" (United Brands). Given Dr Rosewell’s identification of the product market on my finding that the Council operated a licensing system and operated it in a correct way I do not see how it has a dominant position. It is true that the evidence showed that a number of stalls in the Leeds area (conceded by Mr Watkins in the closing submissions as being too narrow a market area) the Council has 80% of the market stalls within its own geographical area. However the percentage becomes variable once a move is made beyond the Council’s own area. The number of stalls might be between 45 to 50 % if the radius is 10 miles but if it goes beyond that the percentage falls. Once again in my judgment there is no clear evidence because there is no clear evidence of the market as to whether or not it is possible to draw clear evidence that the Council has a dominant position within that market. The case ought to have been made out by an analysis of the stalls in the relevant clearly identified area and showing how the percentage of stalls that the Council had impacted on the provision of stalls by other authorities and organisations within the defined geographical area. There was no such analysis and no such evidence. Merely adding up the numbers of the stalls to my mind is not clear evidence of a dominant position. Evidence is required to establish how the Council (if this is alleged) dominated the market by reason of its strength of numbers. Thus for example one would have expected to have seen evidence from other operators showing that this dominant position inhibited development. In truth the only complaints were complaints from Mr Watkins about the licensing procedures on the two sites and possibly the other evidence of Yeadon. For reasons set out earlier in this Judgment, the Council were entirely justified in their approach on a site by site basis. It is not enough to assert that the large percentage (and even that is by no means clear as I have set out above) of itself ought to lead to a conclusion of dominance. 113. Therefore even if the Council has a dominant position in respect of a clearly identifiable market area there is absolutely no evidence to show it has abused its dominant position. The high point of Mr Watkins case is based on the suggestion of conflict, which I have already dealt with earlier in this Judgment. 114. It is true that the Pontefract Lane Market is profitable but there is no evidence to show that the Pontefract Lane profitability was a factor in the consideration of the granting of licences. 115. I do however accept Mr Watkins submission that the Council is an undertaking because of that profitable operation: see the approach of the European Court in Hofner –v- Macrotron [1991] ECR 1 – 1979 (para 21- 22). There is plainly an economic activity and indeed the evidence of Mr Sanderson showed that the Council had obtained advice that a reasonable profit could be made on licensing. Although the evidence is not clear in the sense that the Council’s income has not been analysed to see whether it makes a profit in any credible way, I do not disregard the evidence which shows that it receives a large income from Pontefract Lane. Thus Dr Bishop (although not qualified to make this observation) was right instinctively as he did in his report to acknowledge that the Council was such an undertaking. I also accept Mr Watkins’ observations on the Ambulanz Glockner decision (case C-475/1999). There is no evidence showing other authorities in NABMA or NABMA itself is an undertaking for the purposes of the Hofner test. I accept NABMA can be an undertaking but on the facts I am unable to conclude it is. DR BISHOP’S EVIDENCE 116. I have been heavily critical of Dr Rosewell’s evidence in this Judgment. However, Dr Bishop’s evidence was also subject to extensive criticism by Mr Freedman QC. There were aspects of his evidence and performance in the witness box, which were unsatisfactory. First in his report he offered legal opinions, which were not within his remit. He knew this because he is a very experienced expert witness. (I ignore Mr Freedman’s adoption of his legal opinion as regards undertaking in this regard). Nevertheless, the circumstances of the withdrawal of his opinion that the Council was an undertaking were unconvincing. It showed an element of partisanship not acceptable for an expert witness. Equally, his report was essentially a negative report in the sense that the Council decided on a policy of attacking Dr Rosewell’s report but not providing its own material for example of a counter market or a product market or even providing any of the types of analyses which Dr Rosewell was criticised for not obtaining. This is of course a high-risk strategy because if the criticisms of the report of Dr Rosewell fail there is no corresponding alternative report to fall back on. This negative approach led in areas to a distorted report. Thus (to take one example) in paragraph 5.4 of his report he asserted that there was no case of an excess demand for stalls at the Council markets. This was based on an analysis by location rather than percentage of stalls. His evidence and his statistics in this paragraph fell into the well known Disraeli observation of there being "lies, damned lies and statistics". He acknowledged in a question from me that the relevant paragraph was absolutely useless because of the methodology adopted. 117. I take on board the criticisms of Dr Bishop’s report cogently put forward by Mr Freedman QC in his skeleton argument. Nevertheless, those criticisms do not have an impact on the case because it is the failure of Dr Rosewell’s evidence that is important rather than the criticisms of a negative report by Dr Bishop. In this context as I have set out in the Judgment above Dr Rosewell’s evidence was seriously flawed and the criticisms of her report by Dr Bishop were well founded and exposed in cross examination. In conclusion therefore as regards the evidence no case is made out which clearly identifies the geographical or product market or which clearly identifies the City Council’s dominance in that market and there is no evidence to show that even if those factors are established that it has abused its dominant position. Equally, there is no evidence to show that there has been any collusive conduct express or implied between undertakings to establish a breach of the relevant chapters and EC articles. In short Mr Watkins case is heavy on assertion but nonexistent on facts. 118. For those reasons the Council’s case is made out for injunctions and Mr Watkins Counterclaim will be dismissed.