Statutory or franchise market rights — Competitor opens rival market — Unlawful same-day market — Infringement at suit of market owner — Remedies — Basis of damages
The respondent council enjoy statutory rights to hold markets in their area under section 50 of the Food Act 1984. Since April 1984 they have operated a market continuously on a small part of a car park in Fenton on Thursdays. In February 1986, the appellant company, following their failure to obtain planning permission to operate a market on another site in the same town, commenced a Thursday market on a further site. They did so without planning permission and have continued to operate it despite being issued with an enforcement notice under the Town and Country Planning Act 1971 against which they appealed. The respondent council brought proceedings claiming they were entitled to an injunction to protect their market rights and to damages based on the likely licence fee they might charge. Peter Gibson J (March 4 1987) held that at common law a franchise market is entitled to protection from disturbance caused by the levying of a rival same-day market held within six and two thirds miles of the franchise market without proof of loss and that while a statutory market owner is entitled to the same protection, that protection is not available if the rival market is in operation before the statutory market opens. He granted the respondents an injunction to prevent the holding of the rival market and damages based on the fee that might be charged. The company appealed against the decision as to damages, contending that where no actual damage is caused the damages awarded must be nominal only.
Held The appeal was allowed. The levying of an unlawful rival market is a tort, and the better view is that it is a nuisance. The first general rule is that the plaintiff recovers damages equivalent to the loss which he has suffered, no more and no less. The second rule is that where the plaintiff has suffered loss to his property or a proprietary right, he recovers damages equivalent to the diminution in value of the property or right. There are exceptions to these general rules, such as in trespass to land, in detinue, and in the infringement of patents. There is also the effect of Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798, where damages for the infringement of a restrictive covenant were awarded not on the basis of diminution in value to the owner of the benefit of the covenant but on the basis of the sum he might have demanded for relaxing the covenant.
In these exceptions damages were awarded in accordance with what might called the “user principle”. Apart from trespass or a breach of a restrictive covenant, damages in the exceptions, which are really exceptions to the second general rule, must first be established and then the question will arise whether they should be assessed by reference to the user principle or to the diminution in value of the plaintiff’s property. The user principle must be restricted to the established exceptions. Unless a market owner can establish actual loss, when he would be entitled to damages based on the diminution in value of the harmed market, a market owner, as in the case of the respondent council, was entitled to only nominal damages.
Terence Cullen QC and Barbara Hewson (instructed by Bishops, of Stoke-on-Trent) appeared for the appellants; and Robert Reid QC and Robin Campbell (instructed by Sharpe Pritchard) appeared for the respondents.
