LB Newham v Khatun

London Borough of Newham v Khatun & Ors [2004] EWCA Civ 55 (24 February 2004)

83. In my judgment, then, the Directive and the Regulations apply to contracts relating to land. I turn to the next question arising on the second issue, namely whether the Directive and the Regulations apply to public authorities such as the Council. More accurately, the question should be whether the measures apply to the Council vis-à-vis its functions under Part VII of the 1996 Act.
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88. It is to my mind plain beyond doubt that the Council is not taken out of the Directive’s scope by reason only of the fact that it is a public or governmental body. Such a conclusion is not only strongly suggested by the Hofner line of reasoning in the competition cases. It is also I think lent force by the two further recitals from the Directive’s preamble which I have set out, and, for good measure, the expression “whether publicly owned or privately owned” in Article 2(c). The true question here is analogous to that arising in Bettercare relating to “economic activity”: do the Council’s Part VII functions fall within the meaning of “trade, business or profession” in Article 2(c)?

89. I have no doubt but that the answer to this question is Yes. The Part VII functions centrally involve the grant of a tenancy for rent. This is obviously “an activity which could… be carried on by a private undertaking in order to make profits”. It is so carried on by private undertakings every day.