Day 6 From Up High
May 22, 2015
High Court Day 6
Before MRS JUSTICE PROUDMAN
HC-2014-001796 Sainsbury’s Supermarkets Ltd v Bristol Rovers (1883) Ltd.
Bristol Rovers’ hard fought six-day trial against Sainsbury’s concluded today in the Royal Courts of Justice.
The Club was forced to take its claim that Sainsbury’s is contractually committed to buy the Memorial Stadium to the High Court when the supermarket chain refused to complete the purchase and sought to terminate the contract.
This was despite the Club having obtained planning permission in December 2014 for the extended delivery hours to the new supermarket, which met Sainsbury’s requirements.
The case was heard in the Royal Courts of Justice by Mrs Justice Proudman. During the trial, a number of witnesses for Sainsbury’s confirmed that it had concluded as much as three years ago that the project would not meet the supermarket chain’s financial targets. It was put to them that as a result Sainsbury’s had been looking for a way out of the deal for some time.
The club was unaware of this until early 2014.
The Club’s case has always been that Sainsbury’s subsequent refusal to co-operate in its steps to challenge the original planning permission for the store was, as stated by its barrister David Matthias QC, a “continuing and flagrant breach” of its obligations under the contract to use all reasonable endeavours to obtain an acceptable planning permission. Bristol Rovers also considers that Sainsbury’s has breached its obligations to act in good faith towards the Club and its obligations under the contract.
This was further expressed by Mr Matthias QC, who said “the justified expectations of Bristol Rovers were that Sainsbury’s would comply with its obligation to use all reasonable endeavours to procure an Acceptable Store Planning Permission, and would be honest and straightforward with it at all stages, and unfortunately they weren’t”.
The Club has now made its case in court and brought its frustrations about Sainsbury’s actions over the last few years into the public domain. The Judge made it clear at the beginning of the trial that she would not make an immediate decision on what she described as an “extremely complex case”. She has instead reserved judgment until a later date.
The Club is however hopeful that judgment in its favour will be made soon, allowing it to draw a line under this dispute and move forward with the construction of the new UWE Stadium and planning for next season in League 2.
No further statement will be released by the Club until such time as we receive judgment.
On Friday afternoon Mrs Justice Proudman told the High Court that she realised the urgency of the case and would ‘work through the court vacation’ to conclude the case.
Thanking lawyers for both sides for their ‘comprehensive’ arguments, she said: “This is not an easy case.
“I will have to work over the vacation and deliver my judgment in the next court term.”
The judge had earlier heard the final arguments from both the club’s lawyers and those representing Sainsbury’s.
David Matthias QC, for Bristol Rovers, told the judge that, after Bristol City Council refused to change Sainsbury’s delivery hours in January last year, the firm ‘pulled down the hatches’.
He said that, having decided nothing more would be done to try to get the hours they wanted, they handed the matter over to their solictors who, he claimed, ‘frustrated’ progress.
He added: “They did what was, from Sainsbury’s point of view, an admirable job of ensuring that no progress was made, that every effort by Bristol Rovers to achieve progress was stymied and the clock was run down – that is, in a nutshell, what happened.
“The reality was that, for all they said that they were using all reasonable endeavours to secure an acceptable store planning permission, they were doing quite the opposite.
“They were using all reasonable endeavours to ensure that an acceptable store planning permission did not materialise.”
Mr Matthias also reminded the judge of his argument that, long before the failed application to the council, Sainsbury’s had concerns about the financial outlook for the proposed store and ‘wanted an exit route if there was one’.
He said that the application to vary delivery times was ‘done on a shoestring’, adding: “There were clear indications from friendly councillors and council officers that this was an application that was bound to fail.” “Officers expressed concerns about some of the technical information, but over and above that it was being made at the wrong time, and Sainsbury’s knew it was being made at the wrong time.”
The barrister said Sainsbury’s ‘didn’t say a word’ to Bristol Rovers about these concerns and that the evidence suggested they weren’t using ‘all reasonable endeavours’ – as he claims the contract required them to do – to get the hours they wanted.
He added: “In our respectful submission, the evidence clearly indicates that they weren’t using reasonable endeavours and they wanted it to fail.
“They were acting in bad faith because they were bringing about a state of affairs that was designed to frustrate the purpose of the contract and to deprive Bristol Rovers of the benefits of the contract.”
Mark Wonnacott QC, for Sainsbury’s told the judge there was no obligation in the agreement with Rovers to ‘make reasonable endeavours’ beyond the initial planning application.
He said that, after they had challenged the restrictions on delivery times once, and failed, they were then entitled to terminate the contract.
The barrister added: “It is, frankly, ridiculous to suggest that Sainsbury’s should have known that all they had to do after the refusal was put in another assessment with a few more fences and the application would be granted.”
High Court Day 5
Lawyers for Bristol Rovers today made their closing arguments in the club’s court battle with Sainsbury’s over the future of the Memorial Stadium site.
David Matthias QC, for the club, told Mrs. Justice Proudman that the supermarket giant had been in ‘continuing and flagrant breach’ of its commitment to Rovers to buy the site for £30m and redevelop it as a supermarket once the club moved to its planned new home.
He said the firm was wrong to treat its application to Bristol City Council, to vary the delivery hours the local authority had imposed when green-lighting plans for the superstore, as an ‘appeal’.
The barrister also argued Sainsbury’s was ‘obliged’ – under its agreement with Rovers – to challenge the council’s refusal to change the hours.
Mr. Matthias told the judge: “In our submission, the most we have to do is establish that, by the cut-off date, if they had complied with their obligations and not been in continuing and flagrant breach of those obligations, the conditions would have been satisfied.”
He also said the supermarket chain should have paid attention to the concerns of the council’s environmental health officer regarding the noise-reduction measures, and heeded the advice to wait until after the TRASHorfield judicial review of the plans was finished.
Had they done so, he said, they would have got the delivery hours they wanted before the agreement’s cut-off date in November last year.
Mr. Matthias added: “We say, in this case, to withdraw and re-submit when the political climate had cooled post the completion of the judicial review is what should have happened – taking into account all of the perceived problems with the acoustic report that had been identified by the environmental health officer.”
Earlier in the penultimate day of the hearing, the court heard evidence from Jim Tarzey, of Pegasus Group, who were consulted by Bristol Rovers when the club made its successful application to vary the delivery times.
Mr. Tarzey, who said he has 27 years experience of advising clients on planning issues, said he had looked in detail at Sainsbury’s application and felt it was not completely clear.
He said the firm had included ‘extensive noise mitigation measures’, but added: “However, it was notable that their application lacked clarity as to what noise mitigation measures Sainsbury’s had already committed to and what they would offer in terms of further mitigation in support of the change being sought.”
The judge also heard from Mark Curtis, Bristol City Council’s chief environmental health officer, that the extra measures needed to get council approval were acoustic fences, to protect nearby residents from the noise generated by lorries.
Mr. Matthias and Sainsbury’s lawyers will continue with their legal submissions tomorrow.
High Court Day 4
(This report is taken from the Bristol Post.)
Sainsbury’s tells judge they could have pulled out of contract with Rovers to buy Memorial Stadium.
A judge was told that Sainsbury’s would have set an “awful trap” for Bristol Rovers if it had withdrawn a planning application for a new store at the Memorial Stadium.
Mark Wonnacott QC argued that if the supermarket chain had pulled out of its bid to change Bristol City Council’s restrictions on the proposed store’s delivery hours, it would have been able to end its agreement with the club at that point.
He added that as it was, Sainsbury’s did not end the contract until after the council refused to alter the delivery times – which he said released them from the agreement.
The club has previously argued that the supermarket chain should have withdrawn the application and tried again at a later date, when it became apparent the council would not alter the delivery hours – amid intense local pressure and while a judicial review by TRASHorfield was ongoing.
The council eventually agreed to the hours originally asked for by Sainsbury’s after the club took it upon itself to make its own application.
Mr. Wonnacott said: “We say that, if the application – which we agreed to make – had been withdrawn, that would have exhausted that appeal.
“The effect of that appeal being exhausted would have been that the cut-off date had occurred, and we would have had a right to serve the termination notice (on the club).
“That is why I said previously that withdrawing the application would have been an awful trap.
“It would have been the most self-interested thing we could have done.”
Mr. Wonnacott also said he had been made aware of a discussion in an online forum between Rovers’ supporters who were following the case, in which one fan had asked: “When is a cut-off date not a cut-off date?”
The barrister added: “That, in a nutshell, is our position.
“If there is a planning refusal at the end of the process, then the cut-off date occurs and we have a right to terminate the agreement.”
Earlier, the court was told that Steve Gosling, a sound expert hired by Bristol Rovers, prepared a report offering suggestions to reduce noise from the proposed store following the council’s refusal to change delivery times.
Mr. Wonnacott suggested there was ‘little difference’ between the measures in his report and those in Sainsbury’s application – the latter of which he said had been approved by both Rovers and their planning consultants.
The barrister said: “I am going to suggest to you that your measures were little more than a fig leaf to give the council an excuse to allow an application it had previously refused.”
Mr. Gosling replied: “No, that is not what happened.”
The hearing continues.
High Court Day 3
May 19, 2015
Rovers’ Finance Director has said it will be a ‘catastrophe’ for the club if Sainsbury’s does not go through with its development of the Memorial Stadium site.
In his statement to the High Court, Toni Watola said the only outcome that would put the club in the position envisaged by the original agreement with the supermarket chain is if the deal goes ahead at the agreed contract price ‘without further delay’.
Mr. Watola’s comments came as he gave evidence at the hearing being held in London to determine whether Sainsbury’s was entitled to pull out of its deal to buy the site for £30m and build a new superstore – which would allow the club to go ahead with plans for a new stadium at the UWE’s Frenchay campus.
He said the UWE development was ‘highly time critical’ and that, if it did not go ahead, the financial consequences could be dire for the club.
Mr. Watola said: “In the long term, I do not think it is an exaggeration to state that losing the UWE site could be catastrophic to the financial wellbeing of the club. “Therefore, completing the existing deal with Sainsbury’s as soon as possible is of paramount importance.
He added: “Damages are unlikely to be an adequate remedy for the club, which would be left with nothing to show for four years hard work and effort to get this deal across the line. “This would be nothing short of a catastrophe for the directors, staff and supporters of the club, not to mention the wider North Bristol and South Gloucestershire communities which also stand to benefit from the wider stadium scheme.”
He also said the sale of the site, which Sainsbury’s agreed to pay over the odds to secure amid stiff competition from rival supermarkets, may be ‘crucial’ to the club’s future.
“This deal stood to generate more money for the development of the new stadium than would otherwise be achieved and allowed the club to plan a fantastic new facility without having to take on significant external debt,” he said. “In short, this was – and is – the key to the club’s long-term financial success and ultimately may be crucial to its survival.”
The finance director’s statement was read into evidence as the hearing’s third day drew to a close. It described how the Memorial Stadium was ‘increasingly dated and out of step with the requirements of a 21st century sports club and its supporters’, and said the proposed new facility would provide the club with much-needed extra revenue and a ‘first-class focal point for sport’ in the south west.
Mr. Watola also said the club was ‘disappointed’ with Sainsbury’s response in July 2013, after the supermarket was given planning permission by Bristol City Council – but only with restricted delivery hours.
He said: “We had anticipated that Sainsbury’s might need to jump through some hoops to get exactly the planning permission it needed.
“However, we were undoubtedly disappointed that, rather than committing to the purchase and then ironing out the remaining issues in the permission, Sainsbury’s had served a notice which could be a pre-condition to termination (of the agreement). “This indicated a lack of willingness on the part of Sainsbury’s to work with the club to get this deal across the line.”
Beginning his cross-examination of Mr. Watola, Sainsbury’s counsel, Mark Wonnacott QC, asked about the contract between the parties. The barrister raised the issue of the Community Infrastructure Levy (CIL), or planning charge, imposed by Bristol City Council, which ended up being more than the £500,000 maximum Sainsbury’s had agreed to pay and which resulted in Rovers having to reduce the sale price of the Mem site by £1.6m.
Mr. Wonnacott asked why the club’s Chairman, Nick Higgs, was ‘so upset’ when Sainsbury’s said Rovers would have to pay the extra.
Mr. Watola responded: “Well the Chairman was upset because our position was that, over the previous 12 to 18 months, Sainsbury’s had not moved as fast as they could have done and that they were partly to blame for that increase in the CIL.” The barrister then asked: “When you asked Sainsbury’s to pay more than £500,000, who was trying to change the terms of the contract – was it Sainsbury’s, or was it Bristol Rovers?”
Mr. Watola initially replied that he didn’t see it as changing the contract and said the club was in a position where, if it had to stand the extra cost, it would ‘not have helped’ the viability of the new stadium project.
However, when asked again if Rovers was asking Sainsbury’s to change the terms of the contract in respect of Rovers having to absorb the increased CIL, he replied: “Yes”. The hearing continues.
(I didn’t get where I am today by being uncertain of my facts. Allegedly.)
The Recent Career Path Of Ben “Not Sure” Littman.
October 2014 – Present
( 8 months ) London.
January 2013 – October 2014
( 1 year 10 months ) Coventry.
January 2012 – January 2013
( 1 year 1 month )
January 2007 – January 2012
( 5 years 1 month )
High Court Day 2
May 18, 2015
The judge deciding the fate of Bristol’s Memorial Stadium site today told the High Court she was pleased to hear of Rovers’ promotion.
Mrs Justice Proudman, who is hearing the dispute between the club and Sainsbury’s over a £30m deal to redevelop the site and fund a new 21,700 stadium, said: “Good”, when told of yesterday’s triumph over Grimsby Town.
Rovers won on penalties at Wembley to secure a place in the football league.
David Matthias QC, representing the club, told the judge of the historic win before continuing his cross-examination of Chris Templeman, Sainsbury’s head of planning.
Mr Templeman said Sainsbury’s had used ‘all reasonable endeavours’ to go through with the proposed supermarket development.
The court heard that, after Bristol City Council refused the shopping chain’s application to change restrictions on its delivery times, the store could not go ahead.
Mr Matthias asked if Sainsbury’s could have withdrawn the application, in view of an ongoing judicial review by pressure group Traders and Residents Against Sainsbury’s Horfield (Trash), and applied again at a ‘better time’.
Mr Templeman replied: “Well yes, whatever a better time means. (One councillor) said we should wait until the following year, or maybe a year after that, and there was a suggestion we could have applied after the store was open – neither of those options was commercially viable.”
He also refuted the barrister’s suggestion that it was ‘bad faith’ not to tell Rovers about the expected problems with the delivery restrictions in advance of the council’s decision. Mr Matthias then asked if Sainsbury’s board members were ‘pleased’ with the outcome.
Mr Templeman said: “In the context of the commercial situation, if that meant we did not have to complete the purchase of the site, given what I said earlier about the expected return on investment, then yes, that was a positive outcome.”
The club’s barrister also referred to an email sent immediately after the council’s decision, in which Mr Templeman said he ‘feared the worst in PR terms’ but that the supermarket chain would be withdrawing from the deal with Rovers.
The hearing continues.
High Court Day 1
May 15, 2015
Before MRS JUSTICE PROUDMAN
HC-2014-001796 Sainsbury’s Supermarkets Ltd v Bristol Rovers (1883) Ltd
Sainsbury’s were looking for a ‘silver bullet’ to kill off its agreement with Bristol Rovers over the development of the Memorial Stadium, the High Court has heard.
The supermarket giant is locked in a legal battle with the football club over a contract to buy and redevelop the site of the ‘old-fashioned and dilapidated’ stadium.
The deal, finalised in March 2012, was for Sainsbury’s to buy the stadium for £30m, lease it back to the club for a peppercorn rent until a new community stadium on the University of the West of England’s (UWE) Frenchay campus was completed, and then build a superstore and 65 flats on the site.
Sainsbury’s contends that it had every right to terminate the agreement last year, as it had not secured an ‘acceptable’ planning permission for the site by the contract ‘cut off’ date.
But lawyers for the club today claimed the supermarket giant had been looking for a way out of its commitment to the club – which was ‘critical’ to Rovers’ long-held aspiration for a new stadium – from as early as June 2013.
David Matthias QC, for the club, said the proposed store had become ‘less financially viable’ amid a difficult trading climate and as a result of a nearby site being earmarked for redevelopment by rival chain, ASDA.
He said Sainsbury’s saw restrictions placed on its delivery times as an opportunity to get out of the contract and ‘did nothing’ from January 2014 to challenge those restrictions and get suitable planning permission.
The club went back to Bristol City Council without Sainsbury’s and managed to get the restrictions lifted in December last year.
Cross-examining Chris Templeman, head of supermarket planning for the chain, Mr Matthias asked him about email exchanges relating to the proposed store. He said: “All you were talking about, in these exchanges, was ways out of the contract, wasn’t it?”
Mr Templeman replied: “What we were talking about was understanding what these planning conditions were and to what extent there were any that we considered to be onerous.” He said the conditions, which included a ban on deliveries between 5am and 6am, would have affected the store’s ability to be up and running, with the shelves fully stacked, when it opened.
Mr Matthias then said: “You used the phrase ‘silver bullet’ – was that a silver bullet to kill off the agreement”, to which Mr Templeman replied: “I’m not sure I necessarily had that in mind when I wrote that”.
The barrister also asked him what he had meant when he wrote: “It’s good news for the chairman of Bristol Rovers FC”, in response to an email about the grant of planning permission, in June 2013. Mr Matthias said: “The clear implication is it was not good news for Sainsbury’s.”
Mr Templeman responded: “The clear implication is that, from my knowledge, this was a very high-profle project at the time, to secure not only a new home for Bristol Rovers, but also a new stadium for UWE. “The chairman had invested a lot of his own time in making the scheme happen so clearly the granting of planning permission to Sainsbury’s, which unlocks the funding to deliver what has been an incredibly high-profile project, was good news”.
He added: “The scheme that was underpinning that was one which was financially beyond our hurdle rate, so yes, the prospect of either building a store that would not hit our financial hurdles or purchasing a site we would then have to sell at a loss would not be good news.”
Mr Matthias told Mrs Justice Proudman, hearing the case, that the club believes Sainsbury’s has been in breach of its agreement since November 2013 and therefore had no right to terminate it – meaning it is still in existence.
He said the agreement came about following a ‘competitive bidding process’ with various supermarkets, which Sainsbury’s emerged from as the winner, adding: “The completion of the sale of the site to the claimant (Sainsbury’s) is critical to the defendant’s (the club’s) ambitions to deliver the new stadium.”
Mr Matthias argued that the supermarket chain should have taken steps to address the concerns of councillors and the public regarding the restrictions on delivery times, and that its failure to do so was a ‘clear breach’ of the agreement.
He also said Sainsbury’s should have told Bristol Rovers about the difficulties it faced with this aspect of the planning permission. He added: “This would have been an obvious step to have taken because of the defendant’s ability to bring elements of political pressure to bear on elected members and galvanise the support of local residents, many of whom are supporters of the football club and are passionate about its ambition to relocate to the UWE stadium.”
The barrister said: “The true position is that no endeavours to secure an acceptable store planning permission whatsoever were employed after January 2014. “All of the claimant’s endeavours after this point, such as they were, were directed towards terminating the agreement and ‘running down the clock’.”
The hearing continues.
(Information as of the end Friday 15th May 2015 – the first day of the 6 day court case.)
A High Court judge has heard opening arguments in a week-long legal battle over the future of Bristol’s Memorial Stadium site.
The hearing is to settle an ongoing dispute between Bristol Rovers and Sainsbury’s over a land deal involving the club’s current home in Horfield.
Mrs. Justice Proudman, sitting in London, was told the football club agreed a deal with the supermarket chain in 2011, as part of its plans to move to a new ground on the Frenchay campus of the University of the West of England (UWE).
The terms of the deal were that Sainsbury’s would buy the Memorial Stadium for £30 million and lease it back to the club for a peppercorn rent until its move to the new ground was completed – at which time a new supermarket would be built on the site.
The club would use the money towards financing the building of the new 21,700-seat stadium. At the time the deal was made, the court heard, there was no planning permission or infrastructure in place, the costs were uncertain and Bristol Rovers were still negotiating with UWE.
Lawyers for both sides today outlined their cases to the judge, as a six-day hearing got underway.
Mark Wonnacott QC, for Sainsbury’s, said the supermarket giants believes it ‘lawfully terminated’ the contract when various conditions were not met.
But the club’s barrister, David Matthias QC, argued the contract is either still running, or has been terminated in breach of its terms.
Bristol Rovers case with Sainsbury’s will begin at the High Court in London on Friday 15th May 2015 and is scheduled to last six days.
The details of the case have been well documented and as you are all aware a positive outcome is vital to our ambition of securing the long-term future of the club.
If any of you are considering travelling to London to watch the case unfold, please check with the High Court to confirm whether the public gallery will be open for the hearing.
David Matthias QC of Francis Taylor Buildings will be representing the club with the case being heard by Mrs Justice Sonia Proudman.
Bristol Rovers Chairman Nick Higgs said ahead of the case “We are exceptionally grateful to all of our supporters for sticking with us through the whole process and we hope that at the end of it all we can bring you a positive conclusion.”
We will do our utmost to keep you all up to speed with what is happening in London, and our plan at the moment is to publish a summary of the proceedings as and when possible.
There is however a chance reporting restrictions may be placed on either all, or part of the hearing.
(Information available as of 9am on Friday 15th May 2015.)