Bristol Rovers (1883) Ltd v Sainsbury's Supermarkets Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Floyd,Lord Justice McCombe,Lord Justice Laws |
| Judgment Date | 17 March 2016 |
| Neutral Citation | [2016] EWCA Civ 160 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2015/2702 & A2/2015/2702(B) |
| Date | 17 March 2016 |
[2016] EWCA Civ 160
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MRS JUSTICE PROUDMAN DBE
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Laws
Lord Justice McCombe
and
Lord Justice Floyd
Case No: A3/2015/2702 & A2/2015/2702(B)
David Matthias QC and George Mackenzie (instructed by Burges Salmon LLP) for the Appellant
Mark Wonnacott QC and Philip Sissons (instructed by Dentons UKMEA LLP) for the Respondent
Hearing dates: 26 and 27 January 2016
On 28 March 2011 the defendant and appellant Bristol Rovers (1883) Limited ("Bristol"), the owner of the Bristol Rovers football club, entered into a conditional contract ("the Agreement") for the sale of its current stadium, the Memorial Stadium, to the claimant and respondent Sainsbury's Supermarkets Limited ("Sainsbury's"). For Bristol this represented an opportunity to raise funds for the purchase of a modern improved stadium which it would build on the campus of the University of the West of England, and which would replace its outdated Memorial Stadium. For Sainsbury's it was an opportunity to expand its retail presence in Bristol. The Agreement contemplated the demolition of the Memorial Stadium and the construction of a retail-led mixed use development including residential units and a Sainsbury's superstore. From mid-2013, however, Sainsbury's realised that the economics of the deal had changed, and wished to terminate the Agreement if it lawfully could. Sainsbury's claims that it has lawfully terminated the Agreement for non-satisfaction of a condition precedent. Bristol's case is that the Agreement is still on foot or has been terminated in breach of contract.
The trial of the action took place before Proudman J in the Chancery Division on six hearing days between 15 and 22 May 2015. In her decision dated 13 July 2015 she found that Sainsbury's had validly terminated the Agreement. Bristol appeals from that decision, with permission granted by the judge herself.
On this appeal Mr David Matthias QC and Mr George Mackenzie represented Bristol; Mr Mark Wonnacott QC and Mr Philip Sissons represented Sainsbury's.
The structure of the agreement
Basic agreement
The agreement on the part of Bristol to sell, and Sainsbury's to buy, was subject to a number of conditions, all of which needed to be satisfied before the Agreement became unconditional. The Agreement thus provided for a date on which the Agreement would become unconditional, the Unconditional Date, defined as the date on which the last of the Conditions is satisfied. Clause 4.1 then said:
"If the Unconditional Date shall occur on or prior to the Termination Date then [Bristol] shall sell and [Sainsbury's] shall buy the [Site]."
The satisfaction of the Conditions was not however left to fate. Clause 2.2 of the Agreement introduced Schedules 1 to 4 which contain detailed obligations on the respective parties in relation to the Conditions. In this case we are particularly concerned with Schedule 1, which I explain below. Clause 2.2 did not simply require the parties to fulfil the Conditions. It required that:
"[Bristol Rovers] and [Sainsbury's] will comply with the terms of [and] their respective obligations in Schedules 1 to 4 (inclusive) with the intention of satisfying all of the Conditions as soon as reasonably practicable." (emphasis added)
Thus, the object for both parties was to strive to fulfil the Conditions by the Termination Date, so that the agreement to sell and buy could go ahead. It is not, unfortunately, quite as simple as that.
The Store and Stadium Planning Conditions
Clause 1.2 defines the relevant Conditions which must be satisfied. One of these is the Store Planning Condition. It is:
"the Unchallenged Date occurring in respect of an Acceptable Store Planning Permission."
An Acceptable Store Planning Permission is a Store Planning Permission which contains no Store Onerous Conditions. A list of Store Onerous Conditions is set out in clause 1.2. One of these is a condition:
"restricting the delivery and despatch of goods to and from the Store [to] between the hours of 5.00 am to midnight on any day…."
It is now common ground (although previously the subject of dispute) that the delivery restriction would be understood as if the word "to" after "Store" were deleted. The clause was not limited to a condition imposed on a Store Planning Permission which confined deliveries to the times mentioned, but covered any restriction on deliveries between those times. Sainsbury's wanted to be able to deliver and despatch at any time from very early in the morning to very late at night. This had obvious consequences for surrounding residents.
The Unchallenged Date is defined by clause 1.2 as:
"the date of expiry of the Challenge Period in respect of an Acceptable Planning Permission unless prior to such date proceedings have been instituted in which case it will be the date on which Proceedings are exhausted and an Acceptable Planning Permission is granted and/or upheld."
"Proceedings" means judicial review ("JR"), which is further defined as meaning:
"(a) an application under Rule 53 [sic] of the Civil Procedure Rules
(i) made by any third party arising from the grant of an Acceptable Planning Permission by the Local Planning Authority; or
(ii) arising from a Planning Refusal by the Local Planning Authority in relation to any Planning Application…"
The relevant Challenge Period is the period of 3 months and 2 weeks after the grant of an Acceptable Planning Permission by the Local Planning Authority. The meaning of Planning Refusal was deemed to include a grant of Planning Permission which included a Store Onerous Condition, in addition to an outright refusal.
Thus the Agreement envisaged that the Store Planning Condition would be satisfied on the expiry of 3 months and 2 weeks after the grant of an Acceptable Store Planning Permission unless before that date JR proceedings were instituted. The period of 3 months and 2 weeks is designed to be slightly longer than the period allowed under the rules to commence judicial review. The idea of the Store Planning Condition is that there should have been a successful planning application for the superstore, which has no unacceptable conditions for Sainsbury's, and that it should have reached the stage where there should be no further challenge to it by way of JR.
There was a corresponding Condition relating to an application by Bristol for planning permission for the new stadium, called the Stadium Planning Condition, which also had to be satisfied before the Termination Date. As I have already mentioned, clause 2.2 required the parties to comply with their scheduled obligations with a view to satisfying these Conditions as soon as reasonably practicable.
Sainsbury's planning obligations
Schedule 1 paragraph 2 of the Agreement contains Sainsbury's planning obligations. As much attention was focused on these provisions by both parties, I need to set them out in some detail:
i) By paragraph 2.1 Sainsbury's was required to submit a Store Planning Application within 9 months of the later of the date of the Agreement or the date of exchange by Sainsbury's of a Development Agreement. If Sainsbury's did not submit the Application by the defined date, paragraph 2.2 gave Bristol a specific right to terminate.
ii) By paragraph 2.3 Sainsbury's was required to submit a draft of a proposed Store Planning Application to Bristol for its approval.
iii) By paragraph 2.4 the Store Planning Application was to be in the name of or on behalf of Sainsbury's.
iv) By paragraph 2.5 Sainsbury's was to supply a copy of the Planning Application to Bristol within 10 working days after it was submitted and was to keep Bristol informed as to the progress of the application.
v) By paragraph 2.6 it was provided that:
"[Sainsbury's] may at its own expense amend or procure the amendment of any Store Planning Application or withdraw a Store Planning Application and submit another Store Planning Application in each case where it is reasonable to do so in order to obtain an Acceptable Store Planning Permission as soon as reasonably possible or where to do so will enhance the prospects of obtaining an Acceptable Store Planning Permission provided that material amendments are approved in the same manner as provided for in paragraph 2.3."
vi) By paragraph 2.7 Sainsbury's was to forward to Bristol details of any conditions likely to be attached to any Store Planning Permission as soon they became available.
vii) Paragraph 2.8 required Sainsbury's to:
"use all reasonable endeavours to procure the grant of an Acceptable Store Planning Permission as soon reasonably possible…"
viii) Paragraph 2.9 required Sainsbury's to notify Bristol in writing within 20 working days of the date that they received a copy of a Store Planning Permission whether it considered it to be an Acceptable Store Planning Permission or not and (if not) to supply a written statement as to why it was not "Acceptable". Paragraph 2.10 then provided a mechanism by which a Planning Permission was deemed to be an Acceptable one if Sainsbury's did not explain why it was not.
ix) Paragraph 2.11 provided as follows:
"[Sainsbury's] may in its absolute discretion pursue an Appeal against a Planning Refusal but shall be obliged to do so if:
(a) Planning Counsel confirms that such an Appeal has a 60% chance or greater of achieving an Acceptable Store Planning...
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