WH Holding Ltd v E20 Stadium LLP
| Jurisdiction | England & Wales |
| Judge | Mr Justice Snowden |
| Judgment Date | 05 November 2018 |
| Neutral Citation | [2018] EWHC 2971 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC-2017-001445 |
| Date | 05 November 2018 |
[2018] EWHC 2971 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
BUSINESS LIST (CHD)
Royal Courts of Justice
Rolls Building, Fetter Lane
London EC4A 1NL
Mr Justice Snowden
Case No: HC-2017-001445
and
Paul Downes QC and Luka Krsljanin (instructed by Gateley PLC) for the Claimants
Thomas Crangle (instructed by Pinsent Masons LLP) for London Stadium 185 Limited
London Borough of Newham was not represented
Hearing dates: 1 and 2 November 2018
Introduction
This is an application for non-party disclosure made by the Claimant (“West Ham”) in the course of its action against the Defendant (“E20”) which is the owner of the stadium originally built for the London Olympics and Paralympics in 2012 (“the Stadium”). West Ham is entitled to use the Stadium on match days during the football season in accordance with the terms of a 99-year Concession Agreement entered into with E20 on 22 March 2013 (“the Concession Agreement”).
In the claim, West Ham and E20 disagree over the proper construction of the terms of the Concession Agreement which provide for the number of seats which West Ham has rights to use on match days in return for payment of a “Usage Fee” (“the Capacity Issue”). There is also a dispute as to whether E20 was obliged to apply for an amendment to the relevant licences and safety certificates (“Grantor Consents”) which would enable West Ham to use up to 60,000 seats at the Stadium on matchdays, rather than the current maximum capacity which West Ham is able to use, which is 57,000 (the “Consents Issue”).
The disclosure application relates to the Consents Issue. The application is made against London Stadium 185 Limited (“LS185”) which is the company which operates the Stadium on behalf of E20, and as such holds the relevant Grantor Consents and has responsibility for matters such as safety at the Stadium. The key individuals at LS185 to which the application relates are the ex-Chief Executive Officer, Ms. Linda Lennon; the Chief Operating Officer, Mr. Graham Gilmore; and the ex-head of Safety and Security, Mr. Steve Riley.
A second application for non-party disclosure has also been made by West Ham against the London Borough of Newham (“LBN”). Subject to some amendments to the draft order, LBN has not objected to giving the disclosure sought. An employee of LBN, Ms. Sheila Roberts, is and was at all relevant times the chair of the Stadium's Safety Advisory Group (“SAG”) and as such is responsible for the grant of the relevant General Safety Certificate (“GSC”) for the Stadium.
The Claim
In the claim in relation to the Consents Issue, West Ham alleges that from about February 2017, E20 by its agent LS185, has been obliged under the express and implied terms of the Concession Agreement to apply to the SAG for a GSC for an increased capacity of 60,000, but that it has wrongly refused to do so. West Ham contends that E20's refusal to apply for the increase is a breach of a contractual obligation to make such application in response to a reasonable request from West Ham. That obligation is said to include an obligation to act in good faith and in accordance with the Standards of a Reasonable and Prudent Operator of the Stadium, which is a defined term under the Concession Agreement. It is alleged that E20's decision not to apply for a GSC for an increased capacity was both objectively unreasonable and was also not taken in good faith but with the improper motive of extracting more money from West Ham than the Usage Fee under the Concession Agreement. West Ham contends that such an application ought to have been made, and if made, would have been granted.
In brief outline, and so far as relevant for this application, West Ham's factual case is that from 2015 it was seeking an increase in the permitted capacity of the Stadium to 60,000. However, due to safety concerns, in August 2016 the relevant parties informally agreed that until there had been a number of incident-free West Ham football matches at the Stadium, an increased GSC permitting a 60,000 capacity would not be sought.
By early January 2017, a number of West Ham matches at the Stadium had passed without incident, and on the 3 January 2017, Mr. Angus Kinnear of West Ham, emailed Ms. Lennon at LS185, requesting that an application for an increased GSC be made. This appears to have prompted a telephone meeting on 5 January 2017 which may have involved Ms. Lennon, Mr. Riley and representatives of E20 (in particular Mr. Martin Gaunt).
West Ham's case is that during the remainder of January 2017, there was a series of discussions and emails between the relevant personnel at E20, LS185 and West Ham. West Ham contends that the evidence indicates that all those involved believed that an application for an increased GSC should be made and would be likely to be granted.
These communications included an email exchange between Ms. Lennon of LS185 and Sheila Roberts of LBN on 23 January 2017 in which Ms. Lennon sent some documents to Ms. Roberts and asked for an indication of whether they would meet Ms. Roberts' requirements for an application for an increased GSC. Ms. Roberts replied on 26 January 2017 (“in response to your request for clarification on the documents that the certifying authority would like to see”) declining to give confirmation that the documents were adequate, raising a number of questions and setting out the consultation process that would be followed once an application had been formally submitted.
At about the same time, on 25 January 2017 Mr. Gaunt of E20 chased Mr. Riley of LS185 for details of the operational costs of a capacity increase so that advice could be given to E20's board at a meeting scheduled for 31 January 2017.
On 31 January 2017 a board meeting of E20 took place, the minutes of which have been disclosed by E20, but in heavily redacted form. What is clear is that Stadium capacity was discussed. Later the same day a meeting between key representatives of West Ham, LBN and E20 took place, in which, according to minutes taken by West Ham, a representative of E20 told West Ham that the E20 board had taken the decision not to apply for a licence for an increased capacity until a commercial agreement between the parties had been concluded and because E20 had deemed it to be unsafe. The reference to a commercial agreement being concluded reflected the difference of view which had surfaced between the parties by this time as to the maximum capacity to which West Ham was entitled under the Concession Agreement.
West Ham's case, in essence, is that the preparations being made between E20, LS185 and LBN up until 26 January 2017 showed that at least within E20 and LS185, an application for a GSC for a capacity of 60,000 was being viewed as justified and was likely to succeed, and that the subsequent decision of E20's board on 31 January 2017 was unjustified and taken unreasonably and in bad faith.
E20's case, in briefest outline, is that it was not and is not required by the Concession Agreement to seek an increase in capacity but is entitled to negotiate an increased usage fee in return for an increase in the capacity of the Stadium. It also contends that when E20's board made its decision not to apply for an increased GSC, it genuinely believed that there were safety issues and that the costs to E20 of an increase in capacity would be greater than the benefits. E20 pleads that on 31 January 2017 its board commissioned a specialist report on safety, and that this confirmed that testing of a new plan for spectator egress from the Stadium would be required.
The Application
The trial of this claim is due to commence in 14 days' time, on 19 November 2018.
In its application, which was issued as long ago as 7 September 2018, West Ham sought disclosure pursuant to CPR 31.17 of four categories of documents from LS185. Those categories were substantially revised on 14 September 2018 following communications between the parties, and although no formal application to amend has been made, the parties addressed argument on the revised categories.
I add that, as must be right, West Ham has offered from the outset to pay for the reasonable costs of LS185 in carrying out the disclosure exercise.
CPR 31.17
CPR 31.17 states, in material part,
“(1) This rule applies where an application is made to the court under any Act for disclosure by a person who is not a party to the proceedings.
(2) The application must be supported by evidence.
(3) The court may make an order under this rule only where—
(a) the documents of which disclosure is sought are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings; and
(b) disclosure is necessary in order to dispose fairly of the claim or to save costs.
(4) An order under this rule must —
(a) specify the documents or the classes of documents which the respondent must disclose; and
(b) require the respondent, when making disclosure, to specify any of those documents –
(i) which are no longer in his control; or
(ii) in respect of which he claims a right or duty to withhold inspection.
(5) Such an order may –
(a) require the respondent to indicate what has happened to any documents which are no longer in his control…”
Although not used in CPR 31.17, the test of whether documents are “likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings” is often referred to in the authorities as the test as to whether the document is “relevant”. I shall use it in the same way.
Category 1
In its draft...
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