The legal clash between Bristol Rovers and Sainsbury’s over a stadium sale agreement reaches the Court of Appeal today.
The League Two side hopes to revive plans to move to a much bigger new ground, by overturning a ruling that Sainsbury’s was entitled to pull out of a deal to buy the club’s current Memorial Stadium home for £30m.
The club is appealing against Mrs Justice Proudman’s judgment last year, in which she found that the supermarket chain had lawfully terminated the agreement.
The team, which in May won the Conference play-off final and is now riding high in League Two, hopes to win a ruling from the Court of Appeal that the agreement is still on foot, or was terminated by Sainsbury’s in breach of contract, entitling it to damages.
Property law consultant Allyson Colby said the case raises important issues about the relationship between duties of good faith and other contractual provisions.
She said: “Legal textbooks are full of examples of litigants who have found, and exploited, a loophole in their contracts. Ironically, in this case, the club complained that Sainsbury’s was trying to wriggle out of its commitment by sticking to the letter of the parties’ agreement.
“Was the retailer within its rights to pull out of the scheme, or was it ‘offside’ when it did so? The High Court ruled that the retailer’s duty of good faith did not oblige it to embark on a course of action that ran counter to other contractual provisions.
“So, although its duty to act in good faith required it to be faithful to the agreed common purpose, and to act consistently with the justified expectations of both parties to the contract, Sainsbury’s had been entitled to terminate its agreement with the football club, no matter how reasonable it may have been not to do so.
“Will the Court of Appeal agree? Practitioners will be keen to follow the progress of this case all the way to the final whistle.”
The club had hoped to sell the dilapidated ground in the north of Bristol to fund a new, modern stadium on the Frenchay Campus of the University of the West of England. In 2011, it agreed a deal under which Sainsbury’s would buy the Memorial Stadium site for £30m, lease it back to Bristol Rovers at a peppercorn rent while the construction of the new ground was underway, and then redevelop as a supermarket once the move took place.
However, Proudman J found that a store planning condition in the agreement – under which Sainsbury’s had to obtain an acceptable store planning permission – was “not satisfied” in time and so Sainsbury’s was entitled to terminate the agreement.
Bristol city council did grant planning permission for the supermarket redevelopment in 2013, but it was subject to a restriction on delivery times which the club ultimately agreed was an onerous condition that effectively deemed the decision a planning refusal for the purposes of the agreement.
If built, Rovers’ planned new stadium would see the club go from a capacity of just under 12,000, only 3,000 of which is seated, to a 21,700 all-seater ground.
