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HIGH COURT TOLD - SAINSBURY’S WERE LOOKING FOR A 'SILVER BULLET’

15 May 2015

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.

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