The latest from day five in the High CourtThe High Court judge presiding over the club’s hearing to determine the future of the Memorial Stadium was forced to step in today when Sainsbury’s lawyer began questioning finance director Toni Watola on intricate legal aspects of the case.
During the morning session Mrs. Justice Proudman told Mark Wonnacott QC she didn’t think it was fair to expect Mr. Watola to be able to comment on legal clauses of the contract.
She initially said: "I don’t know where this cross examination is going but I don’t know that its really fair to ask Mr. Watola to clauses of the contract which is a matter for submission."
Later she again stepped in to tell him: "It does seem to me that you’re asking this witness to comment on legal matters and this isn’t really fair."
Eventually she was forced to tell Wannacott she would have to take Mr. Watola’s answers to questions involving legal matters with ‘a pinch of salt’ if he chose to continue that particular line of questioning.
Mr. Watola was also cross examined about losses on Rovers’s balance sheet and the club’s assets.
Wannacott QC said the group (the club) was reporting a loss of £566,000 for the year ended June 30, 2014 and added the group’s liabilities exceeded its assets by £5.4m.
Mr. Watola agreed. Wannacott then asked: "But if you look at "Current assets”, you can see of that £4 million, there's £5.6 million of current assets, and then if you go forward to note 12 in the accounts, which I think we find at page 109, you see of the £5.6, nearly £5.7 million-worth of current assets, £5.57 million is an amount due from a group company isn't it?
Mr. Watola answered: “It is”, to which Wannacott asked: “And is that the insolvent company that we've just looke at -- sorry, I won't call it the "insolvent company"; is that the company we've just looked at?
“No”, said Watola, “,That's the subsidiary, Bristol Rovers Football Club Limited.
Wannacott then asked:” Right. And does it have £5.57 million?”, to which Watola replied: “No. But if you're going to look at that balance sheet and talk about shareholders' funds, the one significant item that you've not addressed is the fact that it has one tangible asset which is the Memorial Stadium itself, the asset and the ground, which is still valued in the books at its -- pretty much its purchase price, £2.6 million.
He went on: “Clearly, from all of the valuations that have been done, the site is worth considerably more than £2.6 million, so in terms of those numbers, you can't use those to say that the Club doesn't have assets.”
Mrs. Justice Proudman then asked: “I'm sorry, where do you find the £2.6 million? Because under "Tangible assets" on page 100, it's 4.4 million.
Mr Watola answered: “It does, but attached to that figure, my Lady, is the £1.1 million that we've invested in the new project to move to a new stadium.
Mrs. Justice Proudman then said: “I see”. Wannacott said: ‘’That's a fair point, Mr. Watola, but the exercise we're doing is working out whether you have sufficient internal resource and third-party resource to build the new stadium, and part of the process of >> building a new stadium is selling the Club to us pursuant to the contract, isn't it? >>
Mr. Watola replied: “No, we don't intend to sell the Club, we only intend to sell the ground.“
When Mr. Wonnacott QC asked Mr. Watola what the club would do if the ground was sold and the club were able to play there, he replied that Rovers would look into ground sharing with a club like Cheltenham Town or would even considering returning to Bath City while the new stadium was built.”
Later on lawyers for Sainsbury's told the judge that withdrawing a planning application would have been an 'awful trap' for the club.
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.
As it was, he told Mrs Justice Proudman, 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 Rovers made another 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 in the day, Steve Gosling, of 24 Acoustics, a sound expert hired by Bristol Rovers, gave evidence.
The court heard he had prepared a report offering suggestions to reduce noise from the proposed store following the council's refusal to change delivery times.
Mr Gosling said his recommendations included noise-reducing material on the ramp into the closed service yard and special fences to protect neighbouring houses from the noise.
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 figleaf to give the council an excuse to allow an application it had previously refused."
Mr Gosling replied: "No, that is not what happened.
"Those barriers are essentially noise-control technology that are used widely.” Mr Wonnacott then asked: "When you saw the report prepared on Sainsbury's behalf, did you think it had been deliberately set up to fail?", to which Mr Gosling responded: "No."
The expert also said Sainsbury's report was 'not incompetent', adding: “The report lacked certain details which I would have expected to see, but that does not qualify it as an incompetent piece of work."
The High Court hearing continues.