Fenland businessman to appeal after losing £7m 'David v Goliath' High Court hearing in battle with Sainsbury's over out of town store at Whittlesey
PUBLISHED: 18:11 03 February 2020
A High Court judge today rejected a £7m breach of contract dispute brought by March businessman Bruce Smith against Sainsbury's in what became known as a 'supermarketgate'.
Judge Simon Monty delivered his verdict following a two- week hearing in the High Court in October and November.
Mr Smith immediately announced he would be appealing the decision, describing the verdict as "astonishing".
He said: "It is a great pity justice is not reflected by the truth."
Mr Smith, who sued Sainsbury's through his Whitacre Management Ltd company, will meet with his legal team to prepare grounds for an appeal.
The dispute centred over the granting of planning permission by Fenland District Council to allow Sainsbury's to build an out of town store at Whittlesey and a country park.
The court had been told that Whitacre first entered into an option to buy land outside of Whittlesey in 2011 for £2m and entered into a contract with Sainsbury's to acquire part of the land for £7m provided that planning permission was obtained by a certain date. Mr Smith's company proposed utilising the rest of the land for a business park, a country park, and providing facilities for the town.
The hearing had heard that the first contract gave way to a second contract - and a lengthy battle with rival developers who wanted to secure a Tesco supermarket in the town - following the failure to agree including some land owned by Gildenburgh Water.
The hearing heard details of the ongoing battle between Whitacre and rival developer Richard Sears who had wanted to bring Tesco to Whittlesey.
At one stage, said Judge Monty, Fenland Council had given permission for both applicants. He took evidence from former council leader Alan Melton who told the court how he had sacked 14 members of the planning committee following the granting of both applications.
"Mr Melton described these as 'a very controversial set of planning applications; emotions were running very, very high'" said Judge Monty. However, when the issue again went back to committee the recommendation to approve the Tesco application was rejected by councillors in favour of the Sainsbury's application.
The judge said of Mr Melton that "a fair amount of his evidence was speculation and retrospective observation and comment."
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Judicial reviews followed but by July 2014 and rejection of the claims by Sears, the field was clear for Mr Smith to proceed.
The judge then detailed the various actions by Sainsbury's in the wake of the approval and pointed out that by January 2015 Sainsbury's had "publicly announced that it had abandoned any intention to develop a supermarket in Whittlesey". In June of that year their second planning application was approved.
The case against them rested on whether they had the right to terminate the contract and whether they had frustrated the planning process to deliberately put themselves out of time for the contract to remain valid.
The judge concluded that Sainsbury's were not in breach of the contract and entitled to relieve themselves off an obligation to buy a site they no longer had an intention to build on.
Judge Monty was fulsome in his support of Mr Smith and his intentions, describing him as a "no-nonsense, straight-talking businessman with a long and deep connection to Whittlesey, his home-town".
The judge said that Mr Smith planned to invest in a health centre, support the town's football club and deliver a country park and business units.
"He was prepared to pull out all the stops to make that happen," said the judge. He accepted that Mr Smith wanted to "honour what he saw as his obligations to the people of Whittlesey".
In a lengthy analysis of timings, examination of email exchanges between both parties, and crucially, whether Sainsbury's had used "all reasonable endeavours to obtain a satisfactory planning permission as soon as reasonably possible".
One set of emails examined in the hearing related to what were termed 'onerous conditions' that may have prevented Sainsbury's winning full consent.
They also dealt with exchanges within Sainsbury's that referred to one senior company official inquiring of others "if you have any other ideas that we might be able to use to slow down the application or get it refused then please let me know. Running out of ideas fast!".
But the judge felt Sainsbury's did act reasonably and he pointed a finger at Fenland Council for not approving the second application within their target date. Judge Monty said Fenland Council offered a target date of March 11, 2015 but did not consider the application until June.
He ruled that Whitacre had not established a breach of "reasonable endeavours" or "co-operation" provisions.
"In my judgement, Whitacre Management Ltd has not established the alleged breaches of contract and this claim is dismissed," Judge Monty concluded.