Bristol Rovers (1883) Ltd v Sainsbury's Supermarkets Ltd

A conditional sale agreement may require a party to use all reasonable endeavours to secure planning permission as soon as reasonably possible. That obligation does not automatically end when a contractual cut-off date passes or an application or appeal fails; it continues until a valid termination notice ends the agreement, subject to the contract’s specific limits. Where parties compromise a dispute on a shared assumption about the contractual meaning of “Appeal” and act on it, estoppel by convention may prevent resiling if that would be unjust. General good-faith and assistance clauses must be read consistently with the detailed bargain and do not enlarge obligations withheld by specific provisions.

Bristol Rovers and Sainsbury’s entered into a conditional agreement for the sale and redevelopment of a football stadium site. The Store Planning Condition required an acceptable planning permission, including permission for deliveries without the disputed restrictions. After the local planning authority refused a section 73 application seeking removal of those restrictions, Sainsbury’s sought to terminate. Proudman J held that the termination was valid in [2015] EWHC 2002 (Ch). Bristol Rovers appealed, arguing that Sainsbury’s remained obliged to pursue further planning steps or assist Bristol Rovers with its own application. The central issues concerned the survival of the reasonable-endeavours obligation, the contractual treatment of a section 73 application as an “Appeal”, and the effect of the 60% contractual threshold.

Appeal dismissed. Floyd LJ gave the judgment, with McCombe and Laws LJJ agreeing.

1. Clause 2.2 and Schedule 1, paragraphs 2.6 and 2.8, imposed an overall obligation to use all reasonable endeavours to obtain an acceptable store planning permission as soon as reasonably possible. The process was not linear. It did not end merely because an initial application or appeal failed. The obligation continued while reasonable steps remained available.
2. The Cut Off Date did not automatically end the parties’ obligations. It gave a party the right to serve a Termination Notice. If no valid notice was served, the obligations continued. The planning obligation therefore survived until brought to an end by a valid termination.
3. Under the Town and Country Planning Act 1990, a section 73 application was legally a new planning application, not an appeal in the strict sense. A successful application produced a fresh permission concurrent with the original: Pye v Secretary of State for the Environment [1998] 3 PLR 72, approved in Powergen v Leicester CC [2000] EWCA Civ 165.
4. The September/October 2013 compromise was made on the shared assumption that a section 73 application was an “Appeal” for the purposes of the Agreement. Applying the principles of estoppel by convention stated in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, it would be unjust and unconscionable to allow Bristol to resile. The estoppel continued after refusal of the application because the assumption concerned the operation of the main Agreement and Bristol continued to rely on it.
5. Because the section 73 application was treated as an Appeal, a further application was required only if the 60% test was satisfied. The later determination assessed the prospects of the section 78 appeal at 55%. Sainsbury’s was therefore not in breach by declining to pursue another application.
6. The general good-faith and assistance provisions did not require Sainsbury’s to consent to a planning application by Bristol where the detailed contractual provisions did not require Sainsbury’s itself to make that application. Those general clauses had to be read consistently with the specific planning scheme.
7. The Store Planning Condition was never satisfied before the Long Stop Date. Sainsbury’s was entitled to serve the Termination Notice, and the appeal was dismissed.

• Court of Appeal (Civil Division): Appeal dismissed. The court upheld Sainsbury’s entitlement to terminate the Agreement.
• High Court of Justice, Chancery Division: Proudman J held that Sainsbury’s had validly terminated the Agreement: [2015] EWHC 2002 (Ch).