Supermarket giant Sainsbury’s reneged on a deal to build a new store in the East Midlands in a “deliberate and unlawful” attempt to escape the contract, a court heard. National law firm Clarke Willmott, acting for Whitacre Management Ltd, said Sainsbury’s Supermarkets Ltd breached a contract to buy a development site in Whittlesey near Peterborough in 2015.
The case, which was heard in the Chancery Division of the High Court in London over five days at the start of November 2019, revolves around Whitacre’s legal team’s claim that Sainsbury’s “failed to use all reasonable endeavours” to deliver the promised store despite securing planning consent from Fenland District Council within the stipulated time frame.
Paul Griffiths, partner at Clarke Willmott and a member of Whitacre’s legal team, said: “Our argument was that Sainsbury’s agreed to pay £7m for the site conditional upon obtaining a satisfactory planning permission by a long stop date. However, it failed to use all reasonable endeavours in what we say was a deliberate and unlawful attempt to run the clock down and escape from the contract.”
For its part Sainsbury’s contended it acted reasonably in progressing the planning application even though it admitted it had changed its mind about the project some 18 months previously. The final decision to abandon the project was taken, it said, due to changes in shopping habits, describing the site as “no longer viable”.
The court also heard evidence from local councillors that the planned project included the construction of a country park and a business park adjacent to the proposed store and that the Council and the local population overwhelmingly supported the venture.
Paul Griffiths continued: “During the case we demonstrated that Whitacre Management carried out all its contractual obligations to the letter and that Sainsbury’s must now fulfil its part of that contract and pay our client in full.”
Whittlesey does not have any major supermarket and although Tesco had also shown interest in developing another nearby site, it had pulled out in 2014. The case was tried before his Honour Judge Simon Monty QC sitting as a Judge of the High Court.
Judgment has been reserved.
Whitacre was represented by Stephen Brown of Hardwicke Chambers, instructed by Paul Griffiths of Clarke Willmott. Sainsburys was represented by Mark Wonnacott QC and Harriet Holmes of Wilberforce Chambers instructed by Dentons.
