Bristol Rovers Stadium Sale Not Rescued by Court of Appeal Bid
Bristol Rovers agreed to sell its memorial stadium to Sainsbury’s. The sale was conditional upon Sainsbury’s obtaining a satisfactory planning permission to build a new store which could accept deliveries around the clock. The contract also imposed an obligation upon Sainsbury’s to use reasonable endeavours to secure the consent and to perform the contract in good faith.
Sainsbury’s submitted a planning application but it was rejected. The contract obliged Sainsbury’s to issue an appeal and it complied with this obligation but the local authority’s refusal to grant planning permission could not be reversed. The contract did not require Sainsbury’s to file a further appeal.
Bristol Rovers wanted to sell the stadium to raise money to build a new stadium on a nearby university campus and it proposed issuing its own challenge to the refusal to grant planning permission. Sainsbury’s refused to allow Bristol Rovers to appeal, possibly because it was no longer interested in the site. Bristol Rovers alleged that Sainsbury’s refusal to allow it to appeal the decision breached its obligation to use all reasonable endeavours to procure a satisfactory planning permission and to perform the contract in good faith.
The Court of Appeal decided that Sainsbury’s obligations to use all reasonable endeavours and to perform the contract in good faith did not require it to assist Bristol Rovers to launch an appeal because the contract did not require Sainsbury’s to issue a further appeal. As the contracts set out clear requirements relating to appeals, Sainsbury’s would be under no obligation to assist Bristol Rovers even if the club could demonstrate that the appeal had good prospects of success.
Although the term ‘all reasonable endeavours’ normally requires a party to take all proportionate and cost-effective steps to achieve a particular outcome, such a term does not impose potentially onerous and unpredictable obligations where the contract limits what a party must do. This case helps to clarify the sometimes uncertain ambit of reasonable endeavours clauses by confirming that the obligations which they impose upon parties can be prescribed by contract.