How Sainsbury’s tried to back pedal on Whittlesey store – and the ‘risible’ offer to scupper the deal
- Credit: Archant
Evidence emerged in the Sainsbury’s ‘supermarketgate’ hearing at the High Court that the company offered March businessman Bruce Smith £125,000 to walk away from the deal even before their second planning application was approved.
It was a sum that, when queried under cross examination, Chris Templeman, the Sainsbury's project director, admitted was "not something that would be necessarily attractive".
He agreed it was a low figure against the £7million the supermarket chain would have to pay if they completed the deal for the land "but it was a way of buying our way out of the obligation" to submit the second application.
Accepting Sainsbury's were contractually obliged to use all "reasonable endeavours" to secure planning consent, he said the £125,000 felt, from a commercial perspective, "a deal to offer Mr Smith. Maybe it is a low offer against the £7million purchase price but was an offer nonetheless".
Revelation in court of the buy-off proposal provoked an intervention from the judge who suggested to Mr Templeman that it was not just the risk of getting satisfactory permission he was buying off potentially but because Sainsbury's no longer wished to build the Whittlesey.
"Correct," replied Mr Templeman.
Mr Smith's counsel Stephen Brown suggested it was a "risible" amount of money compared to the cost to Sainsbury's if the permission was granted and they were obliged to complete the deal.
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And the judge intervened again to suggest the amount "doesn't really seem to have scratched the surface of what you would be in for and what you would be buying off?"
During further exchanges Mr Templeman agreed that if you go "£125,000 versus £7 million that's probably not something that would necessarily be attractive, but that wasn't necessarily the thought processes at the time".
In further extraordinary exchanges Mr Templeman said that if "I have been taught one thing in my career in the world of negotiation and that is if you have to go first, go low."
On reflection he agreed it was "too low".
The public face of Sainsbury's - committed to the deal and to bringing a supermarket to Whittlesey - contrasted sharply with what was happening behind the scenes, the court was told.
Sometime between their first and second application for a supermarket at Whittlesey the world changed and Sainsbury's decided they no longer wanted to build it.
Publicly they still urged support for it from the community and from planners (because of their contractual arrangements) but behind the scenes a plot was being hatched to frustrate it, the hearing at the High Court in London was told.
"Finally if you have any other ideas that we might be able to use to slow down the application or get refused then please let me know," was how one executive summed it up in an internal email. "Running out of ideas fast!"
Mr Templeman denied having seen that particular email but agreed the company was looking at "the lawful options to exit".
He also was put on the spot over press statements in September 2014 promising the town would still get its supermarket. By this stage Sainsbury's were treading delicately as they still had a contract with Mr Smith and did not wish to jeopardise the need to use their "best endeavours" to deliver it.
Mr Templeman explained the difficulties his company were experiencing with on the one hand not wishing to undermine the planning application but admitted it was like saying 'do what you want to, Fenland district, we are not building there'"
The reality was, said Mr Templeman, that by September 2014 there was little prospect of it ever being built as Whittlesey like other proposed stores across the country were pulled.
Further evidence of attempts within Sainsbury's to frustrate the planning process came through cross examination of another executive David Lazenby.
"Come on Dave, put me out of my misery and find something that will stick" was an internal email that Mr Lazenby agreed he had received.
Throughout the week evidence was given by former Fenland Council leader Alan Melton of the planning processes and the quandary the authority found itself in with a competing rival bid from Tesco.
The heart of the Sainsbury's claim in this £7m breach of contract dispute is that the planning consents - with conditions - failed to be achieved within the contractual period.
However much will rest on what that date actually was and whether Sainsbury's themselves, by insisting 'onerous' conditions applied to the permission were lifted, did not happen within the specified time frame.
Today (Monday) both parties will be summing up and the hearing is expected to end by 4.30pm.
Judge Monty is expected to deliver a verdict within four to six weeks.