WH Holding Ltd & Ors v E20 Stadium LLP, Court of Appeal - Chancery Division, November 05, 2018, [2018] EWHC 2971 (Ch)

Resolution Date:November 05, 2018
Issuing Organization:Chancery Division
Actores:WH Holding Ltd & Ors v E20 Stadium LLP
 
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Case No: HC-2017-001445

Neutral Citation Number: [2018] EWHC 2971 (Ch)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES

BUSINESS LIST (CHD)

Royal Courts of Justice

Rolls Building, Fetter Lane

London EC4A 1NL

Date: 5 November 2018

Before:

MR JUSTICE SNOWDEN

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Between :

(1) WH HOLDING LIMITED

(2) WEST HAM UNITED FOOTBALL CLUB LIMITED

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(1) LONDON STADIUM 185 LIMITED

(2) LONDON BOROUGH OF NEWHAM

Respondents

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Paul Downes QC and Luka Krsljanin (instructed by Gateley PLC) for the Claimants

Thomas Crangle (instructed by Pinsent Masons LLP) for London Stadium 185 Limited

London Borough of Newham was not represented

Hearing dates: 1 and 2 November 2018

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JudgmentMR JUSTICE SNOWDEN :

Introduction

  1. This is an application for non-party disclosure made by the Claimant (``West Ham'') in the course of its action against the Defendant (``E20'') which is the owner of the stadium originally built for the London Olympics and Paralympics in 2012 (``the Stadium''). West Ham is entitled to use the Stadium on match days during the football season in accordance with the terms of a 99-year Concession Agreement entered into with E20 on 22 March 2013 (``the Concession Agreement'').

  2. In the claim, West Ham and E20 disagree over the proper construction of the terms of the Concession Agreement which provide for the number of seats which West Ham has rights to use on match days in return for payment of a ``Usage Fee'' (``the Capacity Issue''). There is also a dispute as to whether E20 was obliged to apply for an amendment to the relevant licences and safety certificates (``Grantor Consents'') which would enable West Ham to use up to 60,000 seats at the Stadium on matchdays, rather than the current maximum capacity which West Ham is able to use, which is 57,000 (the ``Consents Issue'').

  3. The disclosure application relates to the Consents Issue. The application is made against London Stadium 185 Limited ("LS185") which is the company which operates the Stadium on behalf of E20, and as such holds the relevant Grantor Consents and has responsibility for matters such as safety at the Stadium. The key individuals at LS185 to which the application relates are the ex-Chief Executive Officer, Ms. Linda Lennon; the Chief Operating Officer, Mr. Graham Gilmore; and the ex-head of Safety and Security, Mr. Steve Riley.

  4. A second application for non-party disclosure has also been made by West Ham against the London Borough of Newham (``LBN''). Subject to some amendments to the draft order, LBN has not objected to giving the disclosure sought. An employee of LBN, Ms. Sheila Roberts, is and was at all relevant times the chair of the Stadium's Safety Advisory Group (``SAG'') and as such is responsible for the grant of the relevant General Safety Certificate (``GSC'') for the Stadium.

    The Claim

  5. In the claim in relation to the Consents Issue, West Ham alleges that from about February 2017, E20 by its agent LS185, has been obliged under the express and implied terms of the Concession Agreement to apply to the SAG for a GSC for an increased capacity of 60,000, but that it has wrongly refused to do so. West Ham contends that E20's refusal to apply for the increase is a breach of a contractual obligation to make such application in response to a reasonable request from West Ham. That obligation is said to include an obligation to act in good faith and in accordance with the Standards of a Reasonable and Prudent Operator of the Stadium, which is a defined term under the Concession Agreement. It is alleged that E20's decision not to apply for a GSC for an increased capacity was both objectively unreasonable and was also not taken in good faith but with the improper motive of extracting more money from West Ham than the Usage Fee under the Concession Agreement. West Ham contends that such an application ought to have been made, and if made, would have been granted.

  6. In brief outline, and so far as relevant for this application, West Ham's factual case is that from 2015 it was seeking an increase in the permitted capacity of the Stadium to 60,000. However, due to safety concerns, in August 2016 the relevant parties informally agreed that until there had been a number of incident-free West Ham football matches at the Stadium, an increased GSC permitting a 60,000 capacity would not be sought.

  7. By early January 2017, a number of West Ham matches at the Stadium had passed without incident, and on the 3 January 2017, Mr. Angus Kinnear of West Ham, emailed Ms. Lennon at LS185, requesting that an application for an increased GSC be made. This appears to have prompted a telephone meeting on 5 January 2017 which may have involved Ms. Lennon, Mr. Riley and representatives of E20 (in particular Mr. Martin Gaunt).

  8. West Ham's case is that during the remainder of January 2017, there was a series of discussions and emails between the relevant personnel at E20, LS185 and West Ham. West Ham contends that the evidence indicates that all those involved believed that an application for an increased GSC should be made and would be likely to be granted.

  9. These communications included an email exchange between Ms. Lennon of LS185 and Sheila Roberts of LBN on 23 January 2017 in which Ms. Lennon sent some documents to Ms. Roberts and asked for an indication of whether they would meet Ms. Roberts' requirements for an application for an increased GSC. Ms. Roberts replied on 26 January 2017 (``in response to your request for clarification on the documents that the certifying authority would like to see'') declining to give confirmation that the documents were adequate, raising a number of questions and setting out the consultation process that would be followed once an application had been formally submitted.

  10. At about the same time, on 25 January 2017 Mr. Gaunt of E20 chased Mr. Riley of LS185 for details of the operational costs of a capacity increase so that advice could be given to E20's board at a meeting scheduled for 31 January 2017.

  11. On 31 January 2017 a board meeting of E20 took place, the minutes of which have been disclosed by E20, but in heavily redacted form. What is clear is that Stadium capacity was discussed. Later the same day a meeting between key representatives of West Ham, LBN and E20 took place, in which, according to minutes taken by West Ham, a representative of E20 told West Ham that the E20 board had taken the decision not to apply for a licence for an increased capacity until a commercial agreement between the parties had been concluded and because E20 had deemed it to be unsafe. The reference to a commercial agreement being concluded reflected the difference of view which had surfaced between the parties by...

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