The High Court has restrained Warrnambool and the other defendants from procuring the company to lease a property at Unit 5A, Distribution Centre, Co. Antrim, or acquire any freehold or leasehold property, without Sports Direct International plc’s prior written consent. The order applies pending trial of the action.
The dispute concerns clause 9 of a 2002 agreement, reaffirmed in 2007. Sports Direct, which the judgment says owns 50% of Warrnambool, argued that the agreement required written consent from shareholders holding 60% before the company could acquire property. It sought an interlocutory injunction after the company proposed leasing Unit 5A at an annual rent of £40,292 sterling.
The defendants disputed that Sports Direct had an effective veto. They relied on a 2002 voting pact and argued that, when shares subject to that pact were counted, more than 60% of shareholders supported the lease. The judge said the pact’s effect was a factual question for trial and did not decide it at this interlocutory stage. The defendants accepted that there was a serious issue to be tried about whether clause 9 applied to the proposed lease.
Justice Costello found damages would not adequately remedy Sports Direct if it ultimately succeeded at trial. She considered the claimed right under the shareholders’ agreement and the negative covenant it contained, as well as the effect of a breach on the parties’ shareholder relationship. She also took account of inconsistent positions taken by the defendants, including John O’Neill, about the agreement in earlier proceedings and in the current case.
The court refused the broader injunction sought to restrain any breach of clause 9, finding it too wide because it covered matters not in dispute. Instead, it granted a narrower order restraining property acquisitions without Sports Direct’s written consent pending trial. The order preserves the position while the underlying dispute is determined; it is not a final ruling on the agreement’s application or the voting pact.