Tribunal Upholds Montreal Arms Pub Listing as Asset of Community Value Despite Commercial Viability Concerns

Citation: [2023] UKFTT 946 (GRC)
Judgment on

Introduction

In the case of Dragonfly Architectural Services Limited v Brighton & Hove City Council [2023] UKFTT 946 (GRC), the First-tier Tribunal (General Regulatory Chamber) on Community Right to Bid addressed an appeal by Dragonfly Architectural Services Limited (“Dragonfly”) against the Council’s decision to list the Montreal Arms pub as an Asset of Community Value (ACV). This case explores intricate details of the Localism Act 2011 and the corresponding Assets of Community Value (England) Regulations 2012, particularly focusing on what constitutes an asset of community value and the realistic prospects of a community-oriented future use of the property in question.

Key Facts

Dragonfly contested the listing of the Montreal Arms on the grounds that the Friends of the Montreal Arms (“FMA”) nomination was invalid, the pub hadn’t recently furthered the social wellbeing or interests of the local community, and it was unrealistic to think that the property could do so in the next five years. The tribunal examined both the historical significance of the public house and its theoretical potential to further community interests within the upcoming years. Testimonies, including evidence from a specialist valuer, were also considered in determining the viability of the Montreal Arms as a commercially successful endeavor.

The key legal principles applied in this case include:

  • Validity of the Nomination: The tribunal found the nomination by FMA to be valid under regulation 6 of the Assets of Community Value (England) Regulations 2012, rejecting the appeal on this point. It highlighted that the nomination need only contain the nominator’s reasons for believing the land is of community value, regardless of whether those reasons align perfectly with the statutory test.
  • Community Value in the Recent Past: Defined broadly, “recent past” is decided on a contextual basis. Despite the Montreal Arms being closed since early 2020, the tribunal considered its operation prior to the closure as the ‘recent past’. The tribunal determined that the pub had provided community value as an ‘oasis of calm’ rather than hosting significant community events as FMA suggested.
  • Future Community Use: According to section 88(1)(b) of the Localism Act 2011, the focus is on whether it is realistic to think a non-ancillary use could further the community’s social wellbeing or interests within the next five years. Commercial viability is not the test; instead, the Tribunal considered whether there is a realistic possibility of the property contributing to community well-being. Notably, the case law of R. (TV Harrison CIC) v Leeds School Sports Association [2022] was referenced to assert that the future use need not be “more likely than not” to happen but must be a realistic possibility.

Outcomes

The Tribunal, presided by Judge Neville, dismissed Dragonfly’s appeal, concluding that:

  1. The nomination by FMA was valid despite the questionable motivations behind it.
  2. The Montreal Arms did contribute to the social well-being of the community in the recent past by providing a quiet place for social interaction.
  3. While the prospects for future use contributing to the community’s social wellbeing or interests are slim, it was still realistic to think such use could occur within the next five years. This implies scope for the property to further community interests without necessarily being commercially viable.

Conclusion

The case underlines that the application of ACV status is not strictly contingent on the commercial success of an enterprise but on its potential to enhance the social wellbeing and interests of the local community. The decision emphasizes a liberal interpretation of the Localism Act 2011, particularly the provisions surrounding community value, both retrospective and prospective. For legal practitioners, this case reaffirms the role of intention and community engagement in ACV nominations and highlights the significance the Tribunal places on the broader social utility of properties over purely economic considerations. The ruling also suggests an adaptability in legal interpretation concerning what constitutes ‘recent past’ and ‘realistic’ use, underscoring a pragmatic and often contextual approach to these terms.