Community Right to Bid: Internal Review of Listing Decision
(Section 92 Localism Act 2011)
Asset name:
The Sugar Loaf Public House
25 High Street
Meppershall SG17 5LX
Applicant for the Review:
Hawthorn Leisure Limited
Nominating Group:
Save the Sugar Loaf 2016
Review hearing date:
7th September 2016
Review Decision date:
22nd September 2016
Date Asset listed:
25th July 2016 - Decision by Marcel Coiffait, Director of
Community Services (in consultation with Cllr Tracey Stock –
Deputy Executive Member, Corporate Resources and Charles
Warboys, Chief Finance Officer)
Date review request received: 28th July 2016
Reviewing Officer:
Nick Murley – Assistant Director of Resources
(in consultation with Cllr Steven Dixon, Executive Member for
Education & Skills)
Background information:
At the review hearing the applicant for review was represented
by Zack Simons (of Counsel). The nominating group was not
present in line with the council’s current procedures.
Representations were made by Mr Simons that the test at s.88
(2)(b) of the Localism Act 2011 was not met as there was no
evidence of realistic future use of the premises and it was not
viable for it to continue to be run as a pub.
The Reviewing Officer considered this point and noted that the
Nominating Group had not been asked to supply evidence in
this respect. In order to properly inform his decision the
Nominating Group were therefore asked to supply the Council
with information about their future intentions for the Sugar Loaf
should it come up for sale.
The group’s response dated 15th September 2016 (attached to
this notice) clarified that the group intended to retain the building
as a pub run for the community by the community by setting up
a community benefit society.
Review Decision:
To uphold the listing of the Sugar Loaf pub as an Asset of
Community Value
REASONS FOR DECISION:
The Reviewing Officer considered the following questions:
 Is the nomination valid?
 Is the asset within the authority’s area?
 Does the asset meet the statutory definition of an Asset of Community Value?
1) Is the nomination valid? (i.e. was the nomination made by an eligible body?)
On 8th September 2015 Central Bedfordshire Council (the Council) listed the property as an Asset
of Community Value (ACV) following its nomination by Meppershall Parish Council. On 3rd
December 2015 the property was removed from the list following a Listing Review as it was
agreed that there was insufficient evidence contained in the nomination form to declare the
property as an ACV. On 18th February 2016 the property was nominated by Michael Ridley on
behalf of the Save the Sugar Loaf community group, an independent unincorporated body
consisting of 40 members formed with the sole aim of preserving The Sugar Loaf as a public
house within Meppershall. On 13th April 2016 the nomination was declared unsuccessful and not
listed as an ACV. The reasons given by the Council stated that the information provided did not
confirm the property met the definition of an ACV. On 2nd June 2016 the Council received a third
nomination for the property, which was submitted by Mr Ridley on behalf of the Save the Sugar
Loaf 2016 community group.
The Applicants for the Review contended that the nomination was invalid, with reasons set out in
their original representations against listing.
The Reviewing Officer agrees with the original decision taken that the Save the Sugar Loaf 2016
community group is a valid community nominating body under the rules. It met the definition of an
unincorporated body and is a group made up of 40 members, with at least 21 of these registered
to vote at local elections within Central Bedfordshire Council’s area. The Reviewing Officer
considered the decisions taken by the First Tier Tribunal on this issue, such as in the Hawthorn
Leisure case where a group of 25 local residents without a formal constitution was held to be a
voluntary unincorporated association. It was held that: "In the very different statutory context of the
Localism Act and the regulations, I agree with Northumberland’s reviewing officer that a local
action group, forming itself perhaps for the specific purpose of making a community nomination, is
not expected to turn its mind immediately to the drawing up of a formal constitution or set of rules
or even to give itself a name before making a nomination. The requirement for 21 local individuals
is sufficient to indicate strength of feeling". The judge also commented that Regulation 5(1)(c) was
“a provision which seems designed to empower looser community groups”. In the case of St
Gabriel Properties Ltd v London Borough of Lewisham CR/2014/0011 it was also noted that
“unincorporated body is a broad term which includes community groups of many descriptions”.
The recent First Tier Tribunal case of Mendoza Ltd v Camden LBC [27 April 2016] CR/2015/0015
has also confirmed this approach. In this case, the pub was nominated for ACV listing by
"Supporters" comprising 21 local people who appear on the electoral roll for the Council's area,
who were said to be an association representing the views of the pub's users. Mendoza Ltd, the
owner of the pub, appealed against the listing, arguing that the nomination was ineffective
because the Supporters did not comprise "a person that is a voluntary or community body" for the
purposes of s.89(2)(b)(iii) of the 2011 Act, read with reg.5 of the 2012 Regulations. The tribunal
held, dismissing the appeal, that the membership of the Supporters was sufficiently ascertainable
to meet the requirements of the legislation. The legislation did not require the group to be an
unincorporated association, involving contractual obligations as between its members, or to be an
unincorporated body whose membership had to be capable of being comprehensively identified.
The nomination had been made by 21 identified individuals, who had organised themselves into a
group with the common purpose of nominating the pub as an asset of community value and those
individuals met the legislative requirement to be "local" residents.
In the Hawthorn case the requirements as to the distribution of any surplus was treated as
satisfied because there was no surplus (as in this case) but the judge did indicate that in
appropriate cases the authority should seek a written assurance that no surplus would be
distributed to members. However in the St Gabriel case (where it was noted that the branch
constitution of the nominating party did not prohibit distribution of any surplus to members) the
Judge commented: “There is no requirement for an unincorporated body within Reg. 5(1) (c) to
even have a written constitution, let alone a further requirement that a particular clause be
included”. The Hawthorn case invited local authorities in these circumstances to seek assurances
from the group that any surplus it does make is not distributed to its members and this has been
satisfied. The Council has an assurance from the organiser of the Sugar Loaf group that any
surplus it makes is not distributed to members as there will be no money generated.
Therefore the Reviewing Officer was satisfied that the nomination was valid.
2)
Is the asset within the authority’s area?
Yes, the Sugar Loaf pub is in the village of Meppershall, within the area of Central Bedfordshire
Council.
3)
Does the asset meet the statutory definition of an Asset of Community Value?
The requirements of s.88(1) of the Localism Act 2011 Act are:
(i)
the land or building is currently being used to further the social wellbeing or social interest
of the local community (“community benefit”) and this use is not an ancillary use; and
(ii)
it is realistic to think that there can continue to be use of the land or building which is not
ancillary and which will further community benefit. (This future use for community benefit is
not limited to the current use and so an entirely different community use can be proposed)
The Reviewing Officer first considered whether the requirements of s88(1)(i) were met:
The Save the Sugar Loaf 2016 group submitted what it considered to be “new additional evidence”
along with its nomination. It states that the previous nomination was rejected on the basis that
“whilst the nominating group had provided a significant amount of supporting evidence to support
the nomination, there was insufficient recent evidence in the nomination to demonstrate that the
asset is of community value, and also that the community activities held therein were nonancillary”. This group have stated that their “second nomination addresses that concern and
provides substantial additional and recent evidence to demonstrate both that the asset is of
community value, and also that the community activities therein are non-ancillary.”
The evidence provided is the following:
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Evergreens Thursday Tea Club for over 60’s - Email from Karen Long – leader of
Evergreens dated 6th May 2016. The club is open to all Meppershall residents over the age
of 60 and is led by three volunteers. It meets every other Thursday afternoon from 2.15pm4.30pm. The Sugar Loaf offers its premises for free and also provides refreshments and the
group is said to act as a lifeline for many members – “without the use of the pub the group
would close.”
Meppershall Messenger - Letter from Mike McConnell – Editor of Meppershall Messenger
dated 29th April 2016. The monthly magazine is run by a committee of 7 residents and
circulated to all residents in the village. It is published ten times a year and is physically
collated by volunteers in the Sugar Loaf every month. The AGM of the magazine is also
held in the pub which the public attend. The publication is not-for-profit and could not
sustain the cost of hiring alternative premises. The magazine is a “key part of the
community and ensures that the entire village is aware of local events, matters of concern
and importantly promotes community cohesion and engagement”.
Meppershall Summer Fair - Letter from Allison Roberts – Secretary of Meppershall
Summer Fair Committee (dated 10th May, 2016) attaching minutes of three Fair Meetings
over several years and an Aerial Photo of the 2015 Fair. The fair committee is made up of
12 people and the not-for-profit fair benefits all village residents and over 2,000 people
attend. The committee meets at least monthly in the Sugar Loaf for the last seven years as
it is large enough to accommodate the group and is central to where they live. The group
says that “the committee is open to all and it is vital its meetings are held where anyone
within the village can join the group, contribute to the planning discussions or simply
express their opinion”.
Meppershall Fireworks - Letter from Steve Ansell – Chair of Meppershall Fireworks
Committee (dated 18th May 2016). The fireworks committee is made up of 10 people and
the not-for-profit fireworks benefit all village residents. The committee has several
committee meetings in the Sugar Loaf to plan the event as “Meppershall has very little
suitable and available meeting space” and it is an ideal space and central to the village.
Dominoes Team - Email from Steve Turner – Captain of Sugar Loaf Dominoes team
(dated 29th April 2016) attaching the 2015/16 Fixture List. The team comprises eight
players and is open to all village residents over 18. The team has been in the Shefford &
District Domino League for over 10 years and the team captain says that “without the Sugar
Loaf we would cease to exist”.
Darts Team - Copy of final league table for 2015/16 Shefford & District Ladies Darts. The
team comprises six players and is open to all village women over 18 and was runner-up in
the Shefford and District Ladies Darts League 2015/16.
Golf – the Sugar Loaf has an annual golfing competition with another pub.
St. Mary’s Santa Float & Christmas Carols - Email from James Read, lead organiser and
Santa (dated 15th May 2016). The float team is made up of six volunteers from the parish
church and the event, which includes a visit to and carol singing at the Sugar Loaf, benefits
the whole community, especially children.
Local Community Events - List of events including wakes, christenings and birthday
parties provided by Sugar Loaf staff on 13th May 2016 – benefits whole community as
gatherings were hosted in the pub without any additional charge by the Sugar Loaf.
Fundraising – the Sugar Loaf raises money for various charities – recent evidence was
provided.
The nominating group considers that the Sugar Loaf has been at the heart, both socially and
geographically, of Meppershall since 1870, providing an important social and community focus for
the village. Members of the community use it as their ‘local’; a use which encourages friendships,
conversation and the mixing of classes and generations.
The Applicants for Review stated that the nominating group had not provided sufficient evidence
under this ground and contended that the primary use of the premises was as a pub ( for the
selling of food and drink to the public) and not as a meeting space for local groups. These alleged
uses were either ancillary to the main pub use or so limited as to fall below the de minimis
threshold. Furthermore it was argued that the alleged uses were substantially the same as those
already considered and rejected by the council in April 2016 and either ancillary, de minimis or
irrelevant.
In considering whether the nominated asset furthers the local community’s well-being, the
Reviewing Officer considered the use of the asset and the role it plays within the local community.
He concluded that the principal use of the Sugar Loaf was as a public house and this was not an
ancillary use. He agreed with the original decision maker that the activities listed by the nominating
group could be considered to be part of the main use, rather than merely ancillary use, because a
pub by its nature is a community facility and taken together the activities are amongst the main
activities carried out at the premises.
In reaching this view he had regard to relevant decisions of the First Tier Tribunal. In Worthy
Developments Ltd v Forest of Dean (CR/2014/0005) the pub was used as a meeting place by the
Women’s Institute and the Parent Teachers Association. In Gibson v Babergh District Council
(CR/2014/0019) clubs and bodies used the pub to further social activities in the recent past. The
judge stated: “I find ample reliable evidence to show that the requirement of section 88(2) (a) is
met in the case of the Bull Inn. Until its last closure as a pub by Miss Gibson in 2013, the Bull Inn
plainly furthered the social well being or interests of the local community. Not only was the pub
used by locals for eating and/or drinking (albeit that their numbers were small); various clubs and
other bodies used it.”
In Hawthorne Leisure Ltd v Northumberland County Council (CR/2014/0012) the judge held that
the community benefit of the pub arose from activities such as pub quizzes, over 60s events and
fundraising for the local football club. The judge considered that the use of the premises by the
community as their “local” encouraged friendships, conversation and the mixing of classes and
generations. In the recent case of Hawthorn Leisure Limited v St. Edmondsbury (CR/2015/0018)
which involved a pub, Judge Lane held that the community benefit was satisfied because it “was a
social meeting place, as well as playing a part in village activities.” Evidence had been given that a
beer and food festival took place in the pub’s car park and as part of the Beehive reaching out into
the community the cooking from the pub was presented at local fetes.
The Reviewing Officer therefore decided that the information submitted with the nomination
provided sufficient evidence of the value of the pub as an asset to the local community and the
community use of the pub is not an ancillary use.
The Reviewing Officer then considered whether the requirements of s88(1)(ii) were met:
The Applicants for Review contended that the premises were no longer a viable business. They
submitted the last four years’ accounts for the property which shows a net loss at the property of
£16,018 in 2015. They also submitted a viability report on 22nd July 2016 which the Sugar Loaf
owners had commissioned from Savills based on accounts and barrelage figures of the pub
business. The report concluded that the public house was unviable in its current state without
substantial investment. The pub’s current tenant owed the owners £16,834 which was in excess of
the tenant’s annual rent. The report found that “It is likely that when the current tenant either
terminates his agreement or fails, the chances of it reopening and trading successfully are
negligible.”
At the review hearing it was stated that the pub had only made a loss or only a nominal profit since
2012 despite the owners investing significant amounts of time and effort to improve the offering.
No wages had been taken in 2012-13 and only nominal wages in 2014-15. The pub did not have a
commercial kitchen and barrelage has declined substantially. They stated that as a consequence
“the pub business will shortly cease and a planning application will be made to convert the
property from that of a public house to that of a more sustainable retail business, such as a
convenience store.” The Applicants for Review had submitted a planning application to the council
on 1st July 2016 for change of use of the premises to a Co-Op convenience store which is yet to
be determined.
The Applicants for Review informed the Council at the Review Hearing that they had entered into
heads of terms for a 15 year lease of the site to the Co-op group to operate the site as a
convenience store. Prior to that they had advertised the premises for sale via “findmypub.com”
and also offered it to prospective tenants with no interest after a year. No evidence was submitted
at the hearing on this point. They contended that it was wholly unrealistic that the site would be
used for non-ancillary community use within the following five years as the owner had decided to
no longer operate the site as a pub, the current pub was sustaining heavy losses and could not
profitably operate in the future and stressed that there was no evidence from the nominating group
of any plans or proposals to run the pub in the future. The Applicants for Review relied on the
judgment in STO Capital v London Borough of Haringey (CR/2015/0010) where Judge Lane had
commented: “I see no evidence of any attempt on the part of the nominator or anyone else to raise
funds ( or even begin to formulate proposals) in order to make an offer for the Alexandra.
Although, as the Tribunal has explained, there is no requirement for a fully-fledged business case
to be submitted by the nominator or anyone else, there is, in the present case, simply no evidence
to suggest that a community group might make a realistic bid for the Alexandra.” They also relied
on Judge Bird’s comments in Fernwick Limited v Mid Suffolk District Council (CR/2015/0024)
regarding the Cross Keys pub that “Whilst there is no requirement that there be business plans or
similar to support suggested uses which might be made of buildings, there must be more than
mere speculation to support a finding that it is realistic to think that they could materialise in the
next five years …..There is no such evidence in this case.”
After the review hearing the Reviewing Officer considered that the Nominating Group should be
asked to supply evidence of their future intentions regarding the premises, as this had not
previously been specifically requested, in order to make a properly informed decision. In their
nomination document the Nominating Group has stated the following in terms of future use:
“Meppershall is categorised as a Large Village and is accordingly expected to continue to grow. As
the Council is well aware from ongoing discussions with the developer Croudace Homes, there is
a current planning application in advanced stages4 to add a further 78 homes to the Village, and
additional planning applications5 for a further 52 dwellings in three separate developments are
currently in planning consultation. This together with the increasing popularity of activities and
organisations based around the Sugar Loaf, show that it is realistic to think that there will be
further social, cultural, recreational and sporting interests uses of the Sugar Loaf in the next five
years, thus satisfying the requirements of s.88(2) of the Act.”
Additional evidence was submitted by the nominating group by letter on 15th September. Mr Ridley
set out the group’s intention to set up a community benefit society to purchase the pub with
funding raised through the selling of shares and if necessary a mortgage. He said the number of
objections to the planning application to redevelop the pub was an indication of the level of support
for retaining the Sugar Loaf within the community and evidence that it was “realistic to think here
could be non-ancillary use of the building which would further the social well-being or social
interest of the community.”
Mr Ridley also contended that there was no evidence of any capital expenditure by the pub’s
owners over the last two years and that the business model used appeared to tie the current
tenant into a commercially unviable supply agreement with artificially depressed profits. He also
stated that the current tenant along with local businesses and residents had been unaware that
the pub had been offered for sale over a 12 month period and that this had certainly not been
advertised locally. He said informal approaches to the owner in this period regarding the potential
for purchase had been rebuffed.
The Reviewing Officer considered these further representations from the Nominating Group. He
also gave due regard to the First Tier Tribunal decisions on the issue of realistic future use. The
Tribunal had held that the question is not whether such a use is more likely than not to occur but
whether such a use is realistic, in the sense of not being “fanciful”, even though that use might not
be the most likely scenario. It has also to be realistic to think that there can continue to be a nonancillary use of the asset for the community benefit but it need not be the same as the current
community use. In the Gullivers Bowls Club v Rother (CR/2013/0009) Judge Warren rejected the
argument that this required the anticipated community activity to be commercially viable or even to
have a foreseeable long-term viability. The test of whether there is a realistic prospect that there
could be a future community use of the nominated property does not require the likely future use
of the relevant building to be determined - but rather to determine whether future community use is
one of a number of realistic options for the building. In Evenden Estates v Brighton and Hove City
Council (CR/2014/0015 ) Judge Lane stated “that what is “realistic” may admit a number of
possibilities, none of which needs to be the most likely outcome”. This approach was repeated by
Judge Lane in Gibson v Babergh DC CR/2014/0019 who added that the possibility must not be
“fanciful”. In Crostone v Amber Valley BC (CR/2014/0010) Judge Lane referred to the 2011 Act
allowing an asset to qualify as an ACV when there are a “number of realistic outcomes coexisting”. The owner’s stated intentions should be taken into account “as part of the whole set of
circumstances” (Judge Warren in Patel v Hackney CR/2013/005) but those intentions will not be
decisive alone. This is shown by the actual decision in Patel v Hackney. It concerned the
Chesham Arms pub which had been purchased by Mr. Patel who then closed it with a view to
converting it into flats. There was evidence that there was interest in running it as a pub and that it
had been run profitably. Mr Patel’s evidence was that the residential development was going to
proceed. The judge considered that there were three planning possibilities (remain as it is, be sold
for some other use or be sold and be revived as a pub) and each was realistic. One option was
that a planning application would be refused and the pub reopened. This shows that it is enough
that there are a number of realistic possibilities and one of them is a community use.
In Reed v Shropshire CC (CR/2013/007) the judge accepted the evidence of a pub owner that the
business had dwindled and no-one wanted to buy it but the argument on behalf of the Council was
that there was more than one possible realistic outcome and one of these possibilities was that in
the next five years its use as a pub might resume. In consequence the appeal failed and the pub
remained on the list of ACVs.
In the recent case of Hawthorn Leisure Limited v St. Edmondsbury (CR/2015/0018) Hawthorn
Leisure appealed against the ACV listing of a pub that had ceased business in 2014. The Council
had refused an application for permission for change of use to a dwelling house. A "Friends"
community group wished to buy the pub from Hawthorne Leisure and produced a business plan to
support its proposal to raise funds to make an offer to purchase the pub. It was argued that the
Friends had not produced evidence that the pub had served the wellbeing of the local community
since 2009 and so the "recent past" test in s.88 of the Localism Act 2011 was not met; also that
their business plan was fanciful and their scheme was not "realistic," as required by s.88. The
tribunal held, dismissing the appeal, that the requirements of s.88(2) were satisfied. The business
plan was a dynamic document and it was entirely credible. It was realistic to think that, in the next
five years, the pub could return to furthering a relevant social interest. The Friends had
demonstrated that there was a realistic future for the building as a pub. In view of this, it was
realistic to think that HL would either begin to run it as such, or else sell it to someone who will.
The Reviewing Officer noted the owner’s intentions and the contents of the viability report but
considered that the Nominating Group had supplied sufficient evidence of its intentions regarding
the Sugar Loaf over the next five years to satisfy the requirements of the legislation, as one of a
number of realistic outcomes for the property. He therefore agreed with the original decision
maker that it was realistic to think that pub use of the property could continue to further the social
wellbeing and social interests of the local community.