FT/CR/2024/0003 - [2025] UKFTT 01306 (GRC)

Consideration turns to section 88(2)(b) and whether it is “realistic to think” that over the next 5 years there could be a primary (non-ancillary) use of the premises that would further the social wellbeing or social interests of the local community. That use would not need to be the same as before.

Recently in Dragonfly Architectural Services Limited v Brighton & Hove City Council [2025] UKUT 051 (AA) (“Dragonfly”), the Upper Tribunal considered what was intended by the words “realistic to think” in section 88(2)(b). Having reviewed the authorities concerning ACVs at some length, the Upper Tribunal set out a number of principles to be derived from them (at paragraph [19]). They included the following:

In Dragonfly, the Upper Tribunal found it clear, at paragraphs [30-31] “that the test under the 2011 Act does not require findings of evaluation of likelihood, of commercial viability or of probability. On the contrary, the language of the statute is consistent with a number of realistic outcomes co-existing, the test is a low one, but there must be at least some indication that the aspirations are realistic, referring to a test of “not fanciful” as a synonym for “realistic” is not an error of law and what is “realistic” means a sensible and practical idea of what can be achieved or expected, without concentrating on hard-headed commercial or financial analysis and a detailed business case is not required.”

The Appellant relies upon viability evidence from 2014. Notwithstanding the age of the Sunderland report, the possibility of the White Lion being a community run public house or other community run venture was not considered, as identified by the Tribunal in the 2020 Decision. Letters published in the local press are not necessarily reflective of the wider community, and indeed some of the letters to which he refers originate from the Appellant himself.

Moreover, the issue is not whether a public house/restaurant at the White Lion can operate as a commercially viable business. The statute does not require long-term or commercial viability. Nor is the test a consideration of which outcome is more likely than not. The First-tier Tribunal has consistently explained that the test is not one of the civil standard of proof, which is designed to produce one outcome; the language of the statute is consistent with a number of realistic outcomes co-existing.

In this case, the White Lion is vacant. It had not traded as a public house for 11 years at the time of the latest listing decision. However, the lawful use of the premises remains as a drinking establishment. The premises cannot lawfully be used for any other purpose without the benefit of planning permission. As things stand, a residential use is prohibited by an Injunction Order obtained in 2019.

We find it material that the CIC has now been established. Its Company Report for year ending 30 April 2023 confirms that it was formed solely to make a bid for the pub when it came onto the market. Whilst the Appellant considers that no credible community bid or engagement has been made, this is not borne out by the letters and copy emails produced by the CIC. They demonstrate that offers of purchase have indeed been made of increasing amounts along with attempts to engage with the Appellant. Even if the Appellant considered the offers to be inadequate, they provide evidence that a willing buyer is capable of being found for the premises to be used for a primary purpose benefiting the local community.

The CIC has a business plan. The Appellant argues that the business plan has many errors leading to questions as to its validity. For instance, he queries the lack of financial data and disclosure of the sums raised or pledged, which might not materialise. The Appellant notes that the business plan is to lease to an experienced operator and asks who it is, what their experience is and their business plan. If reliance is to be placed on rental income, then the Appellant says that no account is taken for refurbishments or other expenditures. The model relies on a purchase price which the Appellant believes to be out-of-date.

It is not the task of this Tribunal to analyse the CIC’s business plan. We note that the Council examined the updated business plan of January 2024 that supported the ACV nomination. It contains financial estimates, projections and breakdowns. A copy is provided within the bundle. The Council recorded that the business plan explains how funds would be raised, the amount raised so far and various viability studies. The Council was satisfied that there was a clear indication from the business plan how the CIC would ensure the asset would be managed and restored over the following 5 years. We concur that the information suffices for these purposes to illustrate that the model is a realistic possibility for the future operation of the While Lion as a facility that furthers the social wellbeing or social interests of the local community over that timescale.

We further note from the documentation filed at Companies House that the CIC wishes to restore the functions as a conventional pub and restaurant and hopes to expand them with a coffee shop and to sell local produce.

There is a high level of public support for the White Lion with over 300 signatories in support on its website. This is backed by ‘in-principle’ offers of financial support to the CIC and pledges of support from local businesses. This is in a climate where many public houses are run by CIC’s, as illustrated in the numerous examples identified by the CIC.

The Appellant questions the CIC’s interest in opening the White Lion as a community pub when they did not accept his offer to rent it a lower rent than paid by previous landlords and free of ties. If the CIC refused such an offer, it is perhaps unsurprising given that its business model is founded upon purchase of the freehold. We attribute little weight to this argument.

The Council noted that the Appellant might simply allow the White Lion to sit idle for another 5 years without generating income, as he suggests. The Appellant categorically states that he will not sell to the CIC. Nevertheless, the premises have been marketed as a licensed premises in the last 5 years by a national agent. This firmly indicates that the Appellant would sell even if not to the CIC. The Appellant denies that any other parties have ever contacted him with an interest in running the White Lion. It does not automatically follow that a sale cannot be achieved for its lawful use or other community related use.

In our judgement, the aspirations of the premises being reopened as a public house or another community venture within the next 5 years are realistic. We consider that it is realistic to think that a purchaser or tenant could be found over the next 5 years who would be prepared to take the risk of acquiring the White Lion to run it for the social wellbeing or social interests of the local community.

The Tribunal is satisfied that the Council was correct to register the White Lion as an ACV. Accordingly, the appeal should be dismissed.