Is there any body there?

Shared professionals iStock 000009503395Small Newsletter pic 146x219What exactly is an 'unincorporated body' for the purposes of the Assets of Community Value legislation? Simon Adamyk looks at the difficulties created by the wording and reviews the key tribunal decisions.

The Localism Act 2011 (the “Act”) introduced a new jurisdiction to list a building or other land as an asset of community value (an “ACV”) if, in broad terms, its use is considered to benefit the social wellbeing or social interests of the local community. The relevant provisions are contained in sections 87 to 108 of the Act and in the accompanying Assets of Community Value (England) Regulations 2012 (the “Regulations”). ACVs can include such things as pubs, shops, village halls, libraries, open spaces or football stadia, to name but a few. Local authorities administer this new regime and keep a public list of ACVs.

Not everyone can nominate an asset for inclusion in the list of ACVs. Only certain types of nominators can do so. There is a list of eligible nominators set out in regulation 5(1). One of them is an “unincorporated body” which satisfies certain conditions (regulation 5(1)(c)). But what exactly is an “unincorporated body” for these purposes? The wording of the regulation can raise some difficult questions.

The “unincorporated body” requirement in more detail

The Act provides that land in a local authority’s area which is of community value may be included by a local authority in its list of ACVs only (for present purposes) in response to a “community nomination” (section 89(1)(a)). A community nomination is defined as a nomination which nominates land in the local authority’s area for inclusion in the list of ACVs and which is made by (among others) “a person that is a voluntary or community body with a local connection” (section 89(2)). The Regulations define a “voluntary or community body” (regulation 5(1)). There are seven different types of entity which qualify as such. One of these is an “unincorporated body” (regulation 5(1)(c)).

It cannot, though, just be any unincorporated body: there are other requirements too. Specifically:

  • its members must include at least 21 individuals (regulation 5(1)(c)(i));
  • it must not distribute any surplus it makes to its members (regulation 5(1)(c)(ii));
  • its activities must be wholly or partly concerned with the local authority’s area or a neighbouring authority’s area (regulation 4(1)(a));
  • any surplus it makes must be wholly or partly applied for the benefit of the local authority’s area or a neighbouring authority’s area (regulation 4(1)(b)); and
  • it must have at least 21 “local members”, which means (in essence) members who are registered to vote at an address in the local authority’s area or a neighbouring authority’s area (regulations 4(1)(c) and 4(3)).

The question whether or not an alleged unincorporated body falls within regulation 5(1)(c) is important. This is because if the purported nominator is not a “body”, it cannot fall within regulation 5(1)(c) and consequently (unless it can bring itself within one of the other categories of eligible nominator) any purported nomination which it might make is not a valid nomination for the purposes of the legislation.

An illustration of the problem – protecting the Dog and Duck

The problem in practice is that many nominations of a building or other land as an ACV are made by a group which claims on the nomination form to be an unincorporated body. Some of these undoubtedly can properly be described as such. However, at least some nominations are made by groups of individuals whose association with each other is accompanied by very little formality as they are formed of local residents who come together for a specific purpose, such as to try to save a particular pub.

Imagine, for example, that one night in the ‘Dog and Duck’ (a pub which is under threat of closure) three friends having a drink together decide on the spur of the moment to call themselves “Save the Dog and Duck”. They immediately go round the pub with a petition (written on a piece of paper which one of them happened to have with them) and obtain 21 signatures in favour of the idea of saving the pub. No mention is made in the petition of any group or entity called “Save the Dog and Duck”. In these circumstances, is “Save the Dog and Duck” an unincorporated body within the meaning of regulation 5(1)(c) such that it can validly make a nomination of the pub to be included in the list of ACVs, or is some greater degree of formality required?

Not much help from the Act or the Regulations

There is no definition of an unincorporated body in either the Act or the Regulations. The Act tells us that the nominator must be a “person” (section 89(2)(b)(iii)). However, under the Interpretation Act 1978 “person” includes “a body of persons corporate or unincorporate” (section 5 and schedule 1). Therefore the requirement that the unincorporated body must be a “person” does not appear to add anything material (see Hamna Wakaf Ltd. v London Borough of Lambeth [2016] UKFTT CR/2015/0026 (GRC) at [70]–[72], and see too the comments of Baroness Hanham during the parliamentary debates on the Bill (Lords Hansard, 7 July 2011, cols. 398–399)).

Approach adopted by the First-tier Tribunal so far

The First-tier Tribunal (“FTT”) has on several occasions considered the question of whether the nominator is an unincorporated body within the meaning of regulation 5(1)(c). The FTT has interpreted the term broadly so far. No particular formality is required.

For example, in Hawthorn Leisure Acquisitions Ltd. v Northumberland County Council [2015] UKFTT CR/2014/0012 (GRC), the FTT rejected a submission by the owner that the nominator in that case was not an unincorporated body. The FTT held that the unincorporated body does not need a formal constitution or even a name. The Judge said at [11]:

“[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 FTT in Hawthorn Leisure specifically rejected (at [10]) the submission made by the owner that the term unincorporated body had been defined in case law, namely, in Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1982] 1 WLR 522. The FTT pointed out that the court in Burrell was concerned with the meaning of the term “unincorporated association” rather than “unincorporated body”. The FTT also said that the term had to be construed against the relevant statutory background and held (at [10] to [11]) that the meaning to be attributed to the term against the background of a tax statute (as in Burrell) was not the same as the meaning to be attributed to it “[i]n the very different statutory context of the Localism Act and the regulations”. The FTT adopted a much more informal approach to the meaning of unincorporated body within the context of the Act and the Regulations. Nevertheless, the FTT stated that Burrell was “helpful … for the approach adopted by the Court” and accordingly considered that the approach in Burrell was at least a helpful guide. Unfortunately, the FTT did not say exactly which part(s) of the approach in Burrell it found to be helpful in determining the question. It is possible (it is hard to put it higher) that what the FTT had in mind was the general approach of Lawton LJ in Burrell in examining how people could join the organisation (pp. 525E–F), how it was run (pp. 526E–527D), when and how it was formed (p. 527D) and how its funds were controlled (pp. 527E–528E).

In order to emphasise the breadth of the term unincorporated body, the FTT in St Gabriel Properties Ltd. v London Borough of Lewisham [2015] UKFTT CR/2014/0011 (GRC) stated (at [21]) that, unincorporated body is “a broad term which includes community groups of many descriptions”. This is clearly correct but by itself is of limited practical assistance when difficult cases arise.

Quite where the FTT decisions in Hawthorn Leisure and St Gabriel left the law was not entirely clear.

Happily, some further guidance was given by the FTT in Mendoza Ltd. v London Borough of Camden [2016] UKFTT CR/2015/0015 (GRC). There, the FTT considered Burrell and also Williams v Devon County Council [2015] EWHC 568 (Admin), [2015] LLR 624 (upheld on appeal at [2016] EWCA Civ 419 at [31]). The FTT concluded (at [17]–[21]) that neither Burrell nor Williams was of direct assistance in the context of ACVs because they involved a consideration of what was an unincorporated association, not an unincorporated body, and they involved different statutory or procedural regimes. The FTT said (at [19]–[20]):

“19.     If the legislature had intended to confine a voluntary or community body to those bodies which are unincorporated associations, it would have done so. There is no sound reason for transporting into the 2012 Regulations the requirement for there to be an unincorporated association, of the kind described by Lawton LJ in the Burrell case. Although, of course, an unincorporated body may be an unincorporated association, in the sense that its members have mutual duties and obligations stemming from contract, there is no case for confining the expression ‘unincorporated body’ in that way. …

20.       The Concise Oxford Dictionary defines a ‘body’ as ‘3. An organised group of people with a common function.’ That organisation and common function may arise from a contractual relationship. But, equally, they can, I consider, arise less formally, as a result of a number of individuals coming together to further a matter of common interest.”

Furthermore, the FTT stated (at [24]) that in Burrell and Williams the nature of the obligations and liabilities concerned meant that the membership of the body had to be capable of comprehensive identification, whereas in the case of ACVs a nominator which is a voluntary or community body under the Act and the Regulations does not, by making the nomination, place itself under any actual or potential liability or obligation, nor is there any requirement for the nominator to play any part in the review process or in any subsequent appeal against listing. The Tribunal considered that:

“This difference means that there is no rationale for inferring that the legislation with which we are concerned [ie. the ACV provisions] requires each and every individual comprising the nominating body to be capable of individual identification.”

The facts of Mendoza – a helpful illustration

The facts of Mendoza offer an example of a group which was held to be an unincorporated body within the meaning of the Regulations.

In Mendoza, the purported nominator had a name (the “Carpenters Arms Supporters”) and a written constitution (see at [14]). The aims of the Carpenters Arms Supporters were to preserve the use of the pub, to represent the views of users to various bodies and to be a voice for the pub’s users in any other agreed matters. Provision was made for the election of various officers and for voting rights. As for membership, though, the constitution provided that “All [PUB] users are automatically members of the Supporters. No membership fee or subscription is charged”. Consequently, any and all persons who used the pub appear to have been members of the Carpenters Arms Supporters (even potentially, as the owner pointed out (at [22]), representatives of the owner) and were not given an opportunity to object to this. Nevertheless, the FTT considered that the Carpenters Arms Supporters was an unincorporated body and therefore upheld the nomination as valid. The Tribunal stated (at [28]) that:

“… the membership of the Supporters is sufficiently ascertainable to meet the requirements of the legislation. The legislation does not require the group to be an unincorporated association, involving contractual obligations as between its members, or to be an unincorporated body whose membership must be capable of being comprehensively identified. The nomination in the present case was made by 21 identified individuals, who had organised themselves into a group with the common purpose of nominating the Carpenters Arms as an asset of community value.”

This decision seems correct on the facts. Regardless of the uncertainty as to the full extent of the membership of the group, there were at least 21 identified individuals who were part of that group, the group had a stated common aim, and it had a written constitution which covered a number of important matters in relation to the running of the group. In other cases, though, where the arrangements are less formalised or clear, there might well be doubts as to the nature and/or membership of the group which might well call into question whether the group could properly be described as an unincorporated body, or indeed whether there is any kind of organisation at all of which anyone could properly be said to be a ‘member’.

The decision in Mendoza was referred to by the FTT in the important case of Hamna Wakaf Ltd. v London Borough of Lambeth [2016] UKFTT CR/2015/0026 (GRC) at [40] but was not commented on expressly any further. Nevertheless, the tenor of the approach in Hamna Wakaf is consistent with that in Mendoza. The FTT in Hamna Wakaf again referred (at [72]) to the dictionary definition of “body” and concluded (at [72] and [89]) that a local branch of CAMRA (the well-known Campaign for Real Ale) could be an unincorporated body within regulation 5(1)(c) independently (for these purposes) of the national organisation of which it formed part. (This article does not look further at the specialised question of local branches of national organisations, as that question raises some intricate issues of its own.)

So what of the impromptu group “Save the Dog and Duck”?

So, with this analysis in mind, let us come back to consider our impromptu group “Save the Dog and Duck”.

The decision in Mendoza has helped to an extent in clarifying that the question of what is an unincorporated body in the context of ACVs is not to be determined according to the rules which apply in other contexts to determine what is an unincorporated association. Nevertheless, there still must be a “body”: this is what the Act and the Regulations expressly require.

In the writer’s view, a “body” must be something more than a simple collection of individuals if there is no proper indication of the basis (if any) on which they are associated with one other. Even though no formal constitution or set of rules or even a name is needed, the fewer such formalities exist, the more difficult it will be for the purported nominator to establish that it is indeed an unincorporated body within the meaning of regulation 5(1)(c). The FTT’s reference in Mendoza to the dictionary definition of a “body” as “[a]n organised group of people with a common function” provides some helpful guidance. It seems that the group must have a sufficient degree of organisation and a sufficient common function. The requirement that there must be at least 21 “members” also suggests that there must be a sufficiently clear way of determining who is a member (or, as in Mendoza, that at least 21 individuals are members). If so, then it is open to question whether simply signing a petition expressing support for the idea in general of saving a pub would (without more) provide a sufficient level of organisation and coherence that the individuals who had signed the petition could properly be called a “body” or that any of them individually could properly be considered to be a “member”. A separate question might also arise as to whether any nomination which was subsequently made was actually made by the body or simply by one or more individuals without appropriate authority from the body. It all depends on the facts.

Summary

The FTT has shown itself to be willing to interpret the term “unincorporated body” broadly. Each case will, though, turn on its own facts. In some cases there may be a sufficient level of organisation and common function that it would be proper to describe the individuals in question as a “body”. On the other hand, in at least some cases there may be so little (if any) organisation and common function that it would be difficult to describe the relevant individuals in any meaningful way as a “body”. If, for example, the purported body had not long existed, had no formal constitution or formal membership procedures, no list of members, no meetings and no identified officers or other representatives, it might be more difficult to satisfy the requirement that it was indeed an unincorporated body within the meaning of regulation 5(1)(c).

Simon Adamyk is a barrister at New Square Chambers. He can be contacted on 020 7419 8000 or This email address is being protected from spambots. You need JavaScript enabled to view it..

About the author

Simon Adamyk holds a triple first class degree in law from Cambridge and was awarded the highest mark in the University in each of the three years of his law degree and also a distinction (a ‘starred first’). He also holds a Master’s degree in law from Harvard Law School. He is the author of Assets of Community Value: Law and Practice, the first book dedicated to dealing in detail with this area, which is being published by Wildy, Simmonds & Hill in February 2017. He specialises in chancery/commercial law and is an experienced advisor and litigator with an international practice. He is listed as a Leading Junior in Chambers UK Bar, Chambers Global and Legal 500. Recent comments in those directories include that he is “a mighty intellect and brings piercing analysis and meticulous attention to detail to his work”, “enjoys a stellar practice”, is “a man with a formidable legal intellect”, is “incredibly bright, approachable and good on his feet”, “His mastery of complex factual background is hugely impressive”, and he is “A major boost to any legal team”.