The note, available on the PCA website, offers advice to tied tenants and pub-owning businesses (POBs) to ensure their market-rent-only (MRO) option proposals comply with the pubs code.
However, in a letter sent to the PCA on 18 May, Greene King questioned the legality of the advice note and called for it to be withdrawn. It set a 14-day deadline, which has now passed, triggering an escalation of the demand with the pubco’s representatives instructed to submit a judicial review claim today.
In a statement to The Morning Advertiser (MA), a Greene King spokesperson said: “We have supported and promoted the code since its inception and are proud of the relationships we have with our partners. Without any prior consultation, this latest advice note goes beyond the PCA’s remit, making a complex negotiation more difficult for all parties, and we are disappointed the adjudicator does not agree with our position.
“We continue to request it is reconsidered to provide clarity for pub companies and tenants and are following the set process of requesting the High Court rule independently on the matter.”
Delays for tenants
Greene King tenant, Gary Murphy licensee at Ye Olde Mitre Inne in Barnet, north London, who has an ongoing case lodged with the PCA, told MA that John Forrest, managing director of Greene King's Pub Partners division, had called him yesterday (13 June) to confirm the pubco would be proceeding with its judicial review.
“[Forrest] said the aim was to provide ‘clarity to tenants and pub-owning businesses’ and explained that the Greene King judicial review was focused on the way the PCA advice was issued,” Murphy said.
“I told him that I did not agree that Greene King were acting in the interests of tenants but, inevitably, we all needed a judicial resolution if he and other pub companies cannot accept the PCA's interpretation of the legislation,” Murphy added.
Case for pubs code changes
Murphy said he would continue to push the PCA to provide clarity on whether the code allows tenants to make a claim if a pub company proposes a new lease unnecessarily.
“This should enable tenants to make claims for any delay caused by these judicial reviews. This obstruction by the pub companies also clearly makes the case for some immediate changes to the code,” he added.
Anyone waiting on the outcome may have to wait up to nine months for the judicial review to complete its process.
Ei Group also wrote to the PCA, on 27 April 2018, questioning the validity of the same advice note and warning of a potential judicial review unless the advice was withdrawn.
MA had previously understood that Ei had not decided to move forward with its judicial review threat, however, following Greene King’s decision to move to court action today (14 June) MA has been told by two sources that this position is likely to have changed.
Chris Wright, managing director of the Pubs Advisory Service, told the MA he could confirm that Ei had issued judicial reviews because he had seen the papers that have been sent to the Ei tenants he represents.
He added: “We said the code needed to go for a judicial review right at the beginning."
In a statement Ei said: “We are disappointed that the PCA has been unable to provide much needed clarity around the delivery and some of the content of the recent MRO tenancy terms advice note, which we maintain is unlawful.
“The group remains committed to ensuring that there is complete clarification of the pubs code, to facilitate its proper operation and to provide all interested parties with a clear and transparent basis to move forward.”
MA contacted the PCA for comment but had not received a response by the time of publication.