Land – Reverter – Trust for sale – Appellant local authority selling land conveyed by deceased grantor for use as school – Respondent heirs seeking declaration that appellant holding proceeds of sale on trust for them – High Court dismissing claim – Court of Appeal allowing appeal – Appellant appealing – Whether land ceasing to be used for statutory purpose within section 2 of School Sites Act 1841 prior to sale – Appeal allowed
The respondents were heirs of a deceased grantor who conveyed land to the appellant local authority in 1914 and 1928 under section 2 of the School Sites Act 1841 for use as part of Nettlebed School. Under section 2, land could be conveyed either as a site for a school or for the purposes of education and would revert to the grantor, or their successors, on a trust for sale when that use ceased. Under section 14, the statutory right of reverter was avoided if the land continued to be used for educational purposes.
In 2006, the appellant decided to relocate the school by building new school facilities adjacent to the existing premises and selling the old premises. In 2007, the appellant sold the land. The respondents sought a declaration that the appellant held the sale proceeds on trust for them as the closure of the old school building on the original site meant that it ceased to be used either as a site for a school or otherwise for the purposes of education within section 2. The appellant argued that the closure, sale and use of proceeds was an event or series of events which did not cause a reverter to arise. The holding of a school site pending the exercise of its power of sale under section 14 of the 1841 Act was within the statutory purposes in section 2.
The High Court dismissed the respondents’ appeal: [2018] EWHC 455 (Ch); [2018] PLSCS 48. The Court of Appeal overturned that decision: [2019] EWCA Civ 200; [2019] PLSCS 38. The appellant appealed.
Held: The appeal was allowed.
(1) Section 2 of the 1841 Act provided that a landowner might donate up to one acre of land for various educational purposes, including the establishment of a school, by means of a statutory charitable trust. However, if the land ceased to be used for those purposes, it was returned, through a trust of land, to the landowner or their heirs. Section 14 provided that, if the school needed new premises, the school’s trustees had the power to sell or exchange the land to enable the school to move to a different site. Sale under section 14 could only occur if there had not already been a section 2 reverter. The issue in the present case was whether the permanent closure of a school on the original site in preparation for sale gave rise to a section 2 reverter that ended the statutory charitable trust, so that the trustees could not use the sale proceeds to pay for the new school premises.
(2) For the section 2 reverter to arise, the site had to cease to be used for the relevant purpose or purposes set out in the 1841 Act, not for any narrower purposes set out in the original deed of grant. The relevant purpose meant one or more of the three purposes set out in the Act depending on which of those purposes the grantor had specified. Any narrower purposes were irrelevant. Section 2 did not admit of very close linguistic analysis but the section operated through the medium of a charitable trust and should be interpreted in line with the recognition that charity law gave effect to a general charitable purpose or intention in a situation where particular directions given by the charity’s founder became impracticable. In addition, under the general law of trusts a provision providing for the determination of trust by a reverter should be a clear event and not a process. It followed that it was appropriate to adopt a broad and practical approach to whether, under section 2, a site had ceased to be used for the purposes in the 1841 Act: Fraser v Canterbury Diocesan Bard of Finance (No 2) [2005] UKHL 65; [2005] PLSCS 182; [2006] 1 AC 377 applied.
Courts should avoid interpreting statutory provisions in isolation from other relevant provisions. Hence in this case, the court had to interpret sections 2 and 14 as forming part of a coherent legislative scheme. Furthermore, the 1841 Act was drafted in the less rigorous style which was normal before the creation of the Office of the Parliamentary Counsel in 1869 and the adoption of more precise forms of drafting which followed. That lent further support to taking a broad approach to its interpretation.
(3) The focus on the purpose of the 1841 Act required an appreciation of the balance that the Act struck between the potentially conflicting interests of the grantor and the public. At one time it appeared that the protection of the grantor’s interests should prevail so that the primary focus was on protecting the section 2 reverter. However, section 14 clearly envisaged that the trustees might dispose of the site free of the section 2 reverter. In any event, the section 2 reverter only operated if the site had ceased to be used for the relevant statutory purpose, not subject to any restrictions imposed by the grantor. One aspect of tying section 2 into the general framework of charitable trust law was that, in general terms, the courts would seek, in the general public interest, to uphold a charitable gift and prevent it failing. In line with that, the courts should lean towards the continuation of the purposes set out in section 2 rather than being astute to find that those purposes had failed thereby triggering a section 2 reverter.
(4) The site in the present case did not cease to be used for the purposes of the school when the school moved to the new adjacent site, because the intention throughout was to use the proceeds of sale of the land to pay off the cost of the new school premises. No section 2 reverter was triggered. As a general proposition, the site of a school did not cease to be used for the purposes of section 2 where at all material times it was considered advisable to sell the site and to apply the money arising from the sale for other premises used or to be used for the school.
Christopher McCall QC and Nigel Thomas (instructed by Oxfordshire County Council) appeared for the appellant; Simon Taube QC and Matthew Smith (instructed by Lee Bolton Monier-Williams) appeared for the respondents.
Eileen O’Grady, barrister
Click here to read a transcript of Rittson-Thomas and others v Oxfordshire County Council
