Analysis
In 1914 and 1928 Mr Robert Fleming conveyed land to the Defendant for use as part of a school pursuant to the School Sites Act 1841 ‘to be applied as a part of the playground of the said School and for no other purpose whatever ‘. The interest in any land subject to reverter vested in the claimant beneficiaries.
In 2006 the defendant relocated the school to new premises and marketed the old premises for sale. One parcel including part of the site gifted in 1914 was sold in 2007. The defendant maintained that it intended to apply the proceeds of the sale of the former school site towards the construction of buildings on the new site.
Section 2 of the 1841 Act provides that “upon the said land … ceasing to be used for the purposes in this Act mentioned, the same shall thereupon immediately revert to” the donor ‘s estate.
Section 14 provides that where ‘it shall be deemed advisable to sell or exchange the same for any other more convenient or eligible site, it shall be lawful for the trustees in whom the legal estate in the said land or building shall be vested… to sell… the said land… and to apply the money arising from such sale… in the purchase of another site, or in the improvement of other premises used or to be used for the purposes of such trust. ‘ Section 6(2) of the Reverter of Sites Act 1987 provides that the exercise of the power under s14 (above) “prevents any trust from arising… in relation to that land or any land representing the proceeds of sale of that land”.
The claimants claimed that a notional reverter took place in 2006 when the school ceased to operate on the gifted land such that, pursuant to the 1987 Act, the defendant held a proportion of the sale proceeds on trust for Mr Fleming ‘s descendants. The defendant submitted that no reverter occurred where the defendant implemented a composite plan, scheme or transaction to relocate the school funded in part by the sale proceeds of the previous site.
The issues for the court were:
1) Was there a reverter within the meaning of the 1987 Act; or
2) Was that reverter defeated by the defendants ‘ exercise of their power of sale?
Held
1) Neither ss2 nor 14 of the 1841 Act admit close linguistic analysis, nor can they be considered in isolation; the court must take a broad and practical approach to the question whether land has ceased to be used for the statutory purpose and whether the donee has exercised the statutory power of sale. Where a school has moved out of an old site and into new buildings on an adjacent site and the old site is being sold to raise money to pay for part of the cost of the new buildings, the old site is therefore being used ‘for the purposes of ‘ that public elementary school within the meaning of ss2 and 14 – Fraser v Canterbury Diocesan Board of Finance (No 2) [2007] EWHC 1590 (Ch) applied.
2) Reverter is an event not a process, and once it occurs it is automatic and irrevocable and cannot be undone by a subsequent exercise of the statutory power of sale or exchange. However, the statutory power of sale or exchange can lawfully be exercised in the manner undertaken by the defendant, with the effect that the s6 of the 1987 Act prevents a trust arising. The language of s14 does not require the old site to be sold before the new site is acquired, nor that the sale proceeds be applied to acquire the new site – Dennis v Malcolm [1934] 1 Ch 244 considered. The construction contended for by the claimants would give rise to practical difficulties for trustees and force them to resort to undesirable devices to avoid a reverter, which were not obviously intended by the legislation.
Judgment for the defendant.
JUDGMENT RICHARD SPEARMAN QC Introduction [1] This case concerns two grants of land under s2 of the School Sites Act 1841 (“the 1841 Act“), and gives rise to a question concerning the exercise of the power of sale contained in s14. Although the operation of the 1841 Act has been amended by the Reverter of …Continue reading "Rittson-Thomas & ors v Oxfordshire County Council [2019] WTLR 1285"