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Heirs of donor of land win Court of Appeal battle over proceeds from site sale

The heirs of a donor who gave land for a primary school more than 100 years ago have won an appeal over whether a county council owes them money after disposing of the sites.

The case concerned two grants of land by Richard Fleming under section 2 of the School Sites Act 1841, made in 1914 and 1928. Mr Fleming died in 1933.

Oxford County Council decided to sell the sites in 2006 and used the proceeds to build a new school.

In March 2018 Richard Spearman QC, sitting as a deputy judge of the High Court’s Chancery Division, identified that the question for determination involved two rival approaches to interpretation: “on the one hand, that land ceases to be used as the site for a school the moment the school is closed; and, on the other, that the power of sale exists to enable a school to be moved from one location to another, and that the intention behind section 14 of the 1841 Act would be frustrated if, in order to avoid the reverter of the land to the grantor, it was necessary for the school to remain in use at the original site until the new site is ready for it to move into.”

Mr Fleming’s heirs submitted that the land reverted in February 2006 when the school moved from its original site and that Oxfordshire in fact held a substantial part of the subsequent proceeds of sale on trust for them.

Oxfordshire argued that this was not the case since it still provided a school, funded in part by sale of the original site.

Finding in the local authority’s favour, Judge Spearman said Oxfordshire could argue that although the school had moved to an adjacent site the sale of the old site meant it was being used “for the purposes of that public elementary school”, as originally intended.

“In my opinion, that broader approach accords with, and is reinforced by, the power of sale and exchange conferred by section 14 of the 1841 Act”, the judge said.

He added that if Oxfordshire were required to keep the school in operation until it moved, “that may cause them practical difficulties and may depress the price they are able to realise from the sale, all of which will be to the detriment of the trust”.

The heirs to Mr Fleming appealed.

In Rittson-Thomas & Ors v Oxfordshire County Council [2019] EWCA Civ 200 the Court of Appeal allowed their appeal.

Lord Justice Patten, with whom Lord Justice Hamblen and Lady Justice Nicola Davies agreed, said: “The 1841 Act was intended….to encourage the conveyance of land for a specified and limited purpose or purposes and on terms that title to the land should revert to the grantor as previously described in the event that the use of the land no longer complied with one or more of those specified purposes.

“Since the sale of the old site post-dated the removal of the school to the new site by more than a year it is unrealistic to say, as a matter of ordinary language, even on a broad and practical approach to that issue, that the land continued to be used as a site for a school or otherwise for the purposes of education.”

Lord Justice Patten added: “It is, I think, important to bear in mind that the statutory purposes set out in s.2 of the 1841 Act are charitable educational purposes. They require, in terms, that the land should be used as a site for a school, a school house or otherwise for educational purposes. In each case they limit the use of the land to an identifiable function or purpose.”

He noted that Judge Spearman’s approach to this question of cesser of use was to say that the old site was being sold to raise money to pay for part of the cost of the new buildings and the old site was therefore being used "for the purposes of that public elementary school".

“But that is not the statutory question,” Lord Justice Patten said. “The issue is whether the land continued to be used as the site for a school or for educational purposes: not whether it provided a means of re-imbursing the county council for its expenditure on the new school.

“Expenditure on the improvement of other premises used for the purposes of the trust is a permissible use of the proceeds from the sale of the existing school site under s.14. But that power is only exercisable up to the moment when the land ceases to be used for those statutory purposes.”

The Court of Appeal judge said he was unable to accept that, by keeping the old site vacant pending a sale, the county council continued either to use the land as a site for a school or to use it for educational purposes.

“Both require the active use of the land for the education of children. I would accept that this could include ancillary activities such as the use of the site as a playground or for meals. But, in this case, the old site remained vacant with no further possible use for educational purposes,” he said, allowing the appeal.