No charitable trust was created when the London Borough of Brent bought a former bus depot for conversion to a community centre, even though charities were involved in the transaction, the Court of Appeal has found.
In London Borough of Brent v Johnson  EWCA Civ 28 Lord Justice Lewison ruled against Leonard Johnson, who claimed to be a Harlesden Peoples Community Council (HPCC) trustee and the Stonebridge Community Trust.
The Court of Appeal judge said the issue was whether Brent holds land wholly or partly on charitable trusts either because such a trust arose when it acquired the land or because of the way in which money was raised for its conversion into a community centre.
Brent now claims to be the sole legal and beneficial owner of the former Bridge Park bus depot site and brought that claim in response to an application for a restriction to be entered against its title.
The Chancery Division held that Brent was the sole legal and beneficial owner of the land.
Mr Johnson founded the HPCC in 1981 to establish a centre owned and managed by the local black community.
Brent acquired the site in 1982 for £1.8m and legal title was transferred to it. The purchase price was made up of grant from the former Department of the Environment and Greater London Council with a balance of £834,500 paid by Brent.
The council now wants to redevelop the site as a leisure and community facility with a swimming pool and to sell part of the site.
Mr Johnson, HPCC and Stonebridge Community Trust objected to that, arguing that Brent held the site on a trust of some kind, or that they had acquired a proprietary interest in it by reason of equitable principles. All these arguments failed in the lower court.
Lewison LJ saids the original plan had been for Brent to buy the property with assistance from other agencies, and for HPCC subsequently to buy the property from Brent or be granted a lease. Neither of these ultimately happened.
Although Mr Johnson abandoned the argument that money raised by charities for the later work on the building meant Brent held it partly on trust, Stonebridge continued to advance it.
Lewison LJ said: "The [chancery] judge said that the fact that property is held for charitable purposes does not necessarily lead to the conclusion that it is held on charitable trusts. In my judgment, that is undoubtedly correct.”
He added: “Nor does the fact that a charity contributes to the acquisition or improvement of property necessarily mean that the property owner is a trustee of that property (whether wholly or partly) for charitable purposes.”
The question was not whether on the assumption that a trust was created was that trust charitable, but whether a trust was created at all, Lewison LJ said.
He concluded: “The edifice of an unexpressed charitable trust is, in my judgment, an over-elaborate and unnecessary superstructure to impose on what was essentially a financial grant by one local authority to another to assist the latter to perform its statutory functions.”
This meant the Chancery Division had been correct to find that no charitable trust was created on Brent's acquisition of the property.