Muddying the issue

Stephen Claus looks at how the increasing pressure on local authorities to do more with less is leading some - inadvertently or otherwise – to inappropriately deal with recreation grounds.

All too often people only become concerned about their recreation grounds when they are about to be lost or indeed after the event. Recreation grounds can evoke very strong feelings in local communities, so strong for example that in the recent case of Derek Maidment and Lennox Patrick Ryan and the Charity Commission for England and Wales two tenacious individuals drove their case all the way to conclusion before the Charity Tribunal. Their case involved something rather different from the text of this article, but their determination was associated with the loss of a local amenity against their wishes and the wishes of their community.

Where recreation grounds held on charitable trusts through the provisions of the Open Spaces Act 1906 (OSA 1906) are concerned, often the trusteeship will have been conferred through a simple conveyance which on many occasions will not be comprehensive.

Occasionally there will be a scheme of the Charity Commissioners and rarely there could orders of the court, but generally speaking conveyances were used to appoint the local authority as a trustee of the original recreation ground, and usually without any modification to the trusts existing at the time of transfer.

There are many examples of this type of transfer in the coal fields. Often the existing trustees were left with the benefit of a local mining welfare (usually a building) and an adjacent piece of ground used for recreation. That recreation might take all forms including organised sports such as bowls, cricket and the like.

Without an endowment to manage the grounds concerned, local trustees often found themselves in a situation whereby there was a great need locally for the facility but no money with which to maintain it.

Often in these circumstances, the land was transferred to a tier of local government, which of course may not be the tier which currently enjoys the trusteeship having experienced several local government acts and consequent change of authorities since the original transfers.

Local authorities acting as sole trustee can on occasions confuse the capacity in which they hold this property which is not their corporate property i.e. that which they hold as local authority, they hold such property as trustee i.e. charity property. This failure to distinguish can have catastrophic effects for both the authority concerned and for the recreational ground if the local authority does not understand the capacity in which it is acting.

Even though as charity trustees the local authority is subject to all the usual strategic regulation, since the implementation of the Charities Act 2006 there is no longer any requirement to register such a parcel of land as a charity, as it lacks generally speaking, any income.  The law prior to the Charities Act 2006 of course required those holding charity land to consider registration.  This safeguard has been removed.

Distinguishing between corporate and charity property can be a particular problem from an authorities perspective particularly following local government reorganisation. A successor authority for example may not appreciate that the land that was transferred to it was in fact held by its predecessor authority on charitable trust. It is conceivable that the authority will then mistakenly treat the land in question as part of its corporate holding. There is also the possibility of course which is a separate question from this article, as to whether or not the land has been transferred to the appropriate authority.

But recently an even more worrying feature has come to the surface. The land in question was generally transferred under Section 4 of the OSA 1906, and as such would have gone across under subsisting trust at the date of transfer unless they had been modified or varied by an order of the Charity Commissioners or the court. This was rarely the case.  

What however seems to be emerging is a pattern whereby local authorities believe that the property transferred to them under these provisions was effectively freed from the subsisting trust at the date of the transfer (which is almost never the case) and that this opens up the possibility under the 1906 Act, of the authority having taken the usual steps of selling the land under the provisions in the 1906 Act and effectively freeing the land from its previous constraints.

The footnote to Halsbury's Laws of England fourth edition (reissue) para 16 [1055] volume 29 suggests “land subject to trust arising under the Open Spaces Act 1906 are freed from those trusts by virtue of the appropriation or disposal: see Local Government Act 1972 Section 122 (2B) 123 (2B) 126 (4B)127 (3) as inserted by the Local Government Planning and Land Act 1980 S. 188 schedule 23” (emphasis added). However land transferred to a local authority under Section 4 of the OSA 1906 is not subject to trusts arising under the 1906 Act but in fact remains bound by the existing public recreation trust or charitable trusts subsisting at the time of the transfer. There is therefore no power of sale arising under the 1906 Act and certainly no ability to free the land in question from the earlier usually charitable trust upon which it was held.

This is an absolute quagmire for local authorities especially those less familiar with the complexities of charity law.  The opportunity to inappropriately consider the land as corporate property or alternatively as freed from the charitable trust and held for trust under the Act is enormous.  

The strength of feeling recreation grounds create within the local populous cannot be overstated. In the months and years ahead the incidents of challenge to local authorities in respect of recreation grounds is likely to increase and the need for appropriate specialist advice is more evident than ever before.

The two gentleman from Kent who brought their case to the Charity Tribunal are a classic case in point, and going forward we may see more of this type of challenge.  

Stephen Claus is a Partner and Head of Charity and Social Enterprise at Brabners Chaffe Street LLP.