Playing the field

The Charity Tribunal recently overruled a decision of the Charity Commission, allowing the appeal of Mr Christopher Lasper in respect of the removal from the register of charities of the charity known as “The Town Field”. Stephen Claus looks at the key points raised by the case.

The Town Field (charity number 520295) is a village green in the town of Keswick, Cumbria established for the “recreational use of the local inhabitants for lawful sports and pastimes”.  Keswick Town Council is its sole corporate trustee.

In 1922, the Charity Commissioners vested The Town Field (otherwise known as Derwentwater Green and referred to for the remainder of this article as “the green”) in the Official Trustee of Charity Lands by a Scheme made pursuant to the Commons Act 1899. This Scheme was later replaced by a further Scheme made by the Minister for Education in March 1951 by which the Council was appointed as sole corporate trustee of the charity. The green itself however remained vested in the Official Trustee until its replacement in 1961 by the Official Custodian.

On 1 February 2009, Mr Lasper asked the Commission to remove The Town Field from the register of charities on the basis that, due to the operation of the Commons Registration Act 1965 (“the 1965 Act”), the charitable trusts on which the green was originally held had been extinguished. This extinguishment of the charitable trusts was the result, it was argued, of a direction made by the Commons Commissioner on 23 May 1979 directing that the Council be registered as the owner of the green under section 8(4) of the 1965 Act. This was despite the existence of the 1922 and 1951 Schemes vesting the green in the Official Trustee.

An examination of the facts (as recounted in the Tribunal’s Decision) reveals that the Official Custodian did not come forward to claim the green after public notice was given by the Commons Commissioner pursuant to the 1965 Act. Whilst no explanation has been given as to why the Official Custodian did not claim the green, the Tribunal has suggested that this can be explained by confusion between the name The Town Field and the name Derwentwater Green. However coming forward in this way is not the function of the Official Custodian, rather that is a function of the Trustee.

The Commission, in response to Mr Lasper’s request, refused to remove the charity from the register, arguing that the Commons Commissioner’s 1979 direction was made in error. The Commission contended that the direction was based on inaccurate facts, namely that there was no owner of the green. In fact the green was vested in the Official Custodian, and managed by a Trustee. Furthermore, the Commission argued that there is no provision in section 8 or elsewhere of the 1965 Act which expressly states that charitable trusts are extinguished once land has been vested in a local authority.

Mr Lasper appealed to the Tribunal who, following a failed application by the Commission to strike out the appeal, found unanimously in his favour on 14 January 2011. The Tribunal held that, whilst the Commission made a “weighty point” in respect of section 8 of the 1965 Act, the purpose of the 1965 Act had to be recognised. The Tribunal concluded that the survival of the charitable trusts was inconsistent with the purpose of the 1965 Act which was intended to remove factual and legal uncertainties about the status of town and village greens.

The Tribunal has stated that the charity should be removed from the register in six months unless, following discussions between the Commission and the Council, it emerges that any claims for restitution might be brought by the charity.

Analysis

The relevant legislation considered by the Tribunal in this case is recounted here for ease of reference.

Section 8(4) of the 1965 Act states:

“On the registration under this section of a local authority as the owner of any land the land shall vest in that local authority and, if the land is not regulated by a scheme under the Commons Act 1899, section 10 and 15 of the Open Spaces Act 1906 (power to manage and make byelaws) shall apply in relation to it as if that local authority had acquired the ownership under the said Act of 1906”

Section 10 of the Open Spaces Act 1906 (“the 1906 Act”) reads:

“A local authority who have acquired any estate or interest in or control over any open space or burial ground under this Act shall, subject to any conditions under which the estate, interest, or control was so acquired:

(a) hold and administer the open space or burial ground in trust to allow, and with a view to, the enjoyment thereof by the public as an open space within the meaning of this Act and under proper control and regulation and for no other purpose; and

(b) maintain and keep the open space or burial ground in a good and decent state.

and may inclose it or keep it inclosed with proper railings and gates, and may drain, level, lay out, turf, plant, ornament, light, provide with seats, and otherwise improve it, and do all such works and things and employ such officers and servants as may be requisite for the purposes aforesaid or any of them”

And, Section 126(4B) of the Local Government Act 1972 (“the 1972 Act”) reads:

“Where land appropriated by virtue of subsection (4A) above is held –

(a) for the purposes of section 164 of the Public Health Act 1875 (pleasure grounds); or

(b) in accordance with section 10 of the Open Spaces Act 1906 (duty of local authority to maintain open spaces and burial grounds),

the land shall by virtue of the appropriation be freed from any trust arising solely by virtue of its being land held in trust for enjoyment by the public in accordance with the said section 164 or, as the case may be, the said section 10”

The Tribunal’s approach in this case can be summarised as follows:

• The Commons Commissioner, by operation of the 1965 Act, was correct in his decision to vest the green in the Council under section 8(4) following completion of the statutory process of registration. It is not disputed that the correct process was followed
• By operation of section 8(4), the Council now hold the green under the statutory trusts specified in section 10 of the 1906 Act
• Parliamentary intention in the passing of the 1965 Act was to remove factual and legal uncertainties about the status of town and village greens and as such, the “survival of the charitable trusts of which the local authority might have no knowledge would undermine this process”
• The operation of section 126(4B) of the 1972 Act in the event of an appropriation by the local authority serves as further evidence of the extinguishment of the charitable trusts. As the Tribunal states, “if unknown charitable trusts persisted over such proceeds of sale there would…be an unwitting breach of trust”.

However, the Tribunal’s Decision raises a number of interesting points worthy of comment.

Firstly, and of least significance is the fact that the green was formerly held under a 1922 Scheme made by the Charity Commissioners pursuant to section 18 of the Commons Registration Act 1899. This was subsequently replaced by a Scheme made by the Minister of Education in 1951.

As noted above, section 8(4) of the 1965 Act states that section 10 of the 1906 Act will apply if “the land is not regulated by a scheme under the Commons Act 1899” (emphasis added). Without having had the benefit of seeing the 1951 Scheme that replaced the 1922 Scheme, it is assumed that the provisions of the 1922 Scheme were replaced in their entirety.

Secondly, an interesting question as to interpretation is raised by the wording of section 8(4) of the 1965 Act. Section 8(4) is stated above but emphasis is placed here on the words “shall apply in relation to it as if that local authority had acquired the ownership under the said Act of 1906”.

Under the 1906 Act, land is acquired by a local authority via transfer under sections 2, 3, 4 or 5. A transfer of ownership under these provisions carries with it the subsisting trusts at the date of transfer unless varied or modified by order of the Charity Commission or the courts. Section 10 of the 1906 Act applies to such transfers however, the disposal of such land by a local authority under section 126 of the 1972 Act does not free the land from the subsisting trusts as is commonly assumed by local authorities.

As stated in section 126(4B), land appropriated by a local authority “shall by virtue of the appropriation be freed from any trust arising solely by virtue of its being land held in trust for enjoyment by the public in accordance with the said section 164 or, as the case may be, the said section 10”. These emphasised words limit the freedom to get discharge from trusts to trusts arising solely under section 164 of the Public Health Act 1875 and section 10 of the 1906 Act.

Whilst it is recognised that the green transferred to the Council by virtue of section 8(4) of the 1965 Act as opposed to sections 2, 3 ,4 or 5 of the 1906 Act, does the wording of section 8(4) cause the subsisting trusts to survive “as if that local authority had acquired the ownership under the said Act of 1906”? The Commission’s view and the Tribunal’s interpretation of this wording would be interesting.

Thirdly, and perhaps most significantly, it is stated throughout the Tribunal’s Decision that the Official Custodian did not come forward to claim the green of which he was the owner during the inquiry by the Commons Commissioner under section 8 of the 1965 Act.

Whilst this is true, does this represent a misunderstanding of the role of the Official Custodian whose responsibility is simply to hold land on behalf of charities. Trustees retain all the management functions which, properly speaking, should include responding to inquiries of the Commons Commissioner in respect of the land of which it is/they are trustee. In short, “vesting charity land in the Official Custodian does not change any of the powers, duties or responsibilities of the charity trustees”.

Interestingly in this case, the sole trustee under the 1951 Scheme was the Urban District Council of Keswick, later replaced by Keswick Town Council. As such, it was the responsibility of the Council to come forward to claim the green in its capacity as sole trustee. Its failure to do so, according to the Tribunal, has now resulted in the loss of the green to the charity, presumably a breach of trust?

Perversely, it is now the Council who has benefitted most from the Commons Commissioner’s direction, and subsequently the Tribunal’s Decision, by taking ownership of the green (subject to the statutory trusts in section 10 of the 1906 Act). Furthermore, if the Tribunal’s Decision is upheld in the event of appeal, then as per section 126 of the 1972 Act, the Council may treat this land as being free of these statutory trusts and consequently, the Council will be permitted to apply the proceeds of any sale of the green to the general running costs of the Council.

In simple terms, the Council, via its failure to speak up as owner of the land in breach of its duty as sole trustee of the charity, has (a) cut out/replaced the Official Custodian as title holder of the green; and (b) extinguished the charitable trusts on which the green was previously held.

Comment

This case raises a number of interesting factual, legal and interpretation points on which the comments of the Commission and the Tribunal would be interesting in the event of an appeal.

Whether an appeal will be brought is a matter for the Commission, however, it seems almost unacceptable that a breach of trust by the Council can bring about an extinguishment of the charitable trusts which, ultimately, benefit the Council.

Whilst the intention of the 1965 Act might have been to remove factual and legal uncertainties about the status of town and village greens, its intention cannot have been to create a loophole whereby a council can free land under its sole trusteeship from the charitable trusts under which it was held.

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