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Supreme Court agrees to hear case where town council sold land subject to statutory trust without complying with statutory requirements

The Supreme Court has granted permission to appeal in a dispute over what happens when a local authority disposes of land subject to a statutory trust for public recreational purposes without complying with the relevant statutory requirements.

Local resident Peter Day brought the case over Shropshire Council’s grant of conditional planning permission for 15 homes on land off Greenfields Recreation Ground, Shrewsbury.

The site was subject to a statutory trust for public recreational purposes but had been sold in 2017 by Shrewsbury Town Council without compliance with the mandatory requirements for advertising such a disposal of open space.

In the High Court ([2019] EWHC 3539 (Admin)), Lang J held that, if the disposal of the land did not bring the trust to an end, the trust obligations were nonetheless unenforceable as against the developer as purchaser.

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She held that, in determining the planning application, the local planning authority had acted unlawfully in failing to take reasonable steps to acquaint itself with the site's history and legal status and to consider the legal implications of the sale, but went on to hold that, had the LPA acted lawfully, it would have recognised the unenforceability of the trust obligations against the developer and it would still have granted the planning permission that it did.

Thus, applying section 31(2A) of the Senior Courts Act 1981, she concluded that no relief should be granted; and she refused the judicial review.

In his appeal, Mr Day contended that Lang J was wrong to refuse his application.

In the Court of Appeal Lord Justice David Richards, Lord Justice Hickinbottom and Lady Justice Andrews found in Day, R (On the Application Of) v Shropshire Council [2020] EWCA Civ 1751 that the development site had been sold by the town council to the developer without compliance with the requirements of section 123(2A) of the Local Government Act 1972, but the developer did not have actual knowledge of that failure (“indeed, it appears to be agreed that neither did it have constructive knowledge”).

The Court of Appeal concluded that following disposal of the development site by the town council without compliance with the statutory requirements, the section 10 trust and the right of public recreation over that land (and the concomitant obligations) did not subsist.

A Supreme Court panel comprising Lord Kitchin, Lord Sales and Lord Leggatt granted permission last month, with the Court publishing the outcome of its most recent permission decisions this week (28 March).

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