The High Court takes a purposive approach to the question of whether land has ceased to be used as a school
During the 19th century, Victorian landowners were encouraged to grant land to institutions promoting science, the arts and literature and for school sites and places of worship. Hence the enactment of the School Sites Act 1841, the Literary and Scientific Institutions Act 1854 and the Places of Worship Sites Act 1873. However, when land ceases to be used for the purposes mentioned in the relevant statute, the legislation provides that it reverts to the grantor.
As time passed, problems with the legislation and the difficulty of identifying those with rights of reverter prompted the enactment of the Reverter of Sites Act 1987, which substituted a trust of land in favour of revertees instead. As a result, the revertees are entitled to the proceeds of sale if land ceases to be used for the charitable purposes for which it was donated. This enables two or more trustees of the land to sell it, overreaching the interest of any revertees, and to hold the proceeds of sale on trust for them instead.
Rittson-Thomas v Oxfordshire County Council [2018] EWHC 455 (Ch); [2018] PLSCS 48 raised a novel question. The claimants were the heirs of a landowner who had conveyed land to the council under the 1841 ACT to provide a school for children of the parish. In 2003, the council borrowed approximately £2m to build a new school on adjacent land, which it already owned. It closed the original school in February 2006 and sold the site of the original school afterwards for £1.355m, with the intention of using the proceeds of sale to repay some of the borrowing.
During the 19th century, Victorian landowners were encouraged to grant land to institutions promoting science, the arts and literature and for school sites and places of worship. Hence the enactment of the School Sites Act 1841, the Literary and Scientific Institutions Act 1854 and the Places of Worship Sites Act 1873. However, when land ceases to be used for the purposes mentioned in the relevant statute, the legislation provides that it reverts to the grantor.
As time passed, problems with the legislation and the difficulty of identifying those with rights of reverter prompted the enactment of the Reverter of Sites Act 1987, which substituted a trust of land in favour of revertees instead. As a result, the revertees are entitled to the proceeds of sale if land ceases to be used for the charitable purposes for which it was donated. This enables two or more trustees of the land to sell it, overreaching the interest of any revertees, and to hold the proceeds of sale on trust for them instead.
Rittson-Thomas v Oxfordshire County Council [2018] EWHC 455 (Ch); [2018] PLSCS 48 raised a novel question. The claimants were the heirs of a landowner who had conveyed land to the council under the 1841 ACT to provide a school for children of the parish. In 2003, the council borrowed approximately £2m to build a new school on adjacent land, which it already owned. It closed the original school in February 2006 and sold the site of the original school afterwards for £1.355m, with the intention of using the proceeds of sale to repay some of the borrowing.
Did the council hold the proceeds of sale on trust for the claimants because the land ceased to be used for education as soon as the old school buildings closed? Given that section 14 of the 1841 Act includes a power of sale, which enables a school to be moved from one location to another, the council argued that it would frustrate Parliament’s intention if a school must remain in use on the original site until sale in order to prevent rights of reverter arising.
The Law Commission report that preceded the 1987 Act stated that “a sale under section 14 has always had to be carried out before the closure of the school. This is because, once reverter has occurred, the trustees have no title (or at least have no beneficial title enabling them to employ the proceeds in furtherance of the purpose of the sale).” However, the point has not been tested in any decided case.
The claimants argued that reverter is not a process; it is an event. And, if land is not sold before cessation of the relevant use, the reverter is automatic and irrevocable.
But the judge chose to read the legislation less restrictively. Previous authorities cited to the court – and the Law Commission’s comments – concerned schools that had closed permanently, where there was no question of applying proceeds of sale to the purchase of another site. And, in circumstances like this, where a school has moved and the original site is being sold to raise money to contribute to the cost of new school buildings, the legislation does not necessarily require the original site to be sold before, or at the same time as, the school is moved to new premises.
Allyson Colby, property law consultant
