Land gifted by benefactor for use as school reverted back to his descendants when school replaced

Posted by Ronan Daffey on

The Law

The Court of Appeal has clarified the legal position under legislation from a very different era but whose terms remain relevant and are still being felt today, and local authorities will need to take note of this ruling and organise their educational buildings provision accordingly. The situation that gave rise to the need for a court ruling in this case is more common than some might think.

The School Sites Act 1841 was enacted to encourage philanthropists to donate small parcels of their land of less than one acre for the public good to be used for the education of the poor, with provision for the land to be returned to them or their descendants should the land ever cease to be used for educational purposes. Section 14 of the Act introduced a sensible provision that allowed the local authority to sell the land to buy another site or improve other buildings for the school but, absent this, legal title to the land would "revert" to the grantor on the use ceasing.

Over a century later, legal issues arose as the reverter provisions began to bite, because the 1841 Act automatically and immediately transferred the title to the land back to the original grantor as soon as use as a school ceased, leaving the local authority as a trespasser. On the other side of the same coin, if this situation persisted for 12 years, the local authority would re-acquire the title by adverse possession, dispossessing the grantor, so parliament enacted the Reverter of Sites Act 1987 to restore order. This provides that, on the cessation of the educational use, title to the land remains with the local authority which then holds it, and the proceeds of its sale, on trust for the grantor, thus preventing the trespass and possible eventual dispossession of the intended owner under the 1841 Act.

The Facts

Mr. Fleming donated two small parcels of land, one in 1914 and the other in 1928, to be used respectively as part of the playground and for a new building at what is now Nettlebed Primary School in South Oxfordshire. At the turn of the century, Oxfordshire County Council carried out an assessment of pupil numbers and could see that bigger premises were going to be needed to accommodate more children of primary school age, so started to plan for increased provision.

It built a new school on adjacent land that it already owned between 2004 and 2006, and the children moved into the new accommodation in February 2006. The Council then started marketing the former school, including the now late Mr. Fleming's land, for sale for residential development and sold it in summer 2007, having always made it clear that the sale proceeds would be used to reimburse part of its expenditure on building the new school.

Some, but not all, of Mr. Fleming's descendants, including the claimants, then claimed that the proceeds of sale of the land donated by their ancestor (approximately £1.25m) belonged beneficially to them as the local authority had been holding the land on trust for them since it ceased to be used as a school from 2006 onwards. If they were successful, this would obviously leave a big hole in the Council's budget for capital expenditure on its educational facilities.

The Decision

The Court of Appeal reversed the lower High Court decision and ruled that the Council had indeed been holding the land, and later the proceeds of its sale, on trust for the claimants. The wording of the statutes did not allow it to earmark subsequently received proceeds of sale to reimburse expenditure that it had already incurred. The playground and old school building had been vacated and left unused for any purpose for over a year by the time that it was sold, so the claimants were entitled to the proceeds of sale from the residential property developer.

What local authorities need to do

Fortunately the Court of Appeal, in the guise of Lord Justice Patten, has given the clearest possible steer for how education authorities can manage their property portfolio without risking the loss of valuable resources. The power to use funds that were originally given as physical property to buy alternative land or improve existing property remains, but it is only exercisable up to the moment when that physical property ceases to be used for its statutory purpose. He said "I would accept that this could include ancillary activities such as the use of the site as a playground or for meals. But, in this case, the old site remained vacant with no further possible use for educational purposes."

The message, therefore, is to continue to use the redundant site in some way, maybe for P.E. or nature study if it is outdoors, or occasional drama lessons if it is indoors. The actual use will always depend on circumstances, but it is important that some use is made of the land right up until the moment that contracts are exchanged for its disposal to someone planning a non-educational use.

Rittson-Thomas vs. Oxfordshire County Council 2019 EWCA Civ 200

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Ronan is responsible for keeping the firm’s Real Estate team fee earners up to date with legal developments.

Ronan Daffey
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