PLT Masthead 430

Masthead Education Property and Projects

Reverter of school site

Property sale 827489 s 146x219The heirs to a landowner who donated a site for a school more than 100 years ago recently claimed a substantial proportion of the proceeds of sale held by a council. James Goudie QC explains the outcome.

The case of Rittson-Thomas v Oxfordshire County Council (2018) EWHC 455 (Ch) concerned two grants of land under Section 2 of the School Sites Act 1841 (“the 1841 Act”). It gave rise to a question concerning the exercise of the power of sale contained in Section 14 of the 1841 Act. Although the operation of the 1841 Act has been amended by the Reverter of Sites Act 1987 (“the 1987 Act”), the 1841 Act remains in force, and has, it seems, generated a good deal of litigation. However, the question at the heart of this case had not previously fallen for determination.

That question involved considering two rival approaches to interpretation: on the one hand, that land ceases to be used as the site for a school the moment the school is closed; and, on the other, that the power of sale exists to enable a school to be moved from one location to another, and that the intention behind Section 14 of the 1841 Act would be frustrated if, in order to avoid the reverter of the land to the grantor, it was necessary for the school to remain in use at the original site until the new site is ready for it to move into. The Judge preferred the latter interpretation. He said:

“71.      … I consider that, properly interpreted, section 14 of the 1841 Act does not require the trust property to be sold first and the money realised from the sale only then to be applied towards the cost of purchase or improvement of other suitable new land or buildings. Moreover, there are good reasons, touched on by the Law Commission and exemplified by the facts of the present case, for reading section 14 less restrictively, so that it does not mean that a sale or exchange of school land or buildings always has to be carried out before or at the same time as the school is moved to new premises.

72. It is foreseeable that making it more difficult for trustees who wish to sell an existing site in circumstances where their sole and earnest concern is to enable the school to be moved to a more suitable site may produce various consequences. If the trustees are required to keep the school in operation until the time of the move, that may cause them practical difficulties and may depress the price they are able to realise from the sale, all of which will be to the detriment of the trust. If the trustees are driven to resort to devices in an attempt to eliminate or reduce these adverse consequences, that may be detrimental to the education of the children; and, if the devices fail and reverter therefore occurs, that may produce a windfall for the descendants of the grantor. There is no obvious reason why any such effects should be intended by the legislation.

73. I do not consider that this interpretation of the provisions of sections 2 and 14 of the 1841 is inconsistent with the provisions of the 1987 Act, or that the contrary interpretation, urged upon me by the Claimants, is more consistent with the provisions of the 1987 Act. I agree that the 1987 Act envisages that the statutory power of sale or exchange must be exercised before the statutory reverter occurs. I also agree that reverter is an event, and once it occurs it is automatic and irrevocable and cannot be undone by a subsequent exercise of the statutory power of sale or exchange. In my view, however, the statutory power of sale or exchange can lawfully be exercised in the manner that the Defendant sought to exercise it in the present case; and, in circumstances where it is thus exercised, section 6 of the 1987 Act has the effect of preventing the trust that would otherwise arise under section 1 from arising.”

James Goudie QC is a barrister at 11KBW. This article first appeared on the set's Local Government Law blog.

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