(1) Simon Richard Fraser (2) Nathan George Fraser v (1) Canterbury Diocesan Board of Finance (2) Integrated Services Programme
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE BLACKBURNE,Mr Justice Blackburne |
| Judgment Date | 06 July 2007 |
| Neutral Citation | [2007] EWHC 1590 (Ch) |
| Docket Number | Case No: HC01C02805 |
| Court | Chancery Division |
| Date | 06 July 2007 |
[2007] EWHC 1590 (Ch)
The Hon Mr Justice Blackburne
Case No: HC01C02805
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Christopher Nugee QC and Jonathan Davey (instructed by William Blakeney) for the Claimants
Francesca Quint (instructed by Brachers) for the 2 nd Defendant
Hearing dates: 12 and 13 June 2007
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Justice Blackburne:
Introduction
This is a further chapter in a dispute over who is entitled to the sale proceeds of premises where, for many years, St Philip's Church of England School in Maidstone, Kent (“the Site”) had operated. The Site, Melville Road, was sold by the first defendant, Canterbury Diocesan Board of Finance (“CDBF”), to the second defendant, Integrated Services Programme (“ISP”), for £121,000. The sale was completed on 30 June 1995. Ten years later ISP sold the Site for £400,000. That later sale was completed on 1 April 2005.
Until very shortly prior to the hearing before me the effective issue was whether, as ISP maintained, the claimants were entitled to the £121,000 received by CDBF on the sale to ISP or whether, as CDBF maintained, the claimants were entitled to the £400,000 which ISP had received on the sale in 2005. The contention of the claimants was that it was the latter. It was common ground that it was one or the other and that the answer to the question depended upon correctly identifying the event which had triggered, or but for section 1 of the Reverter of Sites Act 1987 (“the 1987 Act”) would have triggered, the right of reverter set out in the third proviso to section 2 of the School Sites Act 1841 (“the 1841 Act”) (the terms and operation of which I explain later in this judgment) to which the Site became subject when the land in question was conveyed for use as a school by a deed dated 5 April 1866.
A few days before the hearing, CDBF sought for the first time to argue that, as a result of a scheme made in 1952 by which the legal estate in the Site had come to be vested in it, the Site ceased thereafter to be subject to the possibility of reverter under the 1841 Act. This was an entirely new point. I describe it as “the scheme point” and consider it later. ISP, alerted to the point, indicated that it too wished to rely on it. In the event, for reasons which will appear, CDBF took no part in the hearing before me and it was left to ISP, which appeared by Ms Francesca Quint, to run the point together with its argument that, if a right of reverter did survive the 1952 scheme, the triggering event was sale of the Site by CDBF in June 1995 (and not any later event) and therefore that the claimants' claim lies against CDBF.
The background
I must now set out the relevant background facts. In view of the decision of the House of Lords, given in relation to an earlier chapter in this dispute and to which I come later, I can do so fairly shortly.
By the deed dated 5 April 1866 certain land, of which the Site formed the larger part, was conveyed to trustees under the authority of the 1841 Act upon trust:
“…to permit the said premises and all buildings thereon erected or to be erected to be forever hereafter appropriated and used as and for a School for the education of Children and Adults of the labouring manufacturing and other poorer classes in the Ecclesiastical District of Saint Philip Maidstone aforesaid and for no other purpose…”
The deed also stated that the school should be in union with the National Society (the full name of which was the “National Society for Promoting the Education of the Poor in the Principles of the Established Church throughout England and Wales”). It set out provisions designed to secure the continued Church of England character of the school. The Site was thereafter used for St Philip's School, as the school was known.
In fact, the school had already opened on the Site three years earlier, in January 1863. New school buildings were constructed and the school continued in operation on the Site until July 1995. Over the years it underwent various changes in governance and in the social profile of its pupillage intake.
On 10 March 1952 a scheme was made by the then Minister of Education in relation to St Philip's School and a large number of other Church of England educational foundations in the Diocese of Canterbury. Among other things, the scheme vested “all land held in trust for the Foundations” in CDBF. It is common ground that this included the Site. It is the making of the scheme that has given rise to what I have described as the “scheme point”.
On 24 April 1995 CDBF sold the Site at auction to ISP for £121,000. The sale was completed on 30 June 1995. It was a term of the sale contract that ISP, as purchaser, should grant to CDBF, as vendor, a licence to occupy the Site in accordance with an agreed draft. On completion, on 30 June 1995, ISP granted the stipulated licence by which CDBF, as licensee, was granted the right “to use the Premises [ie the Site] for the Licence Period for the purposes of and ancillary to a school”. The licence period was expressed to run from the date of the licence until determined by at least a week's notice which either side could give but which the licensor could not give before 14 July 1995. It is common ground that the licence continued until St Philip's School closed on 21 July 1995. It is also common ground that the change in ownership and the licence back to CDBF to enable the school to continue caused no break in the continuity of the school's operations at any material time up to its closure on 21 July 1995.
At least from September 1996 ISP operated a special needs school on the Site. This continued until that establishment was also closed. That happened in or about March 2000.
On 29 June 2001 these proceedings were issued. The claimants (and others), claiming to be the persons who, but for the 1987 Act, would have been entitled to ownership of the Site by virtue of its reverter under the third proviso to section 2 of the 1841 Act, contended that the right of reverter had been triggered by the school's closure in late July 1995 and that as a result (and having regard to amendments to the operation of the reverter effected by section 1 of the 1987 Act) the Site was held on trust for them. They contended that the sale of the Site by CDBF to ISP in June 1995 was irrelevant to the operation of the reverter. They sought declarations to this effect and consequential relief.
On 18 February 2005 ISP contracted to sell the Site for £400,000. By then the special needs school had long since ceased to operate. The sale was completed on 1 April 2005. This prompted further amendments to the proceedings in July 2006 to permit the claimants (by now confined to Mr Simon Fraser and Mr Nathan Fraser, the other original claimants having assigned their interests under the reverter to the Frasers) to seek an account by ISP of its dealings with the Site and, in particular, of the proceeds of sale that ISP had received for the Site, and payment to them of the amount found due on taking that account. CDBF and ISP both resisted these claims.
The 1841 Act and its amendment by the 1987 Act
The purpose and operation of the 1841 Act, so far as it affects the issues which arise in these proceedings, is as follows. (Much of the ensuing summary is taken from the very helpful explanation set out in the skeleton argument of Mr Christopher Nugee QC and Mr Jonathan Davey who appeared for the claimants.)
The 1841 Act was passed in order to facilitate the provision by landowners of parcels of land and sites for local elementary schools. It was widely used during the remainder of the 19 th century, notably, but not exclusively, for Church of England schools promoted by the National Society. The most significant provision of the 1841 Act is section 2 which removed various obstacles to the granting of land for school sites. It enabled grants of land (of up to one acre) to be made as:
“…a Site for a School for the Education of poor Persons, or for the Residence of the Schoolmaster or Schoolmistress, or otherwise for the purpose of the Education of such poor Persons in religious and useful Knowledge …”
There were therefore three statutory purposes. The relevant purpose in the case of the 1866 deed was the first, namely as a site for a school for the education of poor persons: see paragraph 5 above.
As an encouragement to charitably minded landowners (see Sir Wilfred Greene MR in Re Cawston's Conveyance [1940] Ch 27 at 33 to 34) the 1841 Act contained a statutory reverter in the third proviso to section 2 in the following terms:
“Provided also, that upon the said Land so granted as aforesaid, or any Part thereof, ceasing to be used for the Purposes in this Act mentioned, the same shall thereupon immediately revert to and become a Portion of the said Estate held in Fee Simple or otherwise, or of any Manor or Land as aforesaid, as fully as to all Intents and Purposes as if this Act had not been passed, any thing herein contained to the contrary notwithstanding.”
The effect of the third proviso was, so far as material as follows. First, the grantees of the land (the trustees of the school) did not acquire a fee simple absolute in the land but a determinable fee, that is to say an interest which would determine automatically on the reverter being triggered. Second, so long as the reverter had not been triggered, the grantor retained what was...
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