Barnes v Derby Diocesan Board of Finance and Another

(As approved by the Judge)

Introduction

1.The issue in this case is whether the First Defendant, Derby Diocesan Board of Finance Limited (“Derby DBF”) has the power to sell the former parsonage house of the former benefice of Bamford in the diocese of Derby (“the Property”).

2.The issue turns upon the meaning and effect of a scheme (“the Scheme”) made by the Church Commissioners pursuant to the Pastoral Measure 1983 (“the 1983 Measure”), which provided for the Property to be transferred to Derby DBF “for diocesan purposes”.

3.In these proceedings the Claimant seeks a declaration that Derby DBF has no power to sell the Property, and an injunction restraining sale of the Property by Derby DBF.

Representation

4.At the hearing of these proceedings before me Mr. Philip Petchey represented the Claimant, Mr. Thomas Seymour represented Derby DBF, and Mr. William Henderson represented the Attorney-General.

The background facts in more detail

5.In 1860 William Cameron Moore, the great-grandfather of the Claimant, gave land in Bamford as a site for a church and also endowed it in the sum of £1,000. He also gave land for a parsonage house for the parish of Bamford, namely the Property, and in 1866 gave further land to increase the size of the garden of the Property.

6.Prior to the Scheme, the Claimant was the patron of the benefice of Bamford.

7.By the Scheme, which came into effect on 1st January 2000, the benefice of Bamford was united with the benefice of Hathersage to create the new benefice of Hathersage with Bamford and Derwent, comprising the parish of Hathersage and the parish of Bamford. The Scheme provided that the parish of Bamford would be renamed the parish of Bamford and Derwent (“the parish of Bamford”) and would continue distinct from the parish of Hathersage.

8.The Scheme directed that the parsonage house of the former benefice of Hathersage would be the place of residence of the incumbent of the new benefice.

9.Paragraph 5 of the scheme provided as follows:

“5.The parsonage house of the benefice of Bamford, together with the site and appartenances thereof and the grounds usually occupied and enjoyed therewith, shall be transferred to the Derby Diocesan Board of Finance Limited for diocesan purposes”.

10.The Scheme appointed the Claimant and the Duke of Devonshire joint patrons of the new benefice.

11.The effect of the Scheme was that, upon the Scheme coming into effect, the Property vested automatically in Derby DBF 1983 Measure, Schedule 3, para.7.5.

12.Derby DBF wishes to sell the Property. Derby DBF is a

company limited by guarantee, without a share capital, and claims that it has power to sell by virtue of the objects specified in its memorandum of association.

13.The Claimant is concerned to ensure that, if the Property is sold, the proceeds of sale, or part of them, are applied within the parish of Bamford, to reflect the fact that the land for the Property had originally been given for the benefit of that parish. He claims that Derby DBF has no power to sell the Property, and that a power of sale of the Property can only be conferred on Derby DBF if the Scheme is amended by a further scheme or by an order made under s.39 of the 1983 Measure. In either case, he would have an opportunity to make representations as to provisions dealing with the manner in which the proceeds of sale should be applied.

The legal setting

14.Church of England Measures, duly passed and assented to, have the force and effect of an Act of Parliament: Church of England Assembly (Powers) Act 1919.

15.Part 1 of the 1983 Measure sets out the procedure for making pastoral schemes and orders altering parochial arrangements within the Church of England. It lays down a detailed process of consultation and approval. Ultimately, a scheme is sealed by the Church Commissioners (“the Commissioners”), who submit it to the Privy Council for confirmation by Her Majesty in Council.

16.Part II of the 1983 Measure deals with the contents and effect of pastoral schemes. Section 17 provides that a scheme may provide for the creation, by union or otherwise, of new benefices. Section 31(1) is critical in the present case and provides as follows:

“31: Parsonage houses.

(1)A pastoral scheme may provide for any of the following matters:

(a)The designation of any house belonging to a benefice as the place of residence of the incumbent of any benefice created or affected by the scheme or of the incumbent of any benefices to be held in plurality by or by virtue of the scheme;

(b)the designation of any house as the place of residence of any vicar in a team ministry established for the area of any benefice by or by virtue of the scheme;

(c)the transfer to the incumbent of any benefice as his official residence, or as a site therefore, of a parsonage house, part of a parsonage house, a house situated on diocesan glebe land, any parsonage land or any diocesan glebe land;

(d)the transfer of a parsonage house, part of a parsonage house or any parsonage land to the diocesan board of finance to be held by the board as part of the diocesan glebe land of the diocese or for disposal in accordance with paragraph 9 of Schedule 3 or for use for parochial or diocesan purposes”.

17.Paragraph 5 of the Scheme was made pursuant to the power conferred by s.31(1)(d).

18.Section 31(1)(d) specifies three categories of transferred land; namely, land to be held as diocesan glebe land, land to be held for disposal, and land to be held for use for parochial or diocesan purposes.

19.Glebe land is defined in the Endowments and Glebe Measure 1976 (“the 1976 Measure) s.45(1))” as:

“land vested in the incumbent of a benefice (when the benefice is full) as part of the endowments of the benefice other than parsonage land”.

20.Historically, glebe land belonged to a benefice —that is to say the freehold office held by a rector or vicar (compare s.86 of the 1983 Measure) —and vested in the incumbent and provided income for the incumbent. Section 15 of the 1976 Measure provided for the transfer of glebe land to the diocesan board of finance (“the DBF”) for each diocese. Section 19 of the 1976 Measure provided for the diocesan glebe land of a diocese to be held, managed and dealt with by the DBF for the benefit of the diocesan stipends fund of the diocese. Section 20 of the 1976 Measure conferred power on the DBF to sell, exchange, lease, mortgage or otherwise deal with any diocesan glebe land on such terms as the Commissioners may approve. Section 25 of the 1976 Measure provided for the proceeds of, or the capital monies arising from any sale, exchange or other dealing with diocesan glebe land to be paid by the DBF to the Commissioners, and for the allocation of such payment by the Commissioners to the capital account of the diocesan stipends fund of the relevant diocese.

21.Although of no relevance to the matters which I have to decide, I should mention that the duty of the Commissioners to keep a capital account and an income account for the diocesan stipends fund of each diocese was transferred to the DBF of each respective diocese by the Church of England (Miscellaneous Provisions) Measures 2000 (“the 2000 Measure”), which came into effect on 1st January 2001.

22.So far as concerns the second category of transferred land mentioned in s.31(1)(d), namely land to be held by the DBF for disposal, para.9(1) to (4) of Schedule 3 to the 1983 Measure set out the manner of such disposal and the application of the proceeds of sale. It is sufficient to say, for present purposes, that those sub-paragraphs provide that the Commissioners must approve the terms on which the DBF sells or otherwise disposes of such property (para.9(2)); the net proceeds shall, subject to the terms of the scheme, be paid into the capital account of the diocesan stipends fund or into the diocesan pastoral account, or partly into the one and partly into the other as the DBF determines (para.9(3)); and the DBF may elect to take over “as part of their corporate property” any such property, for such consideration as the Commissioners may determine to be its fair value, and the amount of such consideration shall be applied as if it were the net proceeds of the disposal of the property (para.9(4)).

23.Diocesan pastoral accounts, mentioned in para.9(3) of Schedule 3 to the 1983 Measure, were, at the time of the Scheme, governed by ss.77 and 78 of the 1983 Measure (now amended). Section 77 provided that the Commissioners should hold an account for each diocese, to be called the diocesan pastoral account. Section 78 described the various uses to which the funds in such accounts could be used. Sub-sections (1) and (2) of s.78 specified particular heads of expense which might be paid with such funds. Sub-sections (3) and (4) (which has now been repealed) continued as follows:

(3)Where, after consultation with the diocesan board of finance, the Commissioners are satisfied that any monies standing to the credit of a diocesan pastoral account are not required or likely to be required for meeting the expenses or expenditure referred to in the...