Haslemere Estates Ltd v Baker
| Jurisdiction | England & Wales |
| Date | 1982 |
| Court | Chancery Division |
Charity - Sale or lease of trust property - Commissioners' consent - Conditional contract for development of trust land - Consent of Charity Commissioners withheld - Whether contract invalidated - Whether developers “person interested in the charity” - Whether entitled to bring charity proceedings in respect of contract -
The governors of a charity, by an order of the Secretary of State for Education and Science dated January 6, 1971, were excepted from the provisions of section 29 (1) of the Charities Act 1960 requiring the consent of the Charity Commissioners in respect of “any lease” executed by them on or before December 31, 1980. During 1979, proposals by the plaintiffs for the development of a site owned by the charity were accepted by the governors, subject to contract and subject to the obtaining of planning consent. It was understood that the consent of the Charity Commissioners would be required to the development agreement and to a form of draft lease. The plaintiffs agreed that “planning permission” in the agreement was to include the granting by the commissioners of an order under section 29 of the Act. On March 31, 1980, the agreement, which was made conditional on the grant of planning permission within two years, was executed. On May 7, the commissioners informed the governors that the Secretary of State's order of January 1971 did not cover the proposed transaction and that the commissioner's prior consent was necessary. On May 20, 1980, the local authority wrote, permitting the development subject to conditions. On June 13 the plaintiffs registered the contract as a class C (iv) land charge. After discussion the governors decided to invite tenders for the proposed development on a new basis, but using the plans prepared by the plaintiffs, and a contract dated September 15, 1980, was made to that effect, with the approval of the commissioners. A better offer than that of the plaintiffs was made, and in January 1981, the commissioners wrote to the governors requiring them to explore certain conditional offers. The plaintiffs refused the governors' request for vacation of the registration of the estate contract. On May 15, 1981, the plaintiffs issued a writ claiming that the agreement of March 31, 1980, had become unconditional and ought to be performed, and on May 20 the writ was registered as a pending land action. The governors moved to vacate the registration of the contract as a class C (iv) land charge and the registration of the writ as a pending land action.
On the questions whether the contract of March 31, 1980, was registrable as an estate contract and whether the writ was registrable as a pending land action: —
Held, (1) that the word “lease” in the 1971 order of the Secretary of State did not include an agreement for a lease and that, in any event, the contract was essentially a building agreement and, accordingly, there was no unconditional contract for a lease in existence (post, p. 1116B–C).
(2) That a contract made “subject to and conditional upon” an order of the Charity Commissioners under section 29 (1) of the Act of 1960 was not invalidated by that section but was merely rendered ineffective until authorised by the commissioners (post, pp. 1116H–1117C).
(3) That if on an application to vacate an entry a fair, arguable case in support of registration could be shown the matter ought to stand over until trial of the action; and that, since a conditional contract relating to land was probably registrable as an estate contract if the condition was one to be satisfied not by the parties but by some extraneous person or event, the application for vacation of the registration would be refused (post, pp. 1118F–1119A).
(4) That the plaintiffs' claim related to money, with a hope that the court would create a charge on the land if the money claim succeeded and was too tenuous to support registration as a pending land action under section 17 (1) of the
Held, further, than on the true construction of section 28 (1) of the Act a contract with the trustees of a charity, even if it related to land or other property of the charity did not render the contractor a “person interested in the charity” and that, accordingly, the plaintiffs' claim for an order of the court under section 29 (1) of the Act authorising the governors to perform the contract of March 31, 1980, was prohibited by section 28 (1) and so should be struck out (post, p. 1122E–G).
The following cases are referred to in the judgment:
Davis v. Nisbett (
Hussey v. Palmer [
Lehmann v. McArthur (
London and South Western Railway Co. v. Gomm (
Manchester Diocesan Council for Education v. Commercial & General Investments Ltd. [
Milner v. Staffordshire Congregational Union (Inc.) [
Pritchard v. Briggs [
Rawlplug Co. Ltd. (The) v. Kamvale Properties Ltd. (
Rendall v. Blair (
Richards (Michael) Properties Ltd. v. Corporation of Wardens of St. Saviour's Parish, Southwark [
Smith v. Butler [
Thomas v. Rose [
Turley v. Mackay [
Williams v. Burlington Investments Ltd. (
The following additional cases were cited in argument:
Aberfoyle Plantations Ltd. v. Cheng [
Benthall v. Kilmorey (Earl of) (
Brewer Street Investments Ltd. v. Barclays Woollen Co. Ltd. [
Calgary and Edmonton Land Co. Ltd. v. Dobinson [
Holme v. Guy (
Lipmans Wallpaper Ltd. v. Mason & Hodghton Ltd. [
Prenn v. Simmonds [
Willmott v. Barber (
MOTION
By writ dated May 15, 1981, and statement of claim dated May 20, the plaintiffs, Haslemere Estates Ltd. and Carlos Estates Ltd., property developers, brought an action against the first defendants, Charles William Baker, on behalf of himself and the Estates Governors of Alleyn's College of God's Gift at Dulwich, and the second defendants, Montagu Evans & Son, a firm of chartered surveyors advising the governors, in which the plaintiffs claimed, inter alia, against the first defendants a declaration that upon the true construction of an order made by the Secretary of State for Education and Science of January 6, 1971, and of the Charities Act 1960 and in the events that had happened, an agreement dated March 31, 1980, between the first defendants and the second plaintiffs relating to the development of Hambledon House, Dulwich and adjoining land had become unconditional and ought to be performed and carried into execution by the first defendants. Alternatively, in paragraph 24 of the statement of claim and paragraph 2 of the prayer for relief, they claimed an order under section 29 (1) of the Charities Act 1960 authorising the first defendants to perform their part of the agreement dated March 31, 1980, and to grant the leases to be granted pursuant thereto, or an inquiry whether it would be for the benefit of the charity, of which the first defendants were trustees, that such an order should be made and, if it should be so found, and order accordingly. They also claimed damages for negligence and other relief against the second defendants.
By notice of motion dated July 10, 1981, the first defendants sought orders that the registration at the Land Charges Registry of the Class C (iv) land charge entry No. 160355 registered on June 13, 1980, on behalf of the second plaintiffs be vacated; that the registration at the Land Charges Registry of a pending land action entry No. 4207 registered on May 20, 1981, on behalf of the plaintiffs be vacated; that paragraph 24 of the plaintiffs' statement of claim and paragraph 2 of the prayer for relief be struck out on the ground that no cause of action was disclosed thereby; and costs.
The facts are stated in the judgment.
Richard Scott Q.C. and David Burton for the plaintiffs.
Leolin Price Q.C. and Gordon Nurse for the defendants.
March 10. SIR ROBERT MEGARRY V.-C. read the following judgment. This is a motion by the first defendants in an action. In it, they...
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