Re Hampton Fuel Allotment Charity

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE NICHOLLS
Judgment Date29 Mar 1988
Judgment citation (vLex)[1988] EWCA Civ J0329-3
Docket Number88/0296

[1988] EWCA Civ J0329-3

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

(MR. JUSTICE KNOX)

Royal Courts of Justice.

Before:

Lord Justice Nicholls

and

Lord Justice Staughton

88/0296

CH 1987 R. No. 4707

(1) London Borough of Richmond Upon Thames
(2) Maureen Joan Mary Woodriff
(3) Anthony George Cavan
(Plaintiffs) Appellants
and
(1) The Reverend John Arnold Rogers
(2) Alfred Hugh Wood
(3) James Leonard Hargreaves
(4) Marie Theresa Martin (Married Woman)
(5) George Ivan Robinson
(6) Diane Jennie Margaret Lister (Married Woman)
(7) Halford Ernest Severn
(8) Andrew Donald Smith
(9) Roy Ellis
(10) St. Clare Nurseries Limited
(11) J. Sainsbury Plc
(12) Her Majesty's Attorney General
(Defendants) Respondents

MR. LEOLIN PRICE, Q.C., MR. H. PICARDI and MISS S. THOMAS (instructed by Mr. G.S. McGowan, Solicitor, Richmond Borough Council) appeared on behalf of the (Plaintiffs) Appellants.

MR. JONATHAN PARKER, Q.C. and MR. M. BRIGGS (instructed by Messrs. Cozens & Moxon of Hampton) appeared on behalf of the (First to Ninth Defendants) Respondents.

MR. GAVIN LIGHTMAN, Q.C. and MR. A. BOYLE (instructed by Messrs. Oppenheimers) appeared on behalf of the Eleventh Defendant.

MR. D. UNWIN (instructed by the Treasury Solicitor) appeared on behalf of the Twelth Defendant.

THE TENTH DEFENDANTS were not represented.

LORD JUSTICE NICHOLLS
1

This is the judgment of the court. These two appeals concern the meaning of the expression "any person interested in the charity" in section 28 of the Charities Act 1960. On 8th March, 1988 Mr. Justice Knox began the trial of two actions, one started in 1987 and the other in 1988. They are concerned with the administration of a charity known as the Hampton Fuel Allotment Charity. The plaintiffs in each action are the London Borough of Richmond-upon-Thames, which we shall call "Richmond council", and two individuals. The defendants are eight individuals (nine, in the case of one of the actions), St. Clare Nurseries Limited, J. Sainsbury plc and Her Majesty's Attorney General. The individuals who are parties to the actions, whether as plaintiffs or defendants, are trustees of the charity.

2

The main asset of the charity is a 10-acre plot of land at Hampton, in the London Borough of Richmond-upon-Thames, known as St. Clare's Nurseries. The freehold belongs to the charity, and it is subject to a 15-year lease granted in 1978. The present lessee is St. Clare Nurseries Limited which uses the land as a garden centre and nursery garden. The land has development potential, and a majority of the trustees, apparently, wish to sell the land or an option to buy the land to Sainsbury. Sainsbury is interested in building a supermarket on the site. Planning permission has been granted. According to the statement of claim in the 1987 action, the proposal is that the trustees should be paid £ 1/2 million for the grant of an option to buy the land for £7 1/2 million. St. Clare Nurseries Limited has entered into a contract to assign the residue of the lease to Sainsbury.

3

A minority of the trustees take the view that a sale by the charity on these terms would be a sale at a gross undervalue, and that the current open market value of the property with vacant possession and available for development is £14 million.

4

Hence these actions. The relief sought in the 1987 action includes an order that the sale of the property is not to proceed except under the directions of the court. There are also, on the pleadings, issues on whether consent to an assignment of the lease has been duly given and whether the trustees are now entitled to forfeit the lease because of breach of covenant. The details are not material on these appeals. Nor, for the same reason, need we mention anything of the relief sought in the 1988 action. Indeed on these appeals we have not seen the pleadings in the 1988 action.

5

At the outset of the trial a preliminary point was taken by the defendant trustees. It was that Richmond council had no standing to be a plaintiff in either action as it was not a "person interested" in this charity. All the other defendants supported this submission, which the judge accepted. He ordered, therefore, that Richmond council should be struck out as plaintiff in both actions. This left, as plaintiffs, two individuals who were appointed as trustees of the charity by Richmond council. The judge refused leave to appeal, but he adjourned the trial for a short time to enable the council to make application to the Court of Appeal for leave to appeal. On the following day the council did so apply, and leave was granted. The appeal came on for hearing two days later, on Friday, 11th March. The arguments lasted all day. Meanwhile the trial was due to continue on the following Monday. At the conclusion of the arguments we expressed the view that since the point was of general importance it was desirable that we should put our judgments in writing but that, because the parties needed to know where they stood, we would state our conclusion at once and give our reasons later. That is what we did. On 11th March we allowed Richmond council's appeals, and set aside the judge's orders. We are now giving our reasons.

6

The charity dates back at least as far as an inclosure award made in 1826. It is regulated now by a scheme sealed by the Charity Commissioners on 26th August, 1981. Paragraph 28 provides that, subject to payment of expenses, the trustees are to apply the income of the charity in relieving, either generally or individually, persons resident in the area of the "Ancient Town of Hampton" who are in conditions of need, hardship or distress by making grants of money or providing or paying for items, services or facilities calculated to reduce the need, hardship or distress of such persons. The trustees are also empowered to pay for such items, services or facilities by making gifts or subscriptions to appropriate institutions or organisations. By paragraph 29 the trustees are precluded from applying any part of the income directly in relief of rates, taxes or other public funds, but they may apply income in supplementing relief or assistance provided out of public funds. The ancient town of Hampton, we observe in passing, lies wholly within the boundaries of the London Borough of Richmond-upon-Thames.

7

The scheme provides for there to be eleven trustees. Of the six "nominative" trustees, three are appointed by Richmond council, and one each by three local parochial church councils. They hold office for four years. Appointees may be, but do not have to be, a member of the appointing body. The vicar for the time being of St. Mary the Virgin, Hampton, is an ex officio trustee. The four "co-optative" trustees are appointed by the trustees. They have to be persons who through residence, occupation, employment or otherwise have special knowledge of the area of the ancient town of Hampton.

Section 28(1) of the Charities Act provides: "Charity proceedings may be taken with reference to a charity either by the charity, or by any of the charity trustees, or by any person interested in the charity, or by any two or more inhabitants of the area of the charity, if it is a local charity, but not by any other person."

"Charity proceedings" are defined in section 28(8): "In this section 'charity proceedings' means proceedings in any court in England or Wales brought under the court's jurisdiction with respect to charities, or brought under the court's jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes."

8

It was common ground that the present two actions are within that definition.

9

The Act affords no express guidance on what is meant by the phrase "any person interested in the charity", and the dearth of authority on the question is surprising, given that the predecessor section, section 43 of the Charitable Trusts Act, was enacted as long ago as 1853. The question seems to have been considered previously in only two cases, both of which are recent. In Haslemere Estates Ltd. v. Baker [1982] 1 W.L.R. 1109 Sir Robert Megarry V.-C. held that a company which claimed to have a binding contract for the grant of a lease of land of a charity was not a "person interested" in the charity for the purpose of charity proceedings in which it sought an order under section 29 of the Charities Act authorising the governors to carry out the contract. He said (at page 1122):

"Now I do not aspire to define the meaning of the phrase 'any person interested in the charity' in this context. That I shall leave for others; I am merely concerned to find a safe resting place for my decision in this case. In my judgment the phrase, in its context, does not bear the wide meaning for which Mr. Scott and Mr. Burton contend. Many a person may be interested in the property of a charity without, for this purpose, being interested in the charity. I do not think that to contract with the trustees of a charity turns the contractor into a 'person interested in the charity,' even if the contract relates to land or other property of the charity. I do not think that the phrase includes every tenant of charity land, or those who have easements or profits or mortgages or restrictive covenants over charity land, or those who contract to repair or decorate charity houses, or those who agree to buy goods from the charity or sell goods to the charity. An interest which is adverse to the charity is one thing, an interest in the charity is another. Those who have some good reason for seeking to enforce the trusts of a charity or secure its due administration may readily be accepted as having an interest in the...

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