The Mayor & Burgesses of the London Borough of Brent v Leonard Johnson (claiming to be a Trustee of ‘Harlesden Peoples Community Council’)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Arnold,Lord Justice Snowden |
| Judgment Date | 18 January 2022 |
| Neutral Citation | [2022] EWCA Civ 28 |
| Docket Number | Case No: CA-2021-000383 (Formerly: A3/2021/0096 A3;/2021/1625) |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 28
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE BUSINESS AND PROPERTY COURTS
Mr Michael Green QC (sitting as a Deputy High Court Judge of the Chancery Division)
PT/2018/000426
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Lewison
Lord Justice Arnold
and
Lord Justice Snowden
Case No: CA-2021-000383
CA-2021-000747
(Formerly: A3/2021/0096 A3;/2021/1625)
Katharine Holland QC and Matthew Smith (instructed by Bevan Brittan LLP) for the Respondent
The 3 rd Respondent did not appear and was not represented
Michael Furness QC and Stephen Cottle (instructed by Hogan Lovells International LLP) for the 1 st Appellant
Peter Crampin QC (instructed by Axiom DWFM Solicitors) for the 2 nd Appellant
Hearing dates: 14 and 15 December 2021
Approved Judgment
Introduction
The issue on this appeal is whether Brent LBC holds land wholly or partly on charitable trusts; either because such a trust arose when it acquired the land or because of the way in which money was raised for its conversion into a community centre. There was a dispute about whether the second way of putting the case was a legitimate argument to be put before this court in view of the way in which the case was put below.
The context in which these issues arise is a claim by Brent that it is the sole legal and beneficial owner of the land. It brought that claim in response to an application for a restriction to be entered against its title. Mr Michael Green QC, sitting as a judge of the Chancery Division, held that Brent was the sole legal and beneficial owner of the land. His judgment is at [2020] EWHC 2526 (Ch).
The background facts
I can take the background facts, none of which may be challenged in this appeal, from the judge's comprehensive judgment.
Bridge Park was an old London Transport bus depot. In about 1981 Mr Johnson founded the Harlesden Peoples Community Council (“HPCC”). The vision in 1981 was to establish a centre in the London Borough of Brent that was owned and managed by the local black community for themselves, not beholden to anyone else, and which, by its very nature, would empower that community and would prevent unrest. It was a high profile project in the wake of the Brixton riots of 1981; and attracted much high-level political support.
Mr Johnson and HPCC identified Bridge Park as a site and pursued its acquisition as a place where they could realise their vision. Because it had no financial resources of its own, HPCC involved Brent in the project. Brent acquired the site on 5 May 1982 for £1.8 million and legal title was transferred into its name. The purchase consideration was made up by a number of grants from the Department of the Environment (“DofE”) and the Greater London Council (“GLC”), with the balance, an agreed amount of £834,500, being paid by Brent itself.
Brent now wishes to redevelop the site as a leisure and community facility that would incorporate a swimming pool. In order to do this, Brent wishes to sell part of the site. Mr Johnson and HPCC object to that sale. The interests of HPCC are advanced by Stonebridge Community Trust (HPCC) Ltd (“Stonebridge”). The Attorney-General has been joined as a party to the proceedings. But she has adopted a neutral position, and has played no part in them.
At the trial Mr Johnson and Stonebridge put forward a number of arguments leading to the conclusion that Brent held the site on a trust of one kind or another, or that they had acquired a proprietary interest in it by reason of equitable principles. All those arguments failed before the judge. Only one is now pursued on this appeal; namely that Brent holds the site wholly or partly on charitable trusts. This was the sixth of the issues that the judge considered.
Details of the acquisition and funding of the conversion
Although it was the subject of dispute at trial, the judge found that the offer of £1.8 million, which London Transport accepted, was the best market price offer taking into account other issues, in particular the planning status of the property. In formulating its plans for the future use of the property, Brent involved a steering group of the HPCC. That group produced a report in December 1981, which the judge described as an “inspiring document”. In it, Mr Johnson wrote:
“The Bus Depot project is based on the philosophy of community self-help and co-operative enterprise. But the project must have outside help as well.
This is a unique opportunity. Unless the Bus Depot is bought for community purposes by 31st March 1981, London Transport will sell it on the open market. Unless the new community spirit that has emerged in Stonebridge over the last few months is given practical support and encouragement it could die. Far worse, it will become frustrated.”
Mr Bryson, the leader of Brent Council, contributed a preface in which he wrote:
“This report outlines a project proposal to use the vacant Stonebridge Bus Depot for community purposes. The proposal is that Brent Council, with assistance from other agencies, should buy the Bus Depot and Harlesden People's Community Council should then establish a Community Co-operative to manage it. Local enterprises, training workshops and leisure and social activities would be based at the Depot….
The long term aim of the project is that it should become self-financing and that the Community Co-operative should buy the Bus Depot back from Brent Council. In the short term the project must have an injection of hard cash. This is needed first to help Brent Council buy the Bus Depot from London Transport for the community and secondly to help the Community Co-operative establish all the activities described in this report at the Bus Depot.”
As the judge observed, the plan was for Brent to buy the property with assistance from other agencies, and for HPCC subsequently to buy the property from Brent. It was also contemplated in the alternative that Brent would grant a lease of the property to HPCC. In the event neither of these came to pass.
Section 4 of the report dealt with costs. Paragraph 4.1 stated:
“The Project costs will take a variety of different forms and, in the first instance, will be incurred either by Brent Council, the Community Co-operative (the CC) or individual member co-operatives or tenants. Each of these bodies will however be receiving income through its activities or grant aid from other bodies to help pay these costs. For example, Brent Council will be looking in particular to the Greater London Council, Central Government and the European Economic Community to assist with the initial acquisition cost of the Bus Depot. Then over a period of years it will receive rental payments from the CC and perhaps ultimately payment for the freehold.”
The judge commented that the words of the report left little room for doubt that the property would be acquired by Brent; but that it would be managed by the community co-operative which would receive all the income generated and might eventually become self-financing.
A subsequent report was presented to Brent's Policy and Resources Committee in February 1982. It recommended that Brent should purchase the bus depot provided financial assistance was forthcoming from the Department of Environment and the GLC. The report made it clear, however, that if insufficient financial assistance was available, Brent should consider selling the whole or part of the property.
By 13 March 1982 contracts for the sale and purchase of the property at the price of £1.8 million had been exchanged, with completion set for 5 May 1982. Completion did indeed take place on that date. The transfer contained the following statement:
“(5) It is hereby agreed and declared as follows:
(i) …
(ii) the land hereby transferred is being acquired by [Brent] for the purpose of the provision of Community facilities being a purpose for which the Council is authorised by Section 120(1) of the Local Government Act 1972 to acquire property.”
The source of monies for the overall purchase price was made up as follows:
| £ | |
| DofE Industrial Urban Aid (the residue of Brent's original 1981/82 allocation) | 36,000 |
| DofE Industrial Urban Aid (an additional 1981/82 allocation specifically for the Bus Depot) | 243,000 |
| DofE Traditional Urban Aid Grant to [HPCC] 1982/83 | 75,000 |
| GLC's Capital Programme 1982/83 | 700,000 |
| London Borough of Brent Capital Programme 1981/82 | 746,000 |
| Total | £1.8 million |
But, as the judge explained, this is not properly reflective of the actual situation as the Urban Aid grants from the DofE only covered 75% of relevant eligible expenditure; and the remaining 25% had to be paid by Brent. There was no dispute that the actual total contribution from Brent towards the acquisition was £834,500.
Although the judge included as part of the acquisition costs the £700,000 paid by the GLC, it was in fact paid pursuant to a deed made between GLC and Brent on 21 June 1982. That deed recited the transfer to Brent on 5 May 1982 and stated:
“(2) Brent proposes to carry out improvement works to the property and thereafter to use the property for the purposes described in the Schedule hereto (‘the Community Project’) and the GLC being of the opinion that the provision of such a...
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