Solicitors and barristers frequently have the dilemma of having to interpret statute or case law and advise their clients on possible outcomes depending on whether untested law is challenged through the courts.

This dilemma does not stop when it reaches the doors of the court.  Judges also wrestle with this concept.

The case of Rittson-Thomas and others v Oxfordshire County Council is a prime example. On Monday (26th April 2021), the Supreme Court reversed the decision of the Court of Appeal in which the latter had applied such a literal interpretation of an ancient Act of Parliament to render the purpose behind it of limited use.

Summary

Historically, in the early 1800’s, schools were not publically funded or available to the masses and instead the education of the working classes was largely dependent on charitable foundations/donations of land and/or buildings to be used for this purpose.  A statute was introduced by parliament to encourage landowners to donate land for these purposes whereby if the land ever ceased to be used for the purpose given, essentially a school, it would revert back to the landowner’s estate. This was contained in the School Sites Act 1841 (SSA). The concept of land reverting back to the landowner had its flaws and in 1987 the Reverter of Sites Act substituted a trust mechanism for the reverter concept whereby any cessation of use of the site for a school had the effect of terminating the charitable use of the land and the former charitable trustees became non-charitable trustees of the property, holding the property on trusts for sale on behalf of the estate or descendants of the former land owner.

What has played out in the courts since then are test cases to determine when the charitable trust fails or ceases.

The case of Oxfordshire County Council (OCC) is a case in point. In 2003, OCC borrowed approximately £1.7 million to build a new school with improved facilities on a site which it already owned, which was adjacent to the site granted by the original donor’s descendant. In or about February 2006, OCC closed the original school and moved the pupils across to the new school building.

OCC’s documented plan was to sell the original land to help pay off the costs of the new school building. In September 2007 almost all of the site was sold to a property developer for over £1.2 million.

The descendants of the donor took OCC to the High Court arguing that the SSA should be interpreted as requiring the sale of the old school at or before the time the pupils were moved to a new premises in order to avoid a trust for sale (formerly the reverter) to apply and as this was not the case they argued that a trust for sale had arisen in their favour. The High Court rejected that argument and took a practical approach.   It is not uncommon for schools established in the 1800s to need room to expand or for the pupils to be moved to a purpose built school with capacity for more pupils. Sales of the old schools can take place quite some time after the pupils have been moved to a new site.

The decision was appealed. The Court of Appeal took a different approach and held that the fact that the pupils of the old school were moved to a new school which was to be funded retrospectively from the proceeds of sale of the old school such as to keep the purpose of the original charitable donation alive did not sit well with all of the provisions of the SSA. The Court of Appeal took a literal interpretation of the provisions of the Act and found for the appellants.  It held that on closure of the old school a trust for sale arose. The effect of the Court of Appeal’s decision was to bring a charity to an end whose purposes were intended and capable of being continued on a new site using the proceeds of sale of the old school. It effectively required the sale of the SSA school to have been completed whilst pupils were still on site. This has had the effect of limiting finance options for SSA schools forcing such schools to have to jump through, to my mind, unnecessary hoops to ensure the timings of sale are sequential.

The Supreme Court has overturned this decision, interpreting the provisions of the SSA altogether (rather than in isolation) to allow a purposive interpretation and look to favour the survival of charitable trusts where at all possible.  In this case it was stated there was a clear intention throughout that OCC would retrospectively fund the building of the new school out of the proceeds of the old school and this was in line with the policy or purpose of the SSA. To require the sale of SSA schools to have been completed on or before transferring the pupils to the new school simply to comply with a strict interpretation of the SSA is, I would argue, to render the purpose of the SSA largely redundant.  A bit of the former Lord Denning’s common sense approach has prevailed and with it the preservation of numerous educational charities around England and Wales!

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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