Heirs denied land worth over £1m as court rules in favour of council

The supreme court has ruled in favour of Oxfordshire County Council in a dispute over land gifted as a site for a school in the early 1900s. The school moved in 2006, with the land subsequently sold for over £1m to fund the new premises. The benefactor’s heirs claimed the land should have reverted to them after the school moved; however, the supreme court disagreed.

Nettlebed School was built on land gifted by Robert Fleming under the School Sites Act 1841 (the Act). In the 1990s, the council decided to relocate to improved facilities and sell the land after the move to fund the new premises. Pupils moved in February 2006 and most of the land was sold to a developer for £1,243,819.50.

Four of Fleming’s heirs claimed that when the pupils moved in 2006, the land should have reverted to them under the Act, which required the site be sold before the school moved, not after. They argued the council had been holding the site on trust for them at the time of sale, and the proceeds belonged to them.

Section 2 of the Act states that if gifted land ceases to be used for educational purposes, the land should revert to the landowner or heirs, known as a ‘section 2 reverter’. Section 14 allows trustees to sell or exchange gifted land to facilitate a site move, if a section 2 reverter has not already occurred.

The key issue was whether the closure of the school in 2006 triggered the reverter, thereby ending the charitable trust, with the effect that the trustees could not use the sale proceeds to pay for the new school.

The council argued it had always intended to use the sale proceeds to fund the new school, but the pupils needed to move before the sale for practical reasons; the court was sympathetic to this argument.

The court concluded the original site did not cease to be used for the purposes of Nettlebed School when the school moved, because the council always intended to use sale proceeds to pay for the new premises.

The judges said a ‘broad and practical approach’ must be taken in charitable trust cases and statutory provisions must be interpreted together, not in isolation. Interestingly, they were also mindful that the 1841 Act was drafted in a less rigorous style, typical of the time, and felt this supported their broad interpretation of the statute.

They also considered the benefactor’s purpose. Andrew Wilkinson, partner and head of inheritance disputes at Lime Solicitors, commented:

“Importantly, the court concluded that they should lean towards the continuation of the original purpose of the gift, rather than trying to find reasons why the land should revert. This is consistent with the court’s general approach in cases like this to try and give effect to a donor’s intentions as best they can.”

He said the case served as a useful reminder of the risks of making a charitable gift for a specific purpose, “Time moves on, and so can a charity’s objectives and projects. It is important to give thought to that possibility, and, wherever possible, make the gift as flexible as possible, allowing the charity to best use the donation as they see fit, as and when those assets are received.”

In 1981, a Law Commission working party estimated that over 2,000 schools gifted under the Act remained on their original sites. Wilkinson commented:

“This is one of a few pieces of legislation from the 1800s that remains on the statute books, but it still has application, particularly for schools that date back to the Victorian era, and where they might find themselves in the position of wanting to move sites.

“However, the clear message from this decision is that the court will do what they can to allow the charitable purpose to continue, rather than the land reverting to the donor’s family.”