England and Wales High Court (Chancery Division) Decisions

1. Hitchin Cow Common was purchased by trustees in 1880 (with a small addition in 1909) out of investments or cash representing compensation on the extinction of commonable rights over Bury Mead and Cock Mead in Hitchin. Most of Hitchin Cow Common is leased to the Hitchin Town Football Club, and the remainder is used as open space for general recreation. The land is registered as common land under the Commons Registration Act 1965, but none of it is registered as being subject to rights of common.

2. In these proceedings, which were commenced as long ago as 1990, the primary question is whether trusts created over the land in 1886 pursuant to an order by the Land Commissioners for England under the Commonable Rights Compensation Act 1882 are valid charitable trusts, as the Attorney General contends. The Official Solicitor has been added as a defendant to represent those parties (if any) who would be entitled if the trusts were invalid, i.e. those persons (if any) who would have been entitled to rights of common over the land but for the order under the 1882 Act. The other remaining parties have not participated in the hearing. They are (a) the trustees; (b) Roxanne Investments Ltd., which was added to represent the persons (if any) who would be entitled to grazing rights under the 1886 trusts; and (c) Celeriter Ltd., which was added in its capacity of lessee of part of the land.

3. At a manorial court held on October 21, 1819, the jurors, having enquired what lands in the township of Hitchin were subject to common of pasture for the commonable cattle of the occupiers of messuages, cottages and land within the township, and for what descriptions and number of cattle, and at what times of year, presented findings that the commonable land in Hitchin included land in Cock Mead and Bury Mead. The right belonged to "the occupier of every ancient messuage or cottage within the township of Hitchin...but no person hath any right of common within this township as appurtenant to or in respect of any messuage or cottage built since the expiration of the 13^th year of the reign of Queen Elizabeth [1571], unless the same shall have been erected on the site of an ancient messuage then standing."

4. The Land Clauses Consolidation Act 1845 laid down a unified acquisition procedure and code of compensation for the compulsory acquisition of land, including common land. It gave power to the promoters of an undertaking to convene a meeting of parties entitled to commonable or other rights over or in the land for the purpose of appointing a committee, not exceeding 5 persons, of the parties entitled to such rights over or in the land to negotiate with the promoters for the compensation to be paid for the extinction of the commonable rights: sections 99, 102-103. All parties were to be bound by any agreement resulting from the negotiations, and payment to the committee would discharge the obligation of the promoters, who would have the right to have the land vested in them; the compensation was to be apportioned by the committee "among the several persons interested therein, according to their respective interests..." (section 104). The Court of Chancery was given jurisdiction to make orders "in respect thereto, for the benefit of the parties interested, as it shall think fit" (section 107).

5. By section 22 of the Inclosure Act 1852, where money was paid to the committee, and the committee was of the opinion that the provisions of the 1845 Act for apportionment could not be satisfactorily carried into effect, the committee could make application to the Inclosure Commissioners to call a meeting of the persons interested in the compensation money for the appointment of trustees of the money and its investment, and for the application of the income for such purposes as the Commissioners might approve. If the Commissioners deemed instructions given at the meeting to be unjust or unreasonable they had the power, by an order under their seal, to give such instructions for the investment of the compensation money and the application of income as they should think fit, including provision for the appointment of trustees.

6. Under the Inclosure Act 1854, sections 15-17, where a majority of the committee was of the opinion that the provisions of the 1845 Act for apportionment could not be satisfactorily carried into effect, the majority could apply to the Commissioners to call a meeting of the persons interested in the compensation money to determine whether the compensation money should be apportioned. If the meeting so resolved, the Commissioners were to ascertain the names of the parties who were entitled to estates, rights, and interests in the common and commonable lands, and the amount or value of their respective rights.

7. In 1858 a little over £1069 was paid, for the extinction of commonable rights over part of Bury Mead, to a committee appointed under the 1845 Act. It is not material to this decision who paid the compensation, but it seems from the 1877 and 1886 Orders referred to below that it was received from the Hitchin Local Board of Health, and not also from various railway companies.

8. Following an application made by the committee to the Inclosure Commissioners under the Inclosure Acts 1845 to 1876, a meeting of the persons interested in the compensation money was held at Hitchin Town Hall on January 10, 1877 at which certain instructions were resolved upon under the 1852 Act. But under the power given to them under that Act, the Commissioners deemed the instructions unreasonable, and made the following Order on October 11, 1877:

9. At some time between 1877 and 1880 the remainder of Bury Mead and Cock Mead was acquired by the Great Eastern, the Eastern Counties and Midland Railway Companies and (perhaps) the Hitchin Local Board of Health. The compensation received for the extinction of commonable rights, together with the 1858 compensation, aggregated about £2,011.

10. The trustees of the 1858 compensation money and the committee which held the 1880 compensation money (who were substantially the same persons) decided to combine the funds to purchase a new tract of grazing land.

11. In 1880 the trustees applied proceeds of the investments held by them representing the 1858 compensation, and funds held by the committee in respect of the later compensation "in the purchase of a tract of pasture land to be used as Common land by the persons who but for such extinction...would be entitled to the commonable rights over Bury Mead and Cock Mead..." (according to the order of the Land Commissioners in 1886, which will be dealt with below). The land conveyed on December 23, 1880 was pasture land in what is now Fishponds Road, which was purchased for £1961, and was conveyed to the trustees and the committee of commoners.

12. The Commonable Rights Compensation Act 1882 ("an Act to provide for the better application of Moneys paid by way of Compensation for the compulsory acquisition of Common Lands and extinguishment of Rights of Common") made provision for a resolution of persons interested in compensation money to apply the money for the purpose (inter alia) of purchase additional land as common land, and the purchase of land as a recreation ground for the neighbourhood. Any such resolution was to bind the minority and absent parties and the Commissioners were to make an order "for the application of the money according to such resolution, and the committee or the persons in whose names such money stands or is invested...shall...pay and apply the said money or realise any security in which the same is invested, and pay and apply the proceeds thereof in manner directed by the said order" (1882 Act, section 2(1)).

13. The Trustees appointed under the 1877 Order and the committee of commoners applied under the 1882 Act for the Land Commissioners to call meetings to approve the 1880 purchase, and to establish trusts under which the land was to be held. The trusts proposed were to permit the land "to be used as Common Land for grazing purposes by the persons who but for such extinction of commonable rights...would have been entitled to commonable rights over Bury Mead and Cock Mead" and to permit the land to be used for "Cricket Football or other sports or purposes..." The meetings were held at Hitchin Town Hall on July 30, 1886. At what was described as a general meeting the 1880 purchase was approved, and a special meeting passed a resolution declaring the trusts. On August 12, 1886 the Land Commissioners made an order allowing the resolution approving the purchase, and declaring and providing that the trusts were to be in accordance with the resolutions passed.

14. A further strip of land was bought for £100 on April 29, 1909, following a meeting called by the Board of Agriculture and Fisheries on the application under the 1882 Act of three of the persons interested in the compensation money.

15. The evidence is that no one within living memory has sought to exercise the right of cow common over the land, and the trustees concentrated on the second object. Since about 1920 most of the land has been used by Hitchin Town Football Club, through leases to Hitchin Town Football and Social Club Ltd. from 1978 and subsequently to companies which owned it. The present legal vehicle is Celeriter Ltd., which has been joined as a defendant to these proceedings, but has taken no part in them.

16. In 1990 Kennedy J (as he then was) gave judgment in judicial review proceedings which arose out of a dispute concerning the question whether the land should be sold for its development value (as those interested in the Football Club contended). The question before Kennedy J related to the validity of a meeting to appoint new trustees. The 1886 Order gave the remaining trustees power to convene a meeting of the persons "interested in the said land" for the appointment of new trustees. The appointment was to be made by a majority in number and "in respect of interest" of those present. Hitchin Town Football and Social Club Ltd. assigned parts of its lease on the premises to various of its directors, who claimed to be entitled to vote at the meeting but who were refused entry. Kennedy J decided that decisions of the trustees were susceptible to judicial review because the trustees were a public body, and that the applicants had been unlawfully excluded from the meeting because they were interested in the land as assignees of the lease. The reference in the 1886 Order to interest in the land was not to be read by reference to the scheme of the 1845 Act and the subsequent legislation culminating in the 1882 Act.

17. Since 1886 the trusts have been administered on the basis that they are valid. There was some evidence that it would be virtually impossible to identify those who were entitled to the right of common over Bury Mead and Cock Mead (and still less, their heirs) at the date the rights were extinguished.

18. The validity and effect of the 1886 trusts are the crucial issues for determination. They are as follows:

19. The position of the Official Solicitor is as follows: (1) prior to the 1886 Order, the funds representing the 1858 and 1880 compensation monies had been paid to committees of commoners duly constituted under the 1845 Act and belonged (subject to their proper application under the 1845 and 1882 Acts) to the persons entitled to the commonable rights on the dates when they were respectively payable; (2) the land had been bought in 1880 in breach of trust, and those persons were entitled to require the trustees to restore the funds or to trace their rights into the land; (3) those persons were the only "persons interested" in those monies for the purposes of section 2 of the 1882 Act and the 1886 Order; (4) the effect of the 1886 Order was to take away from those persons the right to require the trustees to restore the funds and to declare that their rights (to use the land in common with each other as grazing land) lay in the 1880 land; (5) that was a private trust, and the beneficiaries were the individuals (or their personal representatives) who were entitled to share in the 1858 and 1880 compensation monies; (6) if the trust is not to be so construed then the 1886 Order was ultra vires the Commissioners and the land is held on trust for those entitled to share in the money when originally paid; (7) it was ultra vires the Commissioners to declare the trust for use as a sports ground, but if the trust is valid, it is a charitable trust.

20. The position of the Attorney-General is this: (1) the persons interested were in 1877 and 1886 the relevant occupiers from time to time, both then and in the future; (2) prior to the purchase in 1880, the 1858 compensation monies were subject to the trusts of the 1877 Order, and the other part was held by the committee of commoners which should have apportioned the money or sought a meeting under the 1852 Act; (3) consequently, it is unclear what authority there was for the application of the compensation monies in the purchase of the land in 1880; (4) but any irregularities were cured by the 1886 Order; (5) section 2(1) of the 1882 Act applies to land in which compensation money has been invested; (6) the resolution was for the purposes authorised by section 2(1); and (7) the trusts are valid charitable trusts.

21. As I have said, there is some suggestion in the evidence that at some time after 1880 the persons entitled to the commonable rights could not be identified. If they could not be identified at that date or before, then there could have been no properly constituted committee to perform the functions under the 1845 and 1852 Acts. But it is accepted that in the absence of evidence to the contrary it has to be assumed that the recitals and operative parts of the 1877 and 1886 Orders are accurate, and that the 1858 and 1880 compensation monies were made to properly constituted committees. The Commissioners were so satisfied in 1877 and 1886. In any event, in the absence or fraud or wrongdoing, the Commissioners were entitled to treat persons who had acted as a committee in negotiating with the promoters and holding the compensation money as being in reality the committee, notwithstanding any deficiency in their appointment or proceedings: Salmon v Edwards [1910] 1 Ch 552, 562-563.

22. It is also accepted that the persons who purchased the land in 1880, who were the trustees of the 1858 compensation monies and the committee authorised to receive the 1880 compensation money, had no authority to do so. As regards the 1858 compensation the Commissioners had made an order in 1877 that it be held on trust by the trustees to be invested in consols. The 1880 compensation money was held by the committee, who had the choice of apportioning the money under the 1845 Act to those entitled, or applying for a meeting of the persons interested in the money, for the appointment of trustees and the investment of the money. The committee took neither course.

23. Consequently, the principal question is whether the resolutions passed on July 30, 1886 and the Order of the Commissioners of August 12, 1886 created valid charitable trusts over the land pursuant to the 1882 Act.

24. The relevant parts of the 1882 Act are as follows:

25. The intention of section 4 is clearly to validate transactions prior to the Act which had, for some reason, been questionable. Its effect is to validate transactions in which compensation money had been applied for one or more of the purposes in section 2(1), provided that the procedure in section 2(1) is carried out.

26. The effect of section 4 is that where money has been applied, prior to the 1882 Act, the application of the money may be validated and the committee or other persons by whom the money has been applied shall be discharged from all liability in respect of such money so applied. The conditions required by section 4 are these: (i) firstly, that the money had been applied before the 1882 Act in any one or more of the ways authorised by the Act; (ii) secondly, that a resolution has been passed at a meeting of the persons interested, called by the Commissioners, approving the prior application of the money; and (iii) thirdly, the Commissioners shall have allowed the resolution. The three conditions were fulfilled. The first condition was fulfilled by the purchase in 1880 "of a tract of pasture land to be used as Common land" (second recital, 1886 Order), i.e. a "purchase of additional land to be used as common land" (section 2(1)(d)). The second condition is shown to have been fulfilled by the recitals to the 1886 Order, which state that the general meeting held on July 30, 1886 approved of the application by the trustees and the committee of commoners of the money in the purchase of the tract of pasture land in 1880. The third condition was fulfilled by the Order of August 12, 1886.

27. The conditions for the operation of section 2(1) relevant to this case are these:

28. The trust created by the 1877 Order was to apply the income to hire land for grazing purposes by "the persons interested in the money so invested or for the improvement of the existing Cow Commons..." The first trust under the 1886 Order is for the use of the land as "Common Land for grazing purposes by the persons who but for such extinction of commonable rights...would have been entitled to commonable rights over Bury Mead and Cock Mead." The same formula appears in the recital relating to the purpose of the 1880 purchase.

29. The identification of the beneficiaries in the 1886 Order is capable of being interpreted in one of two possible ways: first, to refer to those whose rights were extinguished respectively in 1858 and 1880; second, to refer to those who would in 1886 and thereafter be entitled to commonable rights had they not been extinguished in 1858 and 1880. These would not necessarily be the same, since some of the occupiers (assuming they could be identified) would have died or ceased to occupy the relevant property between 1858 and 1886. But in my judgment, both as a matter of authority and principle, the second interpretation is the right one.

30. In Nash v Coombs (1868) LR 6 Eq. 51 the issue concerned interests in a sum £3053 paid by the Midland Railway Company for the acquisition in 1866 of common land in the Borough of Bedford. The right of common was vested in resident freemen as a result of an award of the Inclosure Commissioners in 1797 made under an Inclosure Act of 1795. The resident freemen sought division of the fund between them under section 104 of the 1845 Act and sections 15 to 17 of the 1854 Act. Sir William Page Wood, V-C, held that freeman had no fee simple right (that is, they did not own the land) and that therefore the money should be held in trust for the freemen resident from time to time. After referring to the award in 1797, he said (at 55-58):

31. The question was debated before me whether this decision turned on the fact that the award in 1797 created a trust for the benefit of a class of resident freemen from time to time (as Mr Evans for the Official Solicitor contended) or whether it was a decision of general application on the nature of the interest of commoners in the compensation fund (as Mr Henderson for the Attorney General contended).

32. Mr Henderson's submission is supported by Re Christchurch Inclosure Act (1888) 38 Ch D 520, although that involved a statutory trust created by an Inclosure Act of 1802 for the benefit of occupiers of cottages and tenements. The question was as to the respective entitlements of the lord of the manor and the occupiers of the cottages. It was held by the Court of Appeal that the lord of the manor was entitled to such part of the fund as represented the value of the soil in the land taken by the London and South-Western Railway Company, and that the remainder of the fund was to be held on trust for the benefit of the occupiers of the cottages from time to time. See also Peggs v Lamb [1994] Ch 172, 194.

33. In my judgment, Mr Henderson's submission, which has the consequence that the persons interested are the occupiers, present and future, for the time being, is the correct one. It should follow also that the beneficiaries of the 1877 trust were also those (both present and future) who would have been entitled to the rights of common. The 1880 purchase, although unauthorised, would not therefore have had the consequence for which the Official Solicitor contends, that it was held in trust for those who in 1858 and 1880 were entitled to rights of common.

34. It is true that the majorities in respect of the "interest of the persons present at the meeting" for the purposes of sections 2(1) and 4 must be related to an interest in the compensation money (or any investment representing the compensation money). I consider this means persons interested at the time of the meeting. But it does not follow that a trust for use as common land is limited to being for the benefit of those same people, still less those who were interested in it when it was paid. It would have made very little sense for it to have done so. The intention was plainly that there should continue to be common land for the benefit of local people, and not solely for those entitled to the compensation money in 1858 and 1880 and their heirs. This is consistent with the provision in section 2(2) for common land to be held by trustees "for the persons interested."

35. It follows that the beneficiaries of the trust for use as common land for grazing are the occupiers from time to time. This conclusion is inconsistent with that of Kennedy J in 1990 in the proceedings concerning the validity of the meeting, but the Attorney General was not a party to those proceedings, and it would seem that Kennedy J was not addressed fully on the issues. The Attorney General and the Official Solicitor each accept (although for different reasons) that I should not regard it as determinative for the purposes of this hearing.

36. I do not consider that there is any obstacle in the fact that section 2(1) makes several references to "money" and makes no express provision for the case where the money has been used in the prior purchase of land as common land. First, section 4 expressly deals with the case where money has been applied in the purchase of land for one of the ways subsequently authorised by the 1882 Act, and consequently makes provision for the passing of a resolution approving the application of the money in the purchase of land as common land. Secondly, there is nothing in section 2(1) which requires in such a case that the subject of the resolution be money: it expressly gives power to the committee or the persons in whose names the money stands or is invested to realise any security in which it is invested and apply the proceeds. Consequently, there was power under sections 2(1) and 4 both in relation to that part of the compensation which should have been held in consols and that part which should have been held as money.

37. Nor do I consider that there is any obstacle in the fact that a trust had been declared in 1877, or in the fact that two trusts were declared over the same property in 1886, one for grazing land and the other for recreation. There is nothing in the 1882 Act which precludes its operation if there has been an order under the 1852 Act. Section 2(1) contemplates that the money may be laid out "in one or more of the following ways." It is true that section 2(2) provides that land purchased as common land shall be conveyed to and vest in trustees upon trusts for the persons interested, and that section 2(5) provides that land purchased as a recreation ground shall be conveyed to and vest in the local authority. If these provisions were mandatory, then there could not be compliance with both, and that would be a pointer to the legislation not contemplating that there could be a dual purpose trust. But it makes much more sense for them to be construed as merely directory.

38. Consequently in my judgment it was open to the Commissioners to approve, and they did approve, a resolution for the creation of a dual purpose trust over the land. The first purpose was the use of the common land for grazing purposes by the then relevant occupiers from time to time, and the second was the purpose of recreation.

39. There can be no doubt that the trust so created is a charitable trust. A trust for the benefit of the inhabitants of a town, or of any particular class of such inhabitants, is a charitable trust (and therefore not subject to the rule against perpetuities), even if the trust is not exclusively for the benefit of those deserving of charity and is not for the benefit of all the inhabitants of the parish or district: Goodman v. Mayor of Saltash (1882) 7 App Cas 633, 642, 650, 665. In Re Christchurch Inclosure Act (1887) 35 Ch D 520, 530 (C.A.) (where the right of common was vested in occupiers of cottages) Lindley LJ said:

40. So also in Peggs v Lamb [1994] Ch 172 Morritt J rejected the argument that freemen enjoyed private trust rights over the Huntingdon commons, and held that the origin of their rights lay in charitable trusts.

41. It is common ground that if the trusts are valid the second purpose is a charitable trust: Re Hadden [1932] Ch 133; Brisbane City Council v A-G for Queensland [1979] AC 411. The purpose for use as common grazing land is outdated and cannot be carried out according to the directions given and to the spirit of the disposition (Charities Act 1993, s.13(1)(a)(ii)), and has ceased to provide a suitable and effective method of using the property (s.13(1)(e)(iii)). A cy-pres scheme is therefore appropriate.

42. The trusts set out in the 1886 Order are valid charitable trusts. If the form of the order, including provisions relating to a cy-pres and/or regulatory scheme under section 16(2) of the Charities Act 1993 (which the trustees support), cannot be agreed, I will hear argument on a date to be fixed.