England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
PROPERTY, TRUSTS AND PROBATE LIST (ChD)

		Claim No. HC2017-000780 Royal Courts of Justice Strand, London, WC2A 2LL
		9 March 2018

Introduction

1. This case concerns two grants of land under section 2 of the School Sites Act 1841 ("the 1841 Act"), and gives rise to a question concerning the exercise of the power of sale contained in section 14. Although the operation of the 1841 Act has been amended by the Reverter of Sites Act 1987 ("the 1987 Act"), the 1841 Act remains in force, and has, it seems, generated a good deal of litigation. However, the question at the heart of this case has not previously fallen for determination. That question involves considering two rival approaches to interpretation: on the one hand, that land ceases to be used as the site for a school the moment the school is closed; and, on the other, that the power of sale exists to enable a school to be moved from one location to another, and that the intention behind section 14 of the 1841 Act would be frustrated if, in order to avoid the reverter of the land to the grantor, it was necessary for the school to remain in use at the original site until the new site is ready for it to move into.

The facts

2. The Claimants in this Part 8 claim are some of the heirs of the late Robert Fleming ("Mr Fleming"), who conveyed land to the Defendant in 1914 and 1928 under the 1841 Act for use as part of Nettlebed School ("the School").
3. By a conveyance dated 29 September 1914 expressed to be made under the authority of the School Sites Acts, Mr Fleming freely and voluntarily conveyed without any valuable consideration to the Defendant certain land ("the First Site") already "forming a portion of the playground of the school at Nettlebed" to the Defendant "for the purposes of the said Acts and to be applied as a part of the playground of the said School and for no other purpose whatever." The First Site comprised about 0.13 acres of land.
4. By a further conveyance dated 5 April 1928, also expressed to be made under the School Sites Acts, Mr Fleming freely and voluntarily conveyed without any valuable consideration to the Defendant further land ("the Second Site") "for the purposes of the said Acts and to be applied as a site for a public elementary school for children of and in the Parish of Nettelebed and adjacent Parishes and for the residence of the School Master (or School Mistress) of the said School or for other purposes of the said School and for no other purposes whatsoever." The Second Site comprised about 0.79 acres of land.
5. The School was in existence prior to 1914. Indeed, other pieces of land which formed part of the school site had also been given to the Defendant for the purposes of the School under the School Sites Acts by other benefactors, including the fourth Lord Camoys. The 1928 conveyance permitted a new school building to be erected on the land conveyed by Mr Fleming while the pre-1928 school site continued in use as the School's kitchen and dining room.
6. The uncontested evidence of the Second Claimant contained in his witness statement dated 23 February 2017 is as follows. Mr Fleming died on 31 July 1933. The interest in any land which was subject to reverter, or in the trust of the proceeds of sale of any such land, now vests in the Claimants and other persons who have been given notice of these proceedings and who do not wish take part in them. The First, Second and Third Claimants each have 2/12 interests, the Fourth Claimant has a 1/12 interest, Mr David Hughes and Ms Victoria Young each have 1/12 interests, and the trustees of the Anne K. Brandt Trust have a 3/12 interest. The Claimants produced emails dated 26 February 2018 from the solicitors for the foregoing persons who are not Claimants confirming that their clients did not wish to be joined as parties to the claim.
7. The Defendant decided to relocate the School to its present site in the 1990s. A letter dated 18 April 2000 from the Defendant's then Joint Head of Legal Services to Currey & Co, solicitors for the trustees of the will of the late NPV Fleming, refers to the Defendant's "proposals for the school which include the sale of the area edged red on the attached plan in order to raise the capital required to build a new primary school on the area edged blue thereon".
8. The Scheme for "Nettlebed Replacement School" was also an agenda item for the meeting of the Defendant's Executive Committee on 22 July 2003. The Defendant's revised detailed project appraisal at that time envisaged that total expenditure of £2,035,000 would be incurred in 2004/5, which would be funded as to £1,702,000 by borrowing, as to £193,000 by contributions from third parties, and as to £140,000 by grants; and that this would be defrayed in part by capital receipts of £1,300,000 in 2005/6, representing the proceeds of sale of land on which the School had operated prior to its relocation to the new site.
9. The Defendant implemented these plans, by (a) building new (and improved) school facilities on land which it already owned, adjacent to the existing premises, (b) in or about February 2006, transferring the children who attended the School to the new premises, and (c) marketing and selling the old premises.
10. On 28 September 2007, the Defendant sold 0.844 acres of land to Bluespace Property Nineteen Limited for the sum of £1,355,000 ("the 2007 Land") pursuant to an agreement for sale dated 1 August 2007. The 2007 Land comprised a small part of the First Site and all, or almost all, of the Second Site. The Claimants' surveyor has calculated that 93.17% of the 2007 Land had been given to the Defendant by Mr Fleming under the 1914 and 1928 conveyances. Based on that calculation, the Claimants contend that 93.17% of £1,335,000 (i.e. £1,243,819.50) has been held on trust for them since September 2007. The Defendant accepts that calculation, but disputes that there was any reverter.
11. The Defendant explained the basis upon which it had proceeded in a letter from its solicitor dated 18 August 2010 to the Claimants' solicitors. This included the statements that "It was at all relevant times the Council's firm and settled intention to apply the proceeds of sale of the former school site towards the construction of buildings for the school on the alternative site" and "In practical terms, the pupils of the old site need somewhere to receive their education and therefore they need the new buildings to move into before the old site [is] sold".
12. In a further letter dated 24 September 2010 passing between the same parties the Defendant stated (among other things) that "the closure, sale and use of proceeds is an event or series of events which does not cause a reverter to arise under the 1841 and 1987 Acts. The holding of a school site pending a planned s14 sale is, in the Council's position, entirely in accordance with the statutory purposes set out in s2 of the 1841 Act and set out in the relevant conveyances".

The issue

13. On behalf of the Claimants, Mr Matthew Smith submitted that a notional reverter occurred in February 2006 when the School ceased to operate from its then site such that, as a result of the 1987 Act, the Defendant held a substantial part of the subsequent proceeds of sale on trust for Mr Fleming's descendants.
14. On behalf of the Defendant, Mr Nigel Thomas submitted that no reverter occurred in circumstances where the Defendant conceived and implemented a composite scheme, plan or transaction pursuant to which the School was to be relocated to new premises, and the funding of a new school on an alternative parcel of land adjoining the old site was to be provided (in part) by using the entire net proceeds of sale of some or all of the land comprised in the old site.

The 1841 Act

15. So far as material to this case, section 2 of the 1841 Act provides as follows:

"… any person, being seised in fee simple, fee tail or for life, of and in any manor or lands of freehold … and having the beneficial interest therein, … may grant, convey or enfranchise by way of gift, sale or exchange, in fee simple … any quantity not exceeding one acre of such land, as a site for a school for the education of poor persons, or for the residence of the schoolmaster or schoolmistress, or otherwise for the purposes of the education of such poor persons in religious and useful knowledge … Provided also, that upon the said land so granted as aforesaid, or any part thereof, ceasing to be used for the purposes in this Act mentioned, the same shall thereupon immediately revert to and become a portion of the said estate held in fee simple or otherwise … as fully as to all intents and purposes as if this Act had not been passed, any thing herein contained to the contrary notwithstanding."

16. The purposes expressed by, and the powers conferred by, the 1841 Act were enlarged by subsequent Acts, but not in any way material to the present case.
17. So far as material to this case, section 14 of the 1841 Act provides as follows:

"… when any land or building shall have been or shall be given or acquired under the provisions of … this Act, or shall be held in trust for the purposes aforesaid, and it shall be deemed advisable to sell or exchange the same for any other more convenient or eligible site, it shall be lawful for the trustees in whom the legal estate in the said land or building shall be vested … to sell or exchange the said land or building, or part thereof, for other land or building suitable to the purposes of their trust, and to receive on any exchange any sum of money by way of effecting an equality of exchange, and to apply the money arising from such sale or given on such exchange in the purchase of another site, or in the improvement of other premises used or to be used for the purposes of such trust."

The 1987 Act

18. So far as material to this case, section 1 of the 1987 Act provides as follows:

"(1) Where any relevant enactment provides for land to revert to the ownership of any person at any time, being a time when the land ceases, or has ceased for a specified period, to be used for particular purposes, that enactment shall have effect, and (subject to subsection (4) below) shall be deemed always to have had effect, as if it provided (instead of for the reverter) for the land to be vested after that time, on the trust arising under this section, in the persons in whom it was vested immediately before that time.

(2) Subject to the following provisions of this Act, the trust arising under this section in relation to any land is a trust for the persons who (but for this Act) would from time to time be entitled to the ownership of the land by virtue of its reverter with a power, without consulting them, to sell the land and to stand possessed of the net proceeds of sale (after payment of costs and expenses) and of the net rents and profits until sale (after payment of rates, taxes, costs of insurance, repairs and other outgoings) in trust for those persons; but they shall not be entitled by reason of their interest to occupy the land."

19. Section 6(2) of the 1987 Act provides as follows:

"It is hereby declared –

(a) that the power conferred by section 14 of the School Sites Act 1841 (power of sale etc) is exercisable at any time in relation to land in relation to which (but for the exercise of the power) a trust might subsequently arise under section 1 above; and

(b) that the exercise of that power in respect of any land prevents any trust from arising under section 1 above in relation to that land or any land representing the proceeds of sale of that land."

Overview of the legislation

20. In Fraser v Canterbury Diocesan Board of Finance (No 2) [2007] EWHC 1590 (Ch), Blackburne J summarised the purpose and operation of the 1841 Act and its amendment by the 1987 Act as follows:

"13. The 1841 Act was passed in order to facilitate the provision by landowners of parcels of land and sites for local elementary schools. It was widely used during the remainder of the 19^th century, notably, but not exclusively, for Church of England schools promoted by the National Society. The most significant provision of the 1841 Act is section 2 which removed various obstacles to the granting of land for school sites. It enabled grants of land (of up to one acre) to be made as:

"…a Site for a School for the Education of poor Persons, or for the Residence of the Schoolmaster or Schoolmistress, or otherwise for the purpose of the Education of such poor Persons in religious and useful Knowledge …"

There were therefore three statutory purposes …

14. As an encouragement to charitably minded landowners (see Sir Wilfred Greene MR in Re Cawston's Conveyance [1940] Ch 27 at 33 to 34) the 1841 Act contained a statutory reverter in the third proviso to section 2 ….

15. The effect of the third proviso was, so far as material as follows. First, the grantees of the land (the trustees of the school) did not acquire a fee simple absolute in the land but a determinable fee, that is to say an interest which would determine automatically on the reverter being triggered. Second, so long as the reverter had not been triggered, the grantor retained what was technically known as a "possibility of reverter". This was not classified as an estate in land. On the reverter being triggered, the grantees' determinable fee came to an end and the grantor's estate automatically revived with the result that the grantor or his successors (the revertees) thereupon became entitled to ownership (and possession) of the land. Third, this position was unaffected by the 1925 property legislation in that, although in general a determinable fee could not after 1925 subsist as a legal estate but only as an equitable interest under a settlement, section 7(1) of the Law of Property Act 1925 made an exception for a fee simple liable to be divested under, inter alia, the School Sites Acts, treating it as a fee simple absolute for the purposes of the 1925 Act (and hence able to qualify as a legal estate) but providing that it remained liable to be divested as if that Act had not been passed. (See generally the judgment of Nourse J in Re Rowhook Mission Hall, Horsham [1985] Ch 62.)

16. Among the consequences of this legislative treatment were the following. First, the grantees' interest and the revertees' (potential) interest in the land constituted two quite separate interests: the grantees had a legal estate but one that would automatically determine on the reverter; the grantor retained a possibility of reverter which would ripen into a legal estate on reverter. But the revertees did not succeed on reverter to the rights of the grantees; rather, it was the grantor's original estate which revived since he had granted away only a limited (ie determinable) interest. Second, the revertees' rights were legal, not equitable. Third, the grantees' interest was held on the trusts set out in the original deed of grant and, being educational, these were charitable in nature. By contrast, the revertees' rights arose quite independently of the charitable trusts; they did not derive from the deed of grant but from the limited nature of the interest thereby granted. Fourth, it followed from the fact that the grantees' interest determined on reverter that if the grantees remained in possession of the land after reverter they were trespassers. This had the result that after the lapse of sufficient time they could acquire a title against the revertees by adverse possession.

17. The 1987 Act was passed to amend the operation of the reverter. By section 1 it was provided that, on an event that would otherwise have caused a reverter, the land should not revert but should be held by the grantees on trust for sale for the revertees. (With the coming into force of the Trusts of Land and Appointment of Trustees Act 1996 the trust for sale was replaced by a trust of land with power to sell.) The practical effect of the section is therefore that where the reverter is triggered (for example, where a school is closed) the trustees will thereafter be able to give a good title to the purchaser.

18. The 1987 Act, which came into force on 17 August 1987, is retrospective in that it deems the trust to have arisen whenever reverter took place (either before or after the Act came into force). Section 1(4) expressly provides, however, that this does not confer any right on any person as a beneficiary, inter alia, in relation to any property in respect of which that person's claim was statute-barred before the commencement of the 1987 Act. The effect of this is that in any case where a reverter takes place on or after 17 August 1975 the land is held on trust for the revertees but since trustees cannot bar their own beneficiaries by adverse possession the revertees will be entitled to the sale proceeds however long the trustees remain in actual possession (although there are provisions for barring their rights when the revertees cannot after due enquiry be found). By contrast, where the reverter has taken place before 17 August 1975 and the trustees have remained in possession for at least twelve years (ignoring cases where a revertee can take advantage of a longer limitation period) the revertees' title will have been barred before the 1987 Act came into effect and, as a result, they will have no claim."

The authorities

21. In Re Cawston's Conveyance and the School Sites Act 1841 [1940] Ch 27 (cited by Blackburne J), Sir Wilfrid Greene MR said at 33-34:

"One can see that the provision with regard to reverter would have been and no doubt was considered by the legislature to be a very useful encouragement to charitably minded persons, particularly if they were the owners of an estate or life tenants of a settled estate, to make grants for purposes such as these, because such persons might very well be satisfied to have the village school built upon the family estate, but would strongly object to the site on which such a school had been built being diverted later on to other purposes; therefore, as I have said, that proviso as to reverter must have been a very valuable encouragement, because landowners by reason of it were thus enabled to ensure that the site should be used in perpetuity for school purposes, or, if it ceased to be used for school purposes, that they would get it back. The common sense of that is obvious."

22. In Dennis v Malcolm [1934] 1 Ch 244, a piece of land was conveyed to trustees under the 1841 Act for the purposes of a school. On 22 March 1932, the school was closed. The trustees purported to exercise their power under section 14 of the 1841 Act to sell the land. In April 1932 the intended purchaser raised the question whether the trustees could make good title to the land. The trustees applied to be registered as proprietors and the Chief Land Registrar refused the application on the footing that a reverter had occurred. Upon the summons before him being amended to seek a declaration to that effect, Clauson J made that declaration. Clauson J said at 249:

"At some date in the year 1932, the property the subject of the grant ceased to be used as a school. If before it had ceased to be used as a school and while it was still being used as a school, the trustees had thought proper to make arrangements to sell the site in order to buy another site and to continue the school on another site or raise money to continue another school, it is possible the trustees might, notwithstanding the clause of reverter, have been able to sell their land under the School Sites Act. But they did not do that. The school was closed and ceased to be used as a school. Some time afterwards negotiations began, which are in progress, for the sale of this piece of land to a purchaser. It will be obvious to anybody who has perused s. 2 of the Schools Sites Act, 1841, that a serious question arose as soon as the property ceased to be used as a school, because the section, while it enables persons to convey land for the purposes of a school, contains this proviso at the end that "when land or any part thereof ceases to be used for the purposes in this Act mentioned" - those purposes being "as a site for a school for the education of poor persons, or for the residence of the schoolmaster or schoolmistress, or otherwise for the purposes of the education of such poor persons in religious and useful knowledge" - "the same" - that is the land - "shall thereupon immediately revert to and become a portion of the said estate held in fee simple or otherwise or of any manor or land as aforesaid," that is the estate of which the grantor was the owner, "as fully to all intents and purposes as if this Act had not been passed, anything herein contained to the contrary notwithstanding." Accordingly, if the event occurs, namely, the site ceasing to be used as a school, this reverter clause comes into operation, as if the Act had not been passed."

23. In Fraser v Canterbury Diocesan Board of Finance (No 2) [2006] 1 AC 377 land was conveyed in 1866 pursuant to section 2 of the 1841 Act for use as a school for the education of "the labouring manufacturing and other poorer classes" of an ecclesiastical district in Maidstone. In 1995 the school was closed and the site sold. The claimants, as successors in title of the original grantors, claimed to be entitled to the proceeds of sale under the statutory trusts created by section 1 of the 1987 Act. The defendants alleged that the claimants' title was already statute-barred when the 1987 Act came into force, on the grounds that the reverter had occurred when the school had ceased to be used for the education of children of the "labouring, manufacturing and other poorer classes" of the district to the exclusion of other children, and as the school had remained in their possession thereafter, the title of the revertees was barred after 12 years' adverse possession. On the trial of a preliminary issue, Lewison J held that until the school closed it continued to educate children who qualified under the terms of the trust even if it also educated other children, and therefore it did not cease to be used for the purpose for which it was established. The Court of Appeal reversed that decision, holding that the reverter occurred before 1975. The House of Lords reversed that decision and restored the decision of Lewison J.
24. The leading speeches were given by Lord Hoffmann and Lord Walker. Lord Hoffmann agreed with the reasons given by Lord Walker, and Lord Nicholls, Lord Hope and Lord Brown agreed with both Lord Hoffmann and Lord Walker.
25. Lord Hoffmann held at [13]-[15] that the words "ceasing to be used for the purposes in this Act mentioned" in section 2 of the 1841 Act referred to the three purposes mentioned in the Act and not to the purposes in the deed of grant, and that although a breach of the restrictions in the deed "could be enforced in the same way as those in any other breach of charitable trust" it "would not have the drastic consequence of causing a reverter".
26. At [16]-[18], Lord Hoffmann explained that Attorney General v Shadwell [1910] 1 Ch 92 is authority for the proposition that "if the grantor has chosen one of the three statutory purposes and the land ceases to be used for that purpose, a reverter is not avoided because it can still be used for one of the other two statutory purposes".
27. At [28], Lord Walker referred with approval to the judgment of Sir Wilfrid Greene MR in Re Cawston's Conveyance and the School Sites Act 1841 [1940] Ch 27 at 33-34, but added:

"This general statutory intention is not in dispute, though it should be noted that the effectiveness of the encouragement may have been reduced, if the grantor directed his mind to it, by a statutory power of sale conferred by section 14 of the 1841 Act."

28. At [45]-[46], Lord Walker said:

"45. … Neither section 2 of the 1841 Act nor the trust deed admits of very close linguistic analysis … But some general principles are clear. It is clear that both the statute and the trust deed were intended to set up arrangements capable of lasting for a very long time-potentially for ever. Both were intended to operate through the medium of a charitable trust. Charity law has for centuries required that a general charitable purpose (or intention) should be recognised and given effect to, even though some particular directions given by the charity's founder are (or become) impracticable: see for instance the explanation given by Buckley J in In re Lysaght, decd [1966] Ch 191, 201–202. It is also a well-established principle of trust law that any provision determining or divesting an estate "must be such that the court can see from the beginning, precisely and distinctly, upon the happening of what event it was that the preceding vested estate was to determine" (Lord Cranworth in Clavering v Ellison (1859) 7 HLCas 707, 725, cited in Sifton v Sifton [1938] AC 656, 670, and in Clayton v Ramsden [1943] AC 320, 326). As Mr Nugee put it in his written submissions, reverter is an event, not a process (and if it occurs, it is automatic and irrevocable.)

46. All these considerations suggest that the court should take a broad and practical approach to the question whether a school has (in the words of the third proviso) ceased "to be used for the purposes in this Act mentioned" (and that it is not simply a coincidence that all the reported cases are concerned with schools which had closed permanently). The relevant statutory purpose was "the education of poor persons" … Mr Nugee in the course of his reply (which was all the more effective for its brevity) posed the question which might have been put to the school managers (around the middle of the 20th century or at any time up to 1975), "Are you still providing education for the poor of the parish?" To my mind that question could only have received an affirmative answer, and that is determinative of this appeal."

The Law Commission's analysis

29. A Law Commission working party produced a report on "Rights of Reverter" dated 6 April 1981 (Cmnd 8410). In commending that report to the then Lord Chancellor, Lord Hailsham, the Law Commission recorded that part of the genesis of the report arose from representations "to the effect that these "reverter" provisions contain defects and anomalies and give rise to serious practical problems", that "[t]he law on reverter is antiquated and obscure", and that "[w]e are satisfied that there is a clear case for its reform".
30. Among other things, at [68] the working party recommended the total repeal of the School Sites Acts (i.e. the 1841 Act "together with those extending, amending and explaining it"). That recommendation was not followed, although the operation of 1841 Act was amended by the 1987 Act in the manner explained by Blackburne J. In any event, so far as concerns section 14 of the 1841 Act, the recommendation of the working party was a qualified one, namely (see [113]) "that section 14 of the 1841 Act should not be expressly replaced, but that the effect of a sale under section 29 of the Settled Land Act [1925] should, in corresponding circumstances, be the same".
31. The working party considered section 14 of the 1841 Act at [106]-[118] in a section of the report entitled "Power of sale or exchange before reverter", making clear that in that discussion references to sales should be taken to extend throughout to exchanges as well. Among other things the report states:

(1) At [107] that "it has always been assumed that section 2 sites are within the section 14 power of sale, and, moreover, that a sale under that section destroys the right of reverter (as, indeed, it would have to if the sale is to be effective)".

(2) At [108] that the section 14 power "clearly exists simply to facilitate the removal of the school (as an institution) from one location to another without effecting any other alteration".

(3) At footnote 95 to [108] that the working party "ventured an explanation" for section 14 in [43] of the report, which includes the following text:

"The power of sale under section 14 is exercisable only in order to enable the trustees to move the school: it does not allow the trustees to close the school, as an institution. In the middle of the nineteenth century the population was increasing and it was readily foreseeable that a school might outgrow its premises. Section 14 recognises not only that the site originally granted (which was by the statute limited in extent) might become too small, but also that there might not be available any adjacent land on which it could expand. The limited power of sale contained in section 14 was an almost essential feature of the 1841 Act if the general policy of the Act was not to be frustrated. By the same token, we believe that grantors would not have regarded the grant of the original site as an end in itself, but only as a means to an end, namely the establishment of a school; and, consistently with that approach, they would not have wished to recall their benefaction simply because their school was a success and had to move to larger premises. Of course, it would be quite different if the site ceased to be used for school purposes because their school ceased to exist. The grantor's right of reverter cannot be overriden by a sale under section 14 if education is thereafter provided not in the same school elsewhere but in a substitute school. Many grantors defined the school which they were helping to establish by reference to a locality and the fact that the new premises are a long way away from the old ones may well make the new school a different school for present purposes, if only because it is likely to have a fundamentally different catchment area."

(4) At [114] that:

"In order to have the desired effect, a sale under section 14 has always had to be carried out before the closure of the school. This is because, once reverter has occurred, the trustees have no title (or at least have no beneficial title enabling them to employ the proceeds in furtherance of the purpose of the sale as set out in the section)."

(5) At [115] that:

"Not surprisingly, trustees do not always find it easy to effect a sale in time. Quite often they fail and the intention behind section 14 is frustrated; but we understand that they sometimes succeed by resorting to devices which cannot be desirable on educational grounds, such as keeping a single class in the old premises after the main move has taken place."

(6) At [116] that "The requirement that the sale take place before reverter takes effect is obviously correct in principle" but that it is "equally obvious" that "the trustees need a period of time to sell". The working party's solution to this conundrum, set out in [112] and revisited in [116], was that the law should be amended so as to provide that the trustees should be required to obtain an order from the Secretary of State or a certificate from an appropriate authority which would be "usually the local education authority" that a sale is being "effected for the purpose of facilitating (or financing) a removal of the educational establishment on the site in question to a new site" and that whenever the trustees had obtained such an order or certificate "reverter should not take effect earlier than two years from the date of the order (or certificate)".

32. It is apparent from this discussion that it was the understanding of the working party that it was not uncommon that a sale of the old site could not be effected before the closure of the school on that location, and that this had sometimes resulted in the reverter taking effect and "the intention behind section 14 [being] frustrated" and had sometimes resulted in the reverter not taking effect because of a resort "to devices which cannot be desirable on educational grounds". However, hitherto this situation does not appear to have been litigated, at least to trial, in any case either before 1981 or in the decades since.

The Claimants' submissions

33. Mr Smith's core submissions were as follows: (a) when (in February 2006) pupils permanently stopped attending a school located on the site which encompassed some of the First Site and (in effect) all of the Second Site, that site ceased to be used for one or more of the purposes listed in the 1841 Act; and (b) in consequence, a reverter automatically occurred at the time with the result that, by virtue of section 1 of the 1987 Act, the relevant land was immediately held on the terms of the statutory trust arising under section 1.
34. Mr Smith further submitted that this outcome is supported by the following.
35. First, it gives effect to the language of the 1841 Act. The central question is what is meant in section 2 by the words which provide for reverter "upon the land so granted … ceasing to be used for the purposes in this Act mentioned." The Act looks simply to the actual use of the relevant land. This is supported by the focus in Fraser, which was on the actual use of the land. Where a site sits empty, it cannot, in ordinary language, properly be described as being used for any of those three purposes. Nothing in section 2 or in Lord Walker's exhortation in Fraser to adopt a "broad and practical approach" to the question of what constitutes a cesser of the relevant user provides any foundation for the suggestion that an empty site which is no longer being used as a school, in circumstances where the school which once operated on that site has now moved elsewhere, should continue to be notionally regarded as "a site for a school for the education of poor persons." If one had asked the question proposed by Lord Walker at [46] in Fraser with regard to the relevant land between February 2006 and September 2007 ("Are you still providing education [on this land]?"), the answer would plainly have been: "No."
36. Put another way, the holding of land is not one of the statutory purposes. Nor, for that matter, is it a purpose that was selected by Mr Fleming. Section 14 of the 1841 Act confers a power of sale and does not contain a statutory purpose. However, the Defendant is, in effect, driven to say that the holding of land is within the statutory purposes of the 1841 Act.
37. Second, it is consistent with the language of section 6(2)(a) of the 1987 Act. That refers "to land in relation to which (but for the exercise of the power [under section 14 of the 1981 Act]) a trust might subsequently arise under section 1" (emphasis supplied). That pre-supposes that the power under section 14 must be exercised before the notional reverter occurs. That power is a power to sell or exchange. So if there has not in fact been any sale or exchange before the cessation of the relevant use, the reverter is automatic and irrevocable. It cannot be undone by a later attempt to invoke section 14.
38. Third, it accords with the analysis of the House of Lords in Fraser that reverter is an event, not a process.
39. Fourth, it is consistent with the policy of the 1841 Act as explained in Fraser.
40. Fifth, it is consistent with the result in Dennis v Malcolm [1934] 1 Ch 244. As it appears that in that case negotiations were sufficiently advanced by April to identify an issue as to title, following the closure of the school on 22 March 1932, it is to be inferred that the legal owner came to a decision to sell before the school was closed. Moreover, given that the owner intended to rely on section 14 of the 1841 Act, it should also be inferred that the proceeds of sale were intended to be used to acquire or improve other land for use as a school. Yet there was no suggestion that the "firm and settled intention" of the legal owner was relevant to the question of whether a reverter could be avoided. What mattered was the action taken before the cessation of the relevant use.
41. Sixth, it has the merit of certainty. On the Claimants' construction, once the land ceases to be used for the relevant statutory purpose, there is an automatic and irrevocable reverter unless the section 14 power has already been used. By contrast, the logic of the Defendant's contention must be that, as long as it holds the relevant intention, it matters not for how long the site sits empty. That is prone to uncertainty and would make it almost impossible for a revertee or a third party to know whether or when a reverter had occurred.
42. Mr Smith further submitted that a requirement for the sale to pre-date the cesser of use would not render section 14 of the 1841 Act redundant. It is perfectly possible to sell a school site and to avoid triggering a reverter if (for example) completion is deferred for a time sufficient to allow the school to be decanted on to the new site or if a sale is made subject to a lease or licence which permits the school to continue to operate pending its relocation.
43. Any suggestion that this renders the efficacy of section 14 subject to apparently arbitrary details of the conveyancing can be answered as follows. First, such a construction preserves the great incentive which the 1841 Act was intended to offer to would-be transferors, whereas the expansive construction for which the Defendant contends would rob the 1841 Act of much of its attraction. Second, the Claimants' construction has the merit of certainty and simplicity: one simply looks at the use of the land to see if a reverter has occurred and one looks simply at the conveyancing documents to ascertain whether it was defeated by the prior exercise of the section 14 power. Third, "the operation of section 14 is arbitrary however one construes the 1841 Act".

The Defendant's submissions

44. Mr Thomas submitted that the question in this case is whether upon the School moving in 2006 from (in substance) the Second Site a trust arose under section 1 of the 1987 Act, or whether the sale of the old School site in 2007 was made pursuant to section 14 of the 1841 Act so that no trust came into being.
45. He submitted that section 14 of the 1841 Act applies for the following reasons.
46. First, the Claimants were aware that the Defendant's underlying intention was to sell the land as part of an overall scheme to pay for the building of a new school on the alternative adjoining site provided by the Defendant in exchange for the old school site on (in substance) the Second Site. If my understanding is correct, this submission was based on the letter dated 18 April 2000 to Currey & Co. However, the Claimants disputed that Currey & Co were their solicitors, or that this letter fixed them with knowledge of the Defendant's intentions. Moreover, Mr Thomas did not explain how bringing the Defendant's plans to the attention of the Claimants would be of relevance to the question that I have to determine. For example, the Defendant has advanced no case based on estoppel. I therefore say no more about this point.
47. Second, the correct approach to the interpretation of the 1841 Act is to apply the "broad and practical" approach to which Lord Walker referred in Fraser at [46]. It is evident from [45]-[46] of his speech that Lord Walker thought that a purposive approach to the interpretation of the 1841 Act was the correct one.
48. Third, to regard the closure of the old school, the opening of the new school and the sale of (in substance) the Second Site to fund the new school as three separate steps in a defined sequence of events is to look at the transaction in the wrong way. The "broad and practical approach" involves seeing the whole process as always having been intended to be one composite transaction albeit one which by the very nature of land transactions was expected to stretch over a period of time.
49. Fourth, the Claimants' contentions would mean that the effect of section 6 of the 1987 Act is to limit section 14 of the 1841 Act to a sale when the school is still functioning (i.e. they require the sale to be made while the school is still functioning). However, generally, if not inevitably, there has to be a new school into which the pupils can move before the old school can be sold, in which case it would follow that title cannot be conveyed until the school has closed. Those contentions thus drastically cut down the scope of section 14.
50. Fifth, a reverter cannot arise simply because a school has been closed if that closure is intended as a preliminary to a contemplated sale or exchange pursuant to section 14 of the 1841 Act, and it cannot be said that section 6 of the 1987 Act suggests this. All that section 6 provides is that the power of sale and exchange is exercisable at any time in relation to a closure to which, but for the exercise of that power, a trust might subsequently arise. The relevant trust does not arise until the land has ceased to be used for the purposes of the 1841 Act. As those purposes must include the purposes of effecting a sale of one school premises for the purposes of establishing the school on other premises under section 14 it follows that "land has not ceased to be so used for these purposes under the 1841 Act as this is part of the purposive structure attendant upon giving land to form a school site under the 1841 Act".
51. If therefore there is a single composite transaction linking cessation of use of the land as a school site, opening of a new school and sale of the old site to pay for the new school it is not possible to say that the old site has ceased to be used for the purposes of the 1841 Act simply because the old site has ceased to be used as a school and then sold. The relevant question is: "For what purpose is the old site being used after the closure?" The answer is: "For the purpose of laying the ground for a section 14 sale." The purpose of using the school land for a statutory exchange was and was known to be still alive until the land in question was sold; and thus it must follow that no trusts under the 1987 Act had commenced.
52. Accordingly, all the sums yielded by the sale which were used by the Defendant to meet the costs of the School are rightly claimed by it, because it is entitled to retain the sale proceeds by reason of section 14 of the 1841 Act.
53. Mr Thomas submitted that the Defendant's construction did not give rise to any, or any unacceptable, uncertainty. In the present case, for example, the old site continued to be used for a statutory purpose for so long as it was held with a view to being sold to raise money to pay for the same school on the new site.
54. With regard to Dennis v Malcolm [1934] 1 Ch 244, Mr Thomas placed reliance on Clauson J's reference to "arrangements" in the observation that "If before it had ceased to be used as a school and while it was still being used as a school, the trustees had thought proper to make arrangements to sell the site in order to buy another site and to continue the school on another site or raise money to continue another school, it is possible the trustees might, notwithstanding the clause of reverter, have been able to sell their land under the School Sites Act." He submitted that this was apt to cover the present case.

Discussion

55. Lord Walker stated that section 2 of the 1841 does not admit of very close linguistic analysis, and I consider that the same may be said of section 14.
56. Lord Walker also stated that the court should take a broad and practical approach to the question whether a school has ceased to be used for the purposes mentioned in section 2 of the 1841 Act, and I see no reason why the same approach is not appropriate to the power of sale conferred by section 14.
57. Lord Walker also observed that it is not simply a coincidence that all the reported cases (i.e. concerning whether a school has ceased to be used for the purposes mentioned in section 2 of the 1841 Act) are concerned with schools that had closed permanently. If my understanding is correct, this is a reference to schools which had closed for good in circumstances where no question arose of (in the words of section 14 of the 1841 Act) "apply[ing] the money arising from [the] proceeds of sale in the purchase of another site, or in the improvement of other premises used or to be used for the purposes of such trust (i.e. a trust for the purposes mentioned in section 2 of the 1841 Act)". That appears to have been true of the schools in both Dennis v Malcolm and Fraser. It also accords with the contents of the Law Commission's report.
58. Finally, as Lord Walker indicated, one possible effect of the power of sale conferred by section 14 might be to reduce the effectiveness of the provision for reverter contained in the third proviso to section 2 as an encouragement to landowners to make use of the powers conferred by the 1841 Act.
59. In my opinion, and applying the guidance provided by Lord Walker, the correct approach to the interpretation of the 1841 Act is that neither section 2 nor section 14 should be considered in isolation. However, in case that is wrong, I will consider sections 2 and 14 both separately and together.
60. If section 2 is considered alone, and bearing in mind that the 2007 Land comprised, in substance, the Second Site, in the present case the question that might have been posed to the Defendant after February 2006 is "Are you using the old site of the School for the purposes of a public elementary school for children of and in the Parish of Nettlebed and adjacent parishes?"
61. If "using" is given a narrow meaning, the answer to that question would be "No", on the basis that premises which are empty are not "used" for anything.
62. In my view, however, taking a broad and practical approach to the question, the Defendant could equally legitimately answer it as follows: "Yes, although the School has moved out of the old site and into new buildings on an adjacent site which now house a public elementary school for children of and in the Parish of Nettlebed and adjacent parishes, the old site is being sold to raise money to pay for part of the cost of the new buildings, and the old site is therefore being used 'for the purposes of' that public elementary school".
63. In my opinion, that broader approach accords with, and is reinforced by, the power of sale and exchange conferred by section 14 of the 1841 Act.
64. In the present case, it is not in dispute as matters of fact (in the words of section 14) that: (a) the Defendant "deemed [it] advisable" to sell the 2007 Land for the sole and express purpose of moving the School to "[an]other more convenient or eligible site" which comprised "other land or building suitable for the purposes of [the] trust" and (b) the Defendant did indeed "apply the money arising from such sale" to meet the cost to the Defendant of "other premises used or to be used for the purposes of [the] trust".
65. Accordingly, it seems to me that whether the Defendant's actions amounted to an exercise of the statutory power of sale must turn on other aspects of the wording of section 14. Does section 14 require that the 2007 Land had to be sold first and that the money realised from that sale had then be applied towards the cost of the new premises? Or (in the words of section 14) is it right to say that, in the events which happened, and although the new site and buildings were paid for first, the Defendant did sell the 2007 Land "for" the "other land or building suitable for the purposes of [the] trust" and did "apply the money arising from such sale … in the purchase of another site, or in the improvement of other premises used or to be used for the purposes of [the] trust"?
66. In my view, although a sale or exchange of one piece of property "for" another may typically involve a transaction in which title in the first property is conveyed before or at the same time as title in the second property is acquired, this is not necessarily the case; and the same applies to the concept of applying the money "arising" from the sale of one piece of property "in the purchase" or "in the improvement" of another. I do not consider that the use of these words requires section 14 to be read as limiting the statutory power of sale or exchange so that it can only lawfully be exercised in circumstances where the original trust property is sold or exchanged before or at the same time as the replacement property is purchased or monies are expended on improving it.
67. The Law Commission working party appears to have considered that in order to avoid the statutory reverter contained in the third proviso to section 2, a sale under section 14 always has to be carried out before the closure of the school.
68. However, this interpretation does not appear to have been tested in any decided case. Nor do I consider that it follows inexorably from the wording of sections 2 and 14, whether considered separately or together. Further, although it would be wrong to place too much weight on that part of the judgment of Clauson J in Dennis v Malcolm [1934] 1 Ch 244 in which he was considering a hypothetical alternative scenario to the facts before him, and spoke only of what was "possible", his reference to "arrangements to sell the site in order to buy another site and to continue the school on another site or raise money to continue another school" suggests that he did not read the sections in this way.
69. In addition, the Law Commission working party also suggested that grantors using the powers conferred by the 1841 Act would not have regarded the grant of the original site as an end in itself, but only as a means to an end, namely the establishment of a school; and that, consistently with that approach, they would not have wished to recall their benefaction simply because their school was a success and had to move to larger premises.
70. Moreover, in light of the fact that it is not always easy to effect a sale in advance of a closure, and as the working party appears to have accepted: (a) there is a tension between interpreting sections 2 and 14 in the way in which the working party assumed to be correct and fulfilling the wishes of grantors, and (b) interpreting sections 2 and 14 in that way may encourage resort to devices which are not desirable on educational grounds (as indeed Mr Smith appeared prepared to accept that the Defendant could successfully have deployed in the present case).
71. For these reasons, I consider that, properly interpreted, section 14 of the 1841 Act does not require the trust property to be sold first and the money realised from the sale only then to be applied towards the cost of purchase or improvement of other suitable new land or buildings. Moreover, there are good reasons, touched on by the Law Commission and exemplified by the facts of the present case, for reading section 14 less restrictively, so that it does not mean that a sale or exchange of school land or buildings always has to be carried out before or at the same time as the school is moved to new premises.
72. It is foreseeable that making it more difficult for trustees who wish to sell an existing site in circumstances where their sole and earnest concern is to enable the school to be moved to a more suitable site may produce various consequences. If the trustees are required to keep the school in operation until the time of the move, that may cause them practical difficulties and may depress the price they are able to realise from the sale, all of which will be to the detriment of the trust. If the trustees are driven to resort to devices in an attempt to eliminate or reduce these adverse consequences, that may be detrimental to the education of the children; and, if the devices fail and reverter therefore occurs, that may produce a windfall for the descendants of the grantor. There is no obvious reason why any such effects should be intended by the legislation.
73. I do not consider that this interpretation of the provisions of sections 2 and 14 of the 1841 is inconsistent with the provisions of the 1987 Act, or that the contrary interpretation, urged upon me by the Claimants, is more consistent with the provisions of the 1987 Act. I agree that the 1987 Act envisages that the statutory power of sale or exchange must be exercised before the statutory reverter occurs. I also agree that reverter is an event, and once it occurs it is automatic and irrevocable and cannot be undone by a subsequent exercise of the statutory power of sale or exchange. In my view, however, the statutory power of sale or exchange can lawfully be exercised in the manner that the Defendant sought to exercise it in the present case; and, in circumstances where it is thus exercised, section 6 of the 1987 Act has the effect of preventing the trust that would otherwise arise under section 1 from arising.
74. I asked Counsel whether any assistance could be derived from the consideration of expressions such as "for the purpose of" in other contexts, citing as an example the judgment of Robert Walker LJ (as he then was) in Pro Sieben Media AG v Carlton UK Television Ltd [1999] 1 WLR 605. Their response was negative. They were both of the view that what mattered in the present context was a consideration of charitable purposes, as to which they cited no authorities. However, I note that recognition that "[c]harity law has for centuries required that a general charitable purpose (or intention) should be recognised and given effect to, even though some particular directions given by the charity's founder are (or become) impracticable" formed part of the reasoning which led Lord Walker in Fraser to conclude that the court should take a broad and practical approach to the question whether a school has ceased to be used for the purposes mentioned in section 2 of the 1841 Act.
75. In light of the stance adopted by both Counsel, I hesitate to expand on the point. I would simply record that I am not convinced that the approach in other contexts is necessarily of no assistance. In Pro Sieben the Court of Appeal considered sections 30(1) and 30(2) of the Copyright Designs and Patent Act 1988, which provide that fair dealing with a work "for the purpose of criticism or review, of that or another work or of a performance of a work" and that fair dealing with a work (other than a photograph) "for the purpose of reporting current events", does not infringe any copyright in the work, provided that it is accompanied by a sufficient acknowledgement. With regard to the composite phrases "for the purposes of criticism or review" and "for the purpose of reporting current events", Robert Walker LJ said at 614: "The words 'in the context of' or 'as part of an exercise in' could be substituted for 'for the purpose of' without any significant alteration of meaning." If it is permissible to have regard to that approach to interpretation, it seems to me that it lends some support for the broader approach which I consider should be preferred.
76. I am grateful to both Counsel for their clear and helpful submissions, to all of which I have paid careful regard, even if I may not have found it necessary to address all of them in coming to the conclusions which I have reached.

Conclusion

77. For these reasons, I propose to refuse the Claimants the relief that they seek, which is, in essence, and so far as remains live before me, a declaration that the Defendant holds 93.17% of the proceeds of sale of the 2007 Land on trust for the Claimants and the non-parties bound by CPR 19.8A in accordance with the shares set out in the first witness statement of the Second Claimant.
78. I ask Counsel to agree an order which reflects this determination of the claim. I will hear submissions on any points which remain in dispute as to the form of the order, and on any other issues such as costs and permission to appeal, either when judgment is handed down, or at some other convenient date.