Scottish Court of Session Decisions

Robert Philp, merchant, Kirkcaldy, died in 1828, leaving a trust-disposition and settlement by which he bequeathed certain funds and estate to trustees for educational purposes in Kirkcaldy and district. The trustees were subsequently incorporated by Act of Parliament 9 and 10 Vict. cap. 24, and for many years they kept and conducted schools of their own. With the progress of educational legislation the continuance of these schools became unnecessary, and the trust falling within the provisions of the Educational Endowments Act 1882, the Commissioners under that Act issued a scheme in June 1888 for the future administration of the trust, under which, in lieu of the discontinued schools, arrangements were made to assist selected scholars in their attendance at public or state-aided schools, and to make annual grants to these schools for the promotion of higher and technical instruction.

Under this scheme the governors of the trust were directed to sell or let the school buildings (with the exception of “Philp's School,” which they were empowered to retain if they saw fit), and to invest the proceeds in securities of certain kinds (sections 15, 16, and 22). No authority was

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conferred upon the governors to spend or alienate the capital of the trust, but various provisions were made as to the application of the income. Inter alia, the governors were directed (section 36) to “apply the annual sum of not less than £250 in maintaining, or assisting to maintain, in Kirkcaldy and in Kinghorn, evening classes for science and art instruction, or for instruction in such branches of technical education as may not be provided for out of grants from Parliament, or rates authorised to be raised under any Act of Parliament now in operation or that may be hereafter passed…. The said annual sum may be applied as the governors may determine—(1) In providing proper accommodation for said classes. (2) In furnishing apparatus, models, and other means of instruction. … (4) in paying fees for pupils…. Section 42 provided—“It shall be in the power of the Court of Session to alter the provisions of this scheme upon application made to them, with consent of the Scotch Education Department, by the governing body or any party interested, provided that such alteration shall not be contrary to anything contained in the Educational Endowments (Scotland) Act 1882.”

In carrying out the directions contained in section 36 of the scheme the governors of the trust did not think it expedient to establish classes of their own, as evening classes for technical education and instruction in science and art already existed in Kirkcaldy. They accordingly made arrangements with the persons in charge of these classes that they should receive pupils nominated by the governors, the fees of these pupils being paid out of the funds of the trust.

In November 1892 the governors, with consent of the Scotch Education Department, presented a petition to the Court, setting forth that, owing to the mode in which they were carrying out the provisions of section 36 of the scheme, the subjects known as Philp's School were practically useless to the trust; that the Kirkcaldy Burgh (Higher) School was about to be largely extended, and that provision was to be made for accommodation for science and art instruction under the superintendence of the Burgh School Board. They accordingly suggested “that the purpose of the 36th section would be best carried out by selling the subjects, and applying the proceeds, so far as they will go, in fitting up the accommodation so to be provided in said Kirkcaldy Burgh (Higher) School with the appliances and general equipment necessary for the carrying on of such instruction.” They further stated—“In the subsequent arrangements to be made as to the admission to these classes of pupils nominated by the petitioners, the petitioners will stipulate with those in charge of them that classes will be taught in the evening, on such days and at such hours as may be arranged, and that the pupils presented by the petitioners shall be admitted on payment by the petitioners of such fee as the petitioners may from time to time fix, and that the petitioners shall have a voice in the management of the classes by representation on the body in charge of them.”

The petitioners therefore craved the Court to authorise them to apply the price to be received on the sale of said subjects in equipping the Kirkcaldy Burgh (Higher) School in the manner proposed, and to approve of the alteration thus made on the scheme.

The Court remitted to Mr Bremner P. Lee, advocate, to report.

In his report Mr Lee stated, inter alia, the following objections to the proposed scheme—“The application of the petitioners may be considered as an application for authority to spend a portion of their capital in the manner proposed. Such a proposal cannot, I think, be looked upon as a modification of the existing scheme, but is an entirely new departure. In the whole complicated machinery provided for the working of this trust and the disposal of its revenues, no provision is made for spending its capital, or any part of its capital. And the reason for this is obvious. The governors having ceased to conduct schools of their own, have made an arrangement by which, in consideration of an annual grant from the trust, a large number of their nominees are received as free scholars in the science and art evening classes, held in the burgh school of Kirkcaldy, and conducted by a committee sanctioned by the Science and Art Department of the Privy Council. So long as the arrangement remains on this footing, the governors are only paying for what they immediately receive. But whenever the capital of the trust is allowed to be spent on what must remain the undertaking of another body, the governors must depend for any due return on the possibility of ensuring the continued existence and success of that other body, and also their interest in the alienated capital. Your petitioners consider that they have provided against this difficulty by a proposed agreement to be entered into between themselves and the School Board, ensuring continuity of instruction and certain privileges to the governors…. Such an agreement I cannot think of much value. It would be incompetent for the School Board to hold the property of another merely on sufferance, and therefore any conveyance by the governors must be such as will absolutely divest them. Nor can the School Board give any such undertaking as would fetter it in the administration of its statutory rights and duties; the School Board, for example, must retain its statutory power to discontinue or change the site of its schools (Technical Schools (Scotland) Act 1887, sec. 7). If this be so, any such agreement as is proposed would, in so far as competent to the School Board, be quite in effectual as a protection to the interests of the petitioners.”

At advising—