Education Matters – Schools sites: a fair reminder of the application of reverter
21 May 2019
A recent decision in the Court of Appeal has highlighted the need for local authorities, academies, and other education bodies to be careful when considering how they they proceed with any proposed closures and/or redevelopments of schools sites – particularly sites that have been in educational use for long periods.
Throughout the nineteenth century, to encourage individuals to donate land for certain charitable purposes including educational, legislation was enacted to entitle the original owners and their heirs to the return of their land (a ‘reverter’) if it was no longer used for the purpose for which that donation was made.
The legislation is considered complex and has been subject to much litigation. This article concerns the 2019 decision of Rittson-Thomas v Oxfordshire County Council.
Land was gifted under the School Sites Act 1841 for use as part of the Nettlebed Primary School, title of which ultimately became vested in Oxfordshire County Council. When the council decided to relocate and redevelop the existing primary school, the decision was taken to close the existing school, and part-fund the relocation and development by the sale of the old school site.
As would be expected, the new site was built and the children moved into it. This was secured by the Local Authority entering into a conditional contract for the sale of the school subject to completion of the new school. The children moved out of the old school site in February 2006 but the sale did not complete until September 2007. Before the old school site sale completed, the site was empty. This meant the site was no longer used for charitable educational purposes.
The question was whether closure of the school, therefore, triggered the application of section 2 of the 1841 Act, a reverter of the title to the original owner or its heirs. The case was brought by the beneficiaries of the estate of the original owner, claiming their entitlement to the majority of the proceeds of sale of the old school site.
The Court of Appeal had to consider two issues:
- the application of s14 of the 1841 Act which permits land donated for charitable purposes to be sold or exchanged and the proceeds of sale retained and applied to the purchase of a replacement site
- whether s14 did not apply, as the charitable use of the land ceased prior to sale or could the situation be saved by the Council’s plan to sell the land and use the proceeds of sale to reimburse the cost of constructing the new school.
In its consideration of the legislation the Court of Appeal analysed a Law Commission Report from 1981. In this the Law Commission reiterated:
“The power of sale under section 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 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 a reverter has occurred, the trustees have no title (or at least
no beneficial interest enabling them to employ the proceeds in furtherance of the sale…)”
Applying that principle the court held that the council did not retain the rights to the proceeds of sale as it had closed the school prior to sale. It was unrealistic to determine that the gifted land continued, following the closure, to be used as a school site or otherwise for the purposes of education. Reverter had taken place and, therefore, almost £1.3m was due to the beneficiaries of the original landowner’s estate and not to the council.
The decision has potential implications for any owners of older school sites. If a sale or relocation is proposed, consider the title carefully, particularly whether the site may have initially been donated under the 1841 Act. If the Act does or may apply, consider carefully and take advice on the options as to how best to structure the timing and funding of any relocation proposal in order to avoid unintended consequences. If it is not clear if the 1841 Act applies, it may be advisable to consider whether to advertise any proposed site sale widely and check for beneficiaries prior to determining a way forward; additionally or alternatively, it may be possible to insure the reverter risk depending on the circumstances.
This article is from the spring 2019 issue of Education Matters, our newsletter for our clients and contacts in the education sector. To download the latest issue, please visit the newsletter section of our website. Law covered as at May 2019.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at May 2019.