Fraser & Anor v. Canterbury Diocesan Board of Finance & Ors

The House of Lords allowed the appeal and held that, for the purposes of the School Sites Act 1841 s.2, a statutory reverter occurs only where the land has ceased to be used for the relevant statutory purpose chosen under the Act (here, the education of poor persons). Admissions of some children who were not poor or not resident within the specified ecclesiastical district did not prove cessation of that statutory purpose. Section 1(4) of the Reverter of Sites Act 1987 preserves no rights for persons whose claims were already statute-barred before 17 August 1987, so the critical issue was whether any reverter and twelve years' adverse possession had been completed before 17 August 1975. The House took a broad and practical approach: a partial departure from detailed trust directions (for example admissions from outside the parish or of better-off children) will not necessarily cause reverter if the statutory purpose remains being carried out.

The appellants (genealogists and assignees of potential beneficiaries under the historical reverter) sought to establish beneficial interests in proceeds of sale of St Philip's School site under the statutory trusts created by the Reverter of Sites Act 1987. The preliminary issue tried was whether the ownership had reverted pursuant to the third proviso to s.2 of the School Sites Act 1841 before 17 August 1975 (ie more than twelve years before the Reverter of Sites Act 1987 came into force), which would render the claim statute-barred under s.1(4) of the 1987 Act.

Facts and procedural history:

• Land was conveyed in 1866 for use as a school for "children and adults of the labouring manufacturing and other poorer classes" in the ecclesiastical district of St Philip, to be run in union with the National Society.
• The school operated from 1867 until closure and sale in July 1995. The Board of Finance (successors to the trustees) sold the site; appellants claim beneficial interest in the proceeds.
• Evidence (school register 1931–1947, log extracts, rate-books, witness statement) showed some pupils from outside the parish and some from relatively prosperous homes; most pupils still came from the parish and many from poor backgrounds. The judge (Lewison J) found the school continued to be used for educating poor persons although it also educated some others.
• The Court of Appeal reversed, holding that an "all-comers" admissions practice amounted to a change of purpose and that reverter had occurred before 1975.

Issues considered:

1. Whether the words "upon the said land ceasing to be used for the purposes in this Act mentioned" in s.2 of the 1841 Act refer to the statutory purposes generically or to the narrower purposes expressed in an individual grant.
2. Whether the evidence established that the school had ceased to be used for the statutory purpose (education of poor persons) before 17 August 1975.

Reasoning and decision:

• The House held that the statutory phrase denotes the statutory purposes and that a grantor may choose a narrower object within those statutory categories but that a breach of the narrower trust provisions does not automatically cause statutory reverter if the relevant statutory purpose remains being carried out.
• Applying this, the House found the evidence insufficient to infer that the trustees had adopted a deliberate policy abandoning the statutory object. The admission of some children from outside the district or of better-off families did not establish cessation of the statutory purpose; alternative, proper explanations (for example maintaining viability) were available and there was an absence of contemporaneous documentary evidence showing a change of admissions policy.
• The House therefore restored the judge's answer to the preliminary issue and allowed the appeal.

Wider implications: The House criticised the reasoning in a number of prior authorities (notably Habermehl and the Court of Appeal in Fraser No. 1) which had read the grantor's narrower trust terms as determinative of reverter, and reiterated a practical approach to identifying cessation of statutory purposes under the 1841 Act.

Appeal allowed. The House held that, under the School Sites Act 1841 s.2, a statutory reverter occurs only where the land has ceased to be used for the relevant statutory purpose chosen under the Act (here, educating poor persons). Admissions of some non-qualifying pupils and breaches of detailed trust directions did not establish cessation of the statutory purpose. There was insufficient evidence of an adopted policy abandoning the statutory object; accordingly the claimants' title was not statute-barred.

Preliminary issue tried in the Chancery Division before Lewison J (decision for claimants on the preliminary issue). The Court of Appeal reversed (Fraser v Canterbury Diocesan Board of Finance [2004] EWCA Civ 15). The House of Lords allowed the appeal ([2005] UKHL 65). A related Court of Appeal decision (Fraser No. 1) is reported at [2001] Ch 669.