Fraser and another (Appellants) v. Canterbury Diocesan Board of Finance and others (Respondents)

A statutory reverter under section 2 of the School Sites Act 1841 occurs only when land ceases to be used for the relevant statutory educational purpose. The question requires a broad and practical assessment. Reverter is an automatic event, not a gradual process.

A school does not cease to serve the education of poor persons merely because it also admits pupils from outside the designated locality or from better-off families. Narrower restrictions imposed by the grant remain enforceable as charitable trusts, but their breach does not necessarily terminate the wider statutory purpose or cause reverter.

Land was conveyed in 1866 under the School Sites Act 1841 for a Church of England school educating poorer children and adults in the ecclesiastical district of St Philip, Maidstone. The school remained open until 1995, although some pupils came from outside the district or from comparatively prosperous families.

The appellants, as assignees of persons claiming through the original grantors, asserted beneficial interests under the statutory trusts substituted by the Reverter of Sites Act 1987. The respondents contended that a reverter had occurred before 17 August 1975, so that any title had become statute-barred before the 1987 Act commenced.

Lewison J decided the preliminary issue for the appellants. The Court of Appeal, in [2004] EWCA Civ 15, reversed that decision. The central issue was whether the school had ceased to be used for the relevant statutory purpose before the critical date.

1. Appeal allowed unanimously. Lord Hoffmann and Lord Walker of Gestingthorpe delivered the substantive speeches. Lord Nicholls of Birkenhead, Lord Hope of Craighead and Lord Brown of Eaton-under-Heywood agreed with both. The answer given by Lewison J to the preliminary issue was restored.

2. Per Lord Hoffmann and Lord Walker, the evidence did not establish that the school had ceased to be used for educating poor persons. The majority of pupils remained local and poor. There was no evidence that any qualifying child had been refused admission. The admission of children from outside the parish or from better-off families was equally consistent with maintaining enrolment, financial viability and the effective education of poorer pupils.

3. Per Lord Walker, the statutory provision must receive a broad and practical application. The legislation and deed established a charitable arrangement intended to endure indefinitely. A reverter must depend upon a sufficiently precise event and is automatic and irrevocable. It is not a process arising gradually from changes in the composition of a school's pupils.

4. The respondent, as successor to the trustees and the party possessing the relevant records, could not invite an inference of breach of trust when lawful explanations were reasonably available and no evidence of an altered admissions policy had been produced. The evidence therefore did not justify either a finding of breach or the stronger finding that the school's purpose had changed.

5. On the further question, Lord Hoffmann held, and Lord Walker agreed, that the relevant purposes are the statutory purposes selected by the grantor, not every narrower restriction contained in the deed. Such restrictions remain enforceable under charitable trust law, but their breach does not necessarily cause reverter. Attorney General v Shadwell [1910] 1 Ch 92 was explained on that basis. Habermehl v Attorney General [1996] EGCS 148 and Fraser v Canterbury Diocesan Board of Finance [2001] Ch 669 were wrongly decided on this point. Lord Walker treated this further question as unnecessary to the disposition, and the earlier order in the separate Fraser proceedings remained unaffected.

1. House of Lords: The appeal was allowed unanimously. The Court of Appeal's decision was reversed and Lewison J's answer to the preliminary issue was restored: [2005] UKHL 65.
2. Court of Appeal: The respondents' appeal was allowed. The court declared that reverter had occurred before 17 August 1975: [2004] EWCA Civ 15.
3. High Court: Lewison J decided the preliminary issue for the claimants, holding that their asserted title had not become statute-barred on the pleaded basis. No citation is stated in the judgment.