London Borough of Brent v Johnson

In a claim alleging that property is held on a charitable trust, the Attorney General represents the beneficial interest of the charity. Where the claim is brought by persons with an interest in the subject matter, adverse to the putative trustee, the Attorney General is ordinarily a necessary party. The Attorney General may join as claimant or, where a neutral stance is appropriate, as defendant so that the decision binds the charitable interest and avoids repeated litigation. The court should not strike out the claim merely because the Attorney General has declined to join without first ascertaining the Attorney General’s position on the existence of the alleged trust.

The London Borough of Brent appealed against orders made by Deputy Master Rhys and Master Clark in proceedings concerning a former bus depot. Brent sought declarations that it was the sole legal and beneficial owner and was free to sell the property. The appellants alleged, among other things, that Brent held it on charitable trust for the local community.

The Deputy Master directed that the Attorney General be served but did not strike out the charitable trust argument. After the Attorney General stated that she would not apply to join, Master Clark held that the appellants lacked standing and struck out the relevant defence. The central issue on appeal was whether the charitable trust argument had to be struck out in those circumstances.

1. Appeal allowed. The charitable trust argument should not have been struck out merely because the Attorney General had declined to apply to join. The Attorney General’s communication did not reveal whether she considered that no charitable trust existed or whether she intended to remain neutral.
2. Re Belling [1967] Ch 425 and Hauxwell v Barton-on-Humber [1974] Ch 432 establish that these are not “charity proceedings” within the Charities Act 1960. The statutory power to permit continuation of charity proceedings despite the relevant authority’s refusal to authorise them therefore provided no analogy.
3. The Attorney General represents the beneficial interest, namely the objects of the charity. In a claim by persons with an interest in the subject matter, but no proprietary interest, alleging that property is held on charitable trust adversely to the putative trustee, the Attorney General is a necessary party. The Attorney General may join as claimant. If a neutral position is intended, joinder as defendant is sufficient to make the outcome binding and to reduce the risk of multiple proceedings.
4. If the Attorney General concludes that the property is not held on charitable trust, the claim cannot be maintained in the circumstances considered in Re Belling. If the Attorney General adopts a neutral stance, the interested parties may argue the issue with the Attorney General joined as defendant.
5. Subject to the Attorney General issue, the appellants had a sufficient interest for a declaration concerning Brent’s beneficial ownership to serve a useful purpose, applying Rolls Royce v Unite the Union [2010] 1 WLR 318. The court was minded to join the Attorney General as defendant and hear further submissions on the appropriate order.

• High Court (Chancery Division): Appeal allowed from the orders of Deputy Master Rhys dated 21 March 2019 and Master Clark dated 13 September 2019. The costs appeal was refused.