The Keepers and Governors of the Possessions, Revenues and Goods of the Free Grammar School of John Lyon, Within the Town of Harrow-on-the-Hill v His Majesty's Attorney General

A cy-près occasion requires more than showing that a charity could use its property in a more extensive or effective way. The existing use must have become unsuitable, ineffective, impossible, impracticable or otherwise fall within Charities Act 2011, section 62. Intangible assets such as brand, reputation, know-how and fluctuating staff capacity are not surplus property under section 62(1)(b) unless an identifiable property interest remains unused. Where charitable objects are contained in a Royal Charter, statutory powers to amend subordinate statutes do not authorise alteration of the Charter or its objects unless Parliament has clearly provided otherwise. A charity’s existing objects may permit activity outside the geographical location of its school where that activity is properly for the purposes of the school.

The claimant, an incorporated charity operating Harrow School and The John Lyon School, sought a cy-près scheme replacing its Charter objects with a power to advance education for the public benefit without geographical limitation. It also sought a declaration that its Governors could amend those objects under sections 7 and 11 of the Public Schools Act 1868. The Attorney General opposed the application, contending that no cy-près occasion had arisen and that the statutory powers could not undermine the charity’s principal objects. The central issues were whether the statutory cy-près conditions were satisfied and whether sections 7 and 11 authorised amendment of objects contained in the Royal Charter.

1. Application dismissed. No cy-près occasion had arisen, and sections 7 and 11 of the Public Schools Act 1868 did not permit alteration of the claimant’s Charter objects. The court reserved the form of order and any declarations.
2. Under section 62(1)(b) of the Charities Act 2011, the relevant property is property dedicated to the original charitable purposes and capable of ownership, identification and application. Fluctuating surplus teacher capacity, brand, reputation and know-how did not constitute an identifiable unused part of the charity’s property. The brand was being used as a whole and could not be divided into surplus and used parts.
3. For section 62(1)(d)(ii), Harrow had not ceased to be a suitable area and local pupils had not ceased to be suitable beneficiaries of the limited benefits they received. Changes in education, geography and online provision were insufficient.
4. For section 62(1)(e)(iii), it was insufficient that a different use might be more suitable or effective. The claimant had to establish that the existing use required by the objects had ceased to be suitable or effective. Maintaining the Schools remained a suitable and effective use.
5. The Charter objects required the establishment, maintenance and improvement of a school at Harrow for the education of children. They did not require every benefit to be conferred within Harrow: activity elsewhere could qualify if properly regarded as being for the purposes of the Schools. The proposed scheme nevertheless went beyond removing a geographical restriction and would replace the existing primary object with the broader advancement of education.
6. Applying the current, amended wording of the Public Schools Act, sections 7 and 11 concerned existing or Act-made subordinate statutes. They did not authorise alteration of a Royal Charter or objects contained in it. Section 8(4), including its reference to the force of approved statutes, did not provide a sufficient basis for that far-reaching construction.