Fraser & Anor v Canterbury Diocesan Board of Finance & Anor

St Philips School, Maidstone was opened in 1863. A Church of England School was run on the same site until its closure in 1995. The land on which the school was situated was the subject of a conveyance made under the School Sites Act 1841. Under section 2 of that Act a reverter of the land takes place if the land ceases to be used for the purposes for which the land was conveyed. The Reverter of Sites Act 1987 abolished reverter, but substituted a trust mechanism. However, the substitution did not apply to titles that had become statute barred before the coming into force of that Act.

On 28 January 2002 Master Bowles ordered the trial of a preliminary issue. The issue I have to determine is whether a reverter took place before 17 August 1975, that is to say more than twelve years before the coming into force of the 1987 Act. If it did, then the Claimants’ title is statute barred. If it did not, then subject to proof that they are the successors to the original grantors, they are entitled to the value of the school.

The population growth of nineteenth century England brought many social problems in its wake. Two such problems were the inability of traditional parishes to cope with the growing towns and the lack of education of the working population.

The first problem was dealt with by the Church Building Acts 1818-1884 and the New Parishes Acts 1843-1884. By these Acts Parliament addressed the under-provision of churches in the expanding industrial towns and cities by funding the building of new churches and by reorganising ancient parishes.

Section 16 of the Church Building Act 1818 empowered Commissioners appointed for the purposes of the Act to recommend to the King in Council that a parish should be divided into two or more distinct and separate parishes. Upon such division, glebe land, tithes and other endowments were apportioned between the new parishes. At this time the incumbent of a benefice was regarded as having proprietary rights in such endowments. Thus the section provided that the division should not come into effect until the death or resignation of the existing incumbent.

As an alternative to dividing a parish, section 21 of the Act empowered the Commissioners to recommend to the King in Council that a parish be divided into ecclesiastical districts. Section 30 of the Act made it clear that the division of a parish into ecclesiastical districts did not affect entitlement to glebe land, tithes or other endowments.

In 1861 the ecclesiastical district of St Philips, Maidstone was created under these statutory powers.

Educational needs of the working population were addressed by the formation of a number of voluntary societies. The first in the field was the Society for Promoting the Royal British or Lancastrian System for the Education of the Poor (subsequently renamed the British and Foreign Schools Society). This society was concerned with the provision of non-conformist schools. In 1811 or thereabouts there was formed the National Society for Promoting the Education of the Poor in the Principles of the Established Church throughout England and Wales (usually known as the “National Society”).

The National Society was incorporated by royal charter in 1817. Its purpose, as described in the charter, was that of educating the children of the poor in the doctrines and disciplines of the Established Church according to the liturgy and catechism provided for that purpose. The National Society made grants to promoters and managers of schools. A school aided by the National Society was “received into union” with the Society. The terms of union required children to be instructed in the holy scriptures and in the liturgy and catechism of the Established Church. The full terms of union may be found in National Society v. School Board of London (1874) L.R. 18 Eq. 608, 609.

By 1833 Parliament had voted to make grants to aid the erection of school houses for the education of the poor. The grant was repeated annually. Initially the Treasury administered the grant, but in April 1839 the responsibility for this was transferred to a Committee of the Privy Council on Education. Grants were normally made only to schools sponsored by one of the societies. Official inspection of schools began in 1840 and grants were made conditional on inspection. In 1856 an Education Department was formed separate from the Privy Council.

Although many landowners were willing to give land for the building of schools, there were legal difficulties. The principal difficulty was that limited owners were not able to make freehold grants of land. In other cases land suitable for the erection of a school would have been subject to rights of common, and no grant could have been made without the consent of the commoners. The National Society pressed for legislation to resolve some of these difficulties.

Pressure from the National Society resulted in the School Sites Act 1836. This facilitated the conveyance of settled land and common land, not exceeding half an acre in extent, for use as a school site. The 1836 Act was soon replaced by the School Sites Act 1841, which is the Act with which I am principally concerned.

Section 2 of the 1841 Act provides:

It is the third proviso, dealing with reverter if the land ceases to be used for the specified purposes, that is at the heart of the preliminary issue.

Section 7 allowed a grant to be made to corporations or trustees to be held by them for school purposes. In the case of a grant to the minister of a parish, and churchwardens and overseers of the poor, the management, direction and inspection of the school was to “be and remain according to the provisions contained in the deed of conveyance thereof”.

Section 10 contained a suggested form of conveyance. The suggested form of trust was a trust of the land “to be applied as a site for a school for poor persons of and in the parish of …..”.

Section 14 empowered the trustees to sell land which had been conveyed under the Act and to buy other land or buildings suitable for the purposes of their trust. Received wisdom was that exercise of the statutory power to sell overrode the reverter under section 2, although there was no authority that actually said so. This was ultimately confirmed by section 6 (2) of the Reverter of Sites Act 1987.

The School Sites Act 1841 was amended by School Sites Acts passed in 1844, 1849, 1851 and 1852. Most of these amendments are irrelevant for present purposes. However, I should mention that section 1 of the 1851 Act extended references to a “parish” to ecclesiastical districts, and that section 1 of the 1852 Act extended the permitted statutory purposes to the education of the children of yeomen and tradesmen and to the education of candidates for holy orders.

In order for a school to qualify for a parliamentary grant, a conveyance under the School Sites Act had to be approved by the Education Department. That Department appears to have required conveyances to follow one of a number of model forms. A printed form was supplied to the promoters of a school, and they filled in the blanks in manuscript. The form of trust expressed in the printed model form was:

The first steps towards state education were taken by the Elementary Education Act 1870 (Forster’s Act). Under this Act the country was divided into school districts. Elected school boards were set up to establish and run schools in districts where there were not enough elementary schools. For this purpose an elementary school did not include a school where the school fees exceeded nine pence per week. If there was a deficiency of elementary schools in a district, the school board was required to make up the deficiency by providing schools.

A school provided by a school board was forbidden by section 14 of the Act from teaching a religious catechism or religious formulary which was distinctive of a particular denomination.

A voluntary school could apply for state funding, but if it did so, the school became a public elementary school and had to comply with the conditions set out in section 7 of the Act. These conditions included a right on the part of parents of a child to withdraw him or her from religious education. Thus, in contrast to “provided schools” where religious instruction distinctive of a particular denomination was forbidden, religious instruction of a particular denomination was permitted, but could not be made compulsory.

The Elementary Education Act 1876 made elementary education compulsory.

Thus with the introduction of state provided elementary schools and compulsory elementary education, few further grants were made under the School Sites Act. However, in 1981 the Law Commission estimated that there were more than 2,000 schools which had been provided under the School Sites Acts and which remained on their original sites.

The Education Act 1902 abolished school boards. Their functions were vested in local education authorities instead. By section 5 of the Act local education authorities were given control of all secular education in public elementary schools not provided by them.

The Education Act 1944 effected a comprehensive reorganisation of state education. The 1944 Act divided education into three stages: primary, secondary and further education. Primary schools were either county schools or voluntary schools. County schools were public elementary schools that had previously been provided by the local education authority or a school board, while voluntary schools were public elementary schools that had not been provided by the local education authority or a school board. The latter class included church schools such as St Philips.

Section 9 of the Act gave local education authorities the power to establish primary and secondary schools. It also gave them power to maintain schools, whether or not established by them.

Section 15 provided that voluntary schools were to be of three categories: controlled schools, aided schools and special agreement schools. The significance of these categories relates to responsibility for the maintenance of school premises and buildings. In addition, the composition of the body of managers of a voluntary school (made up of a mixture of foundation managers and managers appointed by the local education authority) depended on the category into which the school fell.

Section 17 of the Act gave the Minister power to alter the provisions of any trust deed relating to a school in order to remove inconsistencies between the trust deed and instruments of government of such schools.

Section 23 placed the secular instruction in county schools and voluntary schools under the control of the local education authority.

In the case of a controlled school, one third of the managers were to be foundation managers. The primary function of a foundation manager was to secure, so far as practicable, that the character of the school is preserved and developed and that, in particular, the school is conducted in accordance with the provisions of any trust deed relating thereto (see section 114).

The Reverter of Sites Act 1987 was passed following an examination of reverter by the Law Commission, although many of the recommendations of the Commission were not accepted by Parliament.

The main change made by the Act was to substitute for reverter of title a trust mechanism. If an event occurred which would have triggered a reverter before the Act was passed, instead the holders of the legal estate held it on trust for those who would have been entitled to the reverter.

However, this did not apply to property where the revertee’s claim had become statute barred before the commencement of the Act. The Act came into force on 17 August 1987. Hence the trust mechanism did not apply in cases where the reverter had taken place before 17August 1975.

The overall effect of the 1987 Act was to enhance the rights of revertees rather than to extinguish or curtail them, not least because it did away with the possibility that reverter could be extinguished by adverse possession on the part of the holders of the legal estate.

St Philips School opened in January 1863. It had an infants’ department and a girls’ department. It appears to have operated from small buildings off Stone Street in Maidstone. In 1863 an agreement was made for the acquisition of additional land for the erection of new school buildings. Instructions were given to an architect in 1865 and the new buildings were erected. The school moved into them in February 1867.

In the meantime the landowners had executed the conveyance with which I am concerned. The conveyance began by reciting that it was made under the authority of the School Sites Act 1841. It then conveyed two parcels of land. One parcel, owned by the surviving devisees under the will of John Mercer, was sold for £265. The other, owned by Mr Monkton, was donated. The conveyance was made to the Minister and Chapel Wardens of the District Chapelry of St Philip Maidstone. It was made on trust:

It will be seen that this form of conveyance follows very closely the model form of deed that the National Society promulgated. However the words “or Children only”, which appear in the model form after the words “Children and Adults”, were omitted.

Mr Chapman, appearing on behalf of the Canterbury Diocesan Board of Finance, argues that well before 1975 the school ceased to be used for the purposes of the trust because:

The school educated children who came from social classes other than the labouring manufacturing and other poorer classes;

The school educated children from outside the Ecclesiastical District of St Philip and

The school did not educate adults, at least after 1903.

The factual material relevant to these issues is broadly agreed. It is primarily derived from an examination of extracts from the school log book quoted in a commemorative booklet published in 1963; an examination of the school register for the years 1931 to 1944, an examination of rate books, and the evidence of Mr RC Harris who attended the school between 1947 and 1950.

The school initially charged fees of 3d per week. In October 1891, after a five week holiday for hop picking, it reopened as a free school for children above the age of three. Younger children were charged 1d per week. There is some evidence that, before 1891, the parents of some children had difficulty in paying the fee and that on occasions children were turned away for non-payment. Some children had their fees paid by the guardians of the poor.

There is some evidence that the school educated student teachers, but no evidence that this continued after 1903.

In 1895 and again in 1906 the school received a parliamentary grant. This means that it must have become a public elementary school and must, therefore, have complied with the conditions set out in section 7 of the Education Act 1902. Thus parents could have withdrawn their children from religious instruction, although there is no evidence that anyone did.

An analysis of the school registers for 1931 to 1947 shows that the children came from a variety of housing stock. Some came from what were, historically, middle class streets of owner occupied houses. Mr Harris lived in one such street, and his father, who worked for the local electricity board, owned his own house. An examination of the Maidstone rate books for this period shows that some of the children lived in houses with high rateable values. I was shown photographs of some of these houses which were plainly comfortable and relatively spacious houses. However, further analysis by Mr Neil Fraser demonstrated that many of the higher rated houses appeared to have been in multiple occupation and others of them may well have been highly rated because the hereditament also included a shop. In the case of those children who lived in hereditaments including a shop, they may have been the children of “tradesmen”, who were specifically mentioned in the 1851 Act, but not in the conveyance.

Mr Harris said in his evidence that the former parish of St Philip contains a variety of housing including premises which belonged to the local authority and premises in and around Stone Street Maidstone which certainly would have been occupied by the poorer classes. He, however, lived in a “better class area”, as did a friend of his, who also attended St Philips and was the son of a police inspector. He concluded that, having looked at the register, there were clearly a mixed variety of pupils being admitted to the school, some from very obviously poor backgrounds but some clearly from a more wealthy area.

The boundaries of the ecclesiastical district of St Philip (later the parish of St Philip) have changed from time to time. After some statistical skirmishing, it ultimately became common ground that about 16 per cent of pupils at the school lived outside the parish during the years 1931 to 1947.

Under a scheme made in March 1952 the land was vested in the Canterbury Diocesan Board of Finance.

The parish of St Philip disappeared in 1962, when it was amalgamated with the adjoining parish of All Saints. Mr Chapman initially submitted that the disappearance of the parish of St Philip meant that the trusts became impossible to carry out. However, after an examination of section 26 of the Union of Benefices Measure 1923, which says that notwithstanding a union of parishes, parishes comprised in a union remain distinct and separate parishes for secular purposes, he rightly did not press that point.

In 1969 the education authority made proposals for changing the character of the school. The particular change was to reduce the age range of pupils from 5-8 to 5-7. The notice given by the education authority indicated that the school would be available for the Borough of Maidstone.

A number of points were common ground:

Until the changes brought about by the Reverter of Sites Act 1987, reverter was automatic once the triggering event had occurred;

Reverter was irrevocable;

Reverter involved a transfer of the legal title and not merely a passing of the beneficial interest (Re Rowhook Mission Hall, Horsham [1985] Ch. 62, not following Re Clayton’s Deed Poll [1980] Ch. 99. The conflict between these two cases was settled by section 4 of the 1987 Act which plainly assumes that the former decision is correct);

The possibility of reverter applies not only to a grant made by a limited owner but also to a grant made by a fee simple owner, even if that grant took the form of a sale for full value (Re Cawston’s Conveyance [1940] 1 Ch. 27);

Although the 1841 Act itself says that reverter takes place only if the land ceases to be used for a purpose mentioned in the Act, what this means is that reverter takes place if the land ceases to be used for the purpose mentioned in the conveyance, provided that that purpose is itself within the Act (A-G v. Shadwell [1910] 1 Ch. 92; Fraser v. Canterbury Diocesan Board of Finance [2001] Ch. 669);

If reverter did take place, and the school trustee remained in possession for 12 years or more, he would have acquired title by adverse possession, thereby barring the reverter (Re Ingleton Charity [1956] Ch. 585);

Since a trustee cannot acquire title by adverse possession against a beneficiary under the trust, the Reverter of Sites Act 1987 has now made it impossible for title by adverse possession on the part of a school trustee to bar a reverter;

The real question for me to decide is not whether there has been a breach of trust, but whether there has been a cessation of use for the purpose described in the conveyance;

The answer to this question depends on the identification, as a matter of construction of the conveyance, of the purpose for which the land was conveyed;

In the case of a school in union with the National Society, the purpose of the trust is education in the tenets of the Church of England, so that if such a school loses its denominational character (e.g. if it is leased to and run by the local education authority) it ceases to be used for the purposes for which it was established (Habermehl v. A-G [1996] EGCS 148; Fraser v. Canterbury Diocesan Board of Finance, above)

The reverter must have taken place before 17 August 1975 in order for the reverter to have been barred.

The construction of a written instrument is the process of ascertaining the meaning it would convey to a reasonable person of the class of persons to whom it is addressed, possessed of all the relevant background knowledge that was available to the parties. Although this principle can cause difficulties when the instrument to be construed is an old one, and the background may be lost in the mists of time, it nevertheless remains the law. However, the real question is how much influence can the background have on the meaning of the words, especially in a case where the instrument is plainly intended to remain in force indefinitely and to be relied on by persons who were not party to the original instrument.

I set out again, for convenience, the relevant words of the conveyance. The trust was a trust to permit the land to be used:

Mr Christopher Nugee QC, appearing with Mr Baxendale for the Claimants, submitted that I should proceed by the following steps:

The trust is a trust to permit the land to be used as a school;

The trust then describes the kind of school which the trustees must permit (which I will call “a qualifying school”);

I must then ask myself whether the school is a qualifying school;

If it is, I must then ask whether the trustees are permitting the land to be used for any other purpose;

If the answer is “no” then there is no breach of trust, let alone a reverter.

Mr Chapman focussed on the words “for no other purpose”. He submitted that, read as a whole, the words of trust required the school to be a school exclusively for the education of the children and adults described in the conveyance. They had to possess the characteristics that:

They were of the labouring manufacturing and other poorer classes and

They had to reside in the ecclesiastical district of St Philip as it existed from time to time.

I will call such persons “qualifying persons”. If the school educated children who were not qualifying persons, then the school was being used for a purpose which differed from that set out in the conveyance and had ceased to be used for the purpose set out in the conveyance.

Mr Chapman’s formulation of the second characteristic involves a disputed reading of the conveyance. The conveyance speaks of “education of Children and Adults of the labouring manufacturing and other poorer classes in the Ecclesiastical District of Saint Philip Maidstone”. Mr Chapman’s reading attaches the phrase “in the Ecclesiastical District of Saint Philip Maidstone” to the word “classes”. Thus it is the persons being educated who must be “in” the district. It may be open to debate whether the test is one of residence in the district or whether someone who labours in the district would also qualify, but that ambiguity does not matter for present purposes. Mr Nugee argues that the phrase “in the Ecclesiastical District of Saint Philip Maidstone” attaches to the word “education”, so that it is the education that must take place in the district.

Mr Chapman argues that his construction is the natural meaning of the words. It is supported by a consideration of the suggested form of trust set out in section 10 of the 1841 Act, which clearly envisages that those being educated would be persons of a particular parish. Moreover, he says, in 1841 the parish was the basic unit of local government, so that concentration on the inhabitants of a particular parish is not at all surprising.

Mr Nugee argues that his reading is not without content, because under section 14 of the 1841 Act the trustees may sell the school and buy another building. On his reading, the new building must also be within the district since otherwise it would not be suitable for the purposes of the trust. He argues further that it would be impractical if a child who was admitted to the school at a time when he or she was resident in the district but later moved was required to leave the school, perhaps in the middle of a term, in order to avoid a breach of trust. In addition, he says, when the parish boundaries changed then, if Mr Chapman is right, there would have had to have been wholesale expulsions. I am not persuaded that the last two points are correct. The trust is concerned with a purpose. A purpose is an aim or objective (compare Sweet v. Parsley [1970] A.C. 132, 154-155; Cheryl Investments Ltd v. Saldhana [1978] 1 W.L.R. 1329, 1338-9). If the aim or objective of the school was to educate qualifying persons, the fact that a person ceased to qualify, but continued to be educated at the school, would not in my judgment alter the purpose of the school. It would be merely incidental to the achievement of the purpose.

On this point I consider that Mr Chapman is correct for the reasons that he gave. I conclude that a qualifying person was required to live within the district of St Philip.

Mr Chapman also argued that the trust required the school to educate both adults and children, and that if it educated children alone that was a breach of trust. He agreed that if the words “children and adults” stood alone it would have been permissible to educate either adults or children or both. As Mr Nugee said, a trust for the care of sick and injured children is not broken if only sick children and no injured ones are treated. However, Mr Chapman pointed to the model form of deed promulgated by the National Society and submitted that, since the draftsman of the 1866 conveyance had deleted the words “or children only” which appear in the model deed, the draftsman must have intended to preclude the possibility of educating children alone. He accepted that his construction was dependent on the fact of that deletion and the inference to be drawn from it.

Mr Nugee said that the model deed was inadmissible since it represented a draft of the completed conveyance, and under normal circumstances a draft contract is inadmissible to construe the final version. Mr Chapman retorted that this is not the simple case of a draft contract. The model deed was a published printed form, available to the promoters of a school, and was apparently in wide use. There are many reported cases concerning the School Sites Acts in which the model form of deed appears to have been slavishly copied. The precise boundaries of the exclusionary rule that drafts and negotiations are inadmissible to construe a contract are not clear. I am inclined to accept that a published precedent, especially one which is an official or quasi-official form is part of the available background. However, it seems to me that in the case of a conveyance which set up a trust intended to endure “for ever hereafter” the parties would not have intended the meaning of the conveyance to be controlled by the published precedent on which it was based. This, in my judgment, is more a question of weight than admissibility. In my judgment the natural meaning of the words is that the trust was a trust for the education of adults and/or children. I do not consider that that meaning is changed by an examination of the model deed. I conclude that the fact that no adults were educated (or at least none since 1903) was not a breach of trust.

Mr Nugee submitted that I should construe strictly the statutory proviso triggering a reverter because the court will construe strictly a provision which tends to lead to the defeasance of a proprietary right. I do not consider that a strict construction is warranted. This is not the case of a contract or settlement, but of a statute. The purpose of the reverter was to encourage gifts of land for schools. Moreover, despite the recommendations of the Law Commission which would have abolished most reverters, in 1987 Parliament actually enhanced the rights of revertees. Parliament must therefore have considered that the possibility of reverter was still in the public interest.

However, I cannot accompany Mr Chapman along the whole of his route. In my judgment he attributes to the phrase “and for no other purpose” a meaning which it does not bear. It seems to me that the education of qualifying persons is the purpose for which the trust was created. For as long as the school continued to educate qualifying persons, it carried out the purpose of the trust. If the school educated children who were not qualifying persons that might or might not be a breach of trust. It would only be a breach of trust if the education of children who were not qualifying persons was a purpose of the school in the sense I have described.

In Re Bathurst (unreported 18 October 1978) HH Judge Rubin, sitting as a judge of the Chancery Division, considered the effect of the trusts affecting a school in Lydney, Gloucestershire. The trust deed followed the terms of the National Society model deed, and required the land to be used for the education of adults and children or children only of the labouring manufacturing and other poorer classes in the parish of Lydney. The evidence showed that a boy named Harris, who lived outside the parish, was admitted to the school in 1868 and that subsequently there had been children from outside the parish who had been admitted to the school. In 1973 those children were “a substantial number”. Judge Rubin said that:

That was, of course only a tentative expression of opinion. But it does not seem to me that the admission of one pupil who was not a qualifying person can be said to amount to a purpose as that word is used in the trust deed.

Mr Chapman submits that that is not this case. In the present case there is no evidence that the trustees had an admissions policy that restricted admission to qualifying persons. So far as the evidence goes, the trustees never rejected any pupil either on the ground that he or she lived outside the ecclesiastical district or on the ground that he or she was not a member of the relevant social classes. The school was simply open to any child who wished to attend it. Once the school simply became part of the state education system it ceased to be used for the purpose specified in the conveyance.

In my judgment Mr Chapman is correct to submit that the way in which the school was run indicates that its purpose was to educate not merely qualifying persons, but others as well. In my judgment it was a breach of trust for the school to have adopted a policy of educating children who were not resident in the ecclesiastical district of St Philip and who were not from the relevant social classes. Thus I do not accept Mr Nugee’s submission that the school was not being used for a purpose other than that set out in the conveyance.

It is Mr Chapman’s next step that I cannot take. Mr Chapman submits that the purpose for which the school was used was the education of all-comers and not for qualifying persons. That is a different purpose from the education of qualifying persons and hence use of the land for the purpose specified in the conveyance ceased (or perhaps never even began).

I do not characterise what happened in that way. If land is conveyed to be held on trust for purpose A and for no other purpose, and the trustees use the land for purpose A and also for purpose B, it seems to me that they are using it for two purposes, one of which is permitted by the trust and the other of which is not. What they have not done is to cease to use the land for purpose A merely because they are also using it for purpose B.

The evidence in the present case shows that the vast majority of children (in the region of 84 per cent) were children who lived in the ecclesiastical district of St Philip. It also shows that the majority of children came from the poorer classes, although I cannot be precise about the percentage.

In Re Bathurst Judge Rubin said, immediately after the passage I have quoted:

Mr Chapman says that the judge asked himself the wrong question. The question was not whether the school had ceased to be used for the purpose of educating poor persons. The question was whether it had ceased to be used for educating poor persons in the parish of Lydney in conformity with the principles of the National Society. Mr Chapman is correct in saying that the judge did ask himself the wrong question. As later cases show, if a National Society school loses its denominational character, it does cease to be used for the purposes for which it is established. So the actual decision in the case is probably wrong. However, as an answer to the question that the judge did in fact ask himself, the answer he gave is, in my view, correct. In my judgment it would be a misuse of language to say that the school ceased to be used for the purpose of educating qualifying persons, in circumstances in which it educated both qualifying persons and others as well.

Nor do I consider that by becoming part of the state education system the school ceased to be used for the purpose set out in the conveyance. The Education Act 1944 shows that one of the functions of a foundation manager was to ensure that the school adhered to the terms of its trust. There is no incompatibility between a school being part of the state education system and continuing to be used for the purpose of its trust.

In my judgment the evidence shows that, until St Philips closed in 1995, it continued to educate qualifying persons, even if it also educated others who were not qualifying persons. It did not cease to be used for the purpose for which it was established.

Accordingly, in my judgment, there was no reverter before the coming into force of the Reverter of Sites Act 1987. I therefore answer the preliminary issue in the negative.