Fraser and another (Appellants) v. Canterbury Diocesan Board of Finance and others (Respondents)
28. This provision for reverter (not found in the School Sites Act 1836, which was repealed by the 1841 Act) was intended to encourage landowners, and especially limited owners interested in settled land, to make use of the powers conferred by the 1841 Act. This was explained by Sir Wilfrid Greene MR in In re Cawston's Conveyance and the School Sites Act 1841  Ch 27, 33-34:
29. The historical background to the 1841 Act and the facts directly relevant to this appeal reflect the slow and sometimes contentious development of universal elementary education in this country over two centuries. At the beginning of the 19th century the general state of education was very bad. Many grammar schools, founded for poor students, had become fee-paying schools for children of the gentry or the professional classes. The children of the poor often received little or no education, even at an elementary level. A number of voluntary societies, almost all with a strong religious affiliation, were founded in order to improve the education of the children of the poor. The largest and best known of these, strongly affiliated to the Church of England, was (by its full name) the National Society for Promoting the Education of the Poor in the Principles of the Established Church throughout England and Wales ("the National Society"), which was incorporated by Royal Charter in 1817, with the Archbishop of Canterbury for the time being as its president. Societies of this sort attracted a certain amount of jocularity even from contemporaries, including Dickens (especially in the grotesque characters of Mrs Jellyby and Mrs Pardiggle in Bleak House) and they were no doubt suffused, to a present-day observer, by a great deal of class-consciousness and condescension; but they achieved something at a time when Parliament had taken no effective measures towards universal elementary education.
30. The National Society raised large sums by subscription and made grants in favour of schools in which children were to be instructed (in addition to reading, writing and arithmetic) in holy scripture and in the liturgy and catechism of the established church (see National Society v School Board of London (1874) 18 Eq 608, 609). Its aim was to have such a school in every parish in the country (many of the authorities refer to village schools, but often the educational need was even greater in rapidly-growing urban centres). There was no reference to the Church of England in section 2 of the 1841 Act (only a general reference to "the education of such poor persons in religious and useful knowledge"). This was in contrast to section 3 of the School Sites Act 1836 (6 & 7 Guil IV c 70) (repealed by the 1841 Act); section 3 had referred to education in the Christian principles of the established church, and had actually identified the National Society as a potential grantee.
31. The relatively secular character of section 2 of the 1841 Act did not reflect the fact that at first the National Society and similar Church of England or free-church societies were economically the driving force of the new voluntary schools. Section 10 of the 1841 Act provided an optional form of grant, the habendum of which (with its original parentheses) was as follows:
St Philip's School, Maidstone
32. All these points are illustrated by the history of the school to which this appeal relates. It came to be known as St Philip's Church of England Primary School, Melville Road, Maidstone. It opened in 1863 in premises which it did not own, but in 1866 it acquired those premises (by purchase for £265 from the trustees of the will of Mr John Mercer) and some adjoining land (by gift from Mr John Monkton), and these together formed the site for a new school building, which opened in February 1867. It was in continuous use from then until July 1995, when it closed permanently.
33. The two pieces of land were conveyed to the school trustees (the Minister and Chapel Wardens of St Philip, Maidstone) by a single deed dated 5 April 1866. It was expressed to be made under the authority of the 1841 Act and the School Sites Act 1844 (7 & 8 Vict, C 37) (which made minor amendments, not now material, to the 1841 Act). The habendum of the grant was as follows:
34. The trusts of the deed were therefore narrower than the statutory pattern in two respects. They were framed exclusively in terms of the first of the three statutory purposes ("a school for the education of poor persons"), and they required the children's education to be in accordance with the principles of the Church of England.
35. A few years after the school was established, Parliament passed the Elementary Education Act 1870 (39 & 40 Vict, c 79) ("the 1870 Act"). This statute was the first step towards the provision of elementary education for all children at public expense. It set up school boards with the duty of providing public elementary schools. Section 14 prohibited religious teaching distinctive of any particular denomination being given in a public elementary school which was provided (as opposed to being merely maintained) by a school board. Section 23 empowered managers of existing elementary schools to transfer their schools to their local school board, which could agree to assume responsibility for the school. Many schools supported by the National Society or other voluntary societies were in difficult financial circumstances, and their managers sometimes decided to transfer their school to the school board, despite the prohibition on religious teaching of a denominational character. This naturally upset the National Society, but (as was established by National Society v School Board of London (1874) 18 Eq 608) it had no remedy apart from making representations to the Education Department. National School v School Board of London is a useful source of background information but is not directly relevant to the issues in this appeal, since the committee managing St Philip's school did not exercise the power conferred by section 23 of the 1870 Act. The school remained a Church of England school in the voluntary sector. It became a public elementary school under the Education Act 1902, which replaced school boards by local education authorities and brought within its scope elementary schools maintained (although not provided) by local education authorities. Under the Education Act 1944 the school became a voluntary controlled school.
36. Over the years, however, there were changes in the characteristics (in point of residence and social class) of children who attended the school. These changes were the subject of some documentary evidence and written witness statements (on which there was no cross-examination) before the judge. I will address this evidence in a little more detail later on, but it is common ground that although throughout the life of the school the majority of the pupils were resident in the parish and came from families which could properly be described as poor, some were resident outside the parish (the average figure between 1931 and 1947 was about 16%) and some came from parts of Maidstone where the residents were relatively prosperous.
37. Under a scheme made in 1952 the title to the school premises was vested in the respondent the Canterbury Diocesan Board of Finance ("the Board of Finance"). There was a reorganisation of parishes in 1972 but it is common ground that it does not affect this appeal.
38. Following on a Law Commission report (Cmnd 8410, published in 1981) on Rights of Reverter, Parliament enacted the Reverter of Sites Act 1987 ("the 1987 Act"). This makes various amendments to the law, some of which have since been modified in technical respects by the Trusts of Land and Appointment of Trustees Act 1996. The most far-reaching change (made by section 1 of the 1987 Act) was that rights of reverter under the School Sites Acts (and some other comparable statutes) were abolished and replaced by a trust for sale in favour of the persons who (but for the 1987 Act) would be entitled under the reverter (but without entitling them to occupation of the land). This had several important consequences which are not spelled out explicitly in the 1987 Act. The trustees can make a good title to the land (as they did when the school was sold in 1995 for about £125,000). Since trustees cannot acquire title by adverse possession against their beneficiaries, the beneficiaries' rights (if subsisting on 17 August 1987, when the statute came into force) cannot after that date be extinguished by adverse possession. But they may be extinguished by a Charity Commissioners' Scheme or a Ministerial Order under provisions in sections 2 to 5 of the 1987 Act. The details are not relevant, because by section 1(4) of the 1987 Act it confers no rights on any beneficiary whose claim has been statute-barred before 17 August 1987. The only issue in this appeal is whether there was a reverter followed by a period of 12 years' adverse possession completed before 17 August 1987. The evidence suggests that if there was a reverter, it would most probably have occurred during the first half of the 20th century; but the critical cut-off date is 17 August 1975. That is the date which (after the claimants had commenced Part 8 proceedings on 25 October 2001) was specified in the Master's Order dated 28 January 2002 directing a preliminary issue:
39. The appellants are genealogists who are assignees, no doubt for value, of the equitable interests of the persons now interested, by testate or intestate succession, in the estates of John Mercer and John Monkton. But Mr McCall QC (for the Board of Finance) did not suggest that this had any bearing on the legal strength of their claims. Indeed he chivalrously refrained from drawing any attention to this aspect of the matter; but it is apparent from the papers before the House.The determinative issue: the proceedings below
40. The order directing a preliminary issue also directed standard disclosure "if required," but it was not required. The documentary evidence voluntarily provided by the Board of Finance included extracts from a "logbook" chronicling events in the life of the school; the (meticulously kept) school register for the period between 1931 and 1947; and extracts from rate-books (which provided some tenuous evidence of the prosperity of different parts of Maidstone). There was a witness statement from Mr R C Harris, who was a pupil at the school between 1947 and 1950.
41. The judge (Lewison J) summarised the effect of the evidence in paras 44 and 45 of his judgment as follows:
42. Neither side challenged the judge's findings of fact set out above. The dispute centres on four paragraphs later in his judgment, with which the Court of Appeal found fault. The judge was using "qualifying persons" to mean pupils who were (i) "of the labouring manufacturing or other poorer classes" and (ii) resident in the ecclesiastical district of St Philip. In the crucial passages he began by summarising the argument for the Board of Finance:
43. The Court of Appeal reversed this decision. The main reasons are in the judgment of Arden LJ at paras 22-29 of her judgment; Potter LJ agreed with her; so did Wilson J, adding some further reasons of his own. Arden LJ took the judge to have found as a fact that the school had ceased to be used solely for the purposes set out in the trust deed. It had come to be used for a new and wider purpose, the provision of a school for all-comers (with no finding that priority was given to qualifying persons). The judge then, inconsistently with his own findings, treated the wider purpose as two separate purposes (his "purpose A" and "purpose B").Arden LJ observed in para 24,
44. My Lords, I cannot wholly accept the reasoning by which the judge proceeded from his undisputed findings of primary fact. But neither do I agree with the Court of Appeal's criticism of his reasoning. I do not think that the judge was entitled to infer, from the rather meagre evidence before him and the limited findings which he made on it, that the trustees of the school had an "all-comers" admissions policy and that the adoption of that policy amounted to a breach of trust. The school's committee of management might be expected to have kept minutes of their meetings recording any important policy decisions; none were produced and put in evidence by the Board of Finance, and it hardly lies in their mouths to ask the court to infer a breach of trust from a gap in their own evidence. There is no evidence that any fully qualified child was ever refused admission to the school as a result of an all-inclusive admissions policy. An equally probable explanation (and one which should be preferred in the absence of any evidence of breach of trust) is that the management committee recognised the need to keep up enrolment at the school, in order to maintain its financial viability, and accepted pupils from outside the geographical area of the ecclesiastical district, or from middle-class homes, so far as necessary to fill up numbers.
45. Such a course of action would not to my mind amount to the adoption of a new, unauthorised trust purpose. Neither section 2 of the 1841 Act nor the trust deed admits of very close linguistic analysis (the inter-relationship between the statute and the trust deed is something that I shall return to). But some general principles are clear. It is clear that both the statute and the trust deed were intended to set up arrangements capable of lasting for a very long timepotentially for ever. Both were intended to operate through the medium of a charitable trust. Charity law has for centuries required that a general charitable purpose (or intention) should be recognised and given effect to, even though some particular directions given by the charity's founder are (or become) impracticable: see for instance the explanation given by Buckley J in In re Lysaght (deceased)  Ch 191, 201-202. It is also a well-established principle of trust law that any provision determining or divesting an estate "must be such that the Court can see from the beginning, precisely and distinctly, upon the happening of what event it was that the preceding vested estate was to determine" (Lord Cranworth in Clavering v Ellison (1859) 7 HLC 707, 725, cited in Sifton v Sifton  AC 656, 670, and in Clayton v Ramsden  AC 320, 326). As Mr Nugee put it in his written submissions, reverter is an event, not a process (and if it occurs, it is automatic and irrevocable.)
46. All these considerations suggest that the court should take a broad and practical approach to the question whether a school has (in the words of the third proviso) ceased "to be used for the purposes in this Act mentioned" (and that it is not simply a coincidence that all the reported cases are concerned with schools which had closed permanently). The relevant statutory purpose was "the education of poor persons" (the school never gave up its Church of England connection, so I can for the present pass over the question of how significant that change would have been.) Mr Nugee in the course of his reply (which was all the more effective for its brevity) posed the question which might have been put to the school managers (around the middle of the 20th century or at any time up to 1975), "Are you still providing education for the poor of the parish?" To my mind that question could only have received an affirmative answer, and that is determinative of this appeal.The further issue: statutory purposes or trust purposes?
47. That is sufficient to dispose of this appeal. But the House also had the benefit of written and oral submissions on a further issue, which was (as it happens) raised between the same parties in separate proceedings about another school, at Chartham in Kent. Those proceedings reached the Court of Appeal: see Fraser v Canterbury Diocesan Board of Finance  Ch 669 ("Fraser (No 1)"). They were deciding in favour of the Board of Finance and there was no further appeal. The judgment of your Lordships' House in the present appeal cannot alter the outcome of Fraser No 1. But it may be that this House will never again have to consider the 1841 Act, and it may be many years before it comes before the new Supreme Court. For that reason I think that the House should take this opportunity of achieving some further clarification of this obscure area of the law.
48. Fraser No. 1 was a case where a grant was made under the 1841 Act in 1872 (that is, after the coming into force of the 1870 Act) and the school had in 1874 been transferred to a school board under section 23 of the 1870 Act. The school closed permanently in 1992. The issue was whether reverter had occurred in 1874, with the result that the claim of those interested under the reverter had long since become statute barred. The original grant under the 1841 Act followed the National Society standard form, and so was very similar to the grant relating to St Philip's School at Maidstone.
49. Whether a reverter had occurred in 1874 depended on whether (in the words of the third proviso to section 2 of the 1841 Act) the land had "ceas[ed] to be used for the purposes in this Act mentioned." The land had continued to be used as a school until 1992, but as long ago as 1874 it had ceased to be a school run in accordance with the principles of the National Society and the established churchas Mummery LJ put it, in delivering the judgment of the Court of Appeal ( Ch 669, 675, para 6), it had "lost its essentially Church of England character."
50. The Court of Appeal, upholding the deputy judge, held that reverter had occurred in 1874. Mummery LJ reasoned as follows (p 681, paras 30 and 31):