Law Report: Charitable purpose fulfilled elsewhere: Oldham Borough Council v Attorney General - Court of Appeal (Lord Justice Dillon, Lord Justice Russell and Lord Justice Farquharson), 28 July 1992

Where the charitable purpose of a gift of land, namely the provision of playing fields for the inhabitants of a particular area, could be carried out just as well on other land, the court had power to authorise the original land to be sold for development and alternative land provided with the proceeds.

The Court of Appeal allowed an appeal by Oldham Borough Council against the declaration by Mr Justice Chadwick (The Independent, 29 April 1992) that the council had no power to sell or develop Clayton Playing Fields, comprising 23 acres of open space in Oldham, which the donor, Ina Clayton, had conveyed by deed of gift in April 1962, to the council as trustee, 'for the purposes of playing fields solely'.

The council wished to sell the land for development and use the substantial proceeds thus generated to provide alternative land with much better facilities.

But the judge held that so long as the original land could be used for the stated purpose, the council had to go on administering the charity exactly as the donor wished.

David Lowe QC and Hubert Picarda QC (Sharpe Pritchard, for David Shipp, Olham) for the council; David Unwin (Treasury Solicitor) for the Attorney General (representing the interests of charity generally).

LORD JUSTICE DILLON said that under section 13 of the Charities Act 1960, an alteration of the 'original purposes' of a charitable gift could only be authorised by a scheme for the cy-pres (as near as possible) application of the trust property in circumstances set out in subheads (a) to (e) of section 13(1).

Since this case did not fall within those subheads, if, on a true appreciation of the deed of gift and of section 13, the retention of the existing site was part of the original purposes of the charity, the court could not authorise any sale. There was no doubt on the wording of the deed of gift that the donor intended the land to be used for ever for the purposes of the charity.

Did 'original purposes' in section 13 include the intention and purpose of the donor that the land given should be used for ever for the purposes of the charity, or were they limited to the purposes of the charity?

Section 13 was concerned with the principles for applying property cy-pres and nothing else, and there was nothing to suggest any legislative intention to extend the cases where a cy-pres scheme was necessary to cases where before the 1960 Act no scheme was required.

Cases decided before the 1960 Act were consistent in indicating that a sale of charitable property, and reinvestment of the proceeds in the acquisition of other property, to be held on the same charitable trusts or for the same charitable purposes, could be decreed otherwise than by way of a cy-pres scheme where the court was satisfied that the charity would benefit thereby.

There were cases where the qualities of the property itself, such as a house once owned by a historical figure, or a building of architectural merit, were themselves the factors which made the purposes of the gift charitable. In such cases, any other property acquired with the proceeds of sale could not possibly be applied for the original charitable purpose.

But that was far away from cases such as the present, where the charitable purposes could be carried on on other land. LORD JUSTICE RUSSELL and LORD JUSTICE FARQUHARSON agreed.

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