Power of sale to avoid reverter under the School Sites Act 1841 - clarification from the High Court

Is your school located on land charitably given by a local landowner for the purpose of educating poor children in the nineteenth century? If so, the transfer of the land was probably done under the School Sites Act 1841 (the Act). Under that Act the land reverts to the original owner (or heirs) if the purposes of the gift no longer apply. But what happens if the land is to be sold to allow a school to move to other premises and there is a delay in selling the land? Does the land, which may now be very profitable, revert to the heirs of the original donor?

It may be some relief to know that in a recent case (Rittson-Thomas v Oxfordshire CC [2018] EWHC 455) the High Court has given some clarification over the position where land  was originally  granted for the purpose of being used as a school (but reverts back to the grantor when this ceases). The legal position had been understood to be that if the land was sold before the move then there was no ‘reversion’ of the land or its value.

In this case Oxford County Council had parcels of land conveyed to it in 1914 and 1928 to be used as a school under the School Sites Act 1841. In 2003 the council borrowed approximately £2 million to build a new school on adjoining land. The council closed the school and proposed to sell the site and use the sale’s proceeds to repay some of the loan.

The council had the power under section 14 of the Act to apply the proceeds in any sale or exchange to purchase another site or improve other premises.

The descendants of the original grantor sought a declaration that the sale proceeds (93.7% being their interest in the land) were due to them: on the basis that they became due at the point when the school closed, which had happened prior to the power of sale being exercised. The High Court held that it was not necessary under the legislation for the  sale to occur  before  the school left the site.

It should be noted that this is a High Court decision and it is not known at this time whether it will be appealed. However the courts reasoning gives useful guidance as to whether a ‘statutory reverter,’ which would return the value of the land to the heirs of the original donor, can be avoided in such a case.

Given that in 1981 a Law Commission report estimated there were more than 2000 schools in existence which were conveyed under the School Sites Act it has practical significance for many trustees of schools where there is a proposal to relocate to a new site.

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