BATH AND NORTH EAST SOMERSET COUNCIL v HM ATTORNEY GENERAL/THE TREASURY SOLICITOR (BONA VACANTIA) [2002] EWHC 1623 (Ch)

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
[2002] EWHC 1623 (Ch)Case No Case No: HC 01012125Venue Royal Courts of Justice, Strand, London, WC2A 2LL
Between
BATH AND NORTH EAST SOMERSET COUNCILClaimantHM ATTORNEY GENERAL/THE TREASURY SOLICITOR (BONA VACANTIA)Defendant
Before
Mr Justice HartMr David Lowe QC & Mr Nikki Singla (instructed by Bath & NE Somerset Council Solicitors) for the ClaimantMr W H Henderson (instructed by Treasury Solicitor) for the HM Attorney GeneralMr Thomas Leech (instructed by Treasury Solicitor) for the Solicitor for Affairs of HM TreasuryHearing dates : 10/11.07.2002Date 31 July 2002
[1]Mr Justice Hart: By a conveyance dated 1 February 1956 there was conveyed to The Mayor AldermE and Citizens of the City of Bath (“the Corporation”) in fee simple an area of land of about 15 acres known as the Bath and County Recreation Ground (“the Recreation Ground”). The conveyance was made by a company called the Bath and County Recreation Ground Company Limited (“the Company”) and was expressed to be made in consideration of the sum of £11,155 paid by the Corporation to the Company.[2]The habendum of the conveyance was in the following terms:
“ TO HOLD the same unto the Corporation in fee simple upon trust that the Corporation for ever hereafter shall manage let or allow the use with or without charge of the whole or any part or parts of the property hereby conveyed for the purpose of or in connection with games and sports of all kinds tournaments fetes shows exhibitions displays amusements entertainments or other activities of a like character and for no other purpose and shall maintain equip or lay out the same for or in connection with the purposes aforesaid as they shall think fit but so nevertheless that the Corporation shall not use the property hereby conveyed otherwise than as an open space and shall so manage let or allow the use of the property for the purposes aforesaid as shall secure its use principally for or in connection with the carrying on of games and sports of all kinds and shall not show any undue preference to or in favour of any particular game or sport or any particular person club body or organisation..”
[3]The claimant is the statutory successor of the Corporation, the Recreation Ground having become vested in the Bath City Council by virtue of the Local Government Act 1972 and the Local Authorities (England) (Property etc.) Order 1973 on 1 April 1974, and then in the claimant on 1 April 1996 by virtue of the Local Government Act 1992, the Local Government Changes for England (Property Transfer and Transitional Payments) Regulations 1995 and the Avon (Structural Change) Order 1995.[4]By these proceedings the claimant asks the court to determine whether the Recreation Ground(a) became vested in the Corporation on valid charitable trusts and is now vested in the Claimant on valid charitable trusts; or(b) became vested in the Corporation beneficially for its statutory purposes (under Section 4 of the Physical Training and Recreation Act 1937 (“the 1937 Act”)) and is now vested in the Claimant beneficially for its statutory purposes (under Section 19 of the Local Government (Miscellaneous Provisions) Act 1976 or (as to 68 square metres thereof specified on instructions for Appropriation dated 10 November 1994) Section 87 of the Public Health Act 1936); or(c) became vested in the Corporation on some other and if so what trusts and subject to some and if so what rights and liabilities. (The area of 68 sq metres had been appropriated in 1994 to use as public conveniences).[5]The question has become a live one as a result of proposals which have been made for a redevelopment of the Recreation Ground so as to provide, inter alia, a modern stadium in which professional rugby and association football can be played and the creation, partly on the site of the Recreation Ground and partly on adjoining land owned by the claimant of a new Sports and Leisure Centre with conference facilities. These proposals, first given publicity in March 2000, raise a wide range of sensitive planning, environmental and traffic issues. They have excited considerable local opposition, particularly from residents in the immediate locality who have already been troubled in various ways by the perceived consequences of the commercial use of that part of the Recreation Ground now let to Bath Rugby Plc (as assignee of the Bath Football Club) under a 75 year lease granted in 1995.[6]The 1956 Conveyance was expressed to be subject to a number of matters: first, the covenants and conditions (so far as subsisting and capable of being enforced) contained in a Conveyance dated 6 April 1922 made between Francis William Forester (as life tenant under a strict settlement)(1) his Settled Land Act Trustees(2) and the Company (3). That was the conveyance under which the Company had acquired title to the Recreation Ground and other land for a consideration of £6050, and in it the Company had covenanted with Captain Forester that “no workshops, warehouses, factories or other buildings for the purpose of any trade or business which may be or grow to be a nuisance annoyance or disturbance or otherwise prejudicially affect the adjoining premises or neighbourhood shall at any time hereafter be erected upon the said hereditaments or premises except the part thereof now in the occupation of Bath Artcraft Limited and that nothing shall be hereafter erected placed built or done upon the said hereditaments and premises including such part thereof as last aforesaid which may be or grow to be a nuisance annoyance or disturbance or otherwise prejudicially affect the adjoining premises or neighbourhood provided always that no factory chimney shall be erected on the portion of the said hereditaments now in the occupation of Bath Artcraft Limited.”[7]It is clear from internal evidence in the 1922 Conveyance that Captain Forester owned adjoining land, and that the portion of the land occupied by Bath Artcraft Limited consisted of a skating rink. This latter area appears to be that which was conveyed to Bath Artcraft Limited by a conveyance dated 8 April 1922 and by Bath Artcraft Limited to the Corporation by a conveyance dated 27 March 1930. This area is not therefore comprised in the 1956 Conveyance.[8]Secondly, the 1956 Conveyance was subject to and with the benefit of the following:(1) a lease dated 17 October 1933 of what was then known as the Bath Football Ground. This consisted of the football pitch at the western side of the Recreation Ground together with the buildings or structures then referred to as the West Stand and the North Stand. This, to which I will refer as “the football ground” comprised some 3.7 acres. The lessees were nominees of the Bath Football Club and the lease was for a term of 50 years at rents calculated by reference to a proportion of ticket sales. The Company retained sole and exclusive right to enjoy the Ground from 18 April to the second Saturday in September in each year subject to certain qualifications into which I need not enter;(2) an agreement dated 19 October 1950. This is immaterial to the matters I have to consider.(3) an Agreement and Assignment dated 16 August 1954. This related to the erection of a recreational hut and club room on the land comprised in the 1933 lease.(4) A lease dated 15 October 1954 in favour of James Colmer Ltd for a term of 5 years from 24 June 1954 of a small parcel of land (consisting of some tennis courts and a pavilion) at the north eastern corner of the Recreation Ground.[9]The Company had been incorporated in 1894 in order to acquire a lease of the Recreation Ground (then simply a field) from Captain Forester. The object was to develop it “in such a way as to render it suitable for County Cricket Matches, Lawn Tennis Tournaments, Football Matches and other sports”. The quotation is from the prospectus. That document also recorded that “whilst the Directors are of opinion that good dividends can be earned they have this object less in view in the promotion of the Company, than that of materially increasing the attractions of the City”. It was contemplated that rents received and gate money would be sufficient to defray expenses and enable a good dividend to be paid. Having acquired its original lease the Company erected a cricket pavilion on the north side. The conveyancing documents do not record when the football ground first started to be used as such, but the 1933 lease reveals that user by Bath Football Club predated that lease by many years.[10]The background to the Corporation’s acquisition of the Recreation Ground from the Company appears to have been the result of a recognition by the directors of the Company that the costs of maintenance of the Recreation Ground were beyond the potential revenue of the Company. Discussions and negotiations took place between the Company and the Corporation which resulted in the conclusion of an Agreement for Sale on 2 January 1956. There has been agreement in the argument before me that contemporary statements of subjective intention and the content of the negotiations themselves are inadmissible on the question of construction which I have to resolve. It was, however, submitted by Mr Lowe QC on behalf of the claimant that I was entitled to take into account certain statements made by the Corporation’s officers prior to the commencement of the negotiations as to the Corporation’s purposes in acquiring the Recreation Ground and evidence from the internal records of the Corporation indicating the statutory power intended to be exercised. Both seem to me to be inadmissible although, as will appear, the question whether there was any, and if so which, statutory power enabling the Corporation to acquire on the terms of the 1956 Conveyance is relevant to the question of construction.[11]The Agreement for Sale dated 2 January 1956 contained the following provisions relevant to the questions I have to determine:
“1. THE Company will sell and the Corporation will buy the property first and secondly described in the First Schedule hereto. 2. THE purchase price shall be for the property first described in the said First Schedule the sum of £11,155 and for the property secondly described in the said First Schedule the sum of £300. .......... 12. THE property will be conveyed to the Corporation upon trust that the Corporation for ever thereafter shall manage let or allow the use with or without charge of the whole or any part or parts thereof for the purpose of or in connection with games and sports of all kinds tournaments fetes shows exhibitions displays amusements entertainments or other activities of a like character and for no other purpose and shall maintain equip or lay out the same for or in connection with the purposes aforesaid as they shall think fit but subject nevertheless to the restrictions conditions and stipulations hereinafter contained. 13. THE Corporation shall in the conveyance enter into the following covenants with the Company or their assigns. (1) THAT the Corporation will observe and perform the covenants and conditions contained in the said conveyance to the Company dated the 6th day of April 1922 so far as the same are still subsisting and capable of being enforced and will indemnify the Company and their assigns against any breach or non observance thereof so far as aforesaid. (2) THAT the Corporation will observe and perform the restrictions covenants and stipulations specified in the Second Schedule hereto. ....... THE SECOND SCHEDULE before referred to Restrictions conditions and stipulations THE Corporation will not use the Recreation Ground otherwise than as an open space and will so manage let or allow the use of the ground for the purposes hereinbefore mentioned as shall secure its use principally for or in connection with the carrying on of games and sports of all kinds and will not show any undue preference to or in favour of any particular game or sport or any particular person club body or organisation.”
As appears therefrom it was for some reason decided that the covenant contained in the Second Schedule should not be included as a covenant in the subsequent conveyance, but that instead its wording should be tagged onto the wording of the trusts. The Claimant’s contentions[12]It was contended on behalf of the claimant that(1) the 1956 Conveyance did not create or purport to create a trust in the true sense at all but took effect as a conveyance to the Corporation beneficially for its statutory purposes;(2) if (1) was wrong, the trust contained in the 1956 Conveyance was not a valid charitable trust on its face;(3) if (2) was wrong, the trust was nevertheless void as being ultra vires the Corporation;(4) if either (2) or (3) was correct, the effect of the 1956 Conveyance was that the Corporation took beneficially to the exclusion of any resulting trust to the Company (which had long since been dissolved and whose assets were vested in the Crown as bona vacantia). The Attorney-General appeared by Mr William Henderson and argued against propositions (1) (2) and (3). The Crown’s claim to bona vacantia was represented by the Treasury Solicitor on whose instructions Mr Leech of Counsel addressed me in relation to proposition (4). I will deal with the claims in turn. Not a true trust at all[13]The argument here depended upon my accepting that the power being exercised by the Corporation was the power conferred on it by section 4(1) of the 1937 Act, and then concluding that the wording in the 1956 Conveyance was intended to do no more than identify the applicable statutory purposes.[14]Section 4(1) of the 1937 Act is in the following terms:
“(1) A local authority may acquire lay out, provide with suitable buildings and otherwise equip, and maintain lands, whether situate within or without their area, for the purpose of gymnasiums, playing fields, holiday camps or camping sites, or for the purpose of centres for the use of clubs, societies or organisations having athletic, social or educational objects, and may manage those lands and buildings themselves, either with or without a charge for the use thereof or admission thereto, or may let them, or any portion thereof, at a nominal or other rent to any person, club, society or organisation for use for any of the purposes aforesaid. The authority may also provide and, where necessary, arrange for the training of, such wardens, teachers and leaders as they may deem requisite for securing that effective use is made of the facilities for exercise, recreation and social activities so provided.”
It is also necessary to refer to section 4(4): - “(4) A local authority may contribute towards expenses incurred by another local authority, whether under this or any other Act, or by a voluntary organisation, in providing or maintaining within the area of the contributing authority, or on a site where it will benefit any of the inhabitants of that area, anything mentioned in subsection (1) of this section, or a swimming bath or bathing place.”[15]It is probable that as a matter of fact the Corporation did conceive that it was acquiring the Recreation Ground under section 4(1) of the 1937 Act. I say that for three reasons. First, the language of the habendum to some extent echoes the statutory language. Secondly, it is plain from the contemporary material that the Corporation regarded itself as entitled to apply to the Ministry of Education under the 1937 Act for a grant to assist with the purchase. I should add that it cannot now be ascertained whether or not any such application was in the event made. Thirdly, there was no other obvious statutory authority for the purpose.[16]As to the last point, the other possible candidates debated in argument before me were:(1) Section 164 of the Public Health Act 1875 as extended by section 45 of the Public Health Amendment Act 1890;(2) Sections 7 and 9 of the Open Spaces Act 1906; and(3) Section 157 of the Local Government Act 1933. None of the above seems as apt for the particular purposes contemplated by the 1956 Conveyance as the 1937 Act itself, and each of them (with the possible exception of Sections 7 and/or 9 of the Open Spaces Act 1906) suffers from the same apparent difficulty as the 1937 Act itself, namely that it does not on its face authorise the acquisition of land by the relevant local authority other than for the relevant statutory purposes: that is to say it only authorises the acquisition by the local authority beneficially and does not authorise the local authority to acquire the land on charitable trusts.[17]The argument for this proposition essentially turned on whether the words “upon trust” in the habendum could and should be read as if they had instead merely read “and so that”. If they could be so read, then, it was submitted, the authorities showed that they should be construed as a reference to the Corporation’s statutory purposes rather than as imposing a charitable trust. In support of that proposition reliance was placed on two cases, Richmond on Thames LBC v A-G (1982) 81 LGR 156 and Liverpool City Council v A-G , unreported, 15 May 1992.[18]The Richmond case concerned a gift made in 1988 by Sir John Whitaker Ellis of land and buildings to the vestry of the Parish of Richmond. The vestry, having become the registered proprietors of the land, then entered into a deed with Sir John which witnessed that:
“The vestry do hereby for themselves and their successors in consideration of the said gift and of the said transfer covenant and agree with the donor his heirs executors administrators and assigns and declare that the said lands so transferred to them as aforesaid shall not at any time be used by them or be permitted by them to be used otherwise than for the following purposes some or one of them that is to say: - the erection and maintenance thereon of municipal offices rooms and public buildings for the use of the vestry and their officers and the inhabitants of the said parish the laying out and maintenance thereon of a public recreation ground garden and walks and the construction and maintenance thereon of the road to lead from Hill Street in the said parish to the River Thames as shown upon the said estate map .......”
The question for the court was whether the property had been given to the vestry on charitable trusts or whether it had been given to the vestry to be held for its statutory purposes under the Public Health Act 1875. Warner J held (at pp 166-167) that the latter was the correct answer. The vestry was referred to in all the documentation as the urban sanitary authority, which (given the fact that the vestry owed its existence to an eighteenth century Act) must have been a reference to its capacity under the Public Health Act 1875; nowhere in the relevant documents were the words “trust” or “charity” to be found; there was no licence in mortmain (which would have been required had the land not been held for the purposes of the 1875 Act); the gift contemplated expenditure by the vestry; and, finally, the covenant was expressed in negative form.[19]In the Liverpool case Morritt J had to consider the nature of the trusts (if any) affecting land vested in Liverpool City Council as a result of a transfer dated 30 March 1926. The transfer contained covenants by the Council with the donors which, if construed as imperative trusts, could be read as valid charitable trusts. Morritt J held that there was no reason to construe the covenants as creating fiduciary obligations. Amongst his reasons for rejecting the submission that a charitable trust had been intended he included the fact that certain of the covenants contemplated expenditure by the Council out of ratepayers’ money.[20]Basing himself on these authorities Mr Lowe submitted that here, foremost amongst the indications that no charitable trust had been intended, was the fact that the terms of the 1956 Conveyance contemplated expenditure of rate-payers’ money. He also relied on the fact that the 1937 Act did not authorise the acquisition by the Corporation as a charitable trustee, the fact that the terms of the so-called trust did not qualify as charitable under the general law, and the fact that stamp duty had been paid at the full rate of 2% and not at the reduced rate applicable on a conveyance of land.[21]It does not seem to me that the fact that the trusts declared were invalid (either on the ground that they were non-charitable or that they were ultra vires the Corporation) assists on the question whether a trust in the true sense was intended. To read the words “upon trust that” as merely precatory something more is required than to show that, unless so read, the provision is unenforceable. In any event, for the reasons given below, I do not consider that the trusts do fail as being non-charitable. One is left essentially with the proposition that the trusts should be read as merely being a reference to some of the statutory purposes of the 1937 Act simply because they contemplated the expenditure of ratepayers’ money, that full ad valorem stamp duty was paid, and that their language is consistent with the purposes of the 1937 Act.[22]In my judgment these indicia are not enough. In the first place, if all that had been intended was a reference to the statutory purposes, it would have been simple for the conveyance to have been so expressed. Instead one finds an elaborate formula which is plainly trying to do something more, particularly in the three limbs of the closing proviso (namely,(a) user as open space(b) principal user for games and sports and(c) the obligation not to show undue preference to particular sports or persons). In the second place, the words “upon trust” cannot, in my judgment, simply be ignored.[23]On the latter point I was taken, by the eccentric but efficient route of citation of a decision of the Manx Staff of Government Division (Tattersall JA and Acting Deemster Nugee) in In the Matter of the Villa Marina [1999-01] Manx Law Reports 224, to the judgment of Sir Robert Megarry V-C in Tito v Waddell (No 2) [1977] Ch 106, and his discussion in that case of the various ways “in which that protean word [trust] has been used. The word indeed is one that may be found by the unwary to invite the comment Qui haeret in litera haeret in cortice”(ibid. at p.227D). The particular passages relied on were (at 211D) where the Vice-Chancellor said (with emphasis supplied):
“I propose to turn at once to the position of the Crown as trustee, leaving on one side any question of what is meant by the Crown for this purpose; and I must also consider what is meant by ‘trust’. The word is in common use in English language, and whatever may be the position in this court, it must be recognised that the word is often used in a sense different from that of an equitable obligation enforceable as such by the courts. Many a man may be in a position of trust without being a trustee in the equitable sense; and terms such as ‘Brains Trust’, ‘Anti-trust’ and ‘Trust Territories,’ though commonly used, are not understood as relating to a trust as enforced in a court of equity. At the same time it can hardly be disputed that a trust may be created without using the word ‘trust’. In every case one has to look to see whether in the circumstances of the case, and on the true construction of what has been said and written, a sufficient intention to create a true trust has been manifested. When it is alleged that the Crown is a trustee, an element which is of especial importance consists of the governmental powers and obligations of the Crown; for these readily provide an explanation which is an alternative to a trust. If money or other property is vested in the Crown and is used for the benefit of others, one explanation can be that the Crown holds on a true trust for those others. Another explanation can be that, without holding the property on a true trust, the Crown is nevertheless administering that property in the exercise of the Crown’s governmental functions. This latter possible explanation, which does not exist in the case of an ordinary individual, makes it necessary to scrutinise with greater care the words and circumstances which are alleged to impose a trust. ” and at 217F: “.... The burden, said [counsel], was thus in effect on [counsel for the plaintiffs] to show that there was a true trust. Another way of putting much the same point is to emphasise the possible explanations that there are for a transaction. In the case of an individual, there will often be only two feasible explanations, either that he holds on a true trust, or else that he holds on no trust at all, but at most subject to a mere moral obligation. In the case of the Crown, there is a third possible explanation, namely, that there is a trust in the higher sense, or governmental obligation . Though this latter type of obligation is not enforceable in the courts, many other means are available of persuading the Crown to honour its governmental obligations, should it fail to do so ex mero motu. This is accordingly no mere moral obligation; and it can provide a satisfactory and probable explanation of a transaction which has been conducted with formalities which suggest that more than a mere moral obligation was intended. Without putting matters on the basis of any ‘burden of proof’, the existence of this alternative explanation when the alleged trustee is the Crown means that the courts will be ready to adopt it unless there is a sufficient indication that instead a true trust was intended. ”
[24]In support of that analysis, the Vice-Chancellor placed a particular reliance on the decision of the House of Lords in Kinloch v Secretary of State for India in Council (1882) 7 App Cas 619, where the House of Lords had refused to treat as enforceable as a private trust a “trust” contained in the Royal Warrant granted to the Secretary of State consequent upon Dr Lushington’s decision in the Banda and Kirwee Booty case reported at (1875) LR 4 A&E 436.[25]I accept that the word “trust” is a protean one. Nevertheless in the context of a conveyance of English land in fee simple, albeit to a local authority, its normal meaning is in my judgment its technical one. That certainly seems to have been the view of Morritt J (as he then was) in Hampshire County Council v A-G , unreported, 4 May 1994, (“the Hampshire case”). That case concerned the construction of conveyances made to School Boards under the provisions of the Elementary Education Act 1870. The two conveyances there under consideration had contained, respectively, the wording “upon trust for the purposes of a public elementary school within the meaning of [the 1870 Act]...” and “upon trust for the purposes of a site for an Elementary School within the meaning of [the 1870, 1873 and 1876 Acts].” Counsel for the statutory successors of the School Boards had argued that each conveyance was simply one to a corporation on trust for the Corporation’s own general purposes. That argument was rejected as the expressed purpose was in fact narrower than the School Board’s statutory purposes, but Morritt J added, obiter, the following:
“.... As the proposition is inapplicable anyway it is unnecessary to decide that question but I would not wish to be thought to be accepting it. I do not see why a donor who wishes to provide a separate charitable trust in furtherance of the objects of a charitable company should be able to do so if the trustees are third parties but not if the company is the sole trustee thereof. Moreover it seems to me that the contention to the contrary is inconsistent with the passage in the judgment of Buckley J in Re Vernon’s Will Trust (1972) Ch 300 at p 303 E to G.”
He was clearly there accepting that the word “trust” was being used in its conventional sense. Indeed the contrary was not in terms argued. Not a Charitable Trust[26]I turn therefore to the question whether the trusts declared are in principle capable of being valid charitable trusts. It was submitted on behalf of the claimant that they were not, essentially for two reasons. First it was said that the wording envisaged uses of the Recreation Ground which were not exclusively charitable; and, secondly, that there was insufficient public benefit expressed. I find it convenient to take these two points in reverse order.[27]It was common ground that, if charitable at all, the trusts were so as being within Lord MacNaughten’s fourth head, i.e. other purposes beneficial to the community within the spirit and intendment of the preamble to the Statute of Elizabeth I. The necessary element of public benefit has to be satisfied in two respects. First, the purpose itself must be beneficial as one of public utility; and, secondly, the benefit of the purpose must be available to a sufficient section of the community. I am concerned at this stage with the second aspect.[28]This is not a case where the trusts expressly restrict the benefit of the purposes to a selected class of persons so as to raise the question whether that class constitutes a section of the public for the purposes of charity (compare and contrast IRC v Baddeley [1955] AC 572 , esp. per Viscount Simonds at 592: “who has ever heard of a bridge to be crossed only by impecunious Methodists?”). It is, rather, a case where it is said on behalf of the claimant that no intention to benefit the public, or any section of it, is evinced. It was submitted that, not only did the conveyance not by its express terms either dedicate the Recreation Ground to use by the public or otherwise require the Corporation to make it available to the public generally, but that what I have called limb (c) of the proviso expressly contemplated the possibility that the Corporation might restrict enjoyment of the ground to particular persons clubs bodies or organisations.[29]It is true that there is no express reference in the conveyance to the public. I also accept that, where the purposes of a trust are expressed in plain language, it is not permissible to appeal to the nature of the trustee in order to impart a charitable character: see Dunne v Byrne [1912] AC 407 , 410 cited with approval by Lord Wilberforce in Brisbane City Council v A-G for Queensland [1079] AC 411 (JCPC) at 424C-424E). It should, however, be noted that both those cases (and Re Davidson [1909] 1 Ch 567 to which reference was made in Dunne v Byrne ) were concerned with the question whether the character of the trustee could be relied on in order to confine the permitted purposes to those which were charitable in law, rather than the question whether a sufficient section of the public was identified as the beneficiary of the purposes. No authority was cited to me which renders it impermissible to appeal to the nature of the trustee where the latter question arises.[30]In the present case it appears to me that the third limb of the proviso demonstrates that the beneficiaries of the purposes must be taken to have been the public generally. The test of not showing “undue preference to ... any particular person club body or organisation” can only be applied if one regards all persons clubs bodies or organisations as being potentially eligible as beneficiaries of the purposes. That, as it seems to me, necessarily implies that the public in general (or that section of it likely to want to avail themselves of the facilities) has to be considered when the Corporation or its successors are considering how to exercise the powers.[31]I therefore conclude that this trust does not fail as not being for the benefit of a section of the public. The fact that the powers conferred on the Corporation were (and remain) capable of being exercised so as to restrict actual enjoyment of the facilities to persons identified by their membership of particular clubs organisations or bodies does not mean that the trust necessarily and automatically fails this aspect of the public benefit requirement. This feature does, however, require to be examined further when considering the second issue, namely whether the purposes are wholly and exclusively charitable. To that question I now turn.[32]It is now well settled that a trust of land for its use for the purposes of public recreation is charitable. That was implicitly recognised by the legislature in section 6 of the Mortmain and Charitable Users Act 1888, so held by Clauson J in Re Hadden [1932] 1 Ch 133, and recognised by the speeches in the House of Lords in IRC v Baddeley [1955] AC 572 (see Viscount Simonds at 589, Lord Reid at 594-6, and Lord Somervell at 615). In Brisbane City Council v A-G for Queensland [1979] AC 411 the question was treated as uncontroversial (see ibid at 422).[33]Can the trusts here be described as trusts which dedicate the land for the purposes of public recreation? It was submitted on behalf of the claimant that the answer to that question has to be negative for a number of reasons.[34]The principal argument advanced was that on their true construction the 1956 Conveyance trusts are trusts for the promotion of games and sports of all kinds, and that the decided cases show that such trusts are not charitable. The principal authority for this proposition is the Court of Appeal decision in Re Nottage [1895] 2 Ch 649 . That case, which concerned the validity of a gift to the Yacht Racing Association of Great Britain for the purchase of an annual cup to be awarded to the most successful yacht owner in a particular class and which was made with the express intention of encouraging the sport of yacht racing, excited the comment from Lindley LJ (at 655):
“Now I should say that every healthy sport is good for the nation - cricket, football, fencing, yachting or any other healthy exercise or recreation; but if it had been the idea of lawyers that a gift for the encouragement of such exercises is therefore charitable we should have heard of it before now”
To like effect, Lopes LJ said (at 656):- “If we were to hold the gift before us to be charitable we should open a very wide door, for it would then be difficult to say that gifts for promoting bicycling, cricket, football, lawn tennis, or any other outdoor game were not charitable for they promote the health and bodily well-being of the community.”[35]There is no doubt that the Court of Appeal’s decision in Re Nottage proceeded on the broad ground that trusts for the promotion of sport, even though promoting the well-being of the community, were not per se charitable. It is, however, difficult satisfactorily to distinguish between trusts for the encouragement of sport on the one hand and trusts to provide facilities for public recreation on the other hand. One possible line of distinction (adverted to by Mr Picarda in his valuable discussion of this topic in The Law and Practice Relating to Charities, 3rd edition, at p.126) is that between a gift whose dominant intention is to improve the health of the public by providing facilities where they can take healthy recreational exercise and cases where the dominant intention is to encourage competitive sport for the benefit of spectators or the enjoyment of the participants.[36]If this is the correct line of distinction, it appears to me that this trust by its express terms falls on the wrong side of the line. The primary purpose is to secure the user of the land for or in connection with the carrying on of games and sports of all kinds. That purpose could equally be achieved either by a policy designed to achieve the purpose of providing for public recreation or by one designed to achieve the purpose of encouraging competitive sport for the benefit of spectators or the enjoyment of the participants. It is difficult to say that the draftsman had the first, and only the first, in mind.[37]In seeking to support the validity of the trust, Mr Henderson on behalf of the Attorney General submitted that the true distinction was between a trust for the provision of facilities for public recreation on the one hand and a trust for the performance of activities of a non-charitable nature which make use of those facilities on the other. The former is charitable notwithstanding that it encourages sport because the encouragement of sport is merely incidental to the principal object of providing facilities for the enjoyment of the public. In the latter connection he suggested that the fact that the only enjoyment which the public might have would be as spectators would not invalidate the gift. He pointed out that many users of a recreation ground necessarily involve the exclusion of parts of the public while it is being so used but that such user (and exclusion) does not prevent the ground from being a public facility or prevent the trust which allows it to be so used from being a charitable trust.[38]He relied on four cases in support of the distinction which he asked me to draw. The first was the Brisbane City Council case. In that case, one of the purposes for which the land had been dedicated had been that of a “showground”. It was found that this meant, in Queensland, the holding of an annual ‘show’ at which agricultural and horticultural produce was exhibited. The gift was upheld as charitable as being for the promotion of agriculture and horticulture. In that case the “show” was put on by a private society which was for that purpose to have exclusive use of the ground for two weeks in each year. With reference to that Lord Wilberforce said, at p.424 F “......if the trusts declared ... are valid charitable trusts, their validity is not impaired by a provision which permits these trust to be implemented, in part, by being placed at the disposition of private individuals: see Monds v Stackhouse (1948) 77 CLR 232.” As to that, I am not persuaded that that observation is of direct assistance to Mr Henderson. One can see that the charitable purpose of the promotion of agriculture may be furthered by making the facility available to the private society for the purposes of a show. It is difficult, however, to apply quite the same reasoning where the relevant charitable purpose is public recreation. Moreover, even if one does apply the reasoning, it does not assist in showing that on the true construction of the 1956 Conveyance the purpose is that of a providing a public recreational facility to the exclusion of the promotion of sports and games by other, non-charitable, means.[39]Mr Henderson next took me to the decision in Monds v Stackhouse (1948) 77 CLR 232, referred to by Lord Wilberforce with approval in the Brisbane City Council case. That case concerned a gift of money to the Corporation of a city to provide the nucleus of a fund to provide “a suitable hall or theatre for the holding of concerts to provide music for the citizens of the City and for the production of drama entertainments and the holding of meetings of a cultural or educational value”. The High Court of Australia (Latham LJ, Dixon and McTiernan JJ) upheld the gift as charitable. This was on the ground that a gift to a municipal corporation for enabling it to discharge one of its functions was charitable as bringing about a reduction of the burden of rates and taxes on the community (see especially ibid. at 242, 246 and 251). There was no question in that case of the court having to decide whether the purposes for which the hall, when erected, might be used were exclusively charitable. The court was solely concerned with the trusts affecting the gift of the money. I find no assistance in that case on the question which I have to determine.[40]Much closer to the present case on their facts were the next two cases relied on by Mr Henderson. In Crystal Palace Trustees v Minister of Town and Country Planning [1951] Ch 132 the question arose whether the trustees of the Crystal Palace and Park under the Crystal Palace Act 1914 held their property on charitable trusts (the issue being whether they were exempt from certain charges under Section 85 of the Town and Country Planning Act 1947). The purpose of the 1914 Act (as appeared from its title) was “to constitute a body of trustees, for the purpose of acquiring the Crystal Palace and Park and to empower them to hold and manage the same as a place of public resort and recreation and for other purposes”. The Act recited “the great local and public advantage” in the purchase of the Palace and Park and their management as “a place for education and recreation and for the promotion of industry commerce and art”. The chief interest of the case in the present context lies in the nature of the powers given to the trustees by section 14 of the 1914 Act. They included the maintenance and laying out of the park. “(1) ..... for cricket and other games sports amusements meetings assemblies and other purposes”, and (by sub-section (3)) powers to let (and to authorise the lessees to charge) for the purposes of, inter alia, any “club or entertainment or for any recreation or sport or amusement ... or for any purpose of public utility instruction or benefit” with a direction that “in setting aside any portion of the park for any club the trustees shall give a preference so far as possible to those clubs whose membership mainly consists of persons resident in the district of any contributing authority”, but there was an overriding proviso that “not less than twenty acres of the park shall be open to the public free of charge on every day and the greater portion of the lands coloured blue on the signed plan shall be open to the public free of charge on every day except not more than fifty days in each year of which fifty days not more than fourteen days shall at any one time be consecutive or be in any one month.”[41]The only point on which the case is a direct authority (since it was the only point taken by the Minister) was whether the promotion of industry commerce and art were outside the scope of charitable trusts or purposes. On that question Dankwerts J held that such purposes were capable of being charitable in law. He rejected the argument that the breadth of the powers in section 14 potential took them outside the scope of charity (because they might be exercised in a way which did not confer a benefit on the public at large) on the ground that the powers were simply “ancillary to and for the purposes of carrying out the objects expressed in the opening provision of the section.” In that connection he held that he was entitled to have regard to the public, representative, nature of the constitution of the trusteeship (see ibid at 141 e-g), relying for the purpose on In re Ashton [1938] Ch 482.[42]Aside from the latter point (which is of some importance) the case illustrates (in the context of a recreational charity) that the trustees’ power to grant exclusive leases to private clubs may be a legitimate means of implementing the charitable purpose.[43]In Alexandra Park Trustees and Another v Haringey London Borough and others (1967) 66 LGR 306 the court (Pennycuick J) was faced with a similar set of provisions in the Alexandra Park and Palace (Public Purposes) Act 1900. The case turned essentially on the construction of sections 17 and 26 of the 1900 Act. The Act had recited in its title the purpose of acquisition of the palace and park as a “place of public resort and recreation and for other public purposes ...” and the closing words of section 17 were “ Subject to the foregoing provisions the park and other lands shall be maintained as an open space and the park palace and other lands shall be available for the free use and recreation of the public for ever.” (emphasis supplied).[44]It was not in dispute that this latter provision, had it stood alone, would have been a valid charitable trust. Pennycuick J pointed out (at p.317) that even had an admission fee been chargeable that would not itself disqualify the purpose from being charitable. The real controversy was whether the contents of “the foregoing provisions” in section 17 had the effect of including non-charitable purposes. It was held that they did not, each being on their true construction merely administrative powers ancillary to the main object contained in the closing words of section 17. The letting power, in particular, was interpreted as “purely an administrative power enabling the trustees to turn their trust properly to account by letting part of it to outsiders on terms that rents to be received from the outsiders will form part of the trust property” (see ibid at 315).[45]These last two cases do provide strong support for Mr Henderson’s thesis that a trust for the provision of facilities for public recreation by way of sport or otherwise will not fail as a charitable trust simply because some of the activities which make use of the facilities are not themselves necessarily charitable in nature. Thus the fact, strongly relied on by Mr Lowe QC on behalf of the claimant, that the trusts in the present case would allow the use of the Recreation Ground for such disparate activities as the staging of mock civil war battles by the organisation known as the Sealed Knot, or a hot air balloon festival (to list but two of what threatened to be a much longer exposition of the possible permitted uses) will not be fatal if the dominant user is that of a public recreation ground.[46]Where these authorities are of less assistance is in demonstrating that the dominant intention of these trusts is the maintenance of a public recreation ground. In favour of that approach are the fact that the Corporation (and its successors) are public authorities, and the effect of what I have described as the third limb of the proviso. Against that approach, however, is the fact that there is nothing in the conveyance which expressly dedicates the land to public use. Nor is there anything in the history of the Recreation Ground as at the date of the 1956 Conveyance which points to such a dedication: it had been owned for many years by a prima facie commercial concern. Furthermore, the combination of the letting powers, coupled with the absence of any provisions subjecting the income from such lettings to the trusts, carries no necessary implication that the lettings themselves can only be made as part of the implementation of some overriding purpose beneficial to the public. Absent some expression, or permissible implication, of such a purpose, there seems to me nothing in the express wording of the 1956 conveyance which would prevent the whole of the Recreation Ground from being let on a commercial basis to a variety of clubs bodies or organisations in such a way as wholly to exclude the wider public for the duration of such lettings. The third limb of the proviso is, in my judgment, not framed in such a way as to exclude this as a possible method of implementing the trusts, nor is the requirement that the land be maintained as “open space”.[47]One is, finally, left with one fact alone which points to there being an overriding intention to benefit the public. That is the public character of the Corporation itself. Unless the purpose was perceived and intended to be the benefit of the residents of Bath and its surrounding area it is impossible to see what business the Corporation had in 1956 in purchasing the Recreation Ground. Mr Lowe indeed came close to conceding this when, in discussing the requirement in section 1(2)(a) of the Recreational Charities Act 1958 that the facilities be provided with the object of improving the conditions of life “for the persons for whom the facilities are primarily intended” he allowed that it might be inferred that those persons were the citizens of Bath and residents of the surrounding area. To that may be added the consideration that, by the express provisions of the 1956 Conveyance, the Corporation was identified as the body which was entrusted “for ever hereafter” with the performance of the trusts.[48]In opening the case Mr Lowe remarked that this was the kind of case where the immediate impression made by the words used was likely to dictate the ultimate conclusion. For myself the words had no such immediate effect. The case struck me throughout the argument as poised uncertainly on the borderline between various of the difficult distinctions to which this branch of the law of charity has given rise. Given the apparent width of the ratio in Re Nottage it is difficult (for this court at least) to avoid these distinctions. In the result I have been finally, and narrowly, persuaded that the public character of the Corporation and the fact that it was intended to be the trustee in perpetuity enables one to conclude that the dominant intention of the trusts, to which all the express provisions should be regarded as ancillary, was to provide a recreational facility for the public, and that, construed as such, the trusts are valid charitable trusts. I recognise that, in order to arrive at that conclusion, it is necessary to read words into the conveyance such as “to maintain the same as a recreational facility available for the benefit of the public at large” but, having regard to the nature of the intended user, the statutory functions of the Corporation, and the presumption in favour of validity (the so-called “benign” construction), such a reading seems to me permissible.[49]That conclusion in no way pre-empts the question whether the actual uses to which the claimant has put the Recreation Ground, in particular the most recent letting of the football ground, are compatible with the charitable trusts. That is a question which this judgment does not seek to answer. Vires[50]I turn then to the question whether the Corporation had power to accept the land on charitable trusts. As Sir Thomas Bingham MR said, in R v Somerset County Council ex parte Fewings and others [1995] 1 WLR 1037 at 1042 G-H:
“To the famous question asked by the owner of the vineyard (“Is it not lawful for me to do what I will with mine own? St Matthew, chapter 20 verse 15) the modern answer would be clear: “Yes, subject to such regulatory and other constraints as the law imposes” but if the same question were posed by a local authority the answer would be different. It would be: “No, it is not lawful for you to do anything save what the law expressly or impliedly authorises. You enjoy no unfettered discretions. There are legal limits to every power you have.”
To that principle must be added the further one that the powers must be exercised for their proper purposes: see, e.g., per Lord Bingham in Magill v Weeks and another [2002] 2 WLR 37 at 52.[51]For the claimant it was submitted that the only statutory power in point was section 4(1) of the 1937 Act, that that was not apt to permit an acquisition otherwise than by the Corporation beneficially, and that to adopt any other construction would be to read section 4(1) as enabling the Corporation to make gifts of a charitable nature at the expense of its ratepayers. It was further submitted that resort could not be had to the doctrine (see e.g. A-G v Smethwick Corporation [1932] 1 Ch 562 at 575-577) that the Corporation had an implied power to do that which was calculated to facilitate or was conducive or incidental to the discharge of any of its statutory functions. The argument was that the acquisition by the Corporation as a charitable trustee could not be said to assist the Corporation in the discharge by the Corporation of its functions under section 4(1).[52]Mr Lowe adopted a similar analysis in relation to the other provisions which might arguably have been relied on, namely section 164 Public Health Act 1875, and sections 7 and 9 of the Open Spaces Act 1906.

(c) ) that the local authority might:

“for the purposes aforesaid, make any agreement with any person authorised by this Act or otherwise to convey or to agree with reference to any open space or burial ground, or with any other persons interested therein.”
[53]At one point in the argument, Mr Henderson appeared to be resting his case primarily on this provision, but in the end was hesitant in doing so because of a point raised by the court as to whether the Corporation had been a “local authority” for the purposes of the 1906 Act. As to that, I received from Mr Singla (junior counsel for the claimant) after the close of the argument a carefully researched note which strongly suggested, but did not prove, that the Corporation had been a local authority for the purposes of the 1906 Act in its capacity as the council of the municipal borough of Bath under the Local Government Act 1933. If that point can be regarded as out of the way, there remain nonetheless weaknesses in the case for relying on this provision. The natural reading of the word “agreement” read in the context of section 9 is as referring to some contractual term insisted on by the transferor or other persons interested in the land being acquired, and enforceable by him or them. The language may be contrasted with that in section 7 (which permits the local authority to accept subject to “conditions” where the transfer is made by a Corporation “for the purpose of being preserved as an open space for the enjoyment of the public under this Act” - not the case here) and that in sections 3 and 4 which expressly contemplate cases where the local authority may acquire subject to “trusts”.[54]In the end Mr Henderson put his argument in two ways. One was that the acquisition on trust had been incidental to the section 4(1) purpose in the same way as the two acquisitions which were the subject of the decision in the Hampshire case. The proposition here was that the relevant statutory function had been that indicated in section 4(1), and that since the vendor company had, at least in part, dictated the terms on which the acquisition had taken place, it had been within the implied power of the Corporation to accept such terms. The difficulty with that argument, as it seems to me, is that the route by which Morritt J reached his conclusion in the Hampshire case was his finding that each of the conveyances there had been for less than full consideration. On the material before me I can reach no such conclusion: for reasons which I briefly elaborate below, such evidence as there is points to a full consideration as having been paid.[55]The second argument placed reliance on Section 4(4) of the 1937 Act. I have set that out above (see para. 14). Shortly put the argument was that the conveyance could have been made to another local authority (or to a voluntary organisation brought into being for the purpose) and the Corporation could then lawfully have resolved to pay the acquisition cost as an expense of “providing or maintaining” the facility. Although this might seem at first sight a strained construction to place on the sub-section (and certainly corresponded to nothing which the contemporaneous evidence shows the Corporation to have had in mind), I have come to the conclusion that it does provide an answer to the objections as to vires raised by the claimant. A combination of Section 4(1) and 4(4) identifies as a function of the local authority the provision of sites such as the Recreation Ground either vested in the local authority (s. 4(1)) or in a voluntary organisation which might be a charitable trustee (s.4(4)). All that needs to be implied for the 1956 Conveyance trusts to be intra vires is a power for the Corporation itself to act as a charitable trustee for this purpose. Whether or not one makes the assumption that the trust was in part insisted on by the vendor company, it is in my judgment possible to say that the acquisition by the Corporation as a charitable trustee conduced towards, or was incidental to, the discharge of the statutory function.[56]For those reasons I have concluded that the acquisition was not ultra vires the Corporation and that accordingly the trusts do not fail on that account. Resulting trust as bona vacantia[57]Those conclusions render it unnecessary for me to decide what the consequences would have been had I decided either of the two preceding questions differently. Since, however, I heard full argument on the point and since it may be of assistance to the parties to know my provisional conclusions, I will briefly set them out.[58]Mr Leech on behalf of the Treasury Solicitor submitted as follows: where there is a transfer on express private trusts which fail to exhaust the beneficial interest, either because on analysis they do not or because they fail, there will be a resulting trust: see Westdeutsche Landesbank Girozentrale v Islington Borough Council [1996] AC 669 , 708E (Lord Browne Wilkinson) and Twinsectra Ltd v Yardley [2002] All ER 377, 400J; - 401B (Lord Millett); this will be the case even where the transfer was the subject of a bargain and the transferor received value for it: see Davis v Richardson & Wallington Ltd [1090] 1WLR 1511, 1541G-1542A; such a resulting trust may, however, be excluded either expressly or by implication, as it was in Davis v Richardson & Wallington Ltd and as it was not in Air Jamaica Ltd v Charlton [1999] 1 WLR 1399 at 1412F - 1413A; the test is whether a clear intention is evinced excluding the interest of the transferor in any circumstances.[59]Mr Leech further submitted that the issue here could be summarised as being whether there was a sufficient degree of severance between the contract to convey and the trust declared in the 1956 Conveyance. Another way of putting the question is to ask whether the vendor company was a settlor in relation to the trust.[60]An issue of fact of central but not, I think, of necessarily decisive relevance to this question is whether the Corporation paid a full price. If it did not, the conclusion might be that the vendor company and the Corporation were each settlors, the former to the extent that it had contributed an element of bounty. The conclusion might then follow that any resulting trust would be to both of them pro rata to their respective contributions. So far as the evidence before me goes (although it was acknowledged to be incomplete) the conveyance does appear to have been at full price. That inference can be drawn from the fact that the vendor company was a commercial concern which would (or should) have been concerned to obtain full value, from the fact that the price was fixed at a very early stage in the negotiations before any question of a trust or other conditions had been raised (indeed at a stage when it had been contemplated that the transaction might take the form of a sale of shares in the vendor company) and the fact that ad valorem stamp duty was paid on the consideration stated in the conveyance.[61]If that assumption is correct, then the bounty involved in the declaration of a charitable trust emanated wholly from the Corporation’s side. If that is so, then I myself see no reason why the Corporation should not be seen as the settlor for the purposes of any resulting trust. The fact that the vendor company may have had reasons of its own for agreeing to the declaration being stipulated for in the contract should not, in my judgment, alter that analysis. The fundamental term of the contract lay in the bargain contained in Clause 1 of the contract. That bargain was one which the Corporation had power to conclude. Had the point been taken, prior to completion, that the trust which the conveyance was to contain was either invalid on the ground of perpetuity or beyond the powers of the Corporation to declare, the Corporation would nonetheless in my judgment have been entitled to insist on specific performance of the contract by tendering the purchase price and executing a conveyance containing the void trust. The full beneficial interest would then have passed to the Corporation. I would therefore have concluded that any resulting trust would have been to the Corporation.

Cited in 5 later judgments