Court of Appeal: Peter Gibson, Mummery and Latham LJJ, November 2000

The claimants appealed the decision of the Deputy High Court Judge (Peter Leaver QC) who had determined four preliminary questions. The Court of Appeal upheld the deputy judge's decision on the limitation issue rendering consideration of the three remaining points unnecessary. However, in deference to the arguments advanced, a view was expressed which, in each case, was at variance with that of the deputy judge. The School Sites Act 1841 was passed to encourage grants of land for specified educational purposes with an automatic reverter to the grantor or his successors on the cesser of such use. In 1872, Mr Evan Lake conveyed land to the minister and churchwardens of Chartham for the establishment of a school to be run in accordance with the principles of the Church of England. In 1874 the school was transferred to the school board and became a 'provided' school and ceased to be a 'voluntary' denominational school. The school was sold in 1992 for £50,000.

(i) Limitation: The reverter was triggered by the 1874 arrangement. No proceedings were taken for 120 years.
(ii) Extinguishment of reverter: The reverter was not extinguished by section 14 of the 1841 Act on the subsequent sale in 1992 since the Defendant had no intention of using the proceeds to fund another school.
(iii) Nature of reverter: Where land reverted, it was to the estate of the original grantor and not to owners of the neighbouring land out of which it had been carved. The decision of Marchant v Onslow [1995] Ch 1, [1994] 2 All ER 707, was disapproved.
(iv) Beneficiary of reverter: Section 1 of the Reverter of Sites Act 1987 creates a bare statutory trust of the proceeds of sale of the land for 'the persons who but for this Act would from time to time be entitled to ownership of the land by virtue of its reverter'. It was immaterial that the claimants did not derive their title from Mr Lake's personal representatives, since, as successors in title to the beneficiary, they were, as a matter of fact, the persons absolutely and beneficially entitled to the proceeds.

Despite the reversal of issues (ii) to (iv) above, the appeal failed because the claim was statute barred. The appellants were ordered to pay only half of the appellants' costs of the appeal.

NB The first instance judgment is noted at (1999) 5 Ecc LJ 490, and the appeal is fully reported at [2001] 2 WLR 1103.

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(2001) 6 Ecc LJ 163-164