Council wins Court of Appeal battle over fate of land subject to statutory trust for recreational purposes

Shropshire Council has won a case in the Court of Appeal over what happens when a local authority disposes of land subject to a statutory trust for public recreational purposes without complying with the relevant statutory requirements.

Appeal judges Lord Justice David Richards, Lord Justice Hickinbottom and Lady Justice Andrews said in Day, R (On the Application Of) v Shropshire Council [2020] EWCA Civ 1751 that the trust had ended despite errors by the councils involved.

Local resident Peter Day brought the case over Shropshire’s grant of conditional planning permission for 15 homes on land off Greenfields Recreation Ground, Shrewsbury.

The site was subject to a statutory trust for public recreational purposes, and had been sold by Shrewsbury Town Council without compliance with the mandatory requirements for advertising such a disposal.

In an earlier hearing, Lang J held that, if the disposal of the land did not bring the trust to an end, the trust obligations were nonetheless unenforceable against the developer who had bought it.

She said Shropshire acted unlawfully in failing to take reasonable steps to acquaint itself with the site's history and legal status and to consider the legal implications of the sale.

But had it acted lawfully it would have recognised the trust obligations could not be enforced against the developer and would still have granted planning permission.

Lang J therefore concluded no relief should be granted and refused judicial review, after which Mr Day appealed.

The appeal justices said the site had been transferred to the former borough of Shrewsbury in 1925-26, and was held subject to a statutory trust for public recreation.

It was transferred to the town council in 2010, by which time it had been used since 1945 successively as allotments and a council tree nursery before becoming wasteland.

The town council did not put the developer on notice that there was, or even might be, a trust attaching to the land and sold the site without following the required statutory procedure for an advertisement for two consecutive weeks in a local newspaper.

Mr Day argued that Lang J erred in concluding that any subsisting rights under the statutory trust were not enforceable and even if not enforceable, were not a material consideration for the purposes of the planning decision.

He also argued that Lang J erred in considering the public recreation rights over part of the site retained by the town council were immaterial to the planning decision and was wrong to conclude that Shropshire’s planning decisions would have been the same had it not erred.

The appeal justices said that following the sale the section 10 trust attaching to the land did not subsist.

“The development site was sold by the town council to the developer without compliance with the requirements of section 123(2A), but the developer did not have actual knowledge of that failure (indeed, it appears to be agreed that neither did it have constructive knowledge).”

They concluded Lang J had not erred in concluding that, had Shropshire known that the retained part continued to have a statutory public recreational trust attached to it, it would nevertheless have made the decision to grant planning permission.

“We can deal with this ground very shortly,” they said. “There is no force in it. The retained part is part of a car park for users of the recreation ground. It is not to be the subject of development; but will be used for access to the site.”

She had also not erred in concluding that Shropshire would have reached the same planning decision.

Lang J made no costs order although Shropshire cross-appealed that it should receive £5,000 for having won its case.

The appeal justices said: “The judge had a wide discretion in relation to costs; and, in our view, she was entitled to conclude that the appropriate order was no order for costs.”

Mark Smulian