This article discusses Mrs. Justice Lang’s decision in R (ex p. Muir) v Wandsworth BC & Smart Pre-Schools Ltd [2017] EWHC 1947 (Admin). The transcript is available here.

Over recent months it has been clear that property law operates in the context of and responds to a political background. In particular, there has been lively debate surrounding privately owned public spaces – open spaces available to the public but funded by private, often profiting organisations. The benefits and criticisms of these spaces are now fairly well rehearsed. The decision to withdraw public funding from the privately owned Thames Garden Bridge Project focussed public attention on the issue. The case can be made that significant litigation is likely to come out of privately owned public spaces in the future. Against this backdrop, the case discussed below – best characterised as a failed attempt to turn over public space to private use – takes on an interesting significance.

The Facts

The case concerned land and premises (‘Neal’s Farm’) on Wandsworth Common, previously used as a café and to house groundsmen working on the common. The local authority (‘Council’), who held the freehold, terminated the tenancies and, in 2015, invited expressions of interest in a medium term ‘contracted out’ lease of Neal’s Farm. The Council was aware it faced difficulties but decided to try to take some commercial profit from the land – an understandable motive in view of the well publicised difficulties presently facing local authorities.

After receiving and considering the expressions of interest, the Council proposed to let Neal’s Farm to Smart Pre-Schools Ltd (‘Smart’) – a private limited company in the business of providing private nursery care. Smart, an interested party in the proceedings, intended to use the land to operate a private nursery for up to 62 two-to-five-year-olds.

The Council’s decision was challenged by the claimant (‘C’) – who had proposed “an educational and recreational facility for use by local maintained schools.” C brought a judicial review on two grounds: that the decision was not a lawful exercise of the local authority’s powers (‘ground 1’) and that the wrong person had made the decision under the local authority’s constitution (‘ground 2’). This article is only concerned with ground 1.

Statutory Framework

The case required a rather involved examination of the history of ownership of the Wandsworth Common, starting from its appearance in the Doomsday Book, through its ownership by Earl Spencer subject to ancient rights of common and various subsequent owners though to the local authority. This is only a short summary.

Earl Spencer’s successors in title were vested with the powers originally conferred by the Wandsworth Common Act 1871. Neal’s Farm became part of Wandsworth Common in 1913, after it was purchased by the London County Council. The conveyance was “[t]o hold unto and to the use of the Council and their assigns for the purposes of the Open Spaces Act 1906 [OSA 1906].” Three were three key statutory provisions:

  • Section 10, OSA 1906 provides that local authorities acquiring land under the OSA 1906 shall “hold and administer the open space … in trust to allow, and with a view to, the enjoyment thereof by the public as an open space within the meaning of this Act.” Trusts under section 10, OSA 1906 had been considered in a series of three cases; which decided that section 10 trustees were “incapable by law of using [trust land] for any profitable purpose; they must allow the public free and unrestricted use of it.” [1]
  • Section 193 of the Law of Property Act 1925 (‘LPA 1925’) provided members of the public with rights of access to Wandsworth Common for air and exercise, because of the ancient rights of common over the land.
  • What was described in short form as the ‘1967 Order,’[2] which empowers local authorities to provide facilities in various circumstances set out in article 7. Article 11 gave a carve out; if the proposed letting fell within the powers conferred on the Council by the 1967 Order then any restrictions in OSA 1906 and LPA 1925 could be overridden.

The Council maintained that the proposed letting of Neal’s Farm to Smart was consistent with its obligations as a section 10 trustee of the land, did not contravene section 193 and was within its powers under article 7.

Discussion

The judge accepted C’s submission that the Council’s powers and duties granted by the 1967 Order should be viewed through the lens of the OSA 1906 and case law relating to section 10. [3] The local authority conceded that it could not use rent from the proposed letting for its general purposes, but suggested that it would put the money towards the far greater costs of maintaining Wandsworth Common. The 1967 Order, held the judge,[4] reflected the legal position that the local authority held the land on trust for the public as beneficiaries; the:

“overall purpose and scope of Article 7 and 8 of the 1967 Order is to enable the Council to provide and maintain recreational facilities for the public i.e. ‘public recreation’.”[5]

The judge objected to the proposed letting because it was not to benefit the public as a whole; rather, Smart would prevent access to the public save for the cohort of up to 62 enrolled children. Smart and the Council attempted to justify it by suggesting that two-to-four-year-olds eligible for childcare funded by the local authority would be admitted with no top up fee. This failed – there was to be a first come/first served policy with no guarantee that any of these children would be reserved a place. The judge found that letting Neal’s Farm to Smart would prevent the public from enjoying the use of the land for the term of the tenancy.

The local authority contended that the proposed letting fell into article 7(1)(a)(v)-(vi), which permits a local authority to:

“provide and maintain … (v) indoor facilities for any form of recreation whatsoever, (vi) centres and other facilities (whether indoor or open air) for the use of clubs, societies or organisations whose objects or activities are wholly or mainly of a recreational, social or education character.”

The judge decided that the Council had “underestimated the constraints on its powers” [6] under article 7. As to sub-para.(v), the judge considered the meaning of “recreation” and previous decisions on the meaning of the word.[7] These were consistent with the dictionary definition, i.e. a means of refreshing or enlivening the mind or spirit by some pleasant occupation, pastime or amusement. But he found that providing child care in a nursery setting did not fall into that category; although children would play there, play was not the “main purpose” of facility. Similarly, submitted counsel for C, children playing at home did not render a domestic home an indoor facility for recreation.

As to sub-para(vi), the judge considered that the article required the Council either to provide/maintain the facility itself, or, under article 8, grant a third party the right to stand in the local authority’s shoes. The proposed letting to Smart for Smart’s own private use and entitling Smart to charge its own fees for using Neal’s Farm, however, was different. [8] The judge found that the identifiable class in sub-para.(vi) was: [9]

“not-for-profit groups which share a common interest, of a recreational, social or education character. It excludes a commercial organisation like[Smart]. However, I do not consider that the class necessarily excludes a limited company, as not-for-profit groups may be incorporated.”

The judge therefore decided that the decision to grant a lease to Smart was not a lawful exercise of the local authority’s power under the 1967 Order.

Points for consideration

The discussion of the statutory trust created by s.10, OSA 1906 will remind statutory trustees of the severe restrictions on the commercial use they are able to take out of the trust property; the decision, hopefully, will direct attention towards a realistic view of any constraints on the use of trust land at an early stage. The construction of article 7 of the 1967 Order brings helpful clarity.

The decision is one of the latest in a line of at least four applications for judicial review relying upon s.10 1906 OSA,[10] which ought to demonstrate that judicial review remains an important weapon in the property practitioner’s armoury, particularly where a potential claimant takes issue with a local authority’s proposed disposition of land. The introduction above refers to the increasingly blurred lines between local authorities and private organisations. This type of relief may be set to take on more importance over coming years.