Public rights of use: Whether disposal of land subject to statutory trust extinguished rights enjoyed by the public

Where a local authority disposes of land subject to a statutory trust for public recreation to a developer, does such disposal extinguish the rights enjoyed by the public to enjoy the land or should a planning application granted pursuant to disposal be quashed? The Supreme Court hands down its decision in this important case addressing the survival of statutory trust rights during planning application processes.

The background

In R (on the application of Day) v Shropshire Council [2023], a parcel of land owned by Shrewsbury Town Council was subject to a statutory trust for public recreation.

Statutory trusts are created when, under either the Public Health Act 1875 or the Open Spaces Act 1906, a local authority acquires land for the provision of recreation land or public open spaces. Members of the public enjoy rights of access over the land for recreational purposes, and local authorities’ rights to dispose of statutory trust land are limited.

A developer of residential housing acquired the land from Shrewsbury in 2017 and submitted a planning application for the construction of new homes. Shrewsbury had not been aware that the statutory trust affected the subject land, and did not follow the correct procedure contained in the Local Government Act 1972 (“LGA 1972”) in its disposal. Planning permission was granted in 2018.

The grant of planning permission was challenged by a local resident, arguing in judicial review that the statutory trust remained in place over the land because of the local authority’s failure to follow the correct procedure and, because the trust was a material factor for consideration by the planning authority, the planning permission should therefore be quashed.

The local planning authority believed that s.128(2) of the LGA 1972 extinguished the statutory trust rights enjoyed by the public, or otherwise that the surviving rights were not in a form requiring consideration by the planning authority.

At first instance, the judge found that, although the disposal of land was unlawful, as was the local planning authority’s failure to investigate the site sufficiently, the obligations under the statutory trust did not survive the disposal. The court did not grant relief, in a decision which was upheld by the Court of Appeal. The matter was referred to the Supreme Court.

The decision

The Supreme Court disagreed with the previous judgments, finding that the existence of the statutory trust over the land was an important factor which had not been considered by the local planning authority when granting planning permission. The Supreme Court unanimously allowed the appeal, finding that the planning permission should therefore be quashed.

The Court considered two issues:

1. Whether the Court of Appeal was right to conclude that, where the disposal was made without compliance with the statutory procedure contained in the LGA 1972, the land was transferred free from the statutory trust unless the developer had actual knowledge of the statutory trust; and
2. If the statutory trust was extinguished, was the fact that it had existed a material consideration for the planning authority in granting planning permission?

The Supreme Court found that public rights afforded by the statutory trust had not been extinguished; this would only have been the case if the consultation procedure contained in LGA 1972 had been followed.

The Court stated that, if the effect of a disposal into private ownership was to extinguish the statutory trust, then restrictions and conditions relating to sale of land subject to statutory trust would be easily diverted and protection for purchasers contained in the statute not required.

The statute’s provisions were, felt the Supreme Court, created to give members of the public opportunity to become aware of, and to object to, the proposed sale or redevelopment of statutory trust land.

It was central to the Supreme Court’s decision that the statutory trust continued to exist over the land when the planning application had been considered. Without consideration of the statutory trust in this case, and given that the Court could not determine whether the local planning authority’s decision to grant permission would be different if the statutory trust procedure had been followed, the planning permission granted should be quashed.

Advice and action for landlords

This is a key decision for local authorities whose property portfolios include recreational and open spaces for the benefit of the public.

In this case, a lack of awareness of the existence of the statutory trust and a failure to follow statutory procedure in managing the disposal of land subject to such a trust has resulted in the potential scenario where a developer owns land it is now unable to develop, thereby undoubtedly impacting significantly on value.

Local authorities are urged to strengthen and maintain records and systems relating to the ownership and amenity of land within their portfolio, and to implement, act on and document investigative processes prior to the sale of portfolio land, particularly where a statutory trust may exist over recreational or public spaces.