Legal update: New ruling on Bath Recreation Ground

Plus: lessons from the Air Ambulance Service and implementation dates for provisions of the Small Business, Enterprise and Employment Act

Bath Recreation Ground: good news for trustees
Bath Recreation Ground: good news for trustees

The Upper Tribunal (Tax and Chancery) has allowed an appeal against a decision of the First-tier Tribunal (Charity) to amend a controversial Charity Commission scheme for Bath Recreation Ground.

The Upper Tribunal held that trusts had not been created to preserve the land in question in specie – meaning in its current form and no other – as an open space for recreation.

Amendments to the commission's scheme ordered by the lower tribunal had placed restrictions on the trustees' ability to exercise their powers over the recreation ground. In particular, it had restricted the additional land that they could lease to Bath Rugby Club, which already occupies part of the ground. The Upper Tribunal's decision should give the trustees a freer hand.

As the trustees are not required to preserve the land in specie, the decision confirms that they have power (subject to section 121 of the Charities Act 2011) to dispose of all or part of it, provided they apply any sale proceeds to provide alternative open space for recreational purposes. This will disappoint those who consider that the land should be preserved for ever as an open space for the people of Bath and that Bath Rugby Club should leave.

The decision provides useful analysis and application of the law on land held in specie for charitable purposes – a legal area in which there is little case law or academic commentary.

Duty to act collectively

The Charity Commission recently found serious governance failings by the trustees of the Air Ambulance Service.

The charity had run a fundraising event with losses of about £111,000 and the chair and chief executive wrongly authorised a £27,000 loan to a senior member of staff without consulting trustees.

The report serves as a reminder to charity trustees that they are ultimately responsible for everything their charity does. They must therefore be aware of and monitor any significant endeavour that the charity undertakes and ensure that proper risk assessments and due diligence are done at the outset and kept under review. They must act collectively and are accountable for their decisions, as well as those made by staff and sub-committees.

Dates for charitable companies

Companies House has published updated provisional implementation dates for some of the company transparency and filing provisions in the Small Business, Enterprise and Employment Act 2015.

Lawyers who advise charitable companies and charity trading subsidiaries will, in particular, wish to be aware that the start of various requirements and provisions has been moved from April 2016 to 30 June 2016. The prohibition on corporate directors is now expected to come into force in October 2016. It was originally planned to take effect in October 2015.

This column is written by Adrian Pashley, charities editor at Thomson Reuters, Practical Law, on behalf of the CLA

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