The charity tribunal has told the Charity Commission that it must substantially amend the scheme it drew up to try to settle a long-running dispute over charitable land that is used as the home of Bath Rugby Club.
The tribunal delivered its judgment this week after a three-day hearing in January. It says that the Bath Recreation Ground Trust, which owns that land, must change its governance structure to become more independent from Bath and North East Somerset Council, the former sole trustee of the land.
The tribunal was considering an appeal made by three Bath residents against the commission’s approval of a scheme to deal with a "breach of trust" relating to the land.
The commission ruled last year that Bath and North East Somerset Council should be replaced as the sole trustee of the trust by an independent board.
The regulator said at the time that the new trustees would be responsible for resolving a breach of trust that it said took place in 2007 when the trust built a leisure centre on part of its land near the centre of the city and granted a new 75-year lease to Bath Rugby Club, which has used part of the trust's land since 1894.
To resolve the breach, the trust, which exists to provide sporting and recreational opportunities, proposed a trade-off in which the club would continue to use the trust land it uses at present and be allowed to use another piece of trust land so that it could redevelop the ground.
In return, the club would lease to the trust its former training ground at Lambridge, on the outskirts of the city, which would be used for "a wide range of recreational activities".
But in its judgment this week, the tribunal ruled that the scheme must be substantially amended.
It ruled that the governance structure of the charity must be substantially changed and that any trustee from Bath and North East Somerset Council could no longer be chair of the trustees in order to secure its independence.
It means that David Dixon, chair of the trust and deputy leader of the council, must stand down as chair of its board, although he will be able to remain as a trustee.
At least three members of the new trustee board must be residents of the city of Bath, the tribunal said.
The tribunal also ruled that the proposed land swap was "not the only, or the best, practical solution that the trustees should consider in deciding how to further the objects of the charity" and that it was "unlikely that any grant of significant additional land, including the land on which the east stand can be erected, to Bath Rugby will be justifiable on the basis that such a grant is in furtherance of the objects of the charity".
This means that the rugby club will be unable to increase the size of its stadium, which it had been hoping to do.
There was nothing to prevent the charity from operating on other sites in addition to its land in the future, the tribunal said, but the trustees must ensure that Bath Rec is preserved for the future as an open space on which a range of games and sports can take place.
The trustees cannot grant more land for the use of Bath Rugby Club unless they can clearly demonstrate how it furthers the objects of the charity.
The judgment says the scheme should provide for a change in the objects of the charity "by reason of a cy-pres occasion". It says this change should not be permanent and should require land occupied by the leisure centre building to be returned to open space "at an appropriate time in the future".
A spokesman for Bath and North East Somerset Council said it was disappointed with the ruling, which it said "artificially restricts the scope of any future arrangements with Bath Rugby".
A statement from the trust said it was considering appealing the decision.
A community group called the Real Friends of the Rec said the tribunal’s decision was "appalling" and predicted that the charity would eventually need "bailing out by the council to the detriment of local council taxpayers".
A statement from Kenneth Dibble, chief legal adviser to the Charity Commission, said: "We are pleased that the tribunal found favour with our approach in making this scheme and we are optimistic that the trustees will now be able to move forward and enhance the use of this valuable asset for the benefit of the community."