The actions of a council as sole trustee of a charity came under scrutiny in the charity tribunal yesterday.
Two residents of Dartford in Kent are appealing against the decision of the Charity Commission to rubber stamp the local council's scheme to remedy the unlawful sale of charity land.
Dartford Borough Council sold the land to a property developer without the commission's permission.
This prompted an appeal by two Dartford residents, who objected to the commission's decision to accept new governance arrangements for the Kidd Legacy charitable land, which forms part of the Kent's Central Park, after the sale.
At the first day of the full hearing yesterday the residents, Lennox Ryan and Derek Maidment, argued that it was inconceivable that both the council's and the developer's solicitors would have failed to recognise that the 1903 deed leaving the land to the people of Dartford established a charitable trust.
However, Matthew Smith, the commission's barrister, said there was nothing more than innuendo to suggest any bad faith in the sale.
Smith said he did not dispute that the council had acted in breach of trust by selling the land. "It is not the role of the commission to condone it, but the question is how it is best to be remedied," he said.
He argued that the charity's objects to provide a recreational ground did not require the particular land in question if other land became more suitable.
He also argued that the council did not have a legal obligation to maintain the charitable land at its own expense, as it has done for the past 100 years. The proceeds of the land sale – £250,000 – will be used to fund the upkeep of the land.
Smith said: "A trustee can't be required to do something at his own expense. How would one ever find a trustee to act on those terms?"
Neil Robertson, head of the commission's specialist casework division, who gave evidence to the tribunal, said it was not uncommon for councils not to realise that some assets they controlled were charitable, especially when, as in this case, they were not registered with the commission.
The appellants argued that the council made about £5,000 a year from hiring out the legacy land to a fairground. They said this should have been enough to maintain the land.
They also said that the fact the sold land gave access to the park to residents of the west side of the town made it worth more than the council had received for it. Robertson said he had expected the developers' plans to maintain the access, but Ryan said the latest scheme submitted for planning permission did not include it.
The appellants also objected to the commission's acceptance of the council's scheme to replace the sold land with land that already formed part of the park, which is bigger than the charitable land.
The tribunal heard that the council has created a specific committee to act as trustee of the land and plans to invite three lay members on to it, as well as six councillors.
A preliminary ruling established that the tribunal had no power to overturn the land's sale. The full hearing is due to end today.