The recent High Court case of Hoggarth v Bowler [2025] EWHC 1077 (Ch) has brought further clarity on the statutory requirements which apply to disposals of charity land. In this case, the court dismissed a claim that a charity's trustees had breached their legal duties on a sale of land.
Facts
A group of linked charitable trusts known as the Bridlington Charities owned a piece of investment land in East Yorkshire, which they leased to a company called H. Lount & Son Ltd . The company was owned by a family who had operated a caravan park on the land for over 100 years.
The charity's trustees decided to sell the freehold of the land and obtained advice from a chartered surveyor, in accordance with the charity land disposal rules under Part 7 of the Charities Act 2011 and the Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023. A bidding process was initiated to ensure the sale was made on the best terms reasonably obtainable for the charity.
The charity outlined the rules of the bidding process to the company:
- The bid should be a fixed sum, and should not be calculable only by reference to another offer (eg '£X higher than the highest bid'); and
- The bid must include details and evidence of the source of funding for the purchase.
The company made two offers: £1.75 million or for £10,000 more than the highest offer. Its offer letter did not state the source nor evidence the availability of funds. As such, the bid did not comply with the charity's requirements. The charity told the company its bid did not comply. The company subsequently made a further offer of £2 million the day before the closing date. This further bid was also not compliant, as it still did not provide details or evidence of the source of funds. The charity accepted a bid from another party (which was compliant with its bidding process) and entered into an exclusivity agreement.
The company subsequently brought proceedings to prevent the sale from progressing, claiming that the sale would be a breach of trust or duty by the charity's trustees. It argued that the trustees had not complied with s119 of the Charities Act 2011: to obtain a written report from a designated advisor before disposing of land and determine that the disposition is on the best terms that can be reasonably obtained.
The charity countered that the company only brought the claim to frustrate the sale because they wanted the charity to sell the land to them (or a person connected to them), it was brought in the interests of the company, and it was not made in good faith.
Decision
The company's claim was struck out as having no prospect of success. The court found no evidence of breach of trust and held the trustees were justified in accepting the highest compliant bid and rejecting the company's offer. Whilst trustees have an overriding duty to obtain the best price for their beneficiaries, they are not compelled to accept the highest offer. Trustees retain discretion to reject a higher offer and proceed with a lower one, if the circumstances would make this appropriate (eg a non-compliant bid). The court held that the trustees had complied with charity law.
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