Meeting documents

ORDER OF

THE CHARITY COMMISSION FOR ENGLAND AND WALES

to authorise the Trustee to enter into a tenancy agreement under the power given in section 26 of the Charities Act 1993 as amended by the Charities Act 2006 ("the Act")

dated the

25 June 2008

for the charity known as

THE RECREATION GROUND, BATH (1094519)

at

Bath in the County of Somerset

ORDER

In this Order:

"the Charity" means the Recreation Ground, Bath;

"the Rec" means a large open space in the centre of Bath, used for recreational purposes by Bath residents and the public generally and owned by the Charity;

"the Commission" means the Charity Commission for England and Wales;

"BANES" means the trustee of the Charity, Bath and North East Somerset Council;

"the Club" means Bath Rugby PLC, a professional Club;

"the Proposed Lease" means the lease which the Trustee proposes to grant to the Club in the terms of the draft tenancy agreement submitted to the Commission on 22 May 2008 under which the Club will occupy and use the land belonging to the Charity specified in the schedule to this order for the period from 15 August 2008 to 22 May 2009 for the purpose of erecting and maintaining a stand

Background

1. The Rec was acquired by the Mayor, Aldermen and Citizens of the City of Bath from the Bath and County Recreation Ground Company Limited by a conveyance dated 1 February 1956. BANES is the successor to the Mayor, Aldermen and Citizens of the City of Bath. At the time of the transfer the land was subject to a number of leases.

2. BANES did not consider that the Rec was held on charitable trusts, and it was therefore managed by BANES for many years as though it were part of BANES' corporate property. At BANES' request, the Commission gave its view in 1993 that the Rec was not held on charitable trusts.

3. On 23 May 1995 Bath City Council (BANES's statutory predecessor) renewed a lease for a further term of 75 years to the Club for the use and occupation for its stadium of part of the Rec. The Club pays £6,500 rent under that lease.

4. In July 2002 the High Court (Bath and North East Somerset Council v HM Attorney General [2002] EWCA 1623 (Ch)) determined that the Rec was held on charitable trusts and and BANES was charged with maintaining the Rec "as a recreational facility available for the benefit of the public at large."

5. As a result of the decision of the court, the Club's occupation of the Rec is inconsistent with the trusts of the Charity.

6. Nevertheless, BANES' view is that the Club has a valid lease as a result of the operation of s37(4) of the Act and, therefore, cannot be required to vacate the part of the Rec which it occupies under that lease.

7. The Charity was registered on the Register of Charities in November 2002.

8. It is the duty of BANES to seek to resolve the irregularities in relation to the occupation of the Rec and discharge its duties and responsibilities as trustee of the Charity.

9. In 2003 BANES proposed to the Commission that it should undertake a strategic review of the current and future uses of the Rec, to assess and resolve issues arising from the Rec's current occupants, and to ensure that the Rec is managed properly as the property of the Charity for the benefit of the public now and in the future.

10. BANES confirmed that this strategic review would include the occupation of the Rec by the Club and would address the issue of the future use of the Rec in accordance with the trusts of the Charity.

11. In 2003, the Club requested a short-term lease for an additional area of the Rec, as specified in the schedule to this order, to enable it to erect a temporary seating stand without which the Club could not provide the facilities required by the Rugby Premiership. Having considered BANES' arguments and consulted with the Interim Managers appointed by the Commission, in particular regarding the Rec's financial position and pending the resolution of issues with the Rec in the long-term, the Commission agreed that it was in the interests of the Charity to grant the proposed lease. Accordingly, the Commission authorised BANES, as being expedient in the interests of the Charity, to enter into a temporary one-year lease for full market rent to the Club for the additional area. The order took effect on 22 August 2003. Further authority was given by the Commission for BANES to grant additional short-term leases over the additional area to the Club in 2004, 2006 and 2007 in order to permit BANES the time and finances to conduct and conclude its strategic review and consider its possible outcomes. The said order made in 2007 ("the 2007 order") included directions to BANES as follows:

a. BANES continue to resolve issues arising from the current and future uses of the Rec, to ensure that the Rec is managed properly as the property of the Charity for the benefit of the public now and in the future and satisfy the Commission that BANES has discharged its legal duties and responsibilities as trustee of the Charity.

b. BANES demonstrate that it has discharged its responsibilities as charity trustee in respect of any decision relating to the current and future uses of the Rec and the resolution of issues arising from the Rec's current occupants and that such decision was properly taken by BANES in the best interests of the Charity:

• BANES provide to the Commission within a reasonable time-frame or such time-frame as the Commission shall direct from time to time explanations and further details of the options set out in "The Bath Recreation Ground Trust - A Strategic Review" dated 30 May 2007 as the Commission shall require.
  
• In particular, BANES satisfy the Commission that it has acted in accordance with the following requirements in reaching such a decision:

i. To act within the powers conferred upon BANES and the established rules and procedures for dealing with issues of the kind under consideration

ii. To act in good faith

iii. To adequately inform itself in order to make the decision in question

iv. Not to take into consideration any factors which it was not proper for it to take into account

v. To consider any factors which it should take into account

vi. To act reasonably (i.e. the decision should be within the range of decisions which a reasonable body of trustees could have made)

c. BANES take account and give due consideration to representations received from persons interested in any decision relating to the current and future uses of the Rec and the resolution of issues arising from the Rec's current occupants.

d. BANES comply with such additional directions in relation to the option selected, the time-frame and the means by which this shall be effected as the Commission may consider necessary in the interests of the Charity.

e. BANES make its decisions regarding the future occupation of the Rec within a reasonable time-frame or such time-frame as the Commission shall from time to time direct and in any event BANES shall report on a monthly basis to the Commission on its progress in matters relating to the Charity and the occupation of the Rec.

f. BANES ensure that it will take no steps that will cause it or the Charity to create any legal obligations or responsibilities to any individual or entity under any transaction which is restricted by the order of the Commission dated 30 March 2006 made under section 18(1)(vi) of the Act without the prior consent of the Commission.

g. BANES shall report on a monthly basis to the Commission on its progress in matters relating to the Charity and the occupation of the Rec.

h. BANES shall ensure that it will take no steps that will cause it or the Charity to create any legal obligations or responsibilities to any individual or entity without the prior consent of the Commission.

12. BANES completed its strategic review by May 2007and considered its findings. Having taken and considered appropriate professional advice together with the benefit to the Charity by generating additional income, BANES have identified the option in the strategic review to grant a lease of further additional land to Bath Rugby Club ("the Potential Future Lease") as the proposed final solution to the Rugby Club's continuing occupation of the Rec. BANES formally approached the Commission for guidance as to whether the Commission was able legally to support this. In March 2008, the Commission confirmed that it was not yet satisfied that the Charity had put forward any specific proposal that passes the legal test which would allow the Commission to make a legal Scheme to allow the Potential Future Lease. The Charity needed to provide the Commission with a specific proposal that includes a detailed list and analysis of both the benefits and detriments arising to the Rec from the Potential Future Lease and the basis upon which it believes that the former outweigh the latter. The outcome of this is currently awaited by the Commission. To enable BANES sufficient time to develop this proposal further, BANES has applied to the Commission for authority to enter into the Proposed Lease for full market rent.

13. The Commission's role as the regulator for charities in England and Wales is to ensure that BANES:

• discharges its legal duties and responsibilities as trustee of the Charity; and
  
• rectifies the irregularities in the usage of the Rec under the trusts of the Charity

• This includes the Commission giving consideration to all the issues and providing such guidance, advice or regulatory consents as may be necessary

14. Having considered again the findings of the strategic review, the outcomes and resolutions being sought by BANES and its progress in achieving these, together with the grounds for the decision by BANES to grant the Proposed Lease, the Commission is satisfied that it is expedient in the interests of the Charity for BANES to grant the Proposed Lease subject to BANES' compliance with the directions of this order.

15. The terms of the Proposed Lease expressly exclude the provisions of section 24-28 of the Landlord and Tenant Act 1954 in relation to the tenancy to be created by the Proposed Lease and that the necessary notices and statutory declaration will have been given in respect of this tenancy.

NOW the Commission having considered the proposals made by BANES hereby authorises BANES to grant the proposed lease being satisfied that this is expedient in the interests of the Charity.

DIRECTIONS

The Commission directs that:

1. BANES continue to resolve issues arising from the current and future uses of the Rec, to ensure that the Rec is managed properly as the property of the Charity for the benefit of the public now and in the future and satisfy the Commission that BANES has discharged its legal duties and responsibilities as trustee of the Charity.

2. BANES demonstrate that it has discharged its responsibilities as charity trustee in respect of any decision relating to the current and future uses of the Rec and the resolution of issues arising from the Rec's current occupants and that such decision was properly taken by BANES in the best interests of the Charity:

• BANES provide to the Commission within a reasonable time-frame or such time-frame as the Commission shall direct from time to time such further explanations and further details of its proposals as the Commission shall require.
  
• In particular, BANES satisfy the Commission that it has acted in accordance with the following requirements in reaching such a decision:

i. To act within the powers conferred upon BANES and the established rules and procedures for dealing with issues of the kind under consideration

iv. Not to take into consideration any factors which it was not proper for it to take into account

vi. To act reasonably (i.e. the decision should be within the range of decisions which a reasonable body of trustees could have made)

3. BANES take account and give due consideration to representations received from persons interested in any decision relating to the current and future uses of the Rec and the resolution of issues arising from the Rec's current occupants.

4. BANES comply with such additional directions in relation to the option selected, the time-frame and the means by which this shall be effected as the Commission may consider necessary in the interests of the Charity.

5. BANES make its decisions regarding the future occupation of the Rec within a reasonable time-frame or such time-frame as the Commission shall from time to time direct and in any event BANES shall report on a monthly basis to the Commission on its progress in matters relating to the Charity and the occupation of the Rec.

6. BANES ensure that it will take no steps that will cause it or the Charity to create any legal obligations or responsibilities to any individual or entity under any transaction which is restricted by the order of the Commission dated 30 March 2006 made under section 18(1)(vi) of the Act without the prior consent of the Commission.

7. BANES shall report on a monthly basis to the Commission on its progress in matters relating to the Charity and the occupation of the Rec.

8. BANES shall ensure that it will take no steps that will cause it or the Charity to create any legal obligations or responsibilities to any individual or entity without the prior consent of the Commission.

9. BANES will provide to the Commission the proposal for the future occupation and use of the Rec by 1 August 2008.

SCHEDULE

Land containing 1136 square metres or thereabouts being part of the land comprising the Recreation Ground at Bath.