In the Courts - Trusts, Insolvency
Bishop criticised for forcing school closure
Penton Lodge was purchased in 1946 by a Benedictine order of nuns and used as a Roman Catholic school (St Benedict’s). Oral charitable trusts were declared, with three of the nuns being trustees. The school ran into financial difficulties and the property was sold to a developer, Mr Rolfe, and leased back to a charitable company, set up to run the school.
Mr Rolfe had obtained extensive legal advice from barrister Francesca Quint (see viewpoint article, Caritas, Issue 8, July 2008). The price paid by Mr Rolfe was less than the market value with vacant possession but, in return, the lessor accepted onerous repairing obligations under the lease and a low rent. In October 2005, the Bishop of Portsmouth, claiming to represent the community’s interests, alleged a range of breaches and irregularities on the trustees’ part. The school’s creditors were not prepared to wait for the conclusion of the litigation which ensued, and called in their loans. The school closed on 21 April 2006 with 170 children on its books and 42 staff.
The claimants failed, and the judge (Mr Justice Evans- Lombe) also found that the Bishop had no standing to bring the proceedings, because the Church did not stand to benefit. He described the time and expense caused by the Bishop’s intervention as tragic, and recommended that the Attorney General should consider taking proceedings on behalf of the charity to restore the company’s name to the register and appoint a new liquidator who could take steps to bring the lease back to life. He suggested that it might even be possible to restart the school (although obviously this might not prove possible if the debts were too large) and/or apply the remaining assets cy-près under a scheme.
Right Reverend Crispian Hollis (1), Georgina Grundy-Parker (2), Edna Grace Fewtrell (3) v Edwin Douglas Rolfe (2), Vivienne Amy Elizabeth Rolfe (2), The Attorney General (3) [2008] EWHC 1747 (Ch)
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