Section 1 of the Playing Fields (Community Involvement in Disposal Decisions) (Wales) Measure 2010 enables the Welsh Ministers, by Regulations, to make provision for the involvement of communities in the disposal of land consisting, or forming part of, a playing field by a local authority.

The Playing Fields (Community Involvement in Disposal Decisions) (Wales) Regulations 2015, SI 2015/1403 (W.139) (“the Regulations”) apply to the decision by a local authority to dispose of playing fields that meet the definition set out in Regulation 2, fall within Regulation 3 and do not fall within any of the exceptions in Regulation 4.

Regulation 3 provides that the requirements in Regulations 5 to 10 apply where a local authority is considering making a decision to dispose, or to make a decision to enter into an agreement to dispose, of a playing field or any part of a playing field. The requirements would only apply where the playing field in question has been used as a sports or recreational facility by the public at any time in the 5 years before disposal. However, Regulation 3(c) provides that the requirements in Regulations 5 to 10 do not apply where any of the exceptions in Regulation 4(1) apply.

If the disposal in question is a grant of an interest in the playing field which does not have an adverse impact on the use of the playing field, the requirements for consultation, notification and decision making provided for in the Regulations at Regulations 5 to 10 do not apply. Similarly, these requirements do not apply where the playing field is disposed to another local authority or sporting or recreational body and the playing field will be retained for sporting or recreational use.

The requirements at Regulations 5 to 10 of the Regulations do not apply where consultation has been undertaken in respect of particular proposals relating to school organisation under Part 3 of the School Standards and Organisation (Wales) Act 2013. Similarly, they do not apply to any disposals which are pending at the time that these Regulations come into force.

The requirements in Regulation 5 relate to the notice and consultation arrangements which must be followed prior to any decision to dispose, or enter into an agreement to dispose, of a playing field or any part of a playing field. Regulation 5 includes a duty on local authorities to send details of the proposed disposal to specified bodies.

Regulation 6 requires a local authority to ensure that these details include information about the effect that the local authority considers the disposal would have on a number of strategies, plans and assessments. This may include information regarding the effect the disposal would have on the successful implementation or delivery of any relevant strategy, plan or assessment.

Regulation 7 requires a local authority to have regard to all representations received during the consultation period. It also enables the local authority to have regard to any representations received after the end of the consultation period.

Regulation 8 applies where a local authority has decided to proceed with a decision to dispose of a playing field or any part of a playing field. The requirements in Regulation 8 must be complied with before a local authority disposes, or enters into an agreement to dispose, of playing fields or any part of a playing field. Regulation 8(9) imposes requirements on a local authority where it has decided not to proceed with a disposal.

Regulation 9 provides that communications under the Regulations may take an electronic form. Any such electronic communication that is received outside a recipient’s normal office hours will be taken to have been received on the next working day.

Regulation 10 requires local authorities to have regard to any guidance given by the Welsh Ministers when exercising their functions under the Regulations.

In CR/2015/0002, Trouth v Shropshire Council and Caynham Village Hall Committee, the First-Tier Tribunal (General Regulatory Chamber) summarised the position in relation to the Community Right to Bid as follows:-

“The Localism Act 2011 requires local authorities to keep a list of assets (meaning buildings or other land) which are of community value.  Once an asset is placed on the list, it will usually remain there for five years.  The effect of listing is that, generally speaking, an owner intending to sell the asset must give notice to the local authority.  A community interest group then has six weeks in which to ask to be treated as a potential bidder.  If it does so, the sale cannot take place for six months.  The theory is that this period, known as “the moratorium”, will allow the community group to come up with an alternative proposal – although, at the end of the moratorium, it is entirely up to the owner whether a sale goes through, to whom and for how much.  There are arrangements for the local authority to pay compensation to an owner who loses money in consequence of the asset being listed.”

 The Caynham Village Hall Community nominated as land of community value under Section 88 of the 2011 Act (i) a playing field adjacent to the former Caynham Primary School and (ii) a car park, adjacent to the same site. Both pieces of land are situated in the village of Caynham, near Ludlow, within Shropshire Council’s area. The playing field and car park are owned by C, S & D Trouth (“Trouth”).

The Council listed both the playing field and the car park. Trouth sought a review. The result of the review was to maintain both the playing field and the car park on the statutory list. That was the decision appealed to the FTT.

So far as the playing field is concerned, the FTT found as a fact that the requirement of Section 88(2)(a) of the 2011 Act was satisfied.  Plainly, there was a time in the recent past when an actual use of the playing field, that was not ancillary, furthered the social wellbeing or interests of the local community.  For many years, the lease had made it plain that use of the playing field was permitted for local children, quite apart from use of the playing field for the purposes of school recreation.  Trouth had put forward no evidence to show that there was, in reality, no use made by local children or that use by local children was, on the facts, merely ancillary.  The terms of the lease permitted such use both inside and outside school hours, with the result that, in terms of time at least, local use would far outweigh school use.  Furthermore and in any event, significant use has been made of the playing field, with permission, as a result of the holding of village fetes, up to 2011. 

So far as future use is concerned, the stated intentions of Trouth are to continue to pursue their aim of development and to exclude the community from the playing field.  Their case was that “it is more realistic to think” that the playing field will not be used for relevant social purposes in the next five years.  This, however, is not the correct legal approach.  The answer to the question of what is “realistic” may admit of a number of possibilities.   In order to be “realistic”, one possibility does not need to be more likely than all of the others.  A possibility will not be “realistic” if it is merely fanciful.

The issue, therefore, was whether it could be said, looking at the present position, that future relevant community use of the playing field is merely fanciful or, in other words, unrealistic.  Trouth had not shown this to be the case. 

The stated intentions of Trouth regarding community use could not be determinative of the question to be answered in Section 88(2)(b) of the 2011 Act; since, otherwise, listing would be possible, in effect, only with the  consent of the landowner.  One possibility, which could not be dismissed as unrealistic in the circumstances, was that Trouth concluded that redevelopment of the playing field is not going to occur within any commercially viable timescale.  In such circumstances, a sale of the site would be a distinct possibility.  Another realistic scenario is that Trouth decide to permit relevant community use, without giving up on their long-term development plans.  

Therefore, the playing field met the requirements of Section 88 of the 2011 Act. 

As regards the car park, it was common ground that the relevant use of this land is as a car park. It was also common ground that the car park provided parking for those attending activities in the Village Hall.  Those events included meetings of the Women’s Institute, Gardening Society, Shropshire Village Hall Quiz, Yoga classes, Book Exchange, Children’s Film Shows, other social gatherings and civic functions. The car park had served a useful purpose providing unrestricted off road parking for the school and the village hall.  The car park has been closed and objections have been made to the loss of this facility.

The case for Trouth was that the use of the car park was “ancillary” to the use of the village hall and, accordingly, the requirements of Section 88 cannot be satisfied. 

The history of the land comprising the car park and of the village hall, was such that the FTT found as a fact the car park fell to be regarded as its own land unit for the purposes of the 2011 Act.  Although the car park has a close geographic and functional connection with the village hall, this connection was not such as to compel the conclusion that the land unit is the village hall and the car park.  The history of different ownerships and of different objectives of the different owners meant that it was not appropriate to treat the car park in that way.  Accordingly, for the purposes of the 2011 Act, the car park had its own main use, namely, land for the parking of cars.  There is no ancillary use.

It was plain on the facts that the car park satisfied the requirement of Section 88(2)(a).  The issue was whether it is realistic to think there is a time in the next five years when there could be a return to the use of the car park, as a car park.  The FTT found that it was not realistic so to think.  The planning position regarding the car park was currently such that it could not be said that redevelopment was the only realistic scenario within the next five years.  Use as a car park furthered the social wellbeing and social interests by providing convenient means of access (particularly for those with mobility issues) to the wide range of social activities taking place in the village hall.  It was realistic to think that that use might resume within the statutory timescale, either because Trouth conclude that redevelopment within a commercially viable timeframe is unlikely to be achieved, and so decide to dispose of the land, or because they decide that there is utility in letting car parking resume, whilst they continue to press for planning permission.

In Case C39/14, BVVG v Erbs, Judgment on 16 July 2015, the ECJ has again considered when land disposals by public bodies amount to State Aid within TFEU Article 107(1), in accordance with which save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings is, in so far as it affects trade between Member States, incompatible with the internal market. 

The ECJ reiterated that in order for a measure to be categorised as ‘aid’ for the purposes of Article 107(1) TFEU, all the conditions set out in that provision must be fulfilled.  For a measure to be classified as State Aid for the purposes of Article 107(1) TFEU, first, there must be an intervention by the State or through State resources; second, the intervention must be liable to affect trade between Member States; third, it must confer an advantage on the recipient; and fourth, it must distort or threaten to distort competition. The concept of aid may include not only positive benefits such as subsidies, loans or direct investment in the capital of undertakings, but also interventions which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which therefore, without being subsidies in the strict sense of the word, are of the same character and have the same effect. To that end, for the purposes of establishing the existence of State Aid, a sufficiently direct link must be established between, on the one hand, the advantage given to the recipient and, on the other, a reduction of the State budget or a sufficiently concrete economic risk of burdens on that budget.

It cannot therefore, as a rule, be precluded that a sale of public land at a price lower than the market value might constitute State Aid.  Such a sale may confer on the purchaser, as a recipient, an advantage which, in essence, leads to a reduction of the State budget consisting in the State forgoing the difference between the market value of the land and the lower price paid by that purchaser.

In particular, in relation to the sale by public authorities of land or buildings to an undertaking or to an individual involved in an economic activity, such a sale may include elements of State Aid, in particular where it is not made at market value, that is to say, where it is not sold at the price which a private investor, operating in normal competitive conditions, would have been able to fix.

It follows that the application of rules must, in order to comply with Article 107 TFEU, result in all cases in a price as close as possible to the market value.  A number of methods are capable of providing prices corresponding to the market value. Those methods include sales to the highest bidder or an expert report. Likewise, it cannot be ruled out that other methods may also achieve the same result.

In a case concerning the sale by a public authority of an undertaking belonging to it, that, where that authority undertakes an open, transparent and unconditional bidding procedure, it can be presumed that the market price corresponds to the highest offer, provided that it is established, first, that that offer is binding and credible and, secondly, that the consideration of economic factors other than the price is not justified.  In such circumstances, it is not necessary to resort to other methods in order to check the market price, such as independent expert reports.

In Tower Hamlets LBC v Bromley LBC [2015] EWHC 1954 (Ch) the Chancery Division of the High Court was asked to determine the ownership of a Henry Moore sculpture.  Tower Hamlets LBC (“TH”) as the successor to the Stepney Borough Council (“SB”), pursuant to the London Government Act 1963 (“the 1963 Act”).  Bromley LBC (“Br”) was the successor to the London Residuary Body (“the LRB”).  The LRB was the successor to the Greater London Council (“the GLC”) pursuant to the Local Government Act 1985.  The GLC was successor to the London County Council (“the LCC”) pursuant to the 1963 Act.

In 1957 Henry Moore, reflecting on his wartime experiences of the London Blitz and his war artist drawings, created a sculpture which became known as “Draped Seated Woman”. It is a large bronze figure sitting upon a stepped plinth. At least 6 casts were made. On 15 September 1962 one of these was purchased by the LCC.  It was shortly thereafter placed near three tower blocks on the then recently constructed Stifford Estate in the area of SB.  Could TH sell the sculpture to fund local services; or should it be kept for the benefit of the people of London. Who owned the Henry Moore sculpture?

By the mid 1950s the LCC took the view that it had both a cultural and educational responsibility to do what it reasonably could to encourage and assist in the provision of works of art: and that it had two means of doing so. First, the LCC considered that its powers to provide and furnish buildings for various functions included, within the bounds of what was reasonable, an inherent power to provide by way of adornment appropriate and suitable works of art. Second, the LCC had a specific statutory power which provided that it might acquire, by agreement, any work of art, and might erect and maintain, or contribute towards the provision, erection and maintenance of, any work of art in any place within the LCC area.

In 1956 the General Purposes Committee of the LCC proposed that the LCC should earmark annually a sum of money which would be available for the acquisition of works of art for both new and existing buildings and schemes.  That proposal was implemented.

The Stifford Estate was built at Clive Street in Stepney and completed in the early part of 1961. The three tower blocks were regarded as a prime example of modern architecture.  They were built within their own modest grounds abutting onto Jamaica Street at the front, and separated at the rear from Stepney Green by a sizeable public path. They were designed without reference to the inclusion of any particular piece of art, but from an early stage it was contemplated that a work of art would be commissioned and placed somewhere in relation to the development.

Henry Moore confirmed his willingness to sell the sculpture on 4 January 1962.  He was paid for it in September 1962.

Norris J concluded that (paragraph 15) the sculpture, which was originally a chattel, remained a chattel, and never formed part of the realty; that (paragraph 16) the LCC bought the sculpture in discharge of its cultural and educational responsibility; and that (ibid) it did so pursuant to the specific power referred to above.

On the abolition of the LCC, and the creation of the GLC and the various London Boroughs, including TH and Br, the sculpture vested in the GLC, either “in connection with” the Stifford Estate or (as the Judge favoured) as property vested in the LCC.

The Stifford Estate, however, was transferred to TH. Norris J accepted (paragraph 28) that what was transferred was “transferred property”; and that land included property held in connection therewith.  He rejected, however, the submission on behalf of TH that the sculpture was held “in connection with” the Stifford Estate.  Norris J said:-

“31. The 1963 Act was concerned to deal with the transfer of land which had been held by the LCC “for the purposes of their functions as a local authority under the Housing Act 1957”: and the onward transfer by the GLC to a London borough had an identical focus. So the underlying concept is “functionality”: what passes is land held for the purposes of an identified function. If personal property held “in connection with” such land is to pass, it too must have some connection with the discharge of the function of a local authority under the Housing Act 1957. If the LCC had held a collection of pictures which from time to time it displayed in the entrances to public offices and blocks of flats as part of its arts education programme it would have held none of them in connection with the discharge of its function as a local authority under the Housing Act 1957. Those pictures hanging in the hallways of blocks of flats  would not have passed to the GLC as part of the housing stock (as property held in connection with land used to discharge the council’s housing function), leaving those hanging in offices vested in the LCC. The “function” in connection with which the pictures were held was something other than the function of a local housing authority.

32.In my judgment the sculpture was not property “held in connection” with specifically described land held by the GLC for the purposes of its functions as a local authority under the Housing Act 1957. It was held by the GLC (and had been held by the LCC) in connection with its arts education programme as is evident from the circumstances surrounding is acquisition. The power which authorised the acquisition of the sculpture was s.157 of the Local Government Act 1939, not the Housing Act 1957. The power which authorised the retention of the sculpture was s.84 of (and paragraph 16 of Schedule 2 to) the 1963 Act, not the Housing Act 1957. The money that paid for the sculpture was the specific annual allocation for arts purchases and was not accounted for as a housing cost. The sculpture was sited on the Stifford Estate and no doubt benefited the residents of the Stifford Estate, but it also benefited any member of the public using the path alongside Stepney Green or using Jamaica Street.”

Norris J therefore held (paragraph 39) that when the housing accommodation which comprised the Stifford Estate passed to TH, the sculpture was vested in the GLC; and (paragraph 40) that when the GLC was abolished it vested in the LRB.

However, he accepted TH’ case that it had since 1985 repeatedly (and in good faith) believed the sculpture to be its own, and treated it as its own property, including sending it on a long-term loan to Yorkshire, without complaint from the LRB or Br.  Those were acts of conversion. By application of Section 3(2) of the Limitation Act 1980 Br’s title was extinguished.  Norris J held that TH now owned the sculpture. Norris J held (paragraph 49) that the title of BR had been extinguished because various events between 1997 and 2002 were all assertions by TH of rights of dominion over the sculpture inconsistent with the ownership rights of Br.  He said:-

“52. Counsel for Bromley finally objected that Tower Hamlets had no power to acquire property through an act of conversion. But in my judgment it was not “the act of conversion” that conferred title: it was the effect of s.3(2) of the 1980 Act in consequence of the inaction of Bromley (in failing to bring proceedings within the statutory period) even though the sculpture which it now says was intended to benefit and enrich all Londoners was openly on display in Yorkshire.

53. Accordingly I answer the question raised by this action in the sense that the Henry Moore sculpture “Draped Seated Woman” now belongs to Tower Hamlets.”

On 30 June 2015 the European General Court in Joined Cases T-186/13, T-190/13 and T-193/13, Netherlands v Commission, annulled an EU Commission Decision that had found a sale of land by a public private partnership set up by a municipality allegedly below market price to be unlawful State Aid. The Court’s Judgment is not yet available in English.  In determining whether there was selective aid the Court applied the Market Economy Investor Principle and a margin of appreciation for the authority.