A charity ordered to surrender land on the site of a south London primary school has had its legal bid for compensation thrown out by the Court of Appeal.

Lords Justice McCombe, Flaux and Newey have dismissed a judicial review from the Durand Education Trust in relation to land occupied by leisure facilities and accommodation on the site of the former Durand Academy in Stockwell.

The secretary of state was amply justified in concluding that no compensation should be paid to DET for the leisure centre land

Their written judgment also revealed that the company operating the commercial facilities “appears to have paid” the school’s former head Sir Greg Martin and his companies “upwards of £3.5 million” over a 16-year period.

But despite the company making £8.3 million in profit between 2010 and 2018, less than £1 million “accrued for the benefit” of the school.

Durand Academy became Van Gogh primary school in 2018 after the government terminated its funding agreement. At that point the school land and buildings were handed to Van Gogh’s sponsor, the Dunraven Educational Trust.

But Durand Education Trust, a charity set up by the school’s governors in 2010, kept hold of land occupied by a private leisure centre and accommodation, including the top floors of the school’s main building.

DET was ordered last year to transfer the remaining land to Lambeth Council for the use of Van Gogh.

The charity officially transferred the land on October 9 this year, but argued in court that it should be compensated for its investment in the facilities.

Government lawyers argued that investment in the leisure centre land pre-dated DET’s existence, and Lambeth Council warned that services for “vulnerable children and adults” in the borough would suffer if it was forced to pay out a seven-figure sum.

In the written judgment, Lord Justice Newey said the education secretary was “amply justified in concluding that no compensation should be paid to DET for the leisure centre land”, and that there was “no reason to believe that any conduct or expenditure on DET’s part enhanced the value of the leisure centre land”.

“The simple fact is that no works were carried out on the leisure centre land when DET was its owner. The leisure centre was constructed in 2004, the accommodation block dated from 2001 and the upper floors of the school building had been converted in about 1995. In contrast, DET did not even come into being until 2010.”

David Boyle, chief executive of Dunraven trust, said it “will be great to be able to focus on the children of Van Gogh without any additional noise
related to this issue.

“And it would be excellent if those children felt some benefit again of a provision that was set up for their benefit in the first place – it’s been a while since that’s been the case.”

Durand was thrust into the national spotlight in 2014 after a National Audit Office investigation revealed its complex governance arrangements.

The school’s former headteacher, Sir Greg Martin, appeared in front of the Parliamentary public accounts committee in early 2015 to face questions about his salary of more than £400,000, part of which came from management fees for commercial facilities on the school site, run by a private company called London Horizons Limited (LHL).

In the judgment, Lord Justice Newey said that while it “might be said” the non-financial efforts of Martin or his companies had “contributed to the development of the leisure centre”, they had been “well-remunerated for them”.

“LHL appears to have paid the companies upwards of £3.5 million between 2002 and 2018 aside from Sir Greg Martin’s salary and pension contributions as head teacher of successively Durand Primary School and Durand Academy.”

The judgment also states that the “evidence indicates that, while LHL achieved profits of some £8.3 million between 2010 and August 2018, less than £1 million of this sum accrued to the benefit of Durand Academy and neither LHL nor DET transferred any money at all to Durand Academy Trust or Dunraven Academy Trust after 2015”.

DET claimed in court that the decision not to award compensation was disproportionate, and that there was no “fair procedure” in place to determine whether payment was due. It also argued the decision violated its right to peaceful enjoyment of property and its right not to be discriminated against.

The judgment states that the education secretary “has accepted” that the decision did not comply with the public sector equality duty, “and apologised for that”.

Lord Justice Newey said, however, that it was “extremely unlikely that compliance with the PSED would have altered the decision”

“After all, there were very compelling reasons not to award DET any compensation and no likelihood of a decision not to do so having significantly adverse equalities implications.”

The case was heard in the Court of Appeal after DET was unsuccessful on two previous occasions to obtain a judicial review in other courts.

The judgment was handed down on December 8. It is yet to be published on the court’s website, but was provided to Schools Week by the court.