Construction Industry Training Board v Attorney General

JurisdictionEngland & Wales
Judgment Date18 May 1972
Judgment citation (vLex)[1972] EWCA Civ J0518-5
Date18 May 1972
CourtCourt of Appeal (Civil Division)

re: The Construction Industry Training Board


re: The Charities Act, 1960.

Construction Industry Training Board
Her Majesty's Attorney-General

[1972] EWCA Civ J0518-5


Lord Justice Russell,

Lord Justice Buckley (Not present) and

Mr Justice Plowman

In The Supreme Court of Judicature

Court of Appeal

Civil Division

On appeal from Order of the Vice-Chancellor.

Mr JOHN MILLS, Q.C., and Mr J.A.R. FINLAY (instructed by the Treasury Solicitor) appeared on behalf of the Appellant (Defendant).

Mr N.C.H. BROWNE-WILKINSON, Q.C. (instructed by Messrs Frere, Cholmeley & Nicholsons) appeared on behalf of the Respondents (Plaintiffs).


The question raised in this appeal is whether the Board, which is a corporate institution formed by Statutory Instrument under the Industrial Training Act, 1964, is registrable in the register of charities maintained by the Charity Commissioners under section 4 of the Charities Act, 1960. In particular, the question is whether it is a "charity" as defined in section 45(1) of the 1960 Act. The importance of the case lies in the fact that only a registered charity is exempt from Selective Employment Tax.


Under that section, except in so far as the context otherwise requires, "charity" means any institution, corporate or not, which is established for purposes which are exclusively charitable according to the law of England and Wales. I have incorporated in that sentence the further definition of "charitable purposes" in section 46.


Had the definition stopped there, there would be no problem: for it is common ground that the Board fulfils the definition thus far, and thus would be registrable as a "charity" But the statutory definition at once proceeds with the words "and is subject to the control of the High Court in the exercise of the court's jurisdiction with respect to charities", and it is about these words that the arguments have proceeded.


I will note first what are or may be significant aspects of the 1960 Act.


The Charities Act, 1960, superseded the fairly numerous Charitable Trusts Acts, though it was not merely a consolidating statute. Section 1 continued the Charity Commissioners. Section 4 established a register of charities to be maintained by the Commissioners, in which particulars of every charity notexempted by the Act from compulsory registration were to be entered. Section 6 empowers the Commissioners to inquire into charities and, in the course of any such inquiry, to require production of accounts, written statements, and answers on oath. Section 7 gives to the Commissioners very wide powers to require production of any documents relating to a charity. Section 8 requires production to the Commissioners of accounts, which will be open to public inspection, and enables the Commissioners to appoint auditors to audit the accounts of any charity.


Section 13 in effect codifies the circumstances in which the original purpose of a charitable gift can be altered to allow property to be applied cy-pres. Subsection (4) in particular provides that "the court may by scheme made under the court's jurisdiction with respect to charities" in certain circumstances enlarge the area of a local charity. Section 15(1) deals with charities established or regulated by a Royal Charter which itself is amendable by further charter: it permits a scheme (including a cy-pres scheme) to be "made by the court under the court's jurisdiction with respect to charities" notwithstanding that the scheme cannot take effect without alteration of the charter: but the scheme must provide that it shall not operate unless the Charter is relevantly amended. Section 15(3) provides that "the jurisdiction of the court with respect to charities" shall not be excluded or restricted in the case of charities mentioned in the Fourth Schedule by the operation of the enactments or instruments there mentioned, and any such scheme may modify or supersede such enactments or instruments as if they were made by a scheme of the court: these are charities established or regulated by or under various stated statutes.


Section 18 authorises the Commissioners to exercise by order the same jurisdiction and powers "as are exercisablo by the High Court in charity proceedings" for (a) establishing a scheme for the administration of a charity, (b) appointing or removing charity trustees or officers, (c) vesting or transferring property or providing for payment. There is no definition of "charity proceedings" in this section. Section 28, however, which concerns the persons entitled to take "charity proceedings" with reference to a charity, defines that phrase "in this section" as meaning "proceedings in any court in England or Wales brought under the court's jurisdiction with respect to charities, or brought under the court's jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes". It is curious that the definition is confined to that section: but, on ordinary principles, I see no reason to conclude that the phrase "charity proceedings" in section 18 is intended to bear a different meaning from its meaning in section 28.


Section 19 deals generally with charities established or regulated by statute: compare the limited scope of section 15(3). The Commissioners may establish a scheme in such cases, but it requires a statutory instrument to give effect to it, which statutory instrument requires approval by resolution of each House of Parliament. In effect, this is a simplification of procedure for making alterations in the cases of charities regulated by statute, which previously required Parliamentary schemes.


Section 20 empowers the Commissioners, where they are satisfied as a result of an inquiry under section 6 that therehas been misconduct or mismanagement in the administration of a charity and that such action is necessary for the protection of the charity or its funds, to remove trustees, etc., make orders vesting property in the official custodian, and freeze money or securities held by a bank or other person on behalf of the charity. The section contains also specific powers in the Commissioners to remove and appoint trustees.


Section 22 enables the Commissioners to establish common investment schemes for two or more charities.


Section 46 (inter alia) defines "the court" as meaning "the High Court and, within the limits of its jurisdiction, any other court in England or Wales having a jurisdiction in respect of charities concurrent (within any limit of area or amount) with that of the High Court".


Section 49, subject to stated exceptions, provides that the Act shall not extend to Scotland or Northem Ireland.


It is, I think, material to notice one or two passages in previous Charitable Trusts Acts.


The 1853 Act provides, by section 66, that "charity" shall mean every endowed foundation taking or to take effect in England or Wales and coming within (in effect the Statute of Elizabeth) or as to which, or the administration of the revenues or property thereof, the Court of Chancery has or may exercise jurisdiction.


The 1855 Act, by section 48, provided (for the purposes of the Charitable Trusts Acts) that "'charity' shall include every institution in England and Wales endowed for charitable purposes" unless expressly exempted from the operation of the 1853 Act.


The 1914 Act, by section 1(1), provided that the High Court may, by scheme "made under their jurisdiction with respect to charities" (and also the Commissioners by scheme under the Charitable Trust Acts) extend the area of local charities: see now 1960 Act, section 13(4).


Now it was argued before us for the respondent that the function, or at least a main function, of the words in section 45(1) of the 1960 Act, "and is subject to the control of the High Court in the exercise of the court's jurisdiction with respect to charities", is one of territorial limitation. The Vice-Chancellor accepted that the words were "certainly directed to some extent, perhaps primarily, to what one may call the territorial aspect". Indeed, as I understand it, counsel for the appellant was not prepared to dispute that the words might have some territorial aspect.


I find myself unable to accept that the words were directed to this question, for the following reasons. (1) It would be a very odd method of drafting to introduce such considerations in a definition of "charity", when the draftsman is well able to deal with such jurisdiction in a normal manner: see section 46, "the court" definition, and section 49(2). (2) If aimed at territorial considerations, the phrase could have stopped with "the High Court". (3) The phrase "the jurisdiction of the High Court with respect to charities" in section 1(1) of the 1914 Act, dealing with enlargement of the areas of local charities, plainly had no reference to territorial limits: and we find exactly the same situation in section 13(4) of the 1960 Act itself. (4) In general, it is not necessary in a statute expressly to confine its ambit thus.(5) The scope of jurisdiction (in this regard) was surely not in doubt since ( Camille Dreyfus Foundation v. Inland Revenue Commissioners 1954 Chancery, 672): see especially at pages 683, 685, 707 and 712; affirmed by the House of Lords ( 1956 Appeal Cases,. 40). (6) So far at any rate as, for example, schemes by the Commissioners are concerned, there is already a reference to the jurisdiction of the High Court in charity proceedings.


What then is the function and purpose of the additional words in the section 45(1) definition of "charity"? Prima facie, the words are to be read as in some sense restrictive in operation: to be a charity within the statute it is apparently not thought sufficient merely to say of an institution (or trust or undertaking) that it is established for...

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