Parvinder Singh Garcha and ors v The Charity Commission for England and Wales
| Jurisdiction | England & Wales |
| Judge | Mr Justice Norris |
| Judgment Date | 05 August 2014 |
| Neutral Citation | [2014] EWHC 2754 (Ch) |
| Docket Number | Case No: HC13C04285 |
| Court | Chancery Division |
| Date | 05 August 2014 |
[2014] EWHC 2754 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
The Rolls Building
Fetter Lane
EC4A 1NL
Mr Justice Norris
Case No: HC13C04285
Howard Lederman of Counsel (instructed by WLL solicitors) for the Claimants
The Charity Commission did not appear.
Hearing dates: 29 July 2014
Sri Guru Singh Sabha Southall ("the Charity") is a registered charity whose objects include the advancement of the Sikh religion. It is an unincorporated association governed under the provisions of a Scheme approved by the Court in 1993 (as subsequently amended). By clause 13 of the Scheme the management of the Charity is in the hands of an Executive Committee which consists of 21 members of whom 15 are office bearers. Whilst the Charity land and the capital monies arising from it are vested in trustees (under clause 34 of the Scheme), all other monies (whether income, donations or capital) are held in trust accounts at banks, and no cheque or other order for payment can be issued without the authority of the Executive Committee (see clauses 43 and 45 of the Scheme). The assets of the Charity amount to some £25m, and its gross annual income to some £2.5m (of which £1m is expended on meeting the current costs of its work).
The Executive Committee and office holders are subject to periodic election by the members. There are 10,000 members and, unsurprisingly, they form factions. In the 2010 Proceedings (to which I will refer) there is reference to the Falcon Group and the Lion Group. Until 2008 Mr Sohi was the President of the Charity and of its Executive Committee. He belonged to the falcon Group. But in 2008 he lost office and a new President and Executive Committee took over. They belonged to the Lion Group. The handover of power was not entirely smooth: I do not know why and it does not matter. But on the 6 June 2010 the then incumbent Lion Group committee ("the Old Committee") passed a resolution expelling Mr Sohi from membership of the Charity (and also expelling Dr Garcha, the former General Secretary and a close associate of Mr Sohi).
On the 23 August 2010 Mr Sohi commenced proceedings ("the 2010 proceedings") against the Old Committee for a declaration that the resolution passed on the 6 June 2010 was null and void. He named as Defendants the Old Committee and said that they were "sued on their own behalf and on behalf of all other members of [the Charity]". He joined the Attorney General as an additional Defendant. That was because the Charity Commission had given him permission to commence the proceedings on the footing that there was a serious dispute about the management of the affairs of the Charity which needed to be ruled upon by the Court.
Mr Sohi sought to achieve a summary disposal of the 2010 Proceedings in his favour by seeking a mandatory interim injunction that he be restored to membership in order to enable him to stand for election again. But in this he was unsuccessful before Warren J and Morgan J at hearings on 23 August 2010 and 3 September 2010. In refusing a summary disposal the Court must have taken the view that there was a serious issue to be tried and that it did not have the requisite degree of assurance about the outcome to grant a mandatory order: and, indeed, an expedited trial was fixed for 4 days commencing on 29 November 2010.
In the 2010 Proceedings the Old Committee retained BSG LLP as their solicitors ("BSG"): and BSG instructed Mr Warwick of Counsel to attend the two hearings on the 23 August 2010 and the 3 September 2010, to prepare evidence and a Defence, and to appear at the trial. Mr Sohi's Particulars of Claim had alleged that in exercising the power of expulsion the Old Committee had to act in a quasi-judicial capacity; he had also alleged that the procedure for expulsion laid down in the Scheme was internally inconsistent, that one part had to prevail over the other, and that the Old Committee had followed the wrong part; and he asserted that the complaints against him were groundless. But the Old Committee's Defence denied that they were bound to act in a quasi-judicial way (relying upon Calvin v Carr [1980] AC 574), asserted that they had followed the correct procedure, and alleged that they had proper grounds to expel Mr Sohi (because he had not procured a full hand over of all relevant documents to the Old Committee and had not explained payments of £109,756.00 to a Mr Sharnbir Singh Sanga which did not appear to have been approved by the Executive Committee); and that the proceedings were an attempt to ask the Court to sit as a Court of Appeal from the determination of the Old Committee.
The matter did not come to trial because, after the delivery of the brief to Mr Warwick on 20 November 2013 there was mediation on the 23 November 2010 at which the case settled. This resulted in a consent order dated the 20 December 2010 to which Mr Sohi and the Old Committee agreed and to which the Attorney General did not object. Under the consent order it was agreed that Mr Sohi would remain a member of the Charity and would be entitled to stand at the next election: and it was agreed that the Scheme governing the Charity should be further amended to clarify the procedure for the termination of membership. Annexed to the consent order was a schedule dealing with the costs. By its terms:—
a) The Old Committee submitted to an order that they pay two thirds of Mr Sohi's assessed costs (if not agreed):
b) The Old Committee submitted to an order to pay the Attorney General's costs (again to be assessed, if not agreed):
c) All parties submitted to an order that no agreement as to costs could be reached without the consent of the Attorney General: and
d) The costs of the Old Committee were dealt with in this way:—
"For the avoidance of doubt, the Attorney General has no objection to… the payment of the assessed costs (if not agreed) of [the Old Committee] from the funds of the Charity".
Unfortunately, the provision did not specify by whom such costs had to be agreed and so in what circumstances the costs had to be assessed: but the reference was presumably to agreement by the Attorney General.
Under these provisions Mr Sohi was paid £193,391.00. So this means that his costs must have been approximately £300,000.00 for an action which commenced on the 23 August 2010 and finished on the 23 November 2010 and had had two hearings in Court. The total of these costs was not agreed by the Old Committee but by their successors. The Attorney General was paid £14,750.00. BSG were paid £169,084.00. It has become clear from an exchange at the conclusion of the hearing before me that BSG's costs were approved by the Old Committee: by it is not clear from the material at present available that the Old Committee sought the approval of the Attorney General or, indeed, anybody else.
At the next election the Old Committee was displaced. Mr Sohi was restored as President and his associate Dr Garcha is now in the replacement committee ("the New Committee"). It looks as though the Falcon Group may again be in the ascendant. According to the evidence the New Committee was elected on a specific mandate to seek to recover for the Charity the sums paid out of its assets in respect of the 2010 Proceedings. From the claims which have been made and the terms of the correspondence which has been undertaken this mandate is directed to recovering the costs and disbursements paid to BSG for representing the Old Committee. That is because it was the New Committee that approved the total costs sum to be paid to Mr Sohi. I shall assume that the New Committee obtained the approval of the Attorney General to Mr Sohi's costs bill of £300,000.
On the 7 January 2013 Solicitors retained by the New Committee wrote to each member of the Old Committee in these terms:—
"We have been instructed by the current Committee to ascertain the circumstances surrounding the expenditure of funds upon legal costs (or the incurring [of] liability for legal costs) by or on behalf of [the Charity] leading up to that order being made".
What was sought was the delivery up to the New Committee of "the files, documents, invoices and ledgers" of BSG to be considered by the New Committee's legal advisors. In response to that request 19 of the 21 members of the Old Committee have given their agreement to such delivery up. One member of the Old Committee was not approached for consent since it is said he did not approve the Old Committee's Defence. There was no consent on behalf of a former member of the Old Committee who has subsequently died, and whose representatives became to engage with the issue.
At the same time a letter was written to the Charity Commission seeking consent to the making of an application for the delivery up of the documents. From this arose a considerable volume of email correspondence between the New Committee's solicitors and the Charity Commission. In the course of this the Charity Commission enquired:—
"Why are the trustees questioning the basis of the ex-trustees' Defence of the earlier proceedings, when subsequently mediation was conducted between both sides and the outcome agreed through the Consent Order?"
So far as I can see, this question has not been directly answered by or on behalf of the New Committee.
Eventually the Charity Commission refused to grant permission for the commencement of proceedings by the New Committee for a declaration that they were entitled to delivery up and inspection of "the legal files (including invoices and client account ledger held by [BSG] and correspondence files)".
By this application the New Committee seek the approval of the Court to the commencement of just such proceedings. The principles to be...
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