R CONTACT FUND RAISING Ltd and Others v CHARITY Commissioners for England and Wales
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE LIGHTMAN |
| Judgment Date | 20 June 2002 |
| Neutral Citation | [2002] EWHC 1564 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/1472/2002 |
| Date | 20 June 2002 |
[2002] EWHC 1564 (Admin)
IN THE HIGH COURT OF JUSTICE
The Royal Courts of Justice
Strand
London WC2
Mr Justice Lightman
CO/1472/2002
MR SWAIN (DIRECTOR) appeared on behalf of the Claimants
MR R PEARCE (instructed by Treasury Solicitors, London SW1H 9JS) appeared on behalf of the Defendant
I have before me an application by four companies with the name Contact Fundraising in their names, and by Mr Alan Swain, a director of each of those four companies. He seeks by this application permission to apply for judicial review. I shall say a moment later the form of relief that he is seeking.
The four companies in question are all engaged or were at all material times engaged in the activity of raising funds for charities. Mr Swain, as a director of each of these companies, was involved in their activities and Mr Swain was paid remuneration out of the monies collected by the company.
The Charity Commission were very concerned about the way these companies carried on their activities, and in particular the remuneration paid to Mr Swain. In these circumstances, on 2nd September 1997, the Charity Commissioners opened an inquiry under section 8 of the Charities Act 1993 into the administration of the charitable funds solicited and held by the companies.
Mr Swain and the companies thereupon sought leave to quash the Commissioners’ decision to open the inquiry. This application was refused on paper by Laws J on 3rd September 1998, and on consideration at an oral hearing by me on 2nd July 1998.
At that hearing on 2nd July 1998 I heard Mr Swain. The Charity Commissioners were not represented. I took the view that there was jurisdiction to hold such an inquiry on the ground, first of all, that the four companies were charities and, secondly, on the ground that they all held charitable funds. Either of those bases alone was sufficient to justify the holding of the inquiry.
In stating, as I did in my judgment on that application, that the four companies were charities, I had in mind the broad object stated in the Memorandum of Association of each of the companies. I did not, however, have in mind—and I do not believe my attention was drawn to—the provisions in the memorandum enabling unrestricted benefits to be made available to directors and others, and the provision for the distribution of the property of the company among its members. If my attention had been drawn to those provisions, I have no doubt I would have said that these companies were not charities. I have no doubt now, that in view of these provisions, that they are not. Leaving aside this ground of decision, it is sufficient to say that the other ground for my decision was, as I have said, sufficient to found jurisdiction to direct the inquiry.
The status of the companies has been raised by Mr Swain before me. He says that the provisions I referred to in the memorandum are entirely consistent with the company being a charitable institution within section 58 of the Charities Act 1992. It is unnecessary for me to consider that question. That is a matter which is open for Mr Swain to take on any relevant occasion.
The position taken by the Charity Commission has been that, whether or not the four companies are charities, they have received and collected monies for charity and the entirety of those monies must be devoted for charity unless the donors made clear their intention that any part of the monies could go for any other purpose, and in particular for remuneration. That accords with the decision of Brightman J in Jones v Attorney-General. It seems to me that approach of the Charity Commissioners in this case was entirely justified.
In those circumstances, they have repeatedly thereafter, since the inquiry began, sought to obtain from Mr Swain details about his remuneration and how it was calculated. The correspondence on this question has been lengthy. It has spread over the years. What is quite plain is that Mr Swain was quite unwilling to disclose what he had received, or how it was computed and calculated, and the justification for the sums paid.
It is sufficient to say that on 24th March he gave a very generalised account in a letter of the broad approach to determining what remuneration he was entitled to. The matter is far from clear.
The position, however, by this stage was that Mr Swain had determined that the companies should suspend their activities. In those circumstances the Charity Commissioners considered that, whilst they will proceed to make their report in due course, it was unnecessary to proceed with the inquiry further and spend further money on it. The inquiry has accordingly now for practical purposes—save for the matter of the report—concluded.
Notwithstanding this, Mr Swain and his four companies commenced these proceedings for judicial review on 22nd March 2002. What is remarkable about the judicial review claim form is that it seeks (1) a declaration; (2) a prohibition order and; (3) a mandatory order, with no specificity of the forms of order sought beyond those most general terms. There is, however, added to it an application for damages, to include a sum of £350,000, and an application to extend the time limit for bringing this application.
The immediate objections to this application are clear. First, the application, so far as it relates to the inception of the inquiry—and that is its primary object—is, first of all, out of time and, secondly, precluded by the decision rejecting the previous application some three years ago. Applications for judicial review have to be made promptly. There can be no justification for the present application so many years after the inquiry was begun. Secondly, there can be no justification further when the matter has already been judicially determined.
Mr Swain, however, says that the matter should still be reviewed because he wishes to raise on this challenge grounds not raised previously, for example, that the inquiry was not bona fide, but triggered by spite and ill will and that the inquiry was based only on the wording of certain Contact Fundraising literature and not for bona fide reasons. Thirdly, that the Commissioners at the time that they opened the inquiry were only in possession of the governing documents of one of companies and not the others.
These are matters, it seems to me, of no substance for this purpose. If Mr Swain and the companies wish to make a challenge to the validity of the decision of the Charity Commissioners to open this inquiry, they have to raise all the grounds at one time. There can be no basis for merely raising one, namely jurisdiction in 1998, and raising all these further grounds in 2002. It seems to me that the application, so far as it relates to the grounds that I have referred to, are accordingly to be rejected for those reasons.
I should add also that the challenge is made on the basis of lack of good faith, the reason for the institution of the inquiry, and the limited knowledge of the Commissioners when they ordered the inquiry, lack any substance. Certainly there is no evidential basis justifying those allegations by Mr Swain and the companies.
The application is then sought to be supported by a contention that the Commissioners are acting unlawfully in conducting the inquiry by reason of not accepting my finding on the earlier application that the four fundraising companies were charities. When the Charity Commission received a copy of my judgment, they made clear to Mr Swain and the companies that they did not accept that the companies were indeed charities. For the reasons which I have already indicated, they were entitled to take this position.
Mr Swain therefore must have been aware from that moment that there was a serious question whether that passage in my judgment was correct. In my view, the Charity Commissioners were plainly wiser than I was. They were correct and I was wrong. The companies were not charitable, for the reasons that I have stated. Whether or not in fact they are charitable, for the reasons I have already given it seems to me that there can be no complaint made in respect of the proceedings commenced by the Charity Commissioners.
It was then suggested that the Charity Commissioners acted unlawfully in suggesting that the companies had to comply with requirements as to fundraising contained in the Charities Act 1992, Part II, and that it was for the claimants and their legal advisers to determine whether or not the companies are within the scope of that...
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