Tarsem Singh and Another v The Charity Commission and Others
| Jurisdiction | England & Wales |
| Judge | HHJ Barker QC |
| Judgment Date | 22 December 2016 |
| Neutral Citation | [2016] EWHC B33 CH |
| Docket Number | Claim No B30BM419 |
| Court | Chancery Division |
| Date | 22 December 2016 |
[2016] EWHC B33 (CH)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
His Honour Judge Simon Barker QC sitting as a Judge of the High Court
Claim No B30BM419
Mr Robert Pearce QC, instructed by Brabners LLP, appeared for the Claimants
Mr Avtar Khangure QC, instructed by Aspect Law Limited, appeared for the Second, Third and Fourth Defendants
The First Defendant and the Fifth Defendant were not represented and did not appear
Hearing dates 14 April and 7 – 8 September 2016
I direct that pursuant to CPR 39APD6 paragraph 6.1 no tape recording shall be made of this judgment and that copies of this version shall stand as authentic and be treated as the official transcript
Introduction
These proceedings concern the Guru Nanak Gurdwara ("the GNG"), a Sikh temple in Wolverhampton, which is an unincorporated association governed by a written constitution ("the Constitution") and registered as a charity.
The Constitution provides for the management of the GNG by specified officers and other members of a management committee ("the Committee"), comprising 25 Sikhs in total, which is elected, or – more accurately – selected, for a two year term in May of alternate years. The most recent election was that of May 2015. The Constitution provides for a two stage process of election and that the outcome of the election is subject to a ratification procedure whereby the names of the persons elected to the Committee are announced to the congregation of the GNG. The congregation may cause the election of any member of the Committee to be invalid by taking "legitimate" objection. What constitutes legitimate objection is not defined in the Constitution but does not require consideration in this judgment 1. The Constitution also provides for a body of trustees ("the Trustees") who are appointed by the Committee and hold office until death, resignation or removal. The Trustees hold the GNG's property and may be required to fulfil administrative roles as specified by the Constitution in a reserve or back-up capacity.
The claimants ("Cs" and respectively "C1" and "C2") and the second, third and fourth defendants ("Ds") are members of the GNG's congregation. C1 is the president and C2 is the general secretary of the Committee. In general terms, at least, the conduct of Cs is supported by and represents the views of the Committee as a whole and vice versa. Ds are three of the Trustees. Their conduct is supported by and represents the views of a section of the congregation.
The first and fifth defendants (respectively "the CC" and "the A-G") have taken no part in the proceedings.
Background to the litigation
It is common ground that the May 2015 announcement of the new Committee at the GNG caused some turmoil within the congregation. It also seems that before the May 2015 election there was a degree of disharmony within the GNG's congregation over an alleged requirement that disabled and elderly members of the congregation needing to sit be segregated and their view obstructed.
Following the May 2015 election, Ds complained to the CC that the election was invalid and submitted a video recording of the announcement of the Committee's election to the congregation in May 2015. On 30.9.15, the CC issued a letter to C2 as general secretary of the GNG representing the Committee and Ds which expressed the view that the election was "invalid as set out in the Constitution". The writer of the CC's letter also proposed that the Trustees organise a further election and administer the GNG in the meantime. The letter concluded on the basis that the CC's file would be closed because the Constitution provided a machinery for addressing an invalid election.
These events, and difficulties in operating the GNG's bank account caused or triggered by Ds, brought matters to a head. On 16.10.15, after taking legal advice, Cs' solicitor wrote to the CC inviting the CC to withdraw its "decision" of 30.9.15 failing which Cs wished to litigate the issue of whether the election process of May 2015 was effective to install a new Committee at the GNG. Cs recognised that such proceedings would be charity proceedings and would engage s.115 of the Charities Act 2011 ("s.115") which defines charity proceedings at s.115(8) as:
"… proceedings in any court in England or Wales brought under—
(a) the court's jurisdiction with respect to charities, or
(b) the court's jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes".
Cs recognised that s.115(2) prohibited them from pursuing charity proceedings without the sanction of the CC. In this respect, s.115(2) provides:
"Subject to the following provisions of this section, no charity proceedings relating to a charity are to be entertained or proceeded with in any court unless the taking of the proceedings is authorised by order of the [CC]".
The "following provisions" of s.115 were not applicable; accordingly, by their letter dated 16.10.15 Cs sought authorisation from the CC as a matter of urgency.
On 23.10.15 in the absence of a response from the CC, Cs issued proceedings in the name of the GNG against the CC. The substantive basis of the proceedings was to challenge the views expressed in the CC's 30.9.15 letter and to seek a declaration that the May 2015 election of the Committee was valid. On the same day, and on very short notice, His Honour Judge Purle QC heard an application by Cs, suing in the name of the GNG, for interim injunctive relief including restraint of the CC from giving effect to its 30.9.15 decision that the May 2015 election was invalid and restraint of Ds from interfering in the administration of the GNG.
On the material then available, HHJ Purle QC formed the view that it was strongly arguable that the election under challenge was not the subject of legitimate objection. Cs also raised a complaint that Ds had interfered in the administration of the GNG by writing to the GNG's bank with a view to securing the freezing of that account. At that time, the GNG's current account bank balance exceeded £1.8million and weekly donations for the year to 31.5.15 had exceeded £650,000 (an average of £12,500 per week). HHJ Purle QC acknowledged that interim relief might be required in connection with the operation of the GNG's bank account so as to restore the orderly payment of liabilities; expenditure on fund raising, charitable activities and governance was running at approximately £300,000 per annum (an average of almost £6,000 per week). HHJ Purle QC directed amendment of the claim to identify Cs as the claimants in place of the GNG and joinder of the A-G as a defendant. Subject to those procedural corrections to the proceedings, HHJ Purle QC stood Cs' application over to 6.11.15.
On 28.10.15 Cs issued a further application extending the relief sought to include declarations that (1) the CC's letter of 30.9.15 was not a valid order of the CC and (2) Cs and the others of the Committee were validly elected in May 2015 as well as orders restraining Ds from interfering in the administration of the GNG, and, without detracting from the declarations and the restraint of Ds, an order staying the proceedings pending authorisation of any party by the CC, pursuant to s.115, to continue the proceedings.
On 6.11.15 Cs' applications came before Mr Justice Newey. The focus of that hearing was the operation of the GNG's current account with Barclays Bank PLC. Neither Ds nor the court were informed by Cs that during the interval between the hearings the Committee, which included Cs, had resolved to open a bank account with a different bank, Santander PLC. Newey J intended to maintain the status quo pending a decision by the CC on whether or not to grant Cs permission to continue the proceedings. By consent, Newey J made an order addressing the banking of all GNG receipts, the payment of GNG's liabilities, the provision of copy bank statements to D and approval by Ds of expenditure out of the ordinary course of £1,000 or more, and the staying of the proceedings pending the CC's decision or further order of the court. Newey J also ordered Cs to pay 75% of Ds' costs with the 25% of each side's costs being costs in the case. Mr Khangure QC had taken over representation of Ds by this hearing and Cs counsel at that time was Mr Quirke.
There is no transcript of that hearing before Newey J but there are two passages in his judgment as to costs which are relevant. They are:
"5. In the event the focus of today's hearing has been on the operation of the Barclays account. Ultimately a way forward has been agreed in relation to that such that it will be common ground, reflected in a court order, that a variety of payments can legitimately be made from the account with provision for [Ds'] agreement to be sought in respect of other payments"
and
"10. … I also think it right to award [Ds], at least at this stage, less than the totality of the costs not least because some of the costs would have been needed to be incurred to achieve a resolution along the lines of that in fact achieved today in respect of Barclays Bank".
Before me, Cs relied on the first passage as indicating that at the hearing on 6.11.15 no formal order was agreed or made, but rather the agreement was that the parties would reach an agreement as to the Barclays account, alternatively as supporting Cs' contention that they reasonably believed that no order had actually been made on 6.11.15. The second passage sheds light on the first and indicates to me that formal agreement as to the operation of the Barclays account...
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