Young Geun Park v Tae Hyeon Cho and Others Kap Joong Kwon (acting on Behalf of the Korean Residents Society) (Third Party)
| Jurisdiction | England & Wales |
| Judge | Mr Jeremy Cousins |
| Judgment Date | 24 January 2014 |
| Neutral Citation | [2014] EWHC 55 (Ch) |
| Docket Number | Case No: HC11C04508 |
| Court | Chancery Division |
| Date | 24 January 2014 |
and
[2014] EWHC 55 (Ch)
Mr Jeremy Cousins QC,
(Sitting as a Deputy Judge of the Chancery Division)
Case No: HC11C04508
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building, Fetter Lane,
London EC4A 1NL
Mr Neil Vickery (instructed by Direct Access) for the First and Second Defendants/Appellants
Mr Joshua Winfield (instructed by Messrs Bates Wells & Braithwaite London LLP of 2–6, Cannon Street, LONDON EC4M 6YH) for the Claimant/Respondent
Hearing date: 12 th December 2013
Mr Jeremy Cousins QC:
INTRODUCTION
This is an appeal against the order of Master Marsh made on the 4 th July 2013, whereby he directed that the stay ordered by Deputy Master Henderson on the 7 th March 2012 be lifted on the basis that the Claimant, Mr Park, had obtained authority from the Charity Commission to continue with these proceedings pursuant to Section 115 of the Charities Act 2011. Master Marsh also ordered that the First and Second Defendants, Mr Cho and Mr Seok, should pay the Claimant's costs of the application assessed in the sum of £5,000. This appeal turns upon the question of whether the order made by the Charity Commission on the 12 th February 2013 constituted sufficient authority to the Claimant to "take the proceedings" concerned, as to the meaning of which phrase there is considerable dispute.
In November 2007, Mr Park and Mr Cho stood for election as chairman of the Korean Residents Society ("the Society"). Mr Seok was the outgoing chairman. Mr Cho was the successful candidate in the election. The result of the election was disputed and, on the 30 th January 2008, Mr Park commenced proceedings in the Queen's Bench Division, in which Mr Cho and Mr Seok were named as Defendants "acting on behalf of the Korean Residents Society". On the 5 th February 2008, upon an application made by Mr Park, an injunction was granted whereby Mr Cho was restrained from appointing any officers to exercise the functions of the Society. On the same day, a speedy trial was directed, and that trial took place on the 12 th March 2008 before His Honour Judge Mackie QC, sitting as a Judge of the High Court. At the conclusion of the trial, Judge Mackie declared that the election concerned was conducted by the Election Committee in breach of the duties owed to the Claimant. He gave directions as to the conduct of a further election. Judge Mackie's written judgment was handed down on the 23 rd April 2008. Having heard submissions as to costs, he ordered that Mr Seok and Mr Cho pay Mr Park's costs, subject to a detailed assessment if not agreed.
Mr Cho and Mr Seok issued third party proceedings, respectively in December 2010 and February 2011, against Mr Byung Il Suh, who by then was chairman of the Society, whereby they sought an indemnity against the costs that they had been ordered to pay. On the 23 rd March 2011, Master Roberts, upon the default of Mr Suh to respond to their claim, ordered that Mr Suh indemnify Mr Cho and Mr Seok.
On the 23 rd May 2011, Mr Suh issued a fourth party claim against Mr Park as a representative of the Society, claiming indemnity from him in respect of any liability that Mr Suh might have to Mr Cho and Mr Seok. In the meantime, in December 2010, Mr Park had become the chairman of the Society in place of Mr Suh. Mr Park continued to hold that position until December 2012.
On the 30 th September 2011, Master Leslie ordered that the default judgment which had been obtained by Mr Cho and Mr Seok be set aside and that Mr Park be substituted as third party in place of Mr Suh.
On the 1 st November 2011, Mr Park's costs of the trial in 2008 were assessed in the sum of £80,792.62.
On the 4 th November 2011, the matter came, once more, before Master Leslie, who observed in his judgment that the case had been "bedevilled by several things". Before Master Leslie it was submitted by Mr Park in his capacity as third party, and Mr Cho and Mr Seok, that the original proceedings were likely to be charity proceedings within Section 33 of the Charities Act 1993 pursuant to which such proceedings required to be authorised by order of the Charity Commission. Master Leslie expressed the view that the proceedings "almost certainly" were charity proceedings. This point, with regard to the status of the proceedings, had not previously been raised. Master Leslie directed, in the circumstances, that the proceedings and execution be stayed, and he transferred the entirety of the proceedings to the Chancery Division for hearing by a Master.
On the 7 th March 2012, the matter came before Deputy Master Henderson, sitting in the Chancery Division. The Deputy Master directed that the claim, together with its enforcement, be stayed until:
"(a) The issue of whether the claim was a Charity proceedings under Section 33 of the Charities Act 1993 has been determined; and
(b) The issue of whether the enforcement by the Claimant of the orders obtained by him in the claim is affected by Section 33 of the Charities Act 1993 has been determined; or
(c) As an alternative to (a) and (b), the Claimant has obtained authority under Section 33 of the Charities Act 1993."
On the 30th October 2012, Mr Park sought the authority of the Charity Commission to continue charity proceedings for the enforcement of the costs order. The application was made in a letter of that date sent to the Commission by Mr Park's then solicitors. The letter began by explaining that the application was made pursuant to Section 115(2) of the Charities Act 2011. That provision, with effect from the 14th March 2012, was the provision pursuant to which the Commission could make a relevant order, following the repeal of the Charities Act 1993. It is convenient at this stage to set out the provisions of the sub-section:
"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 Commission."
The letter to which I have referred described the history of the litigation, and then went on to address the legal principles which it was suggested were relevant. Reference was made to the well known decision of the Court of Appeal in Rendall v Blair (1890) LR 45 Ch D 139 for the proposition that the proceedings were not a nullity and should not be dismissed; it was observed that Deputy Master Henderson had accepted that proposition and that each of the parties agreed with it. For the purpose of explaining the decision in Rendall v Blair, the letter made reference to Section 17 of the Charitable Trusts Act 1853, Section 33 of the Charities Act 1993 and Section 115 of the 2011 Act. Various considerations were advanced in support of the invitation to the Commission to authorise the continuation of the proceedings so that the court might determine all issues in relation to the enforcement of the costs order which had been made in favour of Mr Park.
On the 12th February 2013, the Charity Commission made an order upon the application before it. The terms in which the order was expressed are highly material to the issue which I have to decide. By paragraph 1 the order defined "the Charity" to mean the Society, the "substantive proceedings" to mean the proceedings which had been commenced by Mr Park in the Queen's Bench Division and which had been subsequently transferred to the Chancery Division, and "the costs order" to mean the order made in favour of Mr Park by Judge Mackie on the 23rd April 2008. Paragraph 2 of the order recorded various matters of which the Charity Commission had been informed, including that the substantive proceedings had not been identified or authorised as charity proceedings under the relevant statutory provisions, that Mr Park was seeking to enforce the costs order obtained under the substantive proceedings, and that he had applied to the Commission to authorise the substantive proceedings and/or the enforcement proceedings as charity proceedings under Section 115 of the 2011 Act. Paragraph 2 of the order continued:
"(5) The Commission does not have power under Section 115 to authorise the substantive proceedings retrospectively.
(6) It is unclear whether the enforcement proceedings fall to be authorised under Section 115 of the Charities Act 2011 as they amount to proceedings brought in a pending cause or matter.
(7) In light of the uncertainty the Commission considers that it should authorise the enforcement proceedings if and insofar as the same meets the definition of charity proceedings pursuant to Section 115(8) of the Charities Act 2011."
Paragraph 3 of the order provided as follows:
"If and insofar as the enforcement proceedings meets the definition of charity proceedings pursuant to Section 115(8) of the Charities Act 2011 the Commission by this order hereby authorises Mr Park, being a person interested in the Charity, to take or continue to take proceedings in the enforcement proceedings, …"
On the 5th June 2013, Mr Park applied to the court for an order that the stay which had been imposed by Deputy Master Henderson be lifted on the ground that Mr Park had obtained authority from the Charity Commission as envisaged by the order of the 7th March 2012. The application came before Master Marsh on the 4th July 2013, and Master Marsh ordered that the stay be lifted.
THE DECISION OF MASTER MARSH
In his judgment, Master Marsh described the background to the application which had been made to him and the history of the proceedings and of the application which was made to the Charity Commission. He said of the...
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