Sabha & Ors v Rai & Ors

LADY JUSTICE ARDEN: This is a renewed application for permission to appeal from two orders made by Penelope Reed QC sitting as a Deputy Judge of the High Court of Justice Chancery Division.

The first order was an order on a substantive trial of an action and the second order was on the costs that would follow from her resolution of the trial that she had had, and there is also an application to me for a stay of execution.

The matter before the judge was not the full trial of the action but the trial of a number of preliminary issues which were directed to be tried by Master Teverson and they were as follows:

The judge answered all these questions "no" and refused to make declarations as to the construction of clauses 2(a), 8 and 12(g) of the constitution.

On costs, the judge made a number of orders. She ordered that costs should follow the event, except for certain costs which had been the subject of an order by Sales J on 28 July 2011.

The judge directed that the first and second defendants should take their costs out of the funds of the charity and she ordered that the costs should include certain costs incurred with a particular paragraph of the particulars of claim and have not been concerned with that. She awarded two interim payments: one of £75,000 in favour of the first defendant; and one of £120,000 in favour of the second defendants, the trustees of the charity, to be payments on account of costs, by 6 October in each case.

It is critical to note that the order in favour of the trustees was on the indemnity basis and the order in favour of the first defendants, the Executive Committee, was on a standard basis.

The position is that Shri Guru Ravidass Sabha Southall is an unincorporated association and it is a place of worship for followers of the teaching of an Indian guru, Shri Guru Ravidass Ji.

The dispute concerns an addendum, as I have mentioned, which was sent out with a notice for the election of officers.

The addendum says:

As I have read that, that was the first addendum. It was the corrected a few weeks later by the issue of a second addendum to the notice, changing the words "our religious guru" to "our religious Granth", that is, a Holy Book.

The Guru Granth Sahib is the Sikh Holy Book, and some of the teachings of Sri Guru Ravidass Ji are to be found in the Sikh Holy Book. Some other of the teachings of Sri Guru Ravidass Ji have been collected in a work known as Amrit Bani.

The claimant's case is that the addendum was in breach of the constitution. The principal object of the constitution is stated in clause 2(a) as follows:

There were a number of submissions below and the judge rejected them as follows:

The judge accepted that Sri Guru Ravidass Sabha Southall was not intended to do research itself but that worship could take place in accordance with that research.

The judge rejected the argument that that meant that all research could be the subject of worship and the judge rejected the argument that the court could not determine the meaning of clause 2(a) because it would involve the court adjudicating on matters of religious belief, which are non-justiciable in our courts. The court, the judge held, could rule on the aims of Sri Guru Ravidass Sabha Southall in accordance with objective standards.

Mr Douglas McPherson, who has appeared on this application for the claimants argued as follows:

First, that the addendum wrongly stated that sabha's religious Granth was the Sri Guru Granth Sahib and that to become may be it was necessary to believe in the Sri Guru Granth Sahib. Some members of the community of course accept only part of the Granth and it is not part of their belief that they need to believe in it, rather than simply respect it or worship it.

Second, Mr McPherson argued that clause 2(a) provided that the aim of the charity was to worship God in accordance with the teachings of Sri Guru Ravidass from the Sri Guru Granth Sahib, so that members do not have to believe the whole of the Holy Book but just the teachings of the guru contained within it.

Thirdly, he argued that clause 2(a) referred to worship in accordance with the teachings of the guru from the Sri Guru Granth Sahib, and research and notice unduly restricted someone who wishes to worship from both the Sri Guru Granth Sahib and the research.

He also argued, fourthly, that clause 2(a) does not require the members to believe in the Sri Guru Granth Sahib and this requirement in the addendum was likely to offend and put off members of other communities, the Christian, Buddhist, and other faiths from the Ravidassia community. As I said, the judge accepted the arguments of the first defendants joined in by the second defendants, the trustees.

The Sri Guru Granth Sahib is described in clause 2(a) as "the Holy Book". The judge said that Mr McPherson's argument was that certain of the members did not accept the whole but the judge held that she had heard evidence that the readings at worship could take place from anywhere in the Sri Guru Granth Sahib, and on special days the whole of the Granth was read from start to finish.

As to the words: "We do not endorse any other Holy Book", Mr Bartlett, appearing for the Executive Committee, submitted that that was simply a statement of fact. The judge accepted that and found that the sabha had not endorsed the Amrit Bani and indeed accepted that neither had the Sabha UK accepted it.

As to the words: "You must believe in the Sri Guru Granth Sahib Ji", the judge held that while there was no such requirement for belief in clause 2(a), members of the Sri Guru Ravidass Sabha Southall would have been aware of the controversy. In any event, readings, as I have said, were taken from all parts of the Granth. The judge specifically did not accept that members of other religions, such as Buddhism and Christianity, would be offended by this requirement and be put off from attending worship (see judgment, paragraph 52).

The next issue the judge had to deal with was whether or not the notice contravened the practice and custom of the sabha; but this, as with other issues, did not really arise acutely, in the light of her decision on the first issue that the addendum was within the constitution. So I am not going go into them in detail. I would mention that it was argued that the Executive Committee was in breach of their duties in failing to comply with a recommendation of the trustees to publish the notice without the addendum.

The grounds of appeal are several but for the purposes of this application Sir Robin Jacob directed that the appellants should simply rely on their best points and so an advocate's statement was filed as required by the rules which deal with some only of the points that are raised, those being the points considered most important to the case and I will primarily concentrate on those points.

The first point was on the judge's conclusion on clause 2(a) of the constitution. The judge interpreted the statement in the notice: "You must believe in the Granth" in paragraph 52 of her judgment, which I have summarised, and the appellants say that her approach was wrong.

It has been put to me that the judge conflated doctrine and practice. She reached the view that there was no requirement for a belief but then went on, it is said, to consider the content of belief in order to reach her conclusion in paragraph 52 of the judgment.

In my judgment this is not the correct interpretation of what the judge has concluded. The judge, it is correct, held that there was no requirement for belief in clause 2(a) of the constitution. The contrary would be totally unarguable because the word "belief" is not referred to. I accept the submission that the word "belief" was a critical word in the understanding and perception of their religion of certain members of the Ravidassia community.

The judge goes on then, having looked at the meaning of the constitution in that paragraph, (purely objectively because that is all that she had to do because there were no express words about belief), to change her perspective and look at the notice from the point of view of readers of the notice.

The judge adopts here a contextual interpretation as she was obliged to do, because there was now a dispute as to what the addendum meant. In my judgment, it is unarguable that the correct approach was not to do exactly what the judge did, which was to look at the readership of the notice.

Therefore, it has to be understood that she is now looking at the notice from a different perspective from the way in which she had looked at the constitution at the start of paragraph 52.

The judge then goes on to consider the notice in the light of the evidence that she had heard, as to worship at the sabha. She noted, as I have said, that readings were taken from all parts of the Granth on special occasions. Therefore she concluded that members of other religions such as Buddhism and Christianity would not be offended, or rather, she said she is not at all sure why they should be offended by the statement in the addendum.

The argument sought to be advanced by Mr McPherson is that the judge has ventured into the impermissible area, as I have said, of the content of belief, but in my judgment that is a misreading of the judge's judgment. She has applied a construction in the light of the facts as she has found them to be. It is a very noteworthy construction, because the judge is saying that it would be quite wrong to read the addendum as meaning that belief was limited to the particular Holy Book mentioned in the addendum.

That is an important matter so far as these appellants are concerned. It will be possible for them to point to paragraph 52 as resisting any possible narrow interpretation of the notice, or addendum, or is indicating some change in the doctrine of the sabha. So it is an important interpretation but in my judgment there is no basis on which I could give permission to appeal on this point. It is a correct approach and it is based on findings of fact which are not challenged and cannot be challenged on which the judge had the primary advantage of hearing the evidence. I am quite satisfied that the judge has been very careful not to stray into the impermissible area.

The next ground on which focus has been made this afternoon is on the duty of the trustees under clause 8(d). I must now read clause 8(d).

It reads:

The next sentence reads:

I need not read further. The position is that the claimant did in fact send a complaint to the trustees and the trustees took the view that the addendum was not improper. That was their decision.

What the appellants seek to argue is that there is to be implied into that clause a number of powers whereby the chairman would be constituted as an appeal organ of the sabha so that it would be able to direct a course of action and to enforce it on the Executive Committee.

Counsel has taken me to another clause, clause 12(g), which was adopted at the same time as clause 8(d), which provides for the trustees not to be subjected to election and to be impartial. So they were ideally placed, he says, to be this appeal organ; and moreover, he refers to the history of disputes that there had been. He says that it is properly to be inferred that clause 8(d) was to be used for the purpose mentioned, namely of getting a definitive decision from the Chairman of the Trust and for that definitive decision to be obeyed by the Executive Committee.

The position here is that there may be some doubt as to what extent the court could take into account the history but leaving that matter entirely aside, in my judgment it is simply impossible to read into clause 8(d) the extensive powers that would be necessary for this purpose and that there would be no prospect of success on appeal for that purpose.

The clause is, as was accepted throughout the hearing, badly drafted. It has simply failed to deal with certain matters, and therefore it is not a matter on which I could give permission. But I wish to say that despite all the history of disputes, and the good reasons why there should be this clause, the court cannot use that history to write a bargain which the parties did not actually formulate for themselves with a bit more precision, so in my judgment there is no prospect of success for which I could give permission on that point.

I now turn to two points that are taken on the judge's costs order. The first is that the judge should not have ordered all the costs of the first defendant to be paid by the appellants and particular emphasis was placed on what was said to be a wrongful delay by the first defendants in conducting a mediation.

I should explain that because the trustees are charity trustees there had to be a mediation and the judge, Norris J would not give permission for the action to proceed until that process had been completed but it took about 2 years.

I should say something about the scope of the judge's discretion on a matter of costs. The one rule about costs is that there are no rules. The judge has to exercise judicial discretion and if the judge has done so, then this court only interferes on very limited ground, such as a misdirection or leaving out of account reaching a important consideration or some result which is clearly perverse. So it is a high hurdle which an appellant has to reach.

In the case of default in mediation, on constituting a reason for depriving the winner of litigation of an award of costs, on the authorities it must be shown that the party whom another party seeks to say should bear some of the burden of costs, or should not be liable to pay costs, made an unreasonable decision in delaying or not accepting mediation. In this case, it was a case of delay.

The judge went into this matter in some detail, and I only intend to point to one paragraph of her judgment on costs. She did consider other points, but the critical point is that she considered having looked at all that was argued in front of her that the Executive Committee genuinely wished the trustees to try to resolve the matter and also considered that mediators within their community might be better placed than an independent mediator. In other words, there were genuine attempts to resolve the dispute by means other than litigation.

What had happened was that in June 2011, the Executive Committee had refused to accept independent mediators and had chosen to have the matter dealt with by the trustees and later by members of the community. The appellants say this was unreasonable because the trustees had shown that they were not independent because of the direction to which I have already referred.

The judge did not accept that in the passage which I have read and the judge held that there was a genuine attempt to achieve mediation by other means: either by the trustees, or by other mediators from the community.

The judge says genuinely, rather than not unreasonably, but the judge's conclusion is essentially the same. She was taking the conclusion that it was not unreasonable for these defendants to act in this way. We are dealing, after all, with a community of a religious nature, not a commercial organisation. In those circumstances, in my judgment there is no prospect of success on appeal in arguing that the judge failed to take into account unreasonable delay in conducting mediation.

I now move to the second point and that is the judge, as I have mentioned, ordered that costs be paid on an indemnity basis in favour of the trustees. The judge's reasoning on this was essentially that there was no cause of action against the trustees and that therefore the conduct of the appellants was out of the norm. That is the usual test for indemnity costs and so the judge directed herself correctly.

She went through a number of matters. She said that the appellants were wrong in their belief that the trustees had previously given directions but Mr McPherson makes the point that that point was abandoned before the hearing.

She went on to find the second defendant had not acted unreasonably and then she held that the second defendant had argued that there was no cause of action and that there should be indemnity costs.

She held that the trustees' decisions of 28 May and 17 June 2012 were not a justification for joining them and she went through the error which had been made about this, but, as I have just mentioned, that point had been abandoned.

She held that there was no relief sought against the trustees and she held the trustees need not have been joined in the preliminary issues for the purposes of the points of interpretation that have been taken.

I have only dealt very briefly with the judge's judgment on this point in view of the lateness of the hour, but there are some points that need to be said. There is a long procedural history in this matter. The question whether the trustees should be joined had been dealt with before Norris J and he had in effect given permission for joinder of the trustees.

The exact terms of his judgment have been read to me by counsel. I do not have them in front of me to quote, but clearly the fact that Norris J had dealt with the joinder was a matter which it would be certainly not be beyond proper argument for the appellant to say the judge should have considered when taking the very serious step of ordering indemnity costs against these appellants.

There is also another point that troubles me. It is said with strength that there was no need for the trustees to be joined but as to that it is possible and properly arguable by the appellants that they could equally well ask why the trustees were there: because the arguments on the preliminary issues were essentially the arguments run by the first defendants it might properly be argued that the trustees were in part responsible for their being at the trial of the preliminary issues.

There was a further issue to be determined if the preliminary issues had gone the other way as to the trustees' ability to have recourse or indemnification out of the funds of the sabha. Of course as events turned out that was not reached, but that might have been a reason why they were in the action to start with.

Mr Asprey's skeleton argument on behalf of the trustees, deals with many points which I have found most helpful, but he has not actually dealt with this point about why the trustees had elected to be represented and to take an active part on the trial of the preliminary issues.

He does deal with some other points, which I will just mention quickly. He refers to correspondence which the judge held satisfied her meant that the appellants were playing games with the trustees. Well, clearly that was relevant but that might not justify (in terms of proportionality) finding that the appellants were liable for the whole of the costs of the hearing on an indemnity basis and there appears to have been no argument about the proportionality of that point which may also afford a proper argument.

Mr Asprey does deal helpfully with the order made by Norris J, but he has not dealt with the point that the judge gave permission to join the trustees and whether that would have any impact on the order that was made in favour of the trustees. Nor does he deal with the point, as I have just mentioned, about whether the trustees needed to be represented before the judge.

In many cases, trustees will come before the court, if they have been joined, at the sitting of the court and say: "We have obviously been invited to come here but we do not propose to present arguments, because they are all going to be presented by another party and we will abide by any order that the court may make," or perhaps even just be content with submitting written submissions.

In fact this was a very long hearing, because the judge had to hear evidence and in the case one of the witnesses there had to be an interpreter which caused the proceedings to be lengthy. All those matters caused there to be very substantial costs.

I propose to dismiss the application, save that I will grant permission to the appellants in relation to the indemnity costs order made by the judge in favour of the trustees against the appellant.

I now have to deal with the stay of execution. Obviously having dismissed the application for permission to appeal in relation to the Executive Council the most I can do is extend time on that matter. There are very considerable sums of money that are required to be paid but all I am really concerned with is the interim payment of £75,000.

I will extend time for 8 weeks with liberty to the Executive Council to apply in writing with notice to the appellants and they should apply in the Chancery Division if they wish to shorten that period of 8 weeks. I hope that will not be necessary, because it seems to me that it is important for everyone's sake that a resolution of this matter now be obtained so that the community can carry on its real purpose.

So far as the payment in favour of the trustees is concerned I will order a stay pending appeal. If the trustees are able to show that they can identify the amount that is due on a standard basis and the amount due on an indemnity basis then obviously they can apply to the court below to vary that order but those figures are not available to me today and they would need to be considered by the appellants.