White & Ors v Williams & Ors

This is a claim for the making of a cy-près scheme in relation to part of the property of a charitable trust known as the Bibleway Church of Our Lord Jesus Christ World Wide (United Kingdom) Trust, constituted by a Trust Deed dated 25^th August 1971. I shall refer to it as “the Bibleway Trust”, and to its trustees as “the Bibleway Trustees”.

The property to which the claim relates is a substantial late Victorian ecclesiastical building known as the Tabernacle Church, Algernon Road, Lewisham, London SE13 7AT. Since the words “Tabernacle” and “Church” have each been used in these proceedings with meanings quite distinct from any building, I shall refer to the property as “the Lewisham Building”. It is at present, and, since its acquisition in December 1977, has been the place of worship and witness of a Christian congregation practising what may loosely be called a Pentecostal manifestation of Christian faith. I shall call it “the Lewisham Congregation”.

The claimants are the present trustees of another charitable trust known as The Tabernacle Ministries of Great Britain, which I shall call “the Tabernacle Trust”, established by a declaration of trust dated 30^th October 2000 by members, including the pastor, of the Lewisham Congregation. I shall call them “the Tabernacle Trustees”. The defendants are the Bibleway Trustees, none of whom are members of the Lewisham Congregation.

The charitable purpose of the Bibleway Trust is defined in clause 3 of the 1971 Trust Deed as being:

“The advancement of religion of the Bibleway Church of Our Lord Jesus Christ World Wide (United Kingdom)…”

Clause 2(iii) of the 1971 Trust Deed provides that:

“The Bibleway Church of Our Lord Jesus Christ World Wide (United Kingdom) shall mean members of the Bibleway Church of Our Lord Jesus Christ World Wide within the United Kingdom of Great Britain and Northern Ireland.”

I shall call that church “the Bibleway Church UK”.

The Bibleway Church UK was, in August 1971, an offshoot of the Bible Way Church of Our Lord Jesus Christ World Wide Inc, an incorporated body founded in 1957 by Dr Smallwood Williams and others in Washington DC, following a schism within another Pentecostal church known as the Church of Our Lord Jesus Christ of the Apostolic Faith. I shall refer to it as “the Bible Way Church USA”. By contrast with the Bible Way Church USA, the Bibleway Church UK has never been incorporated. It was in 1971 either a federation of local congregations or an unincorporated association of individuals practising Pentecostal Christianity in association both with each other and with the much larger Bible Way Church USA.

The Lewisham Congregation was originally established in about 1957 by a Mr Leon White (who later became, and to whom I shall refer as, Bishop White) as part of the Church of Our Lord Jesus Christ of the Apostolic Faith. Following the schism in that church, he led the Lewisham Congregation (of which he was the pastor) into association with the Bible Way Church USA in 1961. It was the first and founding congregation of what became the Bibleway Church UK, and in due course Bishop White was recognised both in the United Kingdom and in the USA as the leader or Bishop of the Bibleway Church UK.

By 1997 the Bibleway Church UK had expanded so as to comprise something approaching forty congregations of widely differing sizes, of which the Lewisham Congregation remained the, or one of the, largest. Bishop Smallwood Williams of the USA died in 1991 and, as the result of a failure by the Bible Way Church USA to recognise any single successor as its leader, that church split into two in 1997, following which its two constituent parts each claimed to be the true successor of the church founded by Bishop Smallwood Williams. The two parts were, respectively, led by Bishops Campbell and Rogers. It appears (although it is unnecessary for me to reach any concluded view on the question) that the schism occurred as the result of disagreements about leadership and governance, rather than differences about doctrine, belief or worship.

Although Bishop White (until 1997 still recognised as the spiritual leader of the Bibleway Church UK) aligned himself with the Campbell faction in the United States, he was unable to carry the whole of the Bibleway Church UK with him into that alignment. Both he and Bishop McIntosh in the UK were formally expelled by the Rogers faction, which in due course purported to recognise Bishop Lynwal Williams (the first defendant) as the spiritual leader of the Bibleway Church UK.

The result in the United Kingdom of the schism which occurred in the USA in 1997 was not a straightforward two-way split. Some congregations, such as the Cambridge congregation led by Bishop Williams, adhered to the Rogers faction. A number of congregations informally led by Bishop McIntosh adhered to the Campbell faction. But others, including the Lewisham Congregation in 2000, seceded from the Bibleway Church altogether, becoming independent and wholly autonomous, albeit still linked by ties of friendship and respect to one or other of the USA factions and their respective adherents in the UK.

By 1997 the main assets of the Bibleway Trust consisted of four buildings, namely the places of worship respectively of the Lewisham, Bethnal Green, Mitcham and Cambridge congregations of the Bibleway Church UK. The place of worship of the Bedford congregation had, until its secession from the Bibleway Church UK in 1984, also been held by the trustees of the Bibleway Trust. That building was transferred by agreement to a new charitable trust established by the Bedford congregation upon its secession. The pastor of the Bedford congregation, Bishop Thomas, had until then been a trustee of the Bibleway Trust, but was then replaced by Bishop Williams. Bishop White had from its inception been a trustee of the Bibleway Trust, so that both he and Bishop Williams, and two others, were its trustees in 1997.

By a process which Mr Gore, counsel for the claimants, accurately described as little more than happenstance, which was largely attributable to retirement and ill-health, the trustees of the Bibleway Trust now consist entirely of members of the Cambridge congregation. There is some dispute as to the validity of the appointment of one or more of them, which it is unnecessary for me to resolve. Bishop Williams maintains that the Rogers faction represents the only true continuing part of the Bible Way Church USA. Following the recent secession of the East Dulwich congregation, the Cambridge congregation is the only significant one in England which continues to adhere to the Rogers faction. It has recently set up a small mission congregation in Enfield, but it remains dependent for pastoral leadership upon persons based at Cambridge. Evidence at trial suggested that the typical Sunday congregation at Cambridge is probably less than 50 members. Its place of worship was sold in 2007 in circumstances to which I will have to return, and its worship and witness are presently conducted from rented premises.

The claimants as Tabernacle Trustees seek in practical terms to achieve a single objective by these proceedings, namely the transfer of title to the Lewisham Building to themselves by means of a scheme (if possible without encumbrances). They do so for two stated reasons. The first is that, now that the Lewisham Building is held by trustees who are neither part of, nor in any kind of meaningful communication with, the Lewisham Congregation, the valuable asset represented by that building cannot be administered in a manner consistent with the present objectives of the Tabernacle Trustees, which are shared by the Lewisham Congregation. The second reason is that (as I shall describe in more detail in due course) the Bibleway trustees have made use, and propose to continue to make use, of the Lewisham Building in ways which put at risk its status as the place of worship and witness of the Lewisham Congregation, and to do so for purposes wholly outwith the spirit of the gift pursuant to which the Lewisham Building came to be vested in the Bibleway Trustees.

In legal terms, the claimants say that the court has jurisdiction to apply the Lewisham Building cy-près by reason of section 13(1)(e)(iii) of the Charities Act 1993, and that the matters to which the court is required to have regard in section 14B of the Act ought to lead to a conclusion that, subject to matters of detail, the appropriate scheme is for a transfer of the Lewisham Building from the Bibleway Trust to the Tabernacle Trust.

For their part, the defendants say that, having duly established control of the Bibleway Trust after years of non-cooperation from their de jure or de facto predecessors, its assets, including the Lewisham Building, are now perfectly capable of being administered by them for the fulfilment of the purposes of the Bibleway Trust, so that the invitation to make or direct a scheme should, either as a matter of jurisdiction or discretion, be rejected by the court.

The claimant appeared by Mr Andrew Gore of counsel. The defendants appeared in person, and Bishop Williams did most of the speaking on their behalf. The Attorney General was duly joined as a defendant, but chose to take no part.

Prior to 1960, jurisdiction to direct the application of property held on charitable trusts cy-près (otherwise than in cases of initial failure) required it to be shown that it had become impossible or impracticable to carry out the specified purposes. The court’s jurisdiction was substantially expanded, originally by section 13 of the Charities Act 1960 and now by section 13 of the Act of 1993 (“the Act”). Section 13(1) provides a list of “circumstances in which the original purposes of a charitable gift can be altered to allow the property given or part of it to be applied cy-près”. Those circumstances include:

“(e)

where the original purposes, in whole or in part, have, since they were laid down,−

(i)

been adequately provided for by other means; or

(ii)

ceased, as being useless or harmful to the community or for other reasons, to be in law charitable; or

(iii)

ceased in any other way to provide a suitable and effective method of using the property available by virtue of the gift, regard being had to the appropriate considerations.”

By subsection 1(A), “the appropriate considerations” means−

“(a)

(on the one hand) the spirit of the gift concerned, and

(b)

(on the other) the social and economic circumstances prevailing at the time of the proposed alteration of the original purposes.”

Section 14B of the Act prescribes the manner by which the court decides whether, and if so how, to exercise its discretion to make, or direct the making of, a cy-près scheme for the application of charitable property. It is worth setting out in full:

“14B Cy-près schemes

(1)

The power of the court or the Commission to make schemes for the application of property cy-près shall be exercised in accordance with this section.

(2)

Where any property given for charitable purposes is applicable cy-près, the court or the Commission may make a scheme providing for the property to be applied−

(a)

for such charitable purposes, and

(b)

(if the scheme provides for the property to be transferred to another charity) by or on trust for such other charity,

as it considers appropriate, having regard to the matters set out in subsection (3).

(3)

The matters are−

(a)

the spirit of the original gift,

(b)

the desirability of securing that the property is applied for charitable purposes which are close to the original purposes, and

(c)

the need for the relevant charity to have purposes which are suitable and effective in the light of current social and economic circumstances.

The “relevant charity” means the charity by or on behalf of which the property is to be applied under the scheme.

(4)

If a scheme provides for the property to be transferred to another charity, the scheme may impose on the charity trustees of that charity a duty to secure that the property is applied for the purposes which are, so far as is reasonably practicable, similar in character to the original purposes.

(5)

In this section references to property given include the property for the time being representing the property originally given or property derived from it.

(6)

In this section references to the transfer of property to a charity are references to its transfer−

(a)

to the charity, or

(b)

to the charity trustees, or

(c)

to any trustee for the charity, or

(d)

to a person nominated by the charity trustees to hold it in trust for the charity,

as the scheme may provide.”

The leading case on the application of section 13 to cases of schism within a religious organisation with associated charitable trusts is Varsani v. Jesani [1999] Ch 219. It was a case in which, after a schism, the adherents to both sides of a Hindu religious sect within the United Kingdom sought a scheme under section 13(1)(e)(iii) in circumstances where, in particular, the majority group had obtained de facto control over the temple at which both groups had previously worshipped together as one congregation, and excluded the minority group. Each group claimed to be the true followers of the faith to which both had previously adhered, so that the advancement of their faith, rather than that of their opponents, represented to them the only continuing purpose of the charity which included the temple and its liturgically important contents among its assets.

While it is necessary to be cautious when seeking to extract principles from cases decided on particular (and different) facts, I consider that the Varsani case provides the following useful guidance relevant to the question whether the court’s cy-près jurisdiction is engaged in the circumstances of this case. First, the court is ill-equipped to determine by reference to issues of belief or ecclesiastical order, which of two or more groups emerging from a schism represent the true faith. Secondly, it will usually be unnecessary to do so in the context of a cy-près application under section 13(1)(e)(iii) of the Act. This is because, in relation to property donated to a religious charity prior to the relevant schism, the spirit of the gift is to be ascertained as at the time when the gift was made, and the schism will, of itself, commonly lead to the results (i) that the appropriation of the whole of the property to the use and control of one of the emerging factions will be contrary to the spirit of the gift, and (ii) that the use of the donated property for the advancement of the religion of one of those factions, to the exclusion of any others, will no longer be a suitable and effective method of using that property. This will (as on the particular facts of the Varsani case) almost inevitably be the consequence where the schism has the effect of dividing a previously united worshipping congregation into incompatible factions which can no longer worship together. In the present case the schism which originated in Bible Way USA and spread to Bibleway UK did not have that consequence within any particular worshipping congregation. The question is whether nonetheless the vesting of control of the Lewisham Building in trustees who, by virtue of the schism, are unable to cooperate or even communicate meaningfully with the Lewisham Congregation, has broadly the same two consequences.

Thirdly, the spirit of the gift, for the purposes of section 13(1A)(a) is to be ascertained more broadly than by a slavish application of the language of the relevant trust deed. As Morritt LJ put it in Varsani at page 234:

“… the concept is clear enough, namely, the basic intention underlying the gift or the substance of the gift rather than the form of the words used to express it or conditions imposed to effect it.”

As Chadwick LJ put it, at page 238:

“The need to have regard to the spirit of the gift requires the court to look beyond the original purposes as defined by the objects specified in the declaration of trust and to seek to identify the spirit in which the donors gave the property upon trust for those purposes. That can be done, as it seems to me, with the assistance of the document as a whole and any relevant evidence as to the circumstances in which the gift was made.”

Varsani is not in itself an authority on the interpretation of section 14B of the Act, which came into force only in March 2008, pursuant to section 18 of the Charities Act 2006. Nonetheless, there is no reason to suppose that the requirement to have regard to the spirit of the original gift imposed by subsections (2) and (3)(a) is to be interpreted any differently than in section 13 of the Act. Subject to that, the meaning of section 14B seems to me to be self-explanatory.

I am satisfied that the principles to which I have referred make it unnecessary for me to determine any issue as to the rights and wrongs of the unfortunate splitting up of the Bibleway Church UK into a number of separate non-affiliated associations as the result of a schism in its USA parent church which was not, in any event, of its own making. Nor would it have been necessary for me to delve deeply into the history of the Bibleway Church UK or, in particular, of the Lewisham Congregation, for the purpose of determining the question whether the court’s jurisdiction to apply the Lewisham Building cy-près has arisen. As will appear, I have no doubt that it has.

It is nonetheless necessary for me to describe and make findings about aspects of the relevant history, both for the purpose of ascertaining what precisely was the spirit of the gifts, in particular of the Lewisham Building, to the Bibleway Trust, and for the purpose of deciding whether there should now be a cy-près scheme, and if so in relation to what property of the Bibleway Trust, and on what main terms. Before setting out my findings of fact, I must first say something about the evidence.

Besides the 1971 Bibleway Trust Deed itself, and a Deed of Variation dated 31^st May 1978, there is relatively sparse documentary evidence relevant to the spirit of the gift of the Lewisham Building to the Bibleway Trust, and virtually none at all in relation to the other church buildings (at Bedford, Bethnal Green, Mitcham and Cambridge). The Bibleway Church UK adopted no formal constitution or rules, and the evidence as to the extent to which it informally applied the written constitution of the Bible Way Church USA (which was in evidence) is not clear.

The financial history and dealings of the Bibleway Trust are by no means satisfactorily documented. Some unsigned accounts (which may never have been more than drafts) were disclosed for the year ended February 1997, prepared with the assistance of Baker Tilly, but presented no reliable picture (for reasons which I shall come to explain). The accounts prepared by or on the authority of the defendants as the present Bibleway Trustees for the period from March 2006 to date raise more questions than they answer and, notwithstanding cross-examination both of Bishop Williams (who was chairman of the Bibleway Trustees during that period) and David Ogunlana, (who was the treasurer), there remain serious uncertainties both as to the present financial position of the Bibleway Trust, and as to its financial dealings during that period, which those accounts do not resolve.

Both the claimants and defendants called a number of witnesses. Each relied upon a single main witness for an account of the relevant history, with shorter supporting statements from a number of others.

For the claimants, the detailed history was described in a lengthy and generally carefully prepared witness statement by Michael Vernon Clarke, a civil servant who joined the Lewisham Congregation in 1977 at the age of twenty. He became an elder of the Bibleway Church UK in 1988. Between 1986 and the early 1990s he served as the national executive treasurer of the Bibleway Church UK, and from then until 2000 as the national executive secretary.

Mr Clarke was an articulate, well prepared witness with an apparently good memory for detail. The reliability of his evidence was a little undermined by the evident strength of his antipathy towards the defendants, and Bishop Williams in particular. That manifested itself to some extent in the witness box, but more seriously in emails sent to Bishop Williams shortly before the trial, for the tone and content of which he was, when taken to task, constrained to apologise. It was necessary therefore for me to treat his evidence with some reserve.

The claimants called no less than 15 supporting witnesses, and relied upon the written evidence of 3 others who were unavailable to attend trial or who were not otherwise called. They were for the most part members of the Lewisham Congregation, and included several whose membership began before the congregation purchased its first church building, in 1971, from the proceeds of sale of which the present Lewisham Building was partly acquired in 1977. They included Bishop White’s widow Genie (the fourth claimant) and his son Pastor Michael White (the present pastor of the Lewisham Congregation and the first claimant).

Subject to one general reservation, I found the evidence of all those supporting witnesses from the Lewisham Congregation to be both honest and reliable. Although a number of them expressed their strong disapproval of Bishop Williams’ conduct in relation to the Lewisham Building, they appeared generally to have avoided allowing that disapproval to degenerate into personal antipathy to the extent that Mr Clarke did, although I cannot rule out the possibility that this was more the result of better self-control than a real difference in their appraisal of Bishop Williams.

My general reservation with the evidence of all the supporting witnesses, and for that matter with Mr Clarke’s evidence, is the need to take account of the risk that to varying extents their perception of the spirit and intention behind the donations which the congregation made toward the acquisition of their two successive places of worship may have been unconsciously affected by the fact and consequences of the schism in 1997, with the result that they may have tended to present a more developed sense of distinction between the Lewisham Congregation on the one hand, and the Bibleway Church UK on the other hand than was probably in the minds of any of them prior to 1997. In that respect, their evidence as a body was in significant contrast with the impression conveyed by some (but not all) of the surviving documents, and it has been no easy task to reconcile those differences.

The claimants called four witnesses from outside the Lewisham Congregation. The first was Bishop Martin Thomas, the Bishop of the Bedford Congregation which, having been part of the Bibleway Church UK, seceded in 1983 and is now called the Mount Zion Church. His evidence was of particular value in relation to the consensual basis upon which, upon secession, the Bedford Congregation was able to obtain a transfer from the Bibleway Trust of its place of worship to new trustees. He was in other respects a witness whose failing memory was revealed during his oral evidence, in particular in relation to the basis upon which individual congregations made financial contributions to the national work of the Bibleway Church UK. His imperfect memory required me to treat his evidence with caution, but the consensual secession of the Bedford Congregation, together with its place of worship, is an important part of the evidence relevant to the spirit of the gifts pursuant to which all the religious buildings vested in the Bibleway Trustees were acquired and held, prior to the schism in 1997.

The second non-Lewisham witness was Bishop Campbell who, as I have described, led one of the emerging factions from the 1997 schism in the Bible Way Church USA, and who gave his evidence by video conference. I have no reason to doubt its reliability, and it provided a useful insight into the basis upon which, prior to the schism, the Bible Way Church USA had dealt with the ownership of church buildings. It was, otherwise, of limited relevance to the issues which I have to decide.

Thirdly, the claimants called Paul Bailey, a former associate minister and trustee of the Mitcham Congregation of the Bibleway Church UK, who gave useful evidence about the basis upon which that congregation acquired its church building in the early 1990s, prior to the schism, when his father was the pastor there. The reliability of his evidence was not significantly challenged in cross-examination.

Finally, the claimants called Errol Ballantyne, a former member of the Cambridge Congregation, which he left in 2005. He provided some evidence of the means whereby the Cambridge church building had been acquired, together with evidence about Bishop Williams’ financial dealings and church work prior to 2006. I found him to be a generally reliable witness.

For the defendants, Bishop Williams was both the main witness, the cross-examiner and the main speaker. His witness statement was very brief, and most of his relevant evidence was therefore that which he contributed during a lengthy cross-examination by Mr Gore. He presented himself as a trustee and church leader struggling under adverse circumstances, including lack of cooperation, withholding of documents and money and personal abuse from other factions within the former Bibleway Church UK, and if he entertained personal animosity against his opponents, he kept it well concealed during his evidence.

Like Mr Clarke however, there were occasions when, in correspondence, he revealed a rather different character, in particular in letters to Bishop White and his son in January 1999 and January 2000 respectively, in which his warnings (fairly described in cross-examination by Mr Gore as threats) about the adverse consequences for Bishop White’s reputation if the affairs of the Bibleway Trust were not conducted in conformity with Bishop Williams’ views and interests, revealed an altogether more forceful and ambitious personality, seeking to get his way by methods which did him no credit either as a Christian minister, or as a trustee.

More generally, Bishop Williams was in many respects an unsatisfactory witness. He was, above all, consistently evasive, being concerned more to justify his conduct rather than to answer simple questions directly. In relation to cross-examination about the defendants’ dealings as trustees with the financial affairs both of the Bibleway Trust and of the Cambridge Congregation he displayed, at least initially, a level of apparent lack of recollection surprising in a chairman of charitable trustees. He appeared determined to take refuge in a constantly reiterated theme that he and his fellow trustees had caused the trust and the Cambridge congregation to incur debts way in excess of available income during the period following the schism because of their perception that substantial funds were being withheld by their predecessors as de facto trustees or controllers of the Trust, although, despite having permission from the Charity Commission to do so, he said that for reasons of church order he and his co-trustees had decided not to take legal proceedings for their recovery.

To be fair, I consider that Bishop Williams was to an extent taken by surprise by the detail of the cross-examination about his financial dealings as chairman of the Bibleway Trustees. Certain limited aspects of those dealings were squarely raised on the pleadings, but the cross-examination went much further than an investigation of those issues. During the weekend gap in Bishop Williams’ cross-examination (namely 17^th - 18^th April) he did at the request both of Mr Gore and the court endeavour to refresh his memory and obtain further documents about aspects of his financial dealings as trustee, and his evidence about them on the following Monday was rather more forthcoming, even though he provided only one further relevant document.

Bishop Williams had not been a member of the Cambridge Congregation when it acquired its place of worship in the early 1970s, nor had he ever been a member of the Lewisham Congregation. Accordingly he had little to offer on the critical issue as to the spirit of the gifts which funded the acquisition of the church buildings vested in the Bibleway Trustees. The result was that, save in relation to the unsatisfactory exchanges between the parties following the schism, there was little significant overlap between the subject matter of Bishop Williams’ evidence and that of the claimants which causes me to have to resolve factual disputes as between them. Nonetheless, although I do not consider that Bishop Williams was a deliberately untruthful witness, his evasiveness, constant self-justification and lack of preparation about aspects of his financial dealings which were raised by the pleadings, made him a generally unsatisfactory witness whose evidence I found it necessary to treat with considerable caution.

Both Bishop Williams’ co-trustees Kay Duncan and David Ogunlana gave oral evidence and were briefly cross-examined. Kay Duncan was the bookkeeper who recorded the daily financial transactions of the Cambridge Congregation and the Bibleway Trust in and after 2006. Mr Ogunlana was, as I have said, the treasurer who undertook primary responsibility for the preparation of the trust accounts. Both of them submitted and verified the briefest of witness statements, and neither was cross-examined at length, Mr Gore choosing to reserve the burden of his cross-examination for Bishop Williams. In the result neither of them displayed the overt characteristics of evasion or self-justification which disfigured Bishop Williams’ evidence, although it transpired from evidence later given by Bishop Williams (who followed both of his co-trustees into the witness box) that Mr Ogunlana at least was, in particular in a response to a question from the court as to the identity of the trust’s sundry creditors (as recorded in its latest accounts), less than forthcoming. Mrs Duncan was, as she herself accepted, inclined to seek and follow Bishop Williams’ directions in all matters of significance. Generally they provided some limited assistance as to the conduct of the affairs of the Bibleway Trust and the Cambridge Congregation in and after 2006. I did not find it necessary to question the limited evidence which they did provide, not least because it was not the subject of any rigorous challenge in cross-examination. They displayed a limited understanding of the Bibleway Trust’s financial dealings and accounts in and after 2006, falling well below that which is to be expected of charity trustees. It appears likely that this was mainly the result of leaving all major decision-making to Bishop Williams.

The defendants through Bishop Williams said that they would have wished to call David Ogunlana’s wife Diana to prove her witness statement and be cross-examined, but she had decided, in the light of what the defendants described as a campaign of vituperation, not to come to court. In the event, her very brief witness statement offered nothing of any evidential value, and Mr Gore did not require her to be called.

Bishop White was born in 1931 and brought up in Jamaica. In 1953 he became a pastor in a Jamaican church associated with the Church of Our Lord Jesus Christ of the Apostolic Faith. He moved from Jamaica to the United Kingdom in 1956 and established the Lewisham Congregation in 1957, initially meeting in private houses and later in rented rooms. At that stage the Lewisham Congregation consisted mainly (if not entirely) of families who, like Bishop White, were immigrants to the United Kingdom of Afro-Caribbean origin, as is confirmed by a delightful photograph produced by Genie White of the congregation at one of its early meetings in an RAF hall.

The Apostolic Faith Church had been led in the USA by a Bishop Lawson. He remained within that church when some seventy congregations seceded to become the Bible Way Church USA in 1957 and, out of loyalty to him, Bishop White ensured that the Lewisham Congregation did so as well. On Bishop Lawson’s death in 1961 however, Bishop White led the Lewisham Congregation together with two other congregations in England to join the Bible Way Church USA as, in effect, its branch within the United Kingdom, and the three congregations held their first national convention in the same year, at or after which Bishop White was recognised both here and in the USA as the leader of the Bibleway Church in the United Kingdom, being made Bishop of the UK branch by Bishop Smallwood Williams in 1970.

The Bibleway Church UK did not make for itself any written constitution at any time prior to the 1997 schism. By contrast the Bibleway Church USA did have a written constitution, variously described in evidence as the red book or the black book by reference to its binding from time to time. I shall call it “the Rule Book”. The copy produced in evidence shows that it was first published in 1962, and revised in February 1973. I was told that at national conventions of the Bible Way Church USA, resolutions were passed from time to time having the effect of amending that written constitution, but not always, if at all, recorded in formal revisions to it.

Article 11 of the Rule Book (in its 1973 revision) headed Local and General Church Property provided in section 1 as follows:

“Real Estate owned by this Organisation shall be held either by the local or General Trustees, in the name of the Bible Way Church of Our Lord Jesus Christ World Wide, Inc. At the request of a local congregation, the General Trustees may hold Real Estate in trust for them. All Real Estate bought by the General Church funds shall be held by the General Trustees.

Real Estate purchased wholly by a local congregation, may be held in trust by their local trustees.”

Bishop Thomas, both in his witness statement and forcefully in cross-examination, said that from its inception the Bibleway Church UK regarded itself as governed by the Rule Book, both generally and in particular in relation to the ownership of real property under Article 11. While I accept that, from time to time, leaders and senior members of the Bibleway Church UK including Bishop Thomas may have had regard to provisions of the Rule Book as a source of useful guidance, I have not been persuaded by the evidence taken as a whole that the members of the Bibleway Church UK regarded themselves as governed or bound by the Rule Book. Save for Bishop Thomas’s evidence to that effect, there is nothing in the voluminous evidence from the claimants which goes that far and, if the Rule Book had been regarded as a form of governing constitution for the Bibleway Church UK I would have expected some reference to it to be made in the Bibleway Trust Deed in 1971, or at least that the terms of the Trust Deed would have reflected a study of the Rule Book by those responsible for drafting it. As will appear, there is no such reference, and its terms suggest that the Rule Book was not referred to by its draftsman.

It is a reasonable inference that the overwhelming majority of the adherents to the Bibleway Church UK were persons of modest means, so that it was necessary for local congregations at least initially to obtain premises for worshipping together either on a wholly informal basis, or by renting them. The evidence shows that, probably, no more than five of the forty or so local congregations established as part of the Bibleway Church UK ever acquired, rather than rented, places for meeting and worship, the five exceptions being Lewisham, Bedford, Cambridge, Bethnal Green and Mitcham. The earliest was Lewisham, at Campshill Road in 1971 and the last was Mitcham, in the early 1990s.

The overwhelming weight of the evidence (and there was really nothing to contradict it) was that, in the UK, both the decision to purchase rather than rent a place of worship, and the funding of any such purchase, was entirely a matter for each local congregation, rather than for the national church. This appears to have been both a matter of policy and pragmatism. As to policy, several witnesses describe Bishop White as having advocated a local congregational responsibility, both as pastor at Lewisham and more generally as Bishop of the Bibleway Church UK. As to pragmatism, such surviving documents as there are suggest that each congregation ran its own financial affairs (regardless whether it was seeking to acquire rather than to rent its own place of worship) and made a very modest contribution every year towards the funding of the church’s activities nationally. Each local congregation submitted a short form annual account to the national convention, recording both that congregation’s own income and expenditure and the precise amount of its contributions to the funding of the national church. Thus for example, an accounting return of the Lewisham Congregation to the national church dated 25^th May 1987 shows that £10,000 odd was collected from 305 communicants, £6,700 spent on local expenses, of which £3,100 odd represented mortgage payments in relation to the Lewisham Building, and a mere £133 was paid to the national church (made up of £20 for foreign mission, £15 for presentation and £98 described as pound money). Allowing for £1,200 brought forward from the previous year’s balance, the closing balance in the Lewisham Congregation’s treasury as at May 1987 was £4,400 odd. That accounting return was made on a standard form designed to be signed by the secretary, treasurer and pastor of each local congregation, although it was accompanied by a quite detailed statement of the local congregation’s expenditure for the relevant year, set out in manuscript on a single page.

A summary document for the year 1993/94 records the income and expenses of seventeen local congregations of widely varying amounts, the highest income being that of Lewisham at £52,000 odd and the lowest being that of Wellingborough at a mere £916.

Until at least 1971, it appears that the Bibleway Church UK handled its financial affairs, both locally and nationally, without the need to appoint trustees, and without anyone perceiving a need to set down in writing the basis upon which, whether at local or national level, contributions made by members of each congregation were held or to be applied. It is instructive to consider that question as at 1970, because the trust deed was in 1971 in effect engrafted onto an informal structure for the making of contributions and the payment of expenses which had by then developed during the previous ten years.

There being no corporate structure of any kind, then or thereafter within the United Kingdom, the first question is whether the Bibleway Church UK consisted in 1970 of a single unincorporated association with a membership consisting of all those regularly worshipping in any of the local congregations or, by contrast, of a loose federation of autonomous local congregations, each constituting a separate unincorporated association by reference to a general affiliation to the Bibleway Church, but also by reference to its particular locality. The defendants contended for the first model and the claimants for the second. There is at least in theory an intermediate model, under which any individual adherent to the Bibleway Church UK would be both a member of an association constituted by his or her local congregation, and a member of the national church.

In my judgment the better view is that the structure conformed to the second or third of those models rather than the first, and it is unnecessary for me finally to decide between them. The general gist of the evidence of the claimants’ witnesses was that from its inception the Bibleway Church UK was a loose federation of autonomous congregations, each being the master of its own destiny under the leadership of its pastor. Congregations were thus able to join the Bibleway Church UK (as did Lewisham, some four years into its existence, in 1961) and to leave it, as did Bedford under Bishop Thomas’s leadership in 1984.

I must briefly mention two aspects of the evidence which at first sight may appear to support the defendants’ model of a national church with local branches. The first is that it appears that, by contrast with most congregational or independent churches, which elect their own pastors, the pastors of the Bibleway Church UK congregations were usually appointed by a higher authority, either Bishop White himself as the Bishop with responsibility for the UK as a whole, or even by Bishop Smallwood, who appears to have taken it upon himself to appoint Bishop White as a bishop in 1970. Pastors are generally described in the evidence as having been ordained, and bishops consecrated, concepts which are generally to be found in churches structured on the first model rather than either the second or third.

In my judgment this feature of the way in which the Bibleway Church UK organised itself was concerned more with spiritual leadership than financial control and economic management, and is in any event insufficient to displace the clear impression to be gained from the evidence as a whole, to the effect that each congregation, albeit under its pastor, regarded itself as an association distinct from the national church, with its own successes and failures, its own financial needs and resources, and its own ability to associate or disassociate itself with the national church, apparently at will.

The second feature of the evidence apparently supporting the defendants’ model is to be found in the draft accounts prepared by Baker Tilly, no doubt on the instructions of the national church’s leadership, for the period ended 24^th February 1997. While these accounts therefore relate to a period just prior to the schism, the probability is that the process of their preparation occurred more or less at the same time as the schism. The draft accounts take the form of what appear to be consolidated accounts, in which the aggregate of the incomes of all the participating congregations is stated as the Bibleway Church UK’s income, the property (including buildings) of all the congregations is treated as the property of the national church, and in which the expenses and liabilities of all the congregations are treated in the same way. In the statement of accounting policies at page seven there is, under the heading “Donations, Gifts and Church Offerings” the following statement:

“Where the donor specifies the purpose for which the donation is to be used, that purpose will determine whether the amount in question should be treated as unrestricted or restricted resources. Where no purpose is specified the accounting treatment of the sum received is taken to unrestricted reserves.”

In fact the draft accounts show no amounts treated as restricted resources, and the unrestricted funds are shown as at 24^th February 1997 as amounting to £494,785, with fixed assets of £316,000 odd (mainly attributable to freehold land and buildings) and gross income for the year of some £285,000 odd.

The apparent support which these draft accounts give to the defendants’ model of the constitution of the Bibleway Church UK is substantially undermined by the following factors. First, there is no evidence that these accounts were ever approved either by the then trustees or by anyone else within the Bibleway Church UK. They may therefore have been based upon little more than uninformed assumptions as to the structure by the Bromley office of Baker Tilly. Secondly, the draft auditor’s report suggests that the accounts would, even if approved, have been heavily qualified.

Thirdly, the only witness who gave evidence about the genesis of the Baker Tilly draft accounts, namely Mr Clarke, said that they were a “not very ethical” attempt to present the Bibleway Church UK as a substantial organisation in the context of making the charity look like a reliable borrower, in the context of the possible funding of the purchase of further places of worship by local congregations. He said that, having been closely involved in the running of the national church at the time, his recollection was that funds made available for the national church’s purposes during the year ended February 1997 by local congregations amounted to no more than about £10,000.

Fourthly, the treatment of local congregational assets, liabilities, income and expenses as attributable to the national church is, in my judgment, quite inconsistent with the rest of the available evidence about the manner in which the Bibleway Church UK was organised prior to the 1997 schism. Neither on its own nor taken in conjunction with the evidence about the ordination and consecration of pastors and bishops, do the Baker Tilly accounts detract significantly from my clear conclusion, on the evidence as a whole, that the UK church was structured both in 1970 and thereafter until 1997 on the basis of autonomous local congregations in accordance with models two or three, rather than the centralised model contended for by the defendants.

The impetus for the creation of the Bibleway Trust appears to have been a perception that, by contrast with cash donations, real property acquired by congregations for use as places of worship should be held upon some formal basis. The Lewisham Congregation was at the same time raising money for the purchase of its first church building, namely a hall in Campshill Road, Lewisham. I shall refer to it as “Campshill Road”.

There is no surviving documentary evidence at all about the purchase of Campshill Road, but it is a reasonable inference that the 1971 Trust Deed was prepared as a basis upon which it could be held on trust, and that it was, either on or after purchase, duly vested in the first trustees, who were Bishop White, Bishop Thomas, Charles McFarlane and George Smith. The evidence does not reveal the amount of the purchase price either, but the oral evidence was unanimous to the effect that Campshill Road was purchased with the combination of donations raised exclusively by members of the Lewisham Congregation, and a loan.

I have already recited the charitable purpose of the Bibleway Trust, as recited in clause 3 of the 1971 Trust Deed. I must now describe its terms in a little more detail. It was constituted by the donation of £10 to the trustees by the Bible Way Church USA.

For the achievement of its charitable purpose, the trustees were given the following express powers, set out as sub-clauses to clause 3:

“(i)

Making donations or subscriptions to any charitable society institution trust or organisation now existing or hereafter to exist

(ii)

In acquiring sites for and building restoring altering enlarging maintaining and endowing burial grounds houses of residence for Bishops Elders and other officers of the Bibleway Church of Our Lord Jesus Christ World Wide (United Kingdom) solely engaged in the furtherance of the religious objects of the Bible Way Church of Our Lord Jesus Christ World Wide (United Kingdom) places of religious worship and ancillary rooms used for the time being in connection with the Bible Way Church of Our Lord Jesus Christ World Wide (United Kingdom)

(iii)

Providing maintaining extending and testing by examination or otherwise education and religious instruction

(iv)

Providing increasing or contributing towards the stipends of and the relief of Bishops Elders teachers organisers and other officers of the said community solely engaged in the furtherance of the religious objects of the Bibleway Church of Our Lord Jesus Christ World Wide (United Kingdom) and the relief of poverty for their widows or their orphaned infant children by means at the discretion of the Trustees of either lump sum payments or pensions PROVIDED that any application for any of the purposes aforesaid shall be valid though the benefits thereof may incidentally extend to persons outside the Bibleway Church of Our Lord Jesus Christ World Wide (United Kingdom)”

Clause 4 contemplated that property might be held pursuant to the Trust Deed both for the general purposes of the Trust and on special charitable trusts. Clause 6, as supplemented by a deed of variation dated 31^st May 1978 (which was itself authorised by a provision for variation in clause 14(ii) of the Trust Deed) gave the trustees power to charge certain property vested in them as such, subject to obtaining such authority, consent or approval of the Charity Commissioners as may be required by law. Clause 11 made provision for annual audited accounts.

Clause 14(i) empowered the trustees by deed executed by two thirds of them pursuant to a resolution passed at a meeting at which a majority of them was present to declare additional charitable purposes for the promotion of religion among the Bibleway Church UK (as defined) and to revoke or vary any of the provisions contained in the Trust Deed subject to certain restrictions. By clause 18 the power to appoint new trustees was vested in a majority of the existing trustees, with the written consent of the Chairman.

The 1971 Trust Deed contained no express power for the trustees to borrow otherwise than by way of charge pursuant to clauses 6(iv) and 7(ii) as amended by the Deed of Variation. It is also to be noted that the definition of the Bibleway Church UK as meaning members within the United Kingdom of Great Britain and Northern Ireland, together with the other terms of clause 3, confers no express power to advance religion among persons living abroad, whether by funding foreign missionary activity, or by one or more of the trustees carrying it out in person at the expense of the Trust.

Save that it is common ground that the places of worship subsequently acquired for the use of the five congregations to which I have referred were vested in the trustees of the Bibleway Trust, the evidence permits no clear conclusion as to whether any other property, such as annual contributions by local congregations for the defraying of the church’s national expenditure, was ever so vested. For present purposes it probably does not matter since it appears highly unlikely that there are now any assets in the hands of the defendants as the present trustees which are traceable as the product of any such property. On the information currently before the court, it appears possible either that the Bibleway Church UK continued to deal with its income in the way which I have described as having been established prior to 1971, or that the trustees and the other leadership of the church made arrangements for income contributed for national purposes to be transferred to the trustees, whether by the opening of a bank account or accounts for the trust or otherwise. All that can be ascertained is that there appears to have been an unconscious assumption which developed at some time between 1971 and 1997 that, so far as concerned the ownership of any church property, the Bibleway Church UK and the Bibleway Trust were one and the same thing.

The Lewisham Congregation rapidly outgrew their meeting hall in Campshill Road. The former Anglican church of St Barnabas in Algernon Road was known to be on the market for sale. It had been constructed in the late 19^th century as an overflow church for another Anglican parish in Lewisham and, more recently, had become a church for the deaf and dumb, before becoming redundant. The purchase was agreed for £40,251 and was funded as to £20,000 from the net proceeds of sale of Campshill Road, as to US$25,000 by a loan arranged by Bishop Smallwood Williams in the USA, and as to the balance, including the cost of moving, refurbishment and fitting out, by fundraising from the Lewisham Congregation. Save for the loan from the USA, the whole of the cost of the purchase and refurbishment of the Lewisham Building is therefore attributable to contributions by members of the Lewisham Congregation, either directly, or by the earlier purchase and re-sale of Campshill Road. Upon completion, its registered owner was identified at HM Land Registry as the Bibleway Church of Our Lord Jesus Christ World Wide (United Kingdom) of St Barnabas Church, Algernon Road, London SE13 7AT. It is common ground between the parties that the Lewisham Building has at all material times been vested in the trustees for the time being of the Bibleway Trust.

No special trusts were declared in relation to the Lewisham Building and, since the Transfer has not itself survived, it is not clear whether any reference to a trust was made therein. Nor is it clear whether that which was donated to the then trustees was the Lewisham Building itself, or the money necessary to acquire it.

It is common ground that within ten years of its acquisition, the Lewisham Congregation had also fully repaid the loan from the USA so that, thereafter, it can be said that the church had been acquired entirely by means of contributions from the Lewisham Congregation. More than one witness before me vividly recalled the sense of joy felt by the congregation as a whole when told that the USA loan had finally been repaid.

The claimants’ original case was that the Lewisham Building had been vested in the trustees of the Bibleway Trust upon trust for the members of the Lewisham Congregation beneficially. Alternatively Mr Gore submits that the Lewisham Building was vested in the trustees on special trusts for the exclusive benefit and purposes of the Lewisham Congregation, now said to be reflected in the purposes of the Tabernacle Trust.

In Neville Estates v. Madden [1962] 1 Ch 832 at 860, Cross J held, on the authority of the decision of the Court of Appeal in Re Church Army (1906) 94 LT 599, that:

“A donor does not direct a special application of his gift unless he subjects it to a trust which prevents the governing body of the charity from using it for its general purposes. The fact that he expects it to be used – and that it is in fact used – for a special purpose is not enough.”

In my judgment the evidence in the present case falls short of establishing that the Lewisham Building was acquired by the Bibleway Trustees on a special trust. Although the 1971 Trust Deed contemplated that property might be held by the trustees on special trust, the evidence seems to me only to establish that the donations were made (or the Lewisham Building actually vested) on the basis of a clear expectation by the Lewisham Congregation that it would be held for use by that congregation as its place of worship and witness and that, if for any reason it ceased to be suitable or sufficient for that purpose (as had the Campshill Road meeting hall) it would be dealt with, whether by sale or mortgage or otherwise, so as to make continuing provision for the worship and witness of the Lewisham Congregation, for as long as that congregation should survive. By witness I mean activity of the congregation by which it complies with the commandment to love one’s neighbour, including charitable work for people in the local community, whether or not members of the congregation.

By contrast, I am not persuaded that the Lewisham Building was vested in the trustees on terms which prevented its use for the general purposes stated in the 1971 Trust Deed. It was, I infer, a sufficient comfort to the contributing members of the congregation to know that the Lewisham Building was to be held on a charitable trust for the religious purposes of the Bibleway Church UK, upon detailed terms of which they did not require to be informed, because the trustees included as chairman their own pastor Bishop White, and other persons in whom they had full confidence. If the relevant gift was the Lewisham Building rather than the contributions to its purpose, then it was vested in the Bibleway Trustees by Bishop White acting on the Lewisham Congregation’s behalf, and it is on that analysis an inescapable conclusion that the terms of the 1971 Trust Deed, no more and no less, were the terms of that trust.

I am nonetheless entirely satisfied that the spirit of the gift (whether of the individual contributions or of the Lewisham Building itself makes no difference) is precisely reflected in the expectation to which I have just referred. The spirit of the gift was that the Lewisham Building was to be used as the place of worship and witness of the Lewisham Congregation and that, if it should become insufficient or unsuitable for those purposes, its value should be applied in the continued fulfilment of those purposes for as long as there was a Lewisham Congregation.

The evidence in this respect is much thinner than in relation to the Lewisham Building, but I am nonetheless satisfied that the spirit of each gift of the relevant building to the Bibleway Trustees was substantially the same, namely that the building and, if necessary, its value and proceeds of sale, should be used and applied as, or for the obtaining of, a place or places of worship and witness for the relevant contributing congregation.

Taking each building briefly in turn, Bishop Thomas’s evidence was that the Bedford Congregation acquired its first building without recourse to loans or other external funding. It was later sold and the proceeds applied to acquire another building also in Bedford. As I have said, it was transferred by the Bibleway Trustees to a new trust set up for the purposes of the Bedford Congregation following the secession of that congregation under Bishop Thomas’s leadership from the Bibleway Church UK in 1984.

The Bethnal Green Congregation acquired a church building in Herald Street. During the hearing the court received a letter from representatives of the Bethnal Green Congregation indicating that a £70,000 loan from Natwest Bank and a £20,000 loan from the previous owner, each secured by a mortgage over the church building, were employed in its acquisition. The letter went on to explain that the former loan had been completely discharged, but that the £5,666.44 balance of the latter loan has deliberately been left outstanding to avoid further charges being granted over the property by the defendants. Otherwise, the funding was raised by contributions from the local congregation. It became known as the Built On The Rock Church. Following the schism in 1997 the Bethnal Green Congregation has become a separate autonomous church, called Built On The Rock, and a separate charitable trust was established to hold its assets. Nonetheless, as at Lewisham, its church building remains vested in the Bibleway Trustees.

There was evidence that the Cambridge Congregation funded the purchase of its church building in Devonshire Road. Mr Clarke qualified this by noting that the purchase was funded in part by gifts from other local congregations but, at least initially, without any contribution from the Bibleway Church UK itself. It is not clear as to the extent to which loan finance was used as well. Bishop Thomas said that Pastor Campbell (Bishop Williams’ predecessor as pastor of the Cambridge Congregation) had accepted a £4,000 loan from the Bibleway Church UK so as to avoid having to sell the Cambridge church building when the congregation was in financial difficulties. Nonetheless, a number of witnesses proved that the Cambridge church building was debt and mortgage free when Bishop Williams became pastor in 1984. Following the schism, the Cambridge church was eventually sold in 2007, in circumstances which I will have to describe in detail later in this judgment.

The Mitcham Congregation acquired its church building in Crusoe Road, Mitcham in the early 1990s. Paul Bailey gave evidence that during his father’s time as pastor there, the funding for its purchase was raised by contributions from the Mitcham Congregation. It appears that following the schism the Mitcham Congregation affiliated itself to the leadership of Bishop McIntosh in the UK (which was itself affiliated to the Campbell faction in the USA). The Mitcham Congregation has established its own charitable trust known as the Rhema Church Ministries to hold its assets, but, again as at Lewisham, its church building remains vested in the Bibleway Trustees.

I have already described the effect on the Bibleway Church UK of the 1997 schism in the USA. For present purposes, it is necessary only to address its consequences in terms of the trusteeship and management of the affairs of the Bibleway Trust. At the time of the schism the trustees were Bishop White, Bishop Williams (who replaced Bishop Thomas in 1984) Mr McFarlane and Mr Smith. Mr McFarlane resigned in July 1997, and Mr Smith followed Bishop Williams in adhering to the emerging Rogers faction in the USA, which itself purported to expel Bishop White from the Bible Way Church for what were described as “acts of insubordination”, and to appoint Bishop Williams in his place as leader of the Bibleway Church UK.

Nonetheless Bishop White managed, at least initially, to retain de facto control of the Bibleway Trust by methods which, apart from his inherent qualities as the founder and leader of the Bibleway Church UK, included ineffective attempts to appoint as new trustees persons who adhered to his and Bishop McIntosh’s leadership of the majority faction within the Bibleway Church UK.

There ensued a lengthy period of stalemate, so far as the Bibleway Trust and its affairs were concerned, which lasted from 1997 until 2006, a period during which Bishop White first retired and then died. The impasse ended only when the Charity Commission finally recognised that Bishop Williams and Mr Smith had, throughout the period of stalemate, been the only legitimately appointed trustees other than Bishop White, following an Opinion obtained on their instructions from Peter Crampin QC in January 2005. There remains an issue whether those of the defendants who now claim to be Bibleway Trustees, other than Bishop Williams, have been validly appointed, but nothing turns on it. The practical reality is that, in and after 2006, Bishop Williams has been in effective control of the affairs of the Bibleway Trust, since the other defendants have looked to him for guidance in relation to those affairs, whether or not validly appointed.

The conduct of the affairs of the Bibleway trust between 1997 and 2006 is both shrouded in mystery and largely irrelevant. Two aspects deserve particular mention. The first is that Bishop Williams made repeated reference during his cross-examination to a belief that those in de facto control of the trust during that period had both failed to cooperate with him, and held back money vested in the trustees as at the time of the schism. As to that, the inability of the rival protagonists in and after 1997 to communicate meaningfully with each other means that there probably was a lack of cooperation with Bishop Williams as de jure trustee. As for the withholding of money, Bishop Williams’ belief is not corroborated by any documentary or other reliable evidence to that effect, save perhaps for the draft Baker Tilly accounts which, as I have said, paint what seems to me to be a very misleading picture of the structure of the Bibleway Church UK’s affairs, including those of the Bibleway Trust. Since Bishop Williams has never received any such money in or after 2006, and decided for reasons of church order not to take proceedings for its recovery, no part of the present assets of the Bibleway Trust consists of property representing the proceeds of anything (other than real property) vested in the trust in 1997.

The second relevant aspect of what occurred during the period of stalemate was that Bishop Williams managed, by means which are not clear to me, to raise substantial loan finance on the security of the Cambridge church building with which to fill a substantial gap between the contributions of the Cambridge Congregation (which appear to have been his only source of incoming funds) and his expenditure upon activities which he described as constituting the legitimate expenditure both of the Cambridge Congregation and of the Bibleway Church UK, of which he regarded himself as the spiritual leader.

Accounts prepared for the Bibleway Church UK and approved by Bishop Williams, Mr Ogunlana and Mrs Duncan as Bibleway Trustees for the year to 30^th March 2006 show “Sundry Creditors (Estimated)” as £335,000. The assets were stated to be Fixed Assets consisting of fixtures and equipment at a cost of £3,500 but with an accounting value after depreciation of £1,000, together with what were described as Current Assets, consisting of Freehold Properties with an estimated value of £1,732,500.

When the Cambridge Building came to be sold in November 2007, for £400,000, no less than £370,289.15 had to be used to redeem a series of charges, in favour of Barclays Bank, another institutional lender and a Patrick Fullerton. I infer that the whole (or all but about £35,000) of the sundry creditors of £330,000 were secured on the Cambridge property by March 2006, for two reasons. The first is that accounts approved by the same defendants for the year ended 30^th March 2007 purported to show sundry creditors as only £35,000 and the estimated value of the freehold properties as having declined from £1,732,500 to £1,525,000, during a year of generally rising property values. The inference is that secured debt was taken out of creditors and deducted from the value of freehold properties.

Secondly, having evidently exhausted the security value of the Cambridge property by borrowing, among others, from Patrick Fullerton, Bishop Williams borrowed a further £20,000 from Mr Fullerton pursuant to an offer letter dated 29^th June 2006, which stated that a legal charge over the Lewisham Building was to be provided as security. No such charge was in fact ever registered against the title to the Lewisham Building but it is reasonably clear that by June 2006, Bishop Williams must have exhausted the capacity of the Cambridge property to provide security for borrowing, so as to require him to propose the conferring of security by charging other property vested in the Bibleway Trustees.

When taken to task in cross-examination for having burdened the Cambridge property with secured debt, Bishop Williams was unable to recall either having obtained the Charity Commissioners’ consent to the grant of security, or having complied with the provisions of sections 38 and 39 of the Act. The regularity or otherwise of the charges of the Cambridge property was not a pleaded issue in the proceedings, nor was the question whether, in the absence of an express power to do so, the Bibleway Trustees had any authority as trustees to borrow money unsecured for the fulfilment of the purposes of the trust. I am therefore reluctant to make findings on those issues, but the real possibility that by 2006, Bishop Williams and his co-trustees (if validly appointed) may have already become habituated to a course of unauthorised borrowing, both secured and unsecured, in order to fund what they conceived was the fulfilment of the Bibleway Trust’s purposes, forms an important aspect of the matters relevant to the question how and upon what terms a scheme ought now to be made or directed.

On 1^st October 2007 Bishop Williams, Mr Ogunlana and Mrs Duncan signed a two page loan agreement whereby the Bibleway Church UK (described as a registered UK charity with the number attributed to the Bibleway Trust) purported to borrow £73,000 from a Mr Alistair Abrahams, for three months until 1^st January 2008, again to be secured by a charge on the Lewisham Building, and personally guaranteed by the three signatories. The loan was expressed initially to be interest free, but to incur an immediate ‘fixed profit’ liability of £10,950 if not repaid on 1^st January 2008, and to incur interest thereafter at 15% per annum. Again, no charge of the type promised was in fact registered against the Lewisham Building.

Bishop Williams explained in cross-examination that the £73,000 represented the aggregate of a series of informal loans made by Mr Abrahams to the trustees prior to October 2007, during a period when, as owner of a Swiss based entity called Emerald Strike Holdings, he had been negotiating a joint venture with the Bibleway Trustees for the profitable re-development of the Cambridge property. Bishop Williams said that at a late stage, the negotiation changed from a joint venture into an outright sale to Mr Abrahams’ company, as in due course occurred, in November 2007, for £400,000.

The £73,000 was not repaid on 1^st January 2008, and has never been repaid. The money was, according to Bishop Williams, spent on expenditure incurred in exploring the development opportunities at Devonshire Road, payment of mortgage arrears and ordinary outgoings in connection with the work of the Bibleway Church UK. After waiting a year, Mr Abrahams obtained a default judgment in the Willesden County Court on 16^th March 2009. On 10^th July 2009 Mr Abrahams obtained an interim charging order against the Lewisham Building, also in the Willesden County Court. Thereafter the charging order proceedings were transferred to the Chancery Division of the High Court with a view to them being determined after these proceedings. The defendants to Mr Abrahams’ claim (Bishop Williams, Mr Ogunlana and Mrs Duncan) have at no time appealed or sought to set aside the money judgment and, although Bishop Williams suggested that there were “mitigating circumstances” in relation to Mr Abrahams’ claim, nothing resembling a defence to the money claim emerged from their evidence, or from Bishop Williams’ submissions.

By contrast, the question whether Mr Abrahams should obtain a final charging order against the Lewisham Building is by no means straightforward and is likely to depend upon issues which overlap substantially with the question whether the defendants as Bibleway Trustees are entitled to an indemnity as against the trust assets, including but not limited to the Lewisham Building, which ought to be satisfied in priority to any cy-près transfer of that property to other trustees. Those issues include:

The propriety of the defendants’ borrowings both from Mr Fullerton and Mr Abrahams, and in particular the defendants’ agreement to charge the Lewisham Building as security for them, was a pleaded issue in these proceedings. Nonetheless, although Mr Abrahams was present in court for part of the hearing, he was not a party to these proceedings and any conclusion of mine upon those issues will not therefore be binding upon him. During closing submissions I suggested that the most cost effective case management solution to this conundrum might be for all questions as to the entitlement of the defendants to an indemnity against the trust property in respect of their personal liabilities as borrowers in connection with the Bibleway Trust’s affairs, together with the question whether Mr Abrahams should obtain a final charging order, should be resolved at a single further hearing, at which all interested parties would be given the opportunity to appear. I include for that purpose not merely the parties to these proceedings and Mr Abrahams, but also those representatives of the former Bibleway Church UK communities at Bethnal Green and Mitcham, who have in correspondence (in response to my enquiry, communicated to them) indicated a wish to have their church buildings transferred cy-près to charitable trustees of their own, in much the same way as have the claimants, in relation to the Lewisham Building. I heard no dissent to that proposal and, for reasons to which I will return I intend to adopt it.

There was no clear or detailed evidence as to the purposes to which the heavy expenditure incurred by Bishop Williams and (to the extent that they were truly involved) the other defendants was applied. A substantial part of it was spent upon the cost of leading and managing the affairs of the Cambridge Congregation. Apart from that, the evidence as to the other purposes to which the expenditure was applied gave rise to further cause for concern as to its propriety. All the defendants’ witnesses referred in general terms to substantial foreign missionary work carried out by Bishop Williams, although there was no evidence at all as to its cost. Having regard to clause 3 of the 1971 Trust Deed, and its focus upon the advancement of the religion of members of the Bibleway Church in the United Kingdom, there must at the very least be real doubt as to whether expenditure on foreign missionary work was a proper application of Bibleway Trust property.

A substantial part of the relevant expenditure appears to have been applied to the setting up and support of a number of limited companies, apparently for the purpose of performing aspects of the church’s witness in Cambridge. For present purposes, the two most significant companies are Cambridge Advanced Technology Training Ltd (“CATT”) and Greater Bibleway S&A Centre Ltd (“S&A”). CATT was incorporated in March 2001, went into insolvent compulsory liquidation in June 2007 and was dissolved in November 2008, with debts which Bishop Williams estimated as not exceeding £100,000. Its apparent purpose was the provision of computer training both to members of the Cambridge Congregation and more widely within the Cambridge community.

S&A was incorporated in November 1998 and dissolved in May 2009 with unsatisfied judgment debts which Bishop Williams estimated at about £5,000. It appears to have been intended that S&A should operate a multicultural community centre, but this project did not materialise. Bishop Williams described it as having, for a time, provided the administrative machinery for the management of the Trust.

Bishop Williams was a director of both companies throughout their short and unsuccessful existence. The foregoing brief summary of their affairs casts serious doubt on the wisdom and even the propriety of the application of a substantial amount of charitable trust money for the purpose of funding their activities. Bishop Williams’ only excuse for having expended trust money in such apparently disastrous enterprises was that he had hoped to obtain government funding for the local community projects which those companies were formed to carry out, but was unable to do so because the deadlock in the management of the Bibleway Trust, and its consequential failure to produce accounts at least until 2006, meant that no such grants were forthcoming.

Again, the question whether the application of Bibleway Trust money in relation to the affairs of those companies was a breach of trust was not a pleaded issue in the proceedings, although it was dealt with at some length in evidence. It is in my judgment neither practicable nor fair to the defendants for me to reach any final conclusions on those questions. It may be that it will never be necessary to do so in connection with the making or direction of a cy-près scheme or schemes in relation to the property of the Bibleway Trust, unless the defendants seek an indemnity against the trust’s property in respect of their present personal liabilities, to which I now turn.

The defendants proffered interim accounts for the Bibleway Trust as at 10^th March 2010, approved by Bishop Williams, Mr Ogunlana and Mrs Duncan which purport to show current liabilities of £142,000 consisting of estimated sundry creditors of £40,000 and “Bank” of £102,000. In cross-examination Mr Ogunlana said that “Bank” meant, in reality, Mr Abrahams and that the £40,000 sundry creditors represented unsecured loans made to the trustees by members of the Cambridge Congregation, although he declined to identify them. Subsequently, in his cross-examination Bishop Williams identified the sundry creditors as being himself, as to £9,000, Mrs Duncan as to £20,000 and her husband Mr Duncan as to £11,000. Bishop Williams said in cross-examination that there were no other creditors of the trust, and I assume from Mr Ogunlana and Mrs Duncan’s approval of the interim accounts that they agree with him, although this was not pursued as a matter of cross-examination of either of them.

I am not satisfied that it is safe, in connection with the making or direction of a scheme or schemes, to proceed on the assumption that there are no other current creditors of the trust than those identified in the interim accounts. Of course, if the defendants have personal liabilities to creditors beyond those identified, they will have no-one but themselves to blame if they fail to identify them before the transfer of the trust’s assets out of their control pursuant to one or more schemes. The court is unlikely to have any sympathy for a subsequent attempt on their part to claim an indemnity in respect of such unidentified liabilities. But the matter does not rest there. It may be that there are other creditors who, as Mr Abrahams did, lent to the defendants on the assumption that they were trustees of a trust with substantial assets, such that it would be appropriate to advertise for such creditors before a final decision to transfer assets out of the Bibleway Trust were made by way of a cy-près scheme.

The first question is whether the court’s jurisdiction to make or direct a cy-près scheme is engaged by the events which I have described. In my judgment it clearly is.

The property of the Bibleway Trust consists at present of three church buildings, each of which (or the funds necessary for their acquisition) were donated to the trustees on the understanding that the buildings would each be used as the place of worship and witness of the congregation making the gift, or as the asset base for the acquisition of further or replacement buildings for the same purposes, for as long as each congregation should continue. The effect of the 1997 schism and the survival of Bishop Williams and Mr Smith rather than Bishop White and Mr McFarlane as the continuing trustees of the Bibleway Trust has led to the consequence that, whereas each of the three donating congregations are now separate and autonomous church communities with no affiliation to that remnant of the former Bibleway Church UK now presided over by Bishop Williams, the persons who are now (or who consider themselves to be) trustees of the Bibleway Trust regard its assets as available for the advancement of the religion of what they regard as the present membership of the Bibleway Church UK, which excludes the members of those three congregations.

The correspondence which immediately preceded the commencement of these proceedings graphically illustrates this unhappy outcome. When each of the Lewisham and Bethnal Green trustees wrote to Bishop Williams seeking a transfer of their respective church buildings from the Bibleway Trust, his response was that the Bibleway Trustees would be prepared to sell each building to the relevant trustees representing those two congregations, in each case for £250,000, together with a pre-emption agreement and an overage agreement. When meaningful negotiations failed to ensue, and these proceedings were threatened, the defendants’ response through their solicitors was to serve notice to quit on the Lewisham Congregation, on the basis that its continued use of the Lewisham Building constituted a trespass. Quite apart from that, the defendants’ exposure of the Lewisham Building to the claims of their creditors, which was carried out without any kind of notice or warning to the Lewisham Congregation, demonstrates by conduct rather than merely by words the defendants’ readiness to make use of the Lewisham Building in a manner alien both to the spirit of its gift and to the interests of the congregation whose contributions funded its acquisition.

It is in this context unnecessary for me to decide whether the present members of the Lewisham, Bethnal Green and Mitcham Congregations are or are not members of the Bibleway Church UK, within the meaning of the 1971 Trust Deed. The then membership of those congregations plainly were within the contemplation of that phrase, both when the Trust Deed was entered into and when each of the relevant church buildings were acquired and vested in the trustees. If they continue to be members of the Bibleway Church UK within the meaning of the Trust Deed, then the devolution of control of the Trust into the hands of persons who take the opposite view will inevitably mean that the achievement of the purposes of the Bibleway Trust have ceased to be a suitable and effective method of using the relevant properties. If they are not members, their exclusion from any form of benefit under the Bibleway Trust would be completely at variance with the spirit of the relevant gifts of those properties.

For those reasons, the court has jurisdiction to make or direct a scheme. It is, furthermore, clear that the court’s jurisdiction has been engaged not merely in relation to the Lewisham Building, but also in relation to the church buildings at Bethnal Green and Mitcham, even though there has been no specific application for a scheme in relation to either of them by the institution of proceedings, rather merely than by letter to the court during the trial of these proceedings. The court’s jurisdiction is therefore engaged in relation to what appears (albeit from unreliable accounts) to be the whole of the property of the Bibleway Trust.

The second question is whether the court should make or direct a scheme, and if so in relation to what property.

I have no doubt that the matters which have engaged the court’s jurisdiction under section 13, considered together with the additional matters set out in section 14B of the Act, are such as to require the making or direction of a scheme. The present situation, under which the Bibleway Trust’s places of worship are controlled by trustees who are as the result of the schism unable meaningfully to communicate with the congregations who worship and witness there, should not be allowed to continue. The eviction of the congregations, as threatened by the defendant Trustees, cannot be an appropriate solution. Nor should each congregation be required, as the defendants have demanded, in effect to re-purchase their own place of worship, after having raised the funds for its acquisition in the first place. Since the three relevant congregations are, although in friendly relations with each other, now independent and autonomous, the replacement of the defendants by a single set of new trustees is unlikely to be a satisfactory solution either, at least in the long term. A scheme or schemes whereby each place of worship is transferred to separate trustees whose role is directed to the fulfilment of purposes specific to the congregation or locality associated with it seems to me to be plainly the best solution.

It is tempting within the context of the present proceedings to formulate a scheme in relation to the Lewisham Building alone, in particular because it rather than the properties at Bethnal Green or Mitcham has been put at risk by the defendants’ conduct, purportedly as Bibleway Trustees. Nonetheless I consider that, on grounds both of fairness and economy, it would be preferable to formulate at one and the same time a scheme or schemes relating to all three properties. My reasons are, shortly, as follows. First, it would be likely to be cheaper in the long run to make (or to direct the Charity Commissioners to make) a single scheme relating to all three properties at one time than to do so purely in relation to the Lewisham Building, leaving the other two properties to be dealt with (as it is clear that their respective congregations now wish) on a subsequent occasion or occasions.

Secondly, the possibility that it will be appropriate to make provision for the rights of creditors of the Bibleway Trustees, including but not limited to Mr Abrahams, and provision for such indemnity for the defendants’ own liabilities against the trust property as they may be able to establish, makes it expedient that the transfer out of the Bibleway Trust of all its assets should be dealt with simultaneously, rather than in a series of steps. Otherwise there is the risk that the burden of any such liabilities may fall unfairly as between the three properties. There is for example no obvious reason why, as a matter of fairness between the three affected congregations, the Lewisham Building should be subjected to the whole of Mr Abrahams’ claim. Equally, separate and sequential treatment of each property may leave the last of the three unfairly burdened with liabilities which are not yet apparent.

I recognise that to extend the ambit of the scheme beyond the Lewisham Building may occasion some delay to the realisation by the claimants of their understandable ambitions to secure unfettered control of the Lewisham Building for the benefit of the Lewisham Congregation. Nonetheless it seems to me that the time necessary to bring in the trustees who represent each of the Bethnal Green and Mitcham Congregations will involve no greater delay than that which will in any event be necessitated by the need to resolve the issue, for example, as to Mr Abrahams’ claim to a final charging order.

The last substantive question is as to the terms upon which each of the three properties should be held on charitable trusts. Section 14B of the Act requires the court to have regard to the spirit of the original gift, the desirability of securing that the property is applied for charitable purposes which are close to the original purposes and the need for the relevant charity to have purposes which are suitable and effective in the light of current social and economic circumstances.

The Tabernacle trustees invite the court simply to transfer the Lewisham Building to them, to the intent that it be held for the purposes of the Tabernacle Trust. The Tabernacle Trust deed specifies the following purposes under the heading ‘Objects’:

“The trustees shall hold the trust fund and its income upon trust to apply them for the following objects (“the objects”):

(a)

to advance the Christian faith in accordance with the Articles of Faith in clause Z and by such means as are charitable to further the religious and other charitable works of the Tabernacle in the United Kingdom or elsewhere as the trustees may from time to time think fit;

(b)

to advance education in accordance with Christian principles by such means as the trustees of the Tabernacle may from time to time think fit including by means of establishing and operating any education establishment or establishments in the United Kingdom and elsewhere;

(c)

to promote and fulfil such other charitable purposes beneficial to the members of the Tabernacle, or to the community in the areas in the United Kingdom or elsewhere as the trustees of the Tabernacle may from time to time think fit.”

The evidence showed that the Lewisham Congregation now has approximately 600 communicating members, and has grown to an extent that the Lewisham Building is no longer ideal, at least on its own, either as a place of worship or as a centre of witness. It is now obliged to hold two main Sunday services because its congregation is too large to worship all together, and its leadership believes that it lacks certain modern facilities (such as lifts) which seriously hampers the Congregation’s ability to support its local community in its chosen areas of social welfare and education. The trustees have already formulated plans for expansion, once they realise their ambition to obtain control of the Lewisham Building. Those plans contemplate the use of the value of the building, either as security for borrowing, or if necessary by selling it, so as to provide additional or alternative premises for the worship and witness of the Congregation. The evidence also shows that the present Congregation is drawn not merely from the immediate neighbourhood of the Lewisham Building, but from a substantial part of South East London, and that some members travel to worship there from quite widely dispersed locations in South East England.

There are two respects in which the purposes declared in the Tabernacle Trust Deed are wider than those declared in the Bibleway Trust Deed. First, the advancement of education in accordance with Christian principles is declared as a specific object, additional to the advancement of religion. Secondly, the general object to promote and fulfil other charitable purposes beneficial to the members of the Tabernacle is extended both to the community in any area of the United Kingdom, or elsewhere, chosen by the Tabernacle Trustees. By contrast, the Bibleway Trust Deed contain powers which specifically focused its purpose as the advancement of the religion of the members of the Bibleway Church in the UK, rather than abroad.

There is nothing in the Tabernacle Trust Deed which, in terms, reflects the spirit of the original gift of the Lewisham Building to charity, in the manner which I have identified above, although there is nothing in the present plans of the Tabernacle trustees which suggests that it or its value is intended to be used otherwise than as, or for the obtaining of, a place or places of worship and witness for the Lewisham Congregation.

I am not persuaded that the requirement to apply the property for charitable purposes which are close to the original purposes requires that the purposes for which the scheme should permit the Lewisham Building to be used be limited solely to the advancement of religion, or that the credal basis of sub-clause (a) of the objects clause of the Tabernacle Trust Deed is inappropriate as the basis for a convenient definition of the Christian faith, by reference to the Articles of Faith set out in Clause Z. There is, in particular, nothing to suggest that before the schism any of the Bibleway Church UK Congregations subscribed to a materially different creed. Furthermore, it seems to me that in the light of current social and economic circumstances it is appropriate that the charitable purposes should include both the advancement of education in accordance with Christian principles, and the promotion and fulfilment of other charitable purposes beneficial to members of the local community which the Lewisham Congregation wishes to serve.

I am by contrast minded to require that the terms upon which the Lewisham Building should be transferred to the Tabernacle trustees by a scheme should include, by way of limitation of the purposes to which the building or its value can be put, some reference to the spirit of the original gift, as I have identified it. I do not propose at this stage to specify precisely how that should be drafted, but rather to invite the claimants to propose a form of limitation by reference to the spirit of the original gift, so that the Lewisham Building is held by the Tabernacle trustees on trusts which are special, to that extent. I make it clear that my decision that this limitation should be included is based upon no apprehension that the present Tabernacle trustees would exercise their powers in relation to the Lewisham Building otherwise than in accordance with the spirit of its original gift, but in my judgment it is better that the limitation should form part of the express trusts upon which the Lewisham Building is hereafter held.

The court has power either to make a scheme itself, or to direct the making of a scheme by the Charity Commission. In cases where the court is invited to make a scheme it commonly obtains the assistance of solicitors and counsel retained by the Attorney General, as occurred for example in the Varsani case. In the present proceedings the Attorney General has, although joined, decided to take no active part, and Mr Gore has on behalf of the claimants invited me to direct the making of a scheme by the Charity Commission as being likely to be less expensive for his clients.

Bearing in mind that there must be a further hearing at which representatives of the Bethnal Green and Mitcham Congregations should be represented, as well as Mr Abrahams and any other creditors claiming a right or interest in the enforcement of the defendants’ liabilities against the property of the Bibleway Trust, I consider that the question precisely how an appropriate scheme is to be settled be best left for determination at that further hearing, after the contents of this judgment have been considered by the Charity Commission and by the Attorney General.

My conclusions may therefore be summarised as follows:

I will hear submissions as to directions, including directions for advertisement for creditors, the joinder of representatives of the Bethnal Green and Mitcham Congregations and other case management matters, at a directions hearing upon, or as soon as may be after, the handing down of this judgment.