Rai & Ors v The Charity Commission for England and Wales

Shri Guru Ravidass Sabha (“Ravidass Sabha”) is an unincorporated registered charitable association. Its activities centre upon a temple in Southall. Ravidassias are followers of Shri Guru Ravidass Ji (born 1377 CE). They believe that he spearheaded the fight against manmade discrimination based on caste, colour or creed and preached the lofty ideals of socialism, secularism, equality and fraternity: and that he taught the lessons of universal brotherhood, tolerance and “love your neighbour”. These teachings have a particular resonance for his followers, many of whom were drawn from the Hindu caste of Untouchables. Some of the teachings of Shri Guru Ravidass Ji were incorporated into the Sikh Holy Book, the Shri Guru Granth Sahib (“the Granth”): but only some 40 hymns and 1 verse.

The governing instrument of Ravidass Sabha is a Constitution dated the 14 December 2007. It sets out (in Clause 2) the aims and objects of Ravidass Sabha. Clause 2(a) is in these terms:-

“To worship almighty God in accordance with the teachings and philosophy, mission and principles of Shri Guru Ravidass Ji from the Holy Book of Shri Guru Granth Sahib and research of Holy Scriptures of Shri Guru Ravidass Ji”.

Whilst the language of the clause is not crystal clear, one tenable reading of the aims and objects is that the Ravidass Sabha exists to facilitate the worship of God in accordance with the teachings and philosophy, mission and principles of Shri Guru Ravidass Ji derived from (i) the Granth and (ii) research of Holy Scriptures of Shri Guru Ravidass Ji. The objectively ascertainable context within which the words used in Clause 2(a) fall to be understood is that whilst some of the teachings, philosophy and principles of Shri Guru Ravidass Ji can be found in the 40 hymns and 1 verse included in the Granth, over the years research has located other material which some Ravidassias regard as Holy Scriptures of Shri Guru Ravidass Ji.

Clause 5 of the constitution deals with membership. Clause 5(b) says:-

“All Permanent Settled in the UK members of original Ravidassia Community of 18 years or over who accept the aims and objects of the Sabha shall be eligible for the ordinary membership of the Sabha”.

Discipline within the Ravidass Sabha is dealt within Clause 8. Clause 8(b) says:-

“Any member in doubt or one who wishes to complaint (sic) against the Executive Committee should address his complaint in writing with evidence to the General Secretary/President of the Sabha… He/she would get the reply within 14 days positively. If he/she is not satisfied with the reply then the matter can be referred to the Chairman of the Trust. Because Trust is responsible of the entire affairs of the Sabha. So Trust will not go to court in any circumstances and also any member of the Executive Committee/Official on any dispute. In addition to that any member to act against the interest of the Sabha such as to publish the unnamed leaflets against any member/official or any such kind of activity is strictly prohibited”.

As that provision indicates there are two separate bodies responsible for the governance of the Ravidass Sabha. First there is an elected Executive Committee. Second, there are eleven appointed trustees (who cannot be members of the Executive Committee) and who elect a chairman from amongst their number. The body of such Trustees is the “Trust” referred to in Clause 8(b).

Elections to the Executive Committee are meant to take place every two years. Clause 12 of the Constitution deals with procedure. The election is to be held in the month of September. By Clause 12(b):-

“Election procedure shall be laid down by the EC at least 6 weeks before the Election, subject to the approval of the General Body Meeting.”

By Clause 12(f) it is provided:-

“At the time of election of the Executive Committee, the New Membership Book shall be ready at the General Body Meeting is to be held. It must hand over to the Chairman of the Concerned Groups at the time of Submission of Nomination forms to the General Secretary of the Executive Committee…”.

This provision needs to be spelt out a little. What is envisaged is that at the time of each election a new register of members is to be prepared. This would record those entitled to vote and to attend the General Body Meeting (to approve the election procedure proposed by the Executive Committee). Under Clause 12(c) of the constitution:-

“All Elections of the Sabha shall take place by secret Ballot; each member casting a single vote for an individual candidate (in direct election).”

In April 2011 elections were overdue. On the 5 April 2011 the Executive Committee placed an advertisement in a Sikh newspaper setting out the proposed membership registration timetable. It included the following statement:-

“PLEASE NOTE: According to constitution of Shri Guru Ravidass Sabha Southall our relegious (sic) Guru is Shri Guru Granth Sahib Ji and we do not endorse any other holy book. To become member of Shri Guru Ravidass Sabha you must belong to Ravidassia Community and belive (sic) in Shri Guru Granth Shib Ji….”.

This Note is an addition to the election registration invitation previously used. What lies behind it is an emerging doctrinal dispute about the results of the “research of Holy Scriptures of Shri Guru Ravidass Ji” referred to in Clause 2(a) of the Constitution. That research has led to the compilation of what is suggested to be a new Holy Book of the Ravidassias known as “Shri Guru Ravidass Amrit Bani”, promulgated on the birthday celebration of Shri Guru Ravidass Ji on 30 January 2010 (“the Amrit Bani”). Some Ravidassias accept the Amrit Bani: some Ravidassias (particularly those originating in the Sikh communities of the Punjab) do not.

But irrespective of the question whether the Amrit Bani constitutes the sole (or an alternative) source of the teachings and philosophy, mission and principles of Shri Guru Ravidass Ji the Public Notice differs from the express terms of Clause 2(a) of the Constitution (which are the aims and objects of the Sabha which under Clause 5(b) a member of the Ravidassia Community must accept to be eligible for membership) in that

Immediately the Notice was published in those terms Solicitors for the Claimants wrote to express their concern, observing that the terms of the Notice were a departure from previous practice. The letter said:-

“We are aware of the fact that, at the moment, there are many members of the Sabha, who believe in Budhism Radha Swami Christianity etc. The new condition would prohibit them from becoming members of the Sabha and [we] seek your confirmation that this condition is removed”.

The letter invoked Clause 8(d) of the Constitution. It concluded in these terms:-

“We wish to make it very clear that it is not the intention of our clients to show any disrespect to [the Granth] or any other Holy Book. That Holy Book has been used to worship Shri Guru Ravidass Ji purely and simply as that was the only Holy Book that contained the holy scriptures of Shri Guru Ravidass Ji. Now that a Holy Book has been dedicated specifically for the Ravidassia faith, that should be utilised and used as the Ravidassia Holy Book”.

It was suggested that there be a reference to mediation.

The Executive Committee did not reply to this letter: so the Claimants requested the Trustees to deal with the matter.

According to the evidence of one of the Trustees (Mr Virdi), there was a meeting of the Trustees on the 8 May 2011 at which it was agreed

On 10 May 2011 the Claimants issued a Claim for an injunction to restrain the Executive Committee from requiring persons seeking registration as members of the Ravidass Sabha to affirm belief in Shri Guru Granth Shib Ji. No pre-action protocol had been observed. Although the action clearly constituted “charity proceedings” no application had been made to the Charity Commission under what was then Section 33 (2) of the Charities Act 1993.

A written application was subsequently made to the Charity Commission on 12 May 2011. Consent was refused on the grounds that the Chairman of the Trustees had indicated a willingness to postpone or cancel the registration of members which was due to commence on the 15 May 2011 and to proceed under the terms of the constitution to resolve the dispute under Clause 8(d), or if the internal resolution mechanism should fail, to engage in a mediation process. This information had been derived from a conversation between the Charity Commission caseworker and the Chairman of the Trustees.

The Claimants were then invited to a meeting with the Trustees: but the Trustees said that it should be without legal representatives present and the Claimants refused to agree to that pre-condition. The meeting went ahead on the 30 May 2011 without them. Three things happened:-

The Claimants would not accept this as a sufficient answer. This was partly because they could not accept that the publication of a Notice (in the original or a revised form) was constitutional. It was partly because they wanted to advance their own cause in relation to the Amrit Bani – an issue that they wanted referred to mediation. The Claimants indicated that they would only consider withdrawal of their claim “provided that they are also given use of one of the halls for worship according to the Amrit Bani”. The Solicitors for the Executive Committee pointed out that the status of the Amrit Bani was not an issue in the proceedings that had been commenced.

The only pleaded issue between the parties was now whether it was right for the Trustees to prepare the membership register by reference to an advertisement which contained a Note along the lines of that which had appeared in the original and in the revised advertisements. The significance of that issue is that although membership would actually be decided in accordance with the Constitution the people being invited to attend to register would be artificially restricted by the apparent requirement that they should “believe” in the Grant and that they should accept that the Granth was the only Holy Book (although the Trustees had declared that it was not their intention in publishing an advertisement in that form so to restrict membership).

In these circumstances another application was made to the Charity Commission for permission to pursue the proceedings which had been commenced. Permission was again refused. In a commendably clear letter of the 16 June 2011 Ms Lake (the responsible Legal Advisor) set out her considered view, reaching this conclusion:-

“The Commission cannot determine that the doctrinal issue that lies at the heart of the membership restriction matter. Insofar as other disputed matters are concerned, such as the failure to hold an AGM, the membership issue restriction arose because the EC were commencing the necessary administrative steps to facilitate an AGM and there is no reason to believe that this is not still their intention in accordance with the constitution. The exercise of the Commission powers would not be a proportionate step in such circumstances and where, as here, the matters in dispute are not disrupting the operations of the charity, and the charity is being administered by the EC in furtherance of its objects… the charity will avoid the loss of charitable funds to unnecessary legal proceedings and will also have a further opportunity to actively avoid this type of dispute happening again by entering into a dialogue and or mediation process (if so advised) with the Claimants to try and re-build relationships within the charity….”.

By the time the Charity Commission had expressed their view the Executive Committee had filed its Defence in the proceedings that had been commenced. Two paragraphs of the Defence are relevant to the issue before me.

In these circumstances the Claimants make an application for the Court for permission to pursue the main proceedings because, on account of the terms of the Public Notice:-

“It is reasonably to be expected that some members or prospective members who belong to the Ravidassia community and are otherwise fully qualified for membership in accordance with the Charity’s constitution will erroneously conclude, on reading the published notice, that they are now not qualified for membership”.

Shortly after commencing the present proceedings the Claimants wrote to the Solicitors for the Executive Committee asking that the election proceed utilising the membership form and the Public Notice previously used in 2008 without amendment. But the Executive Committee responded through its Solicitors saying:-

“Our clients’ position remains that the Notice is not in breach of the Constitution and it is certainly not unlawful as your clients indicate, therefore, if it is the case that your clients wishes (sic) our clients to proceed with the election process this can only be done on the basis that your clients’ claim is withdrawn”.

So an apparent deadlock has been reached over the terms of the Public Notice.

What is now section 115(5) of the Charities Act 2011 provides that:-

“Where subsections (1) to (4) require the taking of charity proceedings to be authorised by an order of the Commission, the proceedings may nevertheless be entertained or proceeded with if, after the order had been applied for and refused, leave to take the proceedings was obtained from one of the judges of the High Court attached to the Chancery Division”.

It was said of this provision’s predecessor (Section 33 of the Charities Act 1993) that its object was:-

“..to prevent charities from frittering away money subject to charitable trusts in pursuing litigation relating to internal disputes”.

See Numan v Magasena [2000] 1WLR 299 at 305D per Mummery LJ. The language of the section itself is as wide as it can be: but a number of points may be made (some arising from the judgment of Neuberger J in Scott v The National Trust (unreported, 12 November 1998)).

First, the Chancery Division is not acting as an appellate court against the decision of the Charity Commissioners: it is exercising its own jurisdiction.

Second, that jurisdiction is conferred in unrestricted terms. It is unwise to attempt to lay down rules or guidelines to fetter the freedom of action of other judges (and none of my observations is intended to have that effect); though it is undoubtedly helpful to draw on the experience of earlier cases in addressing the issues raised in the instant case.

Third, experience has shown that legal costs can be wasted unless a procedure is adopted which brings the real issue and the real contending parties before the court. In Scott it was suggested that the issue might first be addressed on an ex parte basis, but that where the judge was uncertain whether or not to grant leave it was proper and reasonable for the application to be adjourned in order to be heard inter partes. At any such adjourned hearing it would not be for the opponent parties to deploy their full case; they would simply have the opportunity to advance any “knockout” points. I agree with the observation of Neuberger J that in no circumstances (say perhaps exceptional ones) should the leave application be treated as an opportunity for a dress rehearsal of the final hearing. To my own part, I would add that if it is clear (for example from correspondence preceding the application for permission to bring proceedings) that the opponent party takes the reasoned view that the main action has no real prospect of success then the initial hearing should be inter parties: and an applicant who pointlessly applies for ex parte relief is likely to bear the costs so occasioned personally.

Fourth, the Chancery judge is dependant upon the applicant to put forward the evidence on which the application is to be decided. The Court should not be invited to consider the question whether or not to grant leave on the basis of less evidence than was available to, and considered by, the Charity Commissioners. That is not because the hearing is in any sense an appeal from the decision of the Charity Commission: but because there is no point in the Court being asked to make a less informed decision than that has already been made.

Fifth, although the Chancery judge is exercising his or her own original (and not an appellate) jurisdiction, the fact that the Charity Commission has refused permission to bring the proceedings is part of the evidence. The prior decision of the Charity Commission is entitled to be accorded in an appropriate degree of respect because of the weight of expertise brought to bear on evaluating what is obviously a multi-factorial decision. The Charity Commission has developed a structured approach (recorded in Picarda “The Law and Practice Relating to Charities” 4^th edition p. 919) identifying the following questions to be considered:-

Sixth, it is obvious that the Applicants must have a legally sustainable claim to advance in the proceedings for which permission is sought. But whilst that is a necessary condition, it is not a sufficient condition. The policy behind the section is to prevent the resources of the charity being frittered away on internal disputes even if the Applicants have a real prospect of succeeding (as opposed to having merely a fanciful case).

Last, the approach which I intend to adopt is to ask: if the Applicants have a legally sustainable dispute, is the commencement of litigation the best (or the least worst) course in the interests of the charity as a whole to deal with that dispute? Litigation may be the best course for the Applicants to pursue to achieve their objective. But it is the charity’s interest (not that of the Applicants or proposed Respondents) that is the focus of the inquiry.

In answering the question posed I must first identify the relevant dispute. The dispute is now solely as to the terms of the Public Notice inviting persons to register as members of the Ravidass Sabha. The Claimants say that the revised version of the notice has the potential to discourage some persons who would actually be willing to sign the membership application form from seeking registration because the Public Notice contains (for the first time) what appears to be an additionial condition. The Executive Committee does not address this point: but says that the notice is in accordance with the Constitution and says that the election can only proceed if the Claimants withdraw their criticism of the Public Notice. There are in the background other disputes. There is the doctrinal dispute about whether the Amrit Bani can be regarded as “a Holy Book”. There are disputes about the way the charity has been administered. These doctrinal and management disputes are irrelevant because they form no part of the intended proceedings.

I must secondly consider whether in relation to the identified dispute the Claimants have a legally sustainable case. In my judgment they clearly have. It is arguable that (properly construed) it is not a requirement of membership as laid down in the Constitution that members must “believe” in the Granth (even those parts of it which are not attributable to the writings of Shri Guru Ravidass Ji) or that the Granth is the only Holy Book (to the exclusion of the “Holy Scriptures of Shri Guru Ravidass Ji” referred to in the Constitution). It is also arguable that the Executive Committee is not acting reasonably in insisting upon (and that the Trustees are not acting in a trustee-like way in allowing) the publication of the Public Notice in a form which departs from previous usage, is known to be controversial, and is not (according to the Trustees) in fact intended to restrict membership. (I emphasise that I express no provisional (let alone concluded) view as to the ultimate success of either argument. I simply hold that the arguments are legally sustainable).

The third step is to ask whether that legally sustainable case is presented in a proper manner (by which I refer to the first four factors identified in the Charity Commissions structured approach). I am satisfied that they are.

The fourth step is to endeavour to identify what impact upon the charity’s funds the resolution of the dispute by litigation will have. The evidence does not include the accounts of the Ravidass Sabha. It does include estimates of the Claimants’ costs. On the 13 July 2011 they estimated that they had already spent £30,000 and they anticipated that the total costs of pursuing the litigation to trial would be £120,000. They invite the court to make a protective costs order which will enable them to recover those costs from the charity’s funds. By 13 July 2011 the Executive Committee estimated their expenditure on costs at £8000 and they anticipated total costs of £25,000 if the matter went to trial. It would be possible to reduce the impact of the current litigation by making it a condition of the grant of any permission that the Claimants should not look to the funds of the charity in any circumstances for payment of their costs: but the Claimants resisted the imposition of such a condition. So far as the Defendants’ costs are concerned the Solicitors for the Executive Committee appear in correspondence to assume that the Executive Committee may automatically resort to the charity’s funds in respect of their opposition to the grant of permission and in their intended Defence of the main proceedings. This assumption may not be well founded since the Constitution contains no contractual right of indemnity for the members of the Executive Committee, and they may be dependent upon the exercise of a discretion by the Court. But there is clearly a risk that such a claim might be made upon the charity’s funds and a possibility that such a claim might succeed. There is therefore the risk that, by the parties own estimate, the assets of the Ravidass Sabha would be depleted by about £150,000 in resolving the dispute about the form of the advertisement.

The Claimants submit that is not their intention to pursue the matter to trial. They say that the object of their obtaining permission to litigate is to force the Executive Committee to mediate (that is, to mediate on the Claimants’ terms as to an external mediator and the attendance of legal advisors: for the Executive Committee offered internal mediation without the attendance of representatives). It is, however, clear to me (from the terms in which the correspondence has been conducted by the Claimant’s Solicitors) that any mediation would not be confined to the form of the advertisement but would include the other disputes to which I have referred (and in particular the status of the Amrit Bani and its use within the temple). In my judgment I should assess the question of litigating the dispute over the form of the Public Notice on its own merits, and not as a means of securing some other end (namely mediation, and mediation about issues other than those which are pleaded).

I must now consider whether, in the interest of a charity as a whole, litigation is the best (or least worst) option. The parties have so far not agreed on mediation (because they cannot agree upon its form). They have agreed that the original version of the advertisement (which prompted the commencement of proceedings) was wrong because it referred to the Granth as a “Guru” (which it should not have done). The parties have agreed that the membership form shall be that which was used in 2008 (without any additional conditions). The Trustees have declared (and the Executive Committee is bound to accept) that the form of Public Notice used was not intended to restrict membership, and accordingly that acceptance of the aims and objectives set out in Clause 2(a) of the Constitution in its entirety confers an entitlement to membership. The only questions are now whether the revised form of advertisement is lawfully consistent with the Constitution, and whether the Executive Committee ought to insist upon publication in that form even thought there is a sustainable argument that it will erroneously deter some people from applying for membership. Is there a significant chance that an accommodation can be reached upon those differences which does not involve the expensive prosecution of the present proceedings?

In my judgment the answer to that question is in the affirmative. It must first be realised that the litigation cannot possibly settle any doctrinal question as the relationship between the Granth and the “Holy Scriptures of Shri Guru Ravidass Ji” or as to the status of the Amrit Bani. If there is a dispute about whether the Public Notice faithfully reflects Clause 2(a) of the Constitution the Court will decide that not by reference to doctrinal arguments but by reference to the usage of the Ravidass Sabha: compare Attorney General v Pearson (1817) 3 Mer 353 at 400 and 420. It must next be appreciated that neither the Claimants nor the Executive Committee (or even the Trustees) can be assured that being able to look to the charity’s funds for reimbursement of their legal expenses (particularly if those with a prospective claim to indemnity deliberately embark upon a course known to be controversial and acknowledged not to be intended to restrict membership). Litigation may prove necessary to secure that those entitled and wishing to be members of the Ravidass Sabha have a fair opportunity to register as such. But if the contending parties undertake a realistic appraisal of their respective positions in the light of this judgment then in my view it ought to be possible to prepare a membership book and formulate an electoral procedure (having regard to past usage) which will enable the practice of the Ravidass Sabha to reflect the wishes of the majority of its members (and not the wishes of the Claimants on the one hand or the Executive Committee on the other). The members did after all agree:-

“Trust is responsible of the entire affairs of the Sabha. So Trust will not go to the Court in any circumstances and also any member of the Executive Committee/Official on any dispute…”.

Accordingly whilst I would give the terms of the Public Notice inviting registration for membership a greater significance than I think was accorded by the Charity Commission, my own view is in the event the same as that reached by the Charity Commission.

I would not, however, dismiss either the application for permission or the proceedings that were started in May 2010. I would adjourn the permission claim for 2 months (with permission to the Claimants to restore it). I would stay the May 2010 proceedings generally with permission to either party to lift the stay. If my expectations as to the ability of the parties to reach an accommodation in the light of this judgment are disappointed then it may well be necessary, as a last resort, in order to determine how the electing body is to be constituted to provide a legal answer to the question whether the revised Public Notice is consistent with the constitution (and, if so, whether the Trustees and the Executive Committee are acting reasonably in seeking to change past usage in relation to the proposed election.)

I will hand down this judgment on Tuesday 1 May at 10:30am (Court room to be advised) I do not expect the attendance of legal representatives. I reserve all questions of costs to any restored hearing of the permission claim or of the main action.