Park v Cho & Ors [2014] EWHC 55 (Ch)

[2014] EWHC 55 (Ch)

Case No HC11C04508

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Venue Rolls Building, Fetter Lane,

Date 24 th January 2014

London EC4A 1NL

Before

MR JEREMY COUSINS QC,

(SITTING AS A DEPUTY JUDGE OF THE CHANCERY DIVISION)

Between

YOUNG GEUN PARKClaimant

(1) TAE HYEON CHODefendants

(2) IL SOO SEOK (acting on behalf of the Korean Residents Society)Defendant

(3) HER MAJESTY’S ATTORNEY GENERAL)Defendant

KAP JOONG KWON (acting on behalf of the Korean Residents Society)Third Party

Mr Neil Vickery (instructed by Direct Access) for First and Second Defendants/Appellants

Mr Joshua Winfield (instructed by Messrs Bates Wells & Braithwaite London LLP of 2-6, Cannon Street, LONDON EC4M 6YH) for Claimant/Respondent

Hearing Hearing date: 12 th December 2013

JUDGMENT

MR JEREMY COUSINS QC:

INTRODUCTION

[1]This is an appeal against the order of Master Marsh made on the 4th July 2013, whereby he directed that the stay ordered by Deputy Master Henderson on the 7th March 2012 be lifted on the basis that the Claimant, Mr Park, had obtained authority from the Charity Commission to continue with these proceedings pursuant to Section 115 of the Charities Act 2011. Master Marsh also ordered that the First and Second Defendants, Mr Cho and Mr Seok, should pay the Claimant’s costs of the application assessed in the sum of £5,000. This appeal turns upon the question of whether the order made by the Charity Commission on the 12th February 2013 constituted sufficient authority to the Claimant to “take the proceedings” concerned, as to the meaning of which phrase there is considerable dispute.

[2]In November 2007, Mr Park and Mr Cho stood for election as chairman of the Korean Residents Society (“the Society”). Mr Seok was the outgoing chairman. Mr Cho was the successful candidate in the election. The result of the election was disputed and, on the 30th January 2008, Mr Park commenced proceedings in the Queen’s Bench Division, in which Mr Cho and Mr Seok were named as Defendants “acting on behalf of the Korean Residents Society”. On the 5th February 2008, upon an application made by Mr Park, an injunction was granted whereby Mr Cho was restrained from appointing any officers to exercise the functions of the Society. On the same day, a speedy trial was directed, and that trial took place on the 12th March 2008 before His Honour Judge Mackie QC, sitting as a Judge of the High Court. At the conclusion of the trial, Judge Mackie declared that the election concerned was conducted by the Election Committee in breach of the duties owed to the Claimant. He gave directions as to the conduct of a further election. Judge Mackie’s written judgment was handed down on the 23rd April 2008. Having heard submissions as to costs, he ordered that Mr Seok and Mr Cho pay Mr Park’s costs, subject to a detailed assessment if not agreed.

[3]Mr Cho and Mr Seok issued third party proceedings, respectively in December 2010 and February 2011, against Mr Byung Il Suh, who by then was chairman of the Society, whereby they sought an indemnity against the costs that they had been ordered to pay. On the 23rd March 2011, Master Roberts, upon the default of Mr Suh to respond to their claim, ordered that Mr Suh indemnify Mr Cho and Mr Seok.

[4]On the 23rd May 2011, Mr Suh issued a fourth party claim against Mr Park as a representative of the Society, claiming indemnity from him in respect of any liability that Mr Suh might have to Mr Cho and Mr Seok. In the meantime, in December 2010, Mr Park had become the chairman of the Society in place of Mr Suh. Mr Park continued to hold that position until December 2012.

[5]On the 30th September 2011, Master Leslie ordered that the default judgment which had been obtained by Mr Cho and Mr Seok be set aside and that Mr Park be substituted as third party in place of Mr Suh.

[6]On the 1st November 2011, Mr Park’s costs of the trial in 2008 were assessed in the sum of £80,792.62.

[7]On the 4th November 2011, the matter came, once more, before Master Leslie, who observed in his judgment that the case had been “bedevilled by several things”. Before Master Leslie it was submitted by Mr Park in his capacity as third party, and Mr Cho and Mr Seok, that the original proceedings were likely to be charity proceedings within Section 33 of the Charities Act 1993 pursuant to which such proceedings required to be authorised by order of the Charity Commission. Master Leslie expressed the view that the proceedings “almost certainly” were charity proceedings. This point, with regard to the status of the proceedings, had not previously been raised. Master Leslie directed, in the circumstances, that the proceedings and execution be stayed, and he transferred the entirety of the proceedings to the Chancery Division for hearing by a Master.

[8]On the 7th March 2012, the matter came before Deputy Master Henderson, sitting in the Chancery Division. The Deputy Master directed that the claim, together with its enforcement, be stayed until:

“(a) The issue of whether the claim was a Charity proceedings under Section 33 of the Charities Act 1993 has been determined; and (b) The issue of whether the enforcement by the Claimant of the orders obtained by him in the claim is affected by Section 33 of the Charities Act 1993 has been determined; or (c) As an alternative to (a) and (b), the Claimant has obtained authority under Section 33 of the Charities Act 1993.”

[9]On the 30th October 2012, Mr Park sought the authority of the Charity Commission to continue charity proceedings for the enforcement of the costs order. The application was made in a letter of that date sent to the Commission by Mr Park’s then solicitors. The letter began by explaining that the application was made pursuant to Section 115(2) of the Charities Act 2011. That provision, with effect from the 14th March 2012, was the provision pursuant to which the Commission could make a relevant order, following the repeal of the Charities Act 1993. It is convenient at this stage to set out the provisions of the sub-section:

“Subject to the following provisions of this section, no charity proceedings relating to a charity are to be entertained or proceeded with in any court unless the taking of the proceedings is authorised by order of the Commission.”

[10]The letter to which I have referred described the history of the litigation, and then went on to address the legal principles which it was suggested were relevant. Reference was made to the well known decision of the Court of Appeal in Rendall v Blair (1890) LR 45 Ch D 139 for the proposition that the proceedings were not a nullity and should not be dismissed; it was observed that Deputy Master Henderson had accepted that proposition and that each of the parties agreed with it. For the purpose of explaining the decision in Rendall v Blair, the letter made reference to Section 17 of the Charitable Trusts Act 1853, Section 33 of the Charities Act 1993 and Section 115 of the 2011 Act. Various considerations were advanced in support of the invitation to the Commission to authorise the continuation of the proceedings so that the court might determine all issues in relation to the enforcement of the costs order which had been made in favour of Mr Park.

[11]On the 12th February 2013, the Charity Commission made an order upon the application before it. The terms in which the order was expressed are highly material to the issue which I have to decide. By paragraph 1 the order defined “the Charity” to mean the Society, the “substantive proceedings” to mean the proceedings which had been commenced by Mr Park in the Queen’s Bench Division and which had been subsequently transferred to the Chancery Division, and “the costs order” to mean the order made in favour of Mr Park by Judge Mackie on the 23rd April 2008. Paragraph 2 of the order recorded various matters of which the Charity Commission had been informed, including that the substantive proceedings had not been identified or authorised as charity proceedings under the relevant statutory provisions, that Mr Park was seeking to enforce the costs order obtained under the substantive proceedings, and that he had applied to the Commission to authorise the substantive proceedings and/or the enforcement proceedings as charity proceedings under Section 115 of the 2011 Act. Paragraph 2 of the order continued:

“(5) The Commission does not have power under Section 115 to authorise the substantive proceedings retrospectively. (6) It is unclear whether the enforcement proceedings fall to be authorised under Section 115 of the Charities Act 2011 as they amount to proceedings brought in a pending cause or matter. (7) In light of the uncertainty the Commission considers that it should authorise the enforcement proceedings if and insofar as the same meets the definition of charity proceedings pursuant to Section 115(8) of the Charities Act 2011.”

[12]Paragraph 3 of the order provided as follows:

“If and insofar as the enforcement proceedings meets the definition of charity proceedings pursuant to Section 115(8) of the Charities Act 2011 the Commission by this order hereby authorises Mr Park, being a person interested in the Charity, to take or continue to take proceedings in the enforcement proceedings, ...”

[13]On the 5th June 2013, Mr Park applied to the court for an order that the stay which had been imposed by Deputy Master Henderson be lifted on the ground that Mr Park had obtained authority from the Charity Commission as envisaged by the order of the 7th March 2012. The application came before Master Marsh on the 4th July 2013, and Master Marsh ordered that the stay be lifted.

THE DECISION OF MASTER MARSH

[14]In his judgment, Master Marsh described the background to the application which had been made to him and the history of the proceedings and of the application which was made to the Charity Commission. He said of the order which the Charity Commission made:

“The order seeks to distinguish between the substantive proceedings and the enforcement proceedings. It records that the substantive proceedings had been dealt with by the judgment of the 23rd April 2008 but also that Mr Park was seeking to enforce costs and it provides consent or authority to the Claimant to take or continue to take enforcement proceedings. I am bound to say that the analysis dividing up the claim between the claim and the enforcement is one I have difficulty following. There is one claim and enforcement is part of it as much as the substantive proceedings. It may be that the Charity Commission took the view that they could not grant retrospective authority and that it was convenient to distinguish the two stages describing the prospective stage as enforcement and the past proceedings as the substantive proceedings.”

[15]The Master then noted the submission which Mr Winfield, learned counsel for Mr Park (who also appeared for Mr Park on the appeal) advanced which was that one of the conditions in Deputy Master Henderson’s order had been met, namely, that authorisation had been obtained under the 2011 Act and that the making of an order to lift the stay was not a matter of discretion. Mr Winfield’s submission was that the condition in Deputy Master Henderson’s order had been satisfied and therefore the stay came to an end.

[16]Master Marsh went on to refer to the statutory provisions and observed that it was clear that consent to the pursuing/entertaining of charity proceedings could not be granted retrospectively. He noted that it was common ground that the absence of consent did not itself render the proceedings a nullity. He rejected the submission advanced by counsel for Mr Cho and Mr Seok, that if consent was not obtained then although the proceedings were not a nullity, the court would be bound to dismiss the claim. Master Marsh also rejected the submission that the Charity Commission had not given consent to the proceedings up to and including the trial, so that the stay should not be lifted, and that even if it were lifted, the court had no jurisdiction to proceed with the enforcement proceedings. The Master’s reasoning was as follows:

“It is right that the Charity Commission has not purported to sanction the proceedings prior to the date of the order of 12th February 2013 but it is absolutely plain from the terms of the order that, having considered the position, it considered the claim should be continued so as to the remaining part of it. In my judgment, it is simply the case that the Charity Commission has granted the consent that it is able to grant. These proceedings now have authority and the Claimant is now entitled to take the proper steps. The Charity Commission’s decision was made against a backdrop of HHJ Mackie QC having made a final determination. It would have been open to the Charity Commission to have refused the application. It is deeply unattractive for the Defendants who have participated in this trial to take a highly technical point at this stage in order to prevent the final resolution of this claim. In my judgment the court is entitled to conclude that the stay has been lifted as a consequence of the Charity Commission’s order.”

[17]In the circumstances Master Marsh ordered that the stay be lifted. He further directed, in respect of a non-controversial application, that Mr Park be removed as a representative third party and that he be replaced by Mr Kap Joon Kwong.

THE CASE ON THE APPEAL

[18]On the 26th July 2013 Mr Justice Vos, as he then was, directed that the application of Mr Cho and Mr Seok for permission to bring an appeal out of time against the order of Master Marsh, and for permission to appeal that order should be heard before a High Court Judge, and that appeal now comes before me. Mr Justice Vos also gave directions for the preparation of the hearing of the appeal, and directed that Master Marsh’s order should be stayed pending determination of the appeal.

The Submissions on behalf of Mr Cho and Mr Seok

[19]Mr Vickery, learned counsel who appeared on behalf of the Appellants on this appeal (but who did not appear before Master Marsh), advanced three grounds for why the decision of Master Marsh was wrong. The first was that the condition for the lifting of the stay had not been met because the order made by the Charity Commission did not constitute authority under the current statutory provision as required by paragraph 1(c) of Deputy Master Henderson’s order. Mr Vickery acknowledged that the Commission had granted authorisation of a kind, but he submitted that there was only one claim, and that the enforcement of the costs order was the continuation of the original proceedings. It was in those proceedings that the order was made, and as such was a part of those proceedings. There is no separate costs action. Thus he submitted it was impermissible for the Charity Commission to attempt to distinguish between the substantive proceedings and the enforcement proceedings. This was a difficulty which Master Marsh himself had recognised in his judgment. Mr Vickery submitted that the only authorisation which the Charity Commission could grant was for “the taking of the proceedings” without which no proceedings could, pursuant to the wording of Section 115(2), be “entertained or proceeded with”. It was thus essential, he argued, that authorisation for proceedings required authorisation for the taking of the proceedings as a whole; since there was but a single proceeding then the authorisation must relate to it as a whole and not to some aspect of it. He drew attention to the part of the Charity Commission’s order which recorded that it had been informed that it did not have power under Section 115 to authorise the substantive proceedings retrospectively when submitting that the order which it made could not be interpreted as an authorisation of the substantive proceedings, and that the Charity Commission did not even consider authorising the substantive proceedings. Thus, submitted Mr Vickery, it followed that the authorisation obtained was not the authorisation contemplated by Deputy Master Henderson’s order. In those circumstances, Mr Vickery submitted, Master Marsh ought not to have concluded that the condition for lifting the stay had been met.

[20]Mr Vickery developed this submission further, maintaining that when the Charity Commission validates existing proceedings, it validates them from the beginning. Thus it is not sufficient for the Commission to say that a party may proceed with existing proceedings unless it is validating them from their inception. He made it clear that he did not submit that the Charity Commission’s order was invalid, but merely that it did not grant the necessary authority required on the part of Mr Park in order to satisfy the requirements under the 2011 Act.

[21]The second ground advanced by Mr Vickery was that in the absence of authorisation for the taking of proceedings as a whole, proceeding with the enforcement of the costs order was prohibited by the relevant statutory provisions. This ground was closely related to the third ground which he advanced, and which I mention below. Mr Vickery maintained that regardless of the order made by Deputy Master Henderson, there is a need for the Charity Commission’s authorisation before the claim can be entertained or proceeded with by enforcing the costs order. This is because the enforcement of a costs order in itself constitutes “entertaining” or “proceeding with” the proceedings. The costs order was made in the proceedings and its enforcement should be regarded as a continuation of those proceedings. Any methods of enforcement, for example by writ of fi fa, or by charging order, are by applications within the proceedings.

[22]The third ground developed by Mr Vickery was that in the absence of authorisation, the costs order which has been made is invalid, or a nullity, or liable to be set aside on appeal. Mr Vickery did not suggest that the present proceedings were a nullity because they had been commenced without the necessary authorisation. He drew attention to the decision of the House of Lords in Seal v Chief Constable of South Wales Police

[2007] 1 WLR 1910

, a decision on the effect of Section 139(2) of the Mental Health Act 1983 which provides that no civil proceedings shall be brought against any person in respect of any acts done in pursuance of the Act without the leave of the High Court. In that case, the House of Lords, by a majority, held that since the first introduction of the requirement for leave in such circumstances in 1930, there had been a clear consensus of judicial, professional and academic opinion that lack of such leave rendered the proceedings a nullity. That case, Mr Vickery acknowledged, was decided on its own very particular legislative history. He submitted that in other cases, including those in relation to charity proceedings, the courts leaned towards a construction that did not invalidate the proceedings, but allowed them to be sanctioned after they had been started. In this connection he referred me to In Re Saunders

[1997] Ch 60

(concerning the operation of Section 285 of the Insolvency Act 1986), Adorian v Commissioner of Police of the Metropolis

[2009] 1 WLR 1859

(concerning Section 329 of the Criminal Justice Act 2003), and Rendall v Blair, arising under Section 17 of the Charitable Trusts Act 1853, the statutory predecessor of the 2011 Act.

[23]Mr Vickery submitted that the present case appeared to raise a novel point as to the approach which should be taken where lack of authorisation is raised after judgment has been given and a costs order made, but before the costs order has been enforced. Consistently with Rendall v Blair, Mr Vickery suggested that in the absence of authorisation for the proceedings, they must be struck out.

[24]The need for authorisation, Mr Vickery submitted, is relevant to the jurisdiction of the court to entertain charity proceedings. Thus where the point is raised while such proceedings are still being entertained or proceeded with, even following judgment, the authorisation must be obtained. On the authority of the decision of the Privy Council in Strachan v The Gleaner Co. Limited

[2005] 1 WLR 3204

, Mr Vickery argued that where the absence of authorisation for proceedings was raised once a claim was no longer being entertained or proceeded with, any orders made were not nullities but, having been made without jurisdiction were liable to be set aside on appeal. He referred me in particular to what Lord Millett, delivering the judgment of the Board, said at paragraph 28 in Strachan, namely that an order made by a judge without jurisdiction was obviously vulnerable, but not wholly without effect. It must be obeyed unless and until set aside. Mr Vickery drew my attention to some passages in Adorian in which the absence of requisite authorisation to bring proceedings was considered. The case concerned a claim for injuries which the Claimant had sustained while being arrested by the police. He was subsequently convicted of an offence of resisting or obstructing a police officer in relation to the same occasion. The Claimant’s case was that the force used to arrest him had been excessive. Permission to bring those proceedings had been required because of the conviction concerned. The Police Commissioner applied to strike out the claim because of the failure to seek permission; the Commissioner argued that in the circumstances of the claim, the proceedings were void. The Court of Appeal held that the proceedings were not void and that the judge at trial had been entitled to give permission to bring them. The judgment of the Court of Appeal (Sedley, Keene, and Smith LJJ) was handed down by Lord Justice Sedley. The court said:

“40. ... in our judgment Section 329 stipulates only that a Claimant who sues someone for assaulting him in trying to prevent a crime or to apprehend him for committing it will have to show merits sufficient to defeat the special statutory defence if his action is to be allowed to proceed. It makes it legitimate to visit in costs an application which is made later than it should have been, but it does not either explicitly or implicitly involve the drastic step of nullifying proceedings, however sound, which have been initiated without first clearing this hurdle. 41. It follows, as it does in limitation cases, that a law suit within Section 329, begun without permission, can properly proceed to trial if the permission point is not taken. When the claim is plainly eligible for permission, this is an economical and practical course. If it were otherwise, the point could not only be unanswerably taken against the Claimant at an advanced stage of the proceedings, and costs be resisted on the ground that the progress of the action without permission has been entirely unlawful, that the judge would be required to take the point at trial. ...”

[25]Mr Vickery submitted that these passages amounted to no more than a statement of what is reflected in the body of authority other than in cases under Section 139(2) of the Mental Health Act 1983, namely that failure to obtain consent before issuing proceedings does not nullify the proceedings. The court in Adorian had not addressed the question as to what the position would be if the point as to absence of permission was raised after trial. In particular, Mr Vickery argued, the court in Adorian was not to be taken as laying down a general rule that if authorisation was not obtained prior to trial, then the absence of consent or authorisation became of no significance. He added that any analogy with the Limitation Acts was inexact because those Acts do not require authorisation to be obtained and it is well established that limitation bars a right to sue, but only if pleaded as a defence. By contrast, he argued, the parties were not able to waive a requirement for authorisation under the 2011 Act whose purpose is to prevent charities from frittering away money subject to charitable trusts in pursuing litigation relating to internal disputes; see Muman v Nagasena

[2000] 1 WLR 299

, CA, at 305B.

[26]Finally, Mr Vickery argued that if the orders made, including as to costs, within the proceedings were liable to be set aside on appeal then, in the light of indications on the part of the Appellants that they would apply for permission to appeal out of time, the Master should have exercised his discretion to stay enforcement of the costs order pending the outcome of that application.

The Submissions on behalf of Mr Park

[27]Mr Winfield began his submissions by reminding me that in this case in which it is not suggested that there is some other compelling reason why the appeal should be heard, permission to appeal may be granted only where the court considers that the appeal would have a real prospect of success. I bear in mind also that an appeal will be allowed only where the decision of the lower court was(a) wrong or

(b) unjust because of a serious procedural or other irregularity in the proceedings in the lower court.

[28]In answer to the first ground of appeal advanced by Mr Vickery (the condition for lifting the stay had not been met), Mr Winfield submitted that the Charity Commission did not make a true distinction between “the substantive proceedings” and “the enforcement proceedings” when making its order, because the “enforcement proceedings” were defined as “proceedings within the substantive proceedings”. The distinction was thus one of convenience only. He submitted that the Master was correct to hold that consent could not be retrospectively granted, but that it was, as the Master found, “absolutely plain from the terms of the order that, having considered the position, [the Charity Commission] considered the claim should be continued as to the remaining part of it.” Thus submitted Mr Winfield the authorisation contemplated in the order of Deputy Master Henderson was granted by the Charity Commission so that the condition for lifting the stay had been met. He argued also that a further order in respect of the previous steps in the proceedings would render the effect of the Charity Commission’s order nugatory.

[29]With regard to the second ground of the appeal (enforcement prohibited by section 115 of the 2011 Act in the absence of authorisation of proceedings as a whole) there is no dispute that permission is required to enforce the costs order, since it formed part of the proceedings in respect of which permission under the relevant section had not previously been granted, but by its order, the Charity Commission had given permission that covered the whole of the extant part of the proceedings, namely the enforcement of the costs order.

[30]As to the third ground of appeal (the costs order being invalid or a nullity or liable to be set aside on appeal in the absence of authorisation) Mr Winfield submitted that the Master had been correct to find that the claim had proceeded to trial, it had not been the subject of any appeal and its validity had not been impugned. Further, the Master had been correct in finding that the absence of authorisation under the section did not require the court to dismiss the claim, and that once the claim had proceeded to trial, it could not be right for the Appellants, on being dissatisfied with the decision, to suggest that the case should be dismissed.

[31]As to the validity of the previous proceedings, Mr Winfield submitted that the court had no jurisdiction to set aside the orders under consideration, since they were post judgment orders; any order for setting aside must be sought on appeal. Mr Winfield relied upon the passages in Adorian which I have set out above for the proposition that if a matter proceeded to trial without any point being taken as to lack of authorisation, then orders made upon the trial stand. The costs order was not made without jurisdiction he submitted, so that the reasoning in Strachan does not apply and the costs order is not liable to be set aside on appeal. There was, he argued, no novel point in the present case as to the effect of raising an issue of lack of authorisation after trial because Mr Park had obtained permission from the Charity Commission with the consequence that the Appellant’s argument relied upon an artificial distinction between “substantive” and “enforcement” proceedings which had been correctly rejected by the Master.

[32]In dealing with the decision in Saunders, to which Mr Vickery had referred, and in which Mr Justice Lindsay had drawn a distinction between jurisdiction to give leave to continue proceedings, and jurisdiction to give leave to commence proceedings, Mr Winfield submitted that Section 115(2) was directed at “the taking” of proceedings which he submitted should be equated with the continuation as well as the commencement of proceedings.

DISCUSSION

[33]The alternative which was envisaged by Deputy Master Henderson at paragraph (1)(c) of his order, was, I consider, an order of the Charity Commission authorising the taking of “the proceedings” in whatever form such an order was required so as validly to confer such authority. It need hardly be said that the Deputy Master’s order did not contemplate that the obtaining of an order which fell short of this requirement would suffice for the purposes of lifting the stay.

[34]It is clear, in my judgment, that the Charity Commission did not intend to authorise the proceedings from their inception. Its order recited that it had been informed that it could not do so retrospectively, and the whole structure of its order was to distinguish between “the substantive proceedings” and the “enforcement proceedings” within the former. It was expressly only the latter proceedings that the Charity Commission provided that it was authorising. Its order was, therefore, directed to authorising steps in the remaining part of existing proceedings, rather than to the proceedings as a whole.

[35]The question of whether proceedings could be retrospectively authorised, or unauthorised proceedings could be authorised to continue, was considered by Lindsay J in Saunders (see above). In that case, the plaintiffs had commenced proceedings in tort and contract claiming damages against the defendant solicitors. They then discovered that the defendants were subject to bankruptcy orders. The plaintiffs sought to regularise the proceedings by seeking the court’s leave to commence the proceedings under s285(3) of the Insolvency Act 1986, even though they had already been commenced. The defendants (who were represented by solicitors and counsel instructed on behalf of their insurers) argued that the proceedings were a nullity because the leave of the court to commence the proceedings had not first been obtained under the section, and that they could not be validated by the grant of retrospective leave. For this argument the defendants relied upon two first instance decisions in which the courts had so held; Wilson v Banner Scaffolding Ltd, The Times 22nd June 1982 (Milmo J), and In re National Employers Mutual General Insurance Association Ltd

[1995] 1 BCLC 232

(Rattee J). Those cases were decided in relation to companies which were in liquidation and to which the provisions of section 231 of the Companies Act 1948 and 130(2) of the Insolvency Act 1986 respectively applied. Lindsay J considered those two decisions, and a significant body of English authority concerning the effect, upon actions commenced against either companies in liquidation or bankrupts, of the failure first to obtain the leave of the court. This part of his review began with consideration of the decision of the Court of Common Pleas in Gray v Raper (1866) LR 1CP 694, a case decided under the Companies Act 1862, and concluded with the decision of Goff J in In re Hutton (A Bankrupt)

[1969] 2 Ch 201

. Lindsay J then observed (at page 70) that in neither Wilson nor National Employers Mutual had the court been referred to that substantial body of English authority which demonstrated that “our courts and experienced judges and counsel over a period of more than 100 years, and in a manner that by 1893 could be described as a practice, had chosen not to treat proceedings begun without leave as ipso facto nullities and that the logical difficulty inherent in giving leave to commence after proceedings had already begun without that leave was neatly surmounted by giving instead leave to continue and taking that leave sufficiently to sanction the further conduct of the proceedings in question.”

[36]Lindsay J then considered (at pages 70-72) other English authorities which arose in the different statutory context of the requirement of leave to commence proceedings imposed by s17 of the Charitable Trusts Act 1853. The provision made in that Act, which the learned judge described as rather wordy, was very similar to the provision made today in s115 of the 2011 Act. He identified (at page 70) the material wording in the section as follows:

“Before any . . . proceeding . . . shall be commenced . . . there shall be transmitted . . . to the . . . board, notice in writing of such proposed . . . proceeding . .. ; and the . .. board .. . may . . . authorise . .. any . . . proceeding to be commenced . . . in such manner . . . as the . . . board may think proper; . . . and . . . no . . . proceeding . . . shall be entertained or proceeded with by . . . any court or judge, except upon and in conformity with an order or certificate of the . . . board: . . .” 37. Lindsay J’s analysis of the cases concerned with the issue arising under the 1853 Act was as follows: “In Attorney-General v. Sidney Sussex College, Cambridge (1866) 15 W.R. 162, cited as a note to Glen v. Gregg (1882) 21 Ch.D. 513 , 514-515, Lord Chelmsford L.C. said, of an argument by that college that the leave of the Charity Commissioners ought to have been obtained to the plaintiff's proceedings but had not been, that: “The objection if persisted in must prevail, but in that case [he] would give leave to apply to the commissioners, and he would suspend the decree for that purpose.”

On hearing that, counsel for the college said that, if the court had jurisdiction to proceed with the suit, he would not insist on the objection. The case proceeded. In Glen v. Gregg Mr. Rigby, who had been in the Sidney Sussex case as a junior, took the point that the necessary leave had not been asked for or obtained. There was argument as to whether the class of case with which the court was concerned in Glen’s case did need leave. Kay J. held it did and stood the case over so that the requisite authority could be obtained. Plainly he did not think the proceedings were a nullity in the absence of prior leave. The Court of Appeal held that the class of case involved did not in any event require leave so did not need to deal with the nullity or jurisdictional point. In Rendall v. Blair (1890) 45 Ch.D. 139 Kay J. held at first instance that it was clear beyond question that a suit of the kind concerned ought not to be commenced until the leave of the Charity Commissioners had been obtained before the commencement. His own decision in Glen v. Gregg, 21 Ch.D. 513 was cited to him against that view but he dismissed the action with costs. Again, in the Court of Appeal there was discussion of whether leave was needed for the particular class of case concerned. Cotton L.J. held it was, whereas Bowen and Fry L.JJ. held it was not. But all three held that Kay J. had been wrong, even if leave was necessary, to have dismissed the suit for want of prior leave. Cotton L.J. held that there was a course of decisions that consent may be obtained after the commencement (see p. 151) and that one should therefore adjourn to see if it were to be granted; the action then only being dismissed if leave from the Charity Commissioners were to be refused. Bowen L.J. entirely agreed on this point with Cotton L.J., at p. 157. The legislature knew well enough, he said, without its using obscure language, how to bar actions being brought or writs issued unless some condition precedent had been fulfilled. But, section 17 of the Act of 1853, he said at p. 158:

"is not framed in the way in which sections are framed when it is intended that some preliminary steps should be taken before the action is maintainable at all."

Section 17 abstained, he observed, from saying that the action had to be dismissed if the notice it referred to had not been transmitted. The section was "directory," see p. 158:

"It directs what ought to be done. . . . But it does not oblige the court to close the gates of mercy upon the applicant, but enables it to stay proceedings until that consent, which as a matter of duty ought to be obtained in the first instance, is obtained at last."

Bowen L.J. came to that view without the assistance of authority, but he went on to refer to a number of cases consistent with it, holding also that Glen v. Gregg in the Court of Appeal did not decide that the court might not allow a case to be stood over for a necessary consent to be obtained. Fry L.J. agreed with Bowen L.J. The case was sent back to first instance, notwithstanding the view that on its merits, if and when they came to be considered, it would be to the “detriment and ruin of the plaintiff:” see p. 160. Although to some extent Bowen L.J. rested on a distinction between a bar to the institution of proceedings without leave (which was not clearly provided against in the Act of 1853) and a bar to the court dealing with them without leave (against which the Act did provide) it was a strong decision of a very strong court, even if, which is arguable, it was only obiter as opposed to an alternative ground for the decision arrived at. It was a view entirely consistent with the practice of the courts in the insolvency cases to which I have referred earlier. And, whilst there are, of course, differences between the language of section 17 and the various insolvency provisions, Rendall v. Blair, 45 Ch.D. 139 is a firm indication that a court can expect very emphatic language in a statute, perhaps even extending to the provision that for want of leave an action is without more to be dismissed, if the proceedings are only for want of that leave to be a nullity. This line of cases was not, as far as one can tell, drawn to the attention of Milmo J. or Rattee J.” "is not framed in the way in which sections are framed when it is intended that some preliminary steps should be taken before the action is maintainable at all." "It directs what ought to be done. . . . But it does not oblige the court to close the gates of mercy upon the applicant, but enables it to stay proceedings until that consent, which as a matter of duty ought to be obtained in the first instance, is obtained at last."

[37]Lindsay J then considered difficulties and anomalies which arose under s 285(3), but not necessarily s 130(2) of the Insolvency Act 1986, and concluded this part of his review of the authorities at page 82, saying:

“There was a practice in England dating back at least to In re Wanzer Ltd. [1891] 1 Ch. 305 , a practice recognised to be such at least as early as Reg. v. Lord Mayor of London, Ex parte Boaler [1893] 2 Q.B. 146 , that proceedings in insolvency begun without the stipulated leave should not be regarded as irretrievably null but rather as existing and capable of redemption by the late giving of leave. Judges and counsel of great experience in England, from In re Wanzer Ltd. in 1891 to In re Hutton (A Bankrupt) [1969] 2 Ch. 201 , treated retrospective leave in insolvency as a thing capable of being granted and as requiring no particular discussion. As the Court of Appeal emphasised in Rendall v. Blair, 45 Ch.D. 139 , the legislature knows well enough how to provide that leave shall be a strict condition precedent to valid proceedings being issued and that clear words are to be used if that is intended, words perhaps even requiring a provision for the dismissal of the proceedings if the condition precedent is not satisfied. Without some such clear language being used the provision can be taken to be directory -the word used in Rendall v. Blair , and, in Australia, used in In re Testro Bros. Consolidated Ltd. [1965] V.R. 18 and In re Horsham Kyosan Engineering Co. Ltd. [1972] V.R. 403 . To the same effect is the view taken in Canada (Wheat Board) v. Krupski , 26 C.B.R.(3d) 293 and elsewhere that a want of leave is only an irregularity.”

This passage clearly demonstrates that the practice of granting retrospective leave for proceedings has long been well-established in English cases. Although Lindsay J only described the practice of granting leave nunc pro tunc in respect of the insolvency cases, it is clear from what he said at page 71H in respect of the decision in Rendall v Blair that he regarded this as “entirely consistent” with the practice of the courts in the insolvency cases. I respectfully agree with his judgment, and therefore reject Mr Winfield’s submission that consent cannot retrospectively be granted. It follows also that I consider that the Charity Commission proceeded on a false premise when it supposed it could not authorise the proceedings from their inception.

[38]Before I leave the decision in Saunders, I must, however, refer to what Lindsay J said at page 83 with regard to the form of leave:

“As to the form of leave, as leave to continue proceedings (as might be given under section 130(2)) is not possible because section 285(3) relates only to the commencement of the proceedings, there is not open to me that benign sophistry whereby courts have sometimes given leave to continue proceedings in cases where leave to commence had not been given and have thereby disguised the nature of the problem. The jurisdiction in bankruptcy, if I am right and if leave is to be given here, can only be leave nunc pro tunc to commence the proceedings. Presumably, although this would no doubt be exceptional, there would still be a jurisdiction in an appropriate case thereafter to stay their continuation under section 285(1) or (2). So much for the jurisdiction.”

This passage neatly demonstrates the distinction with regard to authorising commencement (including retrospectively) and authorising continuation of existing proceedings.

[39]In the present context it is the taking of proceedings that can be authorised. Can the taking of proceedings be interpreted, as Mr Winfield submits, so as to include the continuation of proceedings which have already been commenced? The section does not speak, at least expressly, of “the taking of the proceedings or any part thereof”. However, the wording of s 115(4) is relevant:

“This section does not require an order for the taking of proceedings— (a) in a pending cause or matter, or (b) for the bringing of any appeal.” (a) in a pending cause or matter, or (b) for the bringing of any appeal.” 41. I mention also at this stage s115(8) of the Act: “ In this section “charity proceedings” means proceedings in any court in England or Wales brought under— (a) the court's jurisdiction with respect to charities, or (b) the court's jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes.”

Mr Vickery, in the course of his able and persuasive submissions, drew attention to s 115(4), very properly, although submitting that it was directed at excluding from the ambit of the section applications made within claims which have already been brought for which authorisation ought to have been obtained in the usual way. He referred me to Ford’s Charity (1855) 3 Drew 324, a decision of Sir Richard Kindersley V-C, under s17 of the Charitable Trusts Act 1853. In that case the Vice-Chancellor held that that a new scheme for the development of a new school which had not previously been considered by the court did not amount to a matter pending, even though another scheme in respect of the same charity funds had been so considered. He held that it was therefore necessary for the Charity Commissioners’ sanction to be obtained in respect of the application to the court. The brief headnote, I consider, fairly summarises that the case decided that a matter pending, for the purposes of the Act, meant a continuation of something directed by the court. Such an interpretation would be entirely consistent with an approach designed to render unnecessary repeated applications for sanction in proceedings where the proceedings have been sanctioned previously. (a) the court's jurisdiction with respect to charities, or (b) the court's jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes.”

[40]However, I consider that s 115(4) has a particular significance in this case. This is not that because the proceedings have already been commenced, and judgment entered, permission is not required. Such a conclusion would mean that s 115(2) would be avoided in effect in relation to any pending matter, whether or not permission in any respect was ever granted. It is significant because it lends colour to what is meant by “the taking of proceedings”. If the phrase is interpreted only to mean “initiating or commencing proceedings” then the sub-section would make little sense, because once a matter is pending, it is not usual to speak of initiating proceedings within it, but rather of taking steps in it, such as making applications. This suggests that “taking of the proceedings” envisages not merely initiating or commencing proceedings from their inception, but also the taking of steps within any existing proceedings. Put slightly differently, the taking of proceedings is something possible in the course of an action which has already been commenced. If that is correct, then the Charity Commission may authorise the taking of steps within existing proceedings, even though such proceedings as a whole have not been authorised from their inception, and are not so authorised. In my judgment, and in the light of that interpretation, I consider that the authorisation given by the Charity Commission was for the taking of proceedings. As such, it was an order for the taking of proceedings, albeit within existing proceedings.

[41]In all the circumstances, I conclude that the order made by the Charity Commission was a permissible order, authorising the taking of a step in the existing proceedings, albeit that the order did not authorise the proceedings from their inception. The judgment and costs orders previously made, though vulnerable to challenge for the reasons explained by Lord Millett in Strachan, particularly in paragraph 28, are effective unless disturbed on appeal.

[42]With regard to whether a stay should have been granted by the Master because of the indication of an intention to seek to appeal out of time earlier orders made in the proceedings, I do not consider that there was any proper basis for the grant of a stay. Both the judgment in this case, and the consequential costs order, have stood for several years without challenge. No appeal has been commenced, nor has permission to appeal, or permission to appeal out of time, been sought. I consider that in those circumstances it would be entirely wrong to stay the operation of the orders concerned.

[43]As I understand the position, a further point which the Appellants pursued as to costs which was raised before the Master, concerning a costs schedule, is no longer pursued on the basis that an appropriate form of schedule was later produced. If, contrary to that understanding, the point remains contentious, I will hear submissions in relation to it on handing down this judgment.

DISPOSAL

[44]For the reasons set out above, I refuse permission to appeal. I should add that although Vos J’s order referred to consideration of granting permission to appeal out of time, it is common ground on this appeal that such an order is not required as the appeal was brought within time.

[45]Finally, I must thank counsel for their extremely well-presented, thorough, and helpful submissions.