Sandhu v Singh & Ors (No. 2) [2018] EWHC 841 (Ch)

[2018] EWHC 841 (Ch)CLAIM NO B30BM419IN THE HIGH COURT OF JUSTICEVenue BUSINESS AND PROPERTY COURTS IN BIRMINGHAMPROPERTY TRUSTS AND PROBATE LIST (ChD)Date 16 April 2018
Before
His Honour Judge Simon Barker QCsitting as a Judge of the High Court
Between
(1) SUKHBINDER SINGH SANDHUPart 20 Claimants(2) SURJIT SINGH MATTUClaimant(3) AJIT SINGH BRAINCHClaimant(1) TARSEM SINGHPart 20 Defendants(2) MANJIT SINGH BOPARAIDefendant(3) THE CHARITY COMMISSIONDefendant(4) HER MAJESTY’S ATTORNEY GENERALDefendant
Mr Avtar Khangure QC, instructed by Aspect Law Limited, appeared for Part 20 ClaimantsMr Harpreet Giani, instructed by Sahota Solicitors, appeared for First and Second Part 20 Defendants for The Third Part 20 Defendant and the Fourth Part 20 Defendant were not represented and did not appearHearing date 11 April 2018
JUDGMENT (2)HHJ Simon Barker QC :

Introduction

[1]On 28.3.18, [2018] EWHC 712 (Ch), I handed down judgment in this action (‘the Judgment’), with no attendance by the parties. The trial had taken place over two weeks in September 2017. The parties attended a post judgment hearing on 11.4.18 to make submissions as to the form of the final order to reflect the substantive outcome of the trial and to make submissions as to costs and any other post-judgment matters.[2]This judgment addresses one issue raised at that hearing, all other matters having been resolved by an order made at the conclusion of the hearing. The order made includes declarations that :(1) The 5 Singhs selected on 2 May 2015 were not recognised or accepted by the congregation on 3 May 2015 and were therefore not validly elected, and(2) The purported election of the Management Committee by the 5 Singhs in May 2015 was and remains invalid.[3]The issue raised at the hearing on 11.4.18 is : In relation to the election, what should happen now?[4]Both Mr Khangure QC, counsel for Cs I shall use the same abbreviations in this judgment as in the Judgment. , and Mr Giani, counsel for Ds, referred to the concluding paragraph of the Judgment, which is as follows :
“85 As to what should happen, on one view the congregation should be given an opportunity to voice and consider objection to each of the 5 Singhs announced on 3.5.15. Once there are 5 Singhs who are recognised or accepted without legitimate objection, they should elect the MC and the congregation should have an opportunity to accept or object to each person so elected. On another view, that put forward by Mr Khangure QC on behalf of Cs, both the election board of 5 Singhs and the MC should be dismissed or removed and, in accordance with the Constitution Under The method of electing the board of five Sikhs at paragraph (6). , the Trustees take over administration of the GNG. The Trustees should name 5 Singhs and those 5 Singhs should elect the MC. Although this latter course has attractions (including being time efficient) the election board of 5 Singhs is not dismissed, the GNG is only part way through its own election process of the May 2015 elections”
. Mr Khangure QC submitted that I was there raising the issue as one for decision at the hearing to follow the handing down of judgment and was not deciding upon the course to be taken. Mr Giani submitted that I there expressed, in my conclusion, the course to be followed in line with my findings in the Judgment as to the outcome of the 2015 election to date. Mr Khangure QC is correct. What I did at paragraph 85 was summarise, in the light of the findings that I had made in the Judgment, the relief sought by Cs and note the alternative course which would be consistent with my judgment. It does not follow that I had ruled out the course proposed by Mr Khangure QC as necessarily being inconsistent with my findings in the Judgment. Were it otherwise I would have stated the order I proposed to make on the substantive issues and invited submissions and a draft order only on costs and any application for permission to appeal.[5]Mr Khangure QC submitted that the court should make an order that : “In the light of the above declarations, the provisions in the Constitution and the Judgment, the matter is to be referred to the Charity Commission for guidance as to holding of a further election of the officers of the charity”.[6]In so submitting, Mr Khangure QC modified the form of relief sought under the Part 20 claim which sought a court order that :
“Pursuant to internal page 4 paragraph 6 of the Constitution the Trustees do forthwith take over the administration of the GNG and do name 5 qualified Singhs as the election board within 4 weeks thereof”
. Mr Khangure QC made this modification to acknowledge that the CC, rather than the court, should consider and decide how the election should be completed, by one or more election processes, so as to establish a current board of 5 Singhs and put in place a current serving MC.[7]Mr Giani opposed the making of that order and submitted that the combined effect of the Constitution and the Judgment is that the Chief of the 2013-2015 5 Singhs should re-announce the 5 Singhs elected on 2.5.15 to the congregation on the first convenient Sunday, after reasonable notice has been given to the congregation, and afford an opportunity for objections and, subject to that, seek the congregation’s recognition or acceptance. Mr Giani submitted that the correct order to make is that : “(1) The Management Committee of 2013-2015 shall resume as caretaker committee with immediate effect, and (2) The caretaker Management Committee shall invite the chief of the old 5 Singhs to announce the names of the new 5 Singhs to the congregation on the first Sunday of May 2018”.[8]Even if it is not appropriate to make the order sought by Mr Khangure QC, there would be nothing to stop the Trustees from writing to the CC and requesting that the CC gives guidance as to the election. Thus, if I make an order as sought by Mr Giani it may nevertheless be overtaken or varied by guidance from the CC.[9]Mr Khangure QC argued for the order sought by Cs as follows. First, as a matter of law, every charity is subject to state supervision by the CC and judicial supervision by the High Court with the CC being the primary referral body. In support of this proposition Mr Khangure QC referred to the recent judgment of Sir Geoffrey Vos C in The Children’s Investment fund Foundation (UK) v(1) H M Attorney General(2) Sir Christopher Hohn(3) Jamie Cooper(4) Marko Lehtimaki [2017] EWHC 1379 (Ch) at [66] where the Chancellor cited a passage from the judgment of Mummery LJ in Gaudiya Mission v Brahmachary [1998] Ch 341 at p.350 : “Under English law charity has always received special treatment. It often takes the form of a trust; but it is a public trust for the promotion of purposes beneficial to the community, not a trust for private individuals. It is therefore subject to special rules governing registration, administration, taxation and duration. Although not a state institution, a charity is subject to the constitutional protection of the Crown as parens patriae, acting through the Attorney-General, to the state supervision of the Charity Commissioners, and to the judicial supervision of the High Court. This regime applies whether the charity takes the form of a trust or of an incorporated body”.[10]Secondly, the CC has issued guidance as to disagreements and disputes between a charity’s trustees, staff or members. Pausing here, it is important to understand that references in this context, and generally in charity law, to a charity’s trustees is to the persons having general control and management of the administration of a charity (see s.177 Charities Act 2011); in the context of an unincorporated association this will generally be or include the management committee. The CC’s guidance, issued in 2013, requires that where there are internal disputes the first step is that within the charity the persons concerned (that is the trustees and may also be members and/or staff) should do everything that can be done to reach agreement, and do so following any directions in the charity’s governing document. The guidance recommends mediation as a means of settling disputes. The CC’s guidance as to when it will get involved in internal disputes is conditional upon there being no trustees or no correctly appointed trustees and all attempts to resolve the dispute having failed. A specific example given in the CC’s guidance is : “Any trustees must have been appointed following the directions laid out in your charity’s governing document. If you don’t have properly appointed trustees, the [CC] may step in to help you get a full body of trustees. If the [CC] finds evidence of misconduct or mismanagement that put your charity’s funds and users at risk, it will step in and provide advice and guidance. Even after the [CC] gets involved, your trustees need to work together to come up with a solution. If the [CC] thinks a solution will not be reached, it may withdraw help or even instruct your charity to cease operating and wind up”.[11]Thirdly, having regard to the factual position, Mr Khangure QC submitted that the Judgment has established that(1) the 5 Sighs were not validly elected and that the MC was not validly elected (Judgment [83]);(2) the 5 Singhs usurped their office, in disregard (ie violation) of the Constitution, by carrying on as if duly elected (Judgment [81]) when, had they thought objectively about the events of 3.5.15, they should have realised that the process of objecting had been side-stepped;(3) the MC has, at all times, acted without authority and beyond its powers by carrying on as if duly elected (Judgment [82]) and has also acted at all times in disregard or violation of the Constitution; and, therefore,(4) the internal management of the GNG has broken down since mid-2014 at the latest and the 2013-2015 MC has shown itself to be incapable of functioning as a quorate body (Judgment [7] and [48]).[12]As to further relevant facts, Mr Khangure QC drew attention to the correspondence between the parties’ solicitors (Ds’ then solicitors were replaced before the trial) over the period June 2015 to August 2016. Cs’ solicitors challenged the validity of the 2015 election and proposed mediation, identifying specific issues, and proposed confining expenditure from the GNG’s bank account to GNG purposes (which, during this period, was imposed by a consent order made in November 2015 (‘the banking order’)). Ds’ then +solicitors prevaricated and then refused mediation. Mr Khangure QC also referred to the established breaches of the banking order.[13]Fourthly, Mr Khangure QC referred to conduct, not only in the context of costs submissions but also as relevant to whether the internal dispute is incapable of resolution without recourse to the CC. Mr Khangure QC drew attention to the delays in finalisation of the banking order agreed to before Newey J in November 2015 which required a further hearing in January 2016; to breaches of the banking order; to what Cs characterise as tactical manoeuvring in the litigation by Ds, when claimants, seeking to discontinue the proceedings in order to avoid a court decision about the 2015 election and to bring an end to the banking order; to the disability issue, which forms part of the relevant background to the internal disputes and this litigation, which was the subject of separate proceedings and a misconceived attempt to judicially review an unsuccessful appeal decision; and, to Ds disregard of court orders which led to them being debarred from defending the action for a period until granted relief from sanctions.[14]Fifthly, Mr Khangure QC sought to put the factual position in the context of the Constitution, and in particular the provision contained in the section headed “The method of electing the board of five Sikhs” which provides : “(6) If due to any particular reason the Committee and the election board of five Singhs are dismissed then Trustees shall take over the charge of administration. They shall name the election board of five proper qualified five Singhs within the 4 weeks. That board in turn shall elect the new committee. This election shall have to be completed within 4 weeks”; the provision under the heading “Method of Electing Management Committee” which provides : “(a) On the first Sunday of May, before the election, the acting management committee Here the 2013-2015 MC. would be discharged (but the discharged committee shall carry on doing its duty until the new committee is elected as a working committee); and, the further provision at the end of the Constitution under the heading “Violation of principles” which provides : “Any person, an employee, a Committee member, or an Election Board Member, who violates the rules shall be regarded as a culprit, and the necessary action should be taken against him. This Sikh Temple is registered with the Charity Commission”.[15]Mr Khangure QC submitted that “dismissed”, in ordinary language and as defined in the Oxford English Dictionary, has a wide range of general meanings extending beyond removal from office and including being sent away, discharged, discarded, rejected or being bid or allowed to depart.[16]Applying the facts to these provisions of the Constitution, Mr Khangure QC submitted that neither the 5 Singhs nor the MC have been elected but both the 5 Singhs and the MC have violated the rules (that is the Constitution) in ways that justify their exclusion from further participation in the pending election. In this context, Mr Khangure QC relied on my findings in the Judgment at [81] and [82] and on conduct in the litigation the subject of earlier judgments including what, he submitted, amounted to flagrant disregard of court orders. Mr Khangure QC submitted that “the necessary action” had to be viewed in the context of the Constitution and reflect the intransigence of the 5 Singhs and the MC and the gravity of their violations.[17]Mr Khangure QC added that “the discharged committee” (i.e. the 2013-2015 MC) is incapable of functioning and cannot properly be expected, and should not be asked or directed, to continue the administration and management of the GNG pending conclusion of the 2015 election and/or the following through with the now overdue 2017 election.[18]Sixthly, Mr Khangure QC submitted that unless there is a referral to the CC the present impasse is likely to continue, there is likely to be further litigation, and that will not only require a considerable devotion of effort on the part of those who give voluntary service to the GNG but will also impact adversely on the GNG’s finances.[19]Finally, Mr Khangure QC submitted that, while it would be open to the court, on the present facts and given the High Court’s supervisory function, itself to make an order dismissing the 5 Singhs and the MC, or treating them as dismissed, and directing that the Trustees take over charge of administration of the GNG, including election of 5 Singhs, on reflection the better course would be to refer the issue to the CC.[20]Mr Giani based his submissions on findings in the Judgment which he set in the context of the Constitution as follows. First, as to the effect of the Judgment, Mr Giani submitted that the Judgment unequivocally and unambiguously finds that(1) the congregation is the superior body within the GNG (Judgment [19] and [84]);(2) the process of selecting the 5 Singhs on 2.5.15 was lawful and not affected by the behaviour and departure of Messrs L Singh, Dhaliwal, S Sandhu and Badh (Judgment [52] – [53]);(3) the events of 3.5.15 were flawed, and rendered the election of the 5 Singhs incomplete (Judgment [66]) but not incurably flawed (Judgment [83]); and,(4) the course to be followed is to resume the election process from the point at which the election took a wrong turn in 2015 by putting the 5 Singhs elected on 2.5.15 to the congregation for any objections to be raised and considered and, subject thereto, recognition or acceptance of 5 Singhs by the congregation(Judgment [85]). Putting this in context, Mr Giani submitted that this is entirely consistent with the rules in the Constitution as to “Themethod of electing the board of five Sikhs”. In particular, by 2.5.15 the following requirements had been satisfied : “Before the First Sunday of May, the President, Vice President General Secretary, Vice General Secretary, Treasurer, Stage Secretary of the present Committee along with five (original) members of the selection Board (eleven altogether) shall have consultation with each other and then they shall select five members for the new selection board after investigating the suitable Sikhs. At least Seven Members should agree for the acceptance of each name”; and, time not being essential, there is no barrier to compliance with the remaining requirements : “The Chief of the old election Board should get recognition or acceptance of the congregation for the new election board on the first Sunday of May. If congregation objects to any name and the objection is legitimate then another member should be selection in his place”.[21]Secondly, Mr Giani submitted that there is no scope for doubt as to what constitutes the congregation (Judgment [30] – [31]), how recognition or acceptance is to be measured (Judgment [29]), or what constitutes legitimate objection (Judgment [32] – [38]) and its consequence (Judgment [39]). Thus, there is a clear route to completion of the election process of the 5 Singhs and then, by them, the MC.[22]Thirdly, Mr Giani submitted that while that process and the necessary process of electing the MC is ongoing, the 2013-2015 MC should take over management and administration of the GNG on a caretaker basis. Mr Giani submitted that this should happen is a consequence of the election of the MC in 2015 being void ab initio and is expressly provided for in the Constitution under “Method of Electing Management Committee” :
“(a) On the first Sunday of May, before the election, the acting management committee would be discharged (but the discharged committee shall carry on doing its duty until the new committee is elected as a working committee)”
. Mr Giani expressly acknowledged that the MC purportedly elected in May 2015 are bound to withdraw from functioning as the management of the GNG. As to the 2013-2015 MC being dysfunctional, Mr Giani submitted that, notwithstanding the breakdown in functionality, that MC is duty bound to continue the administration and management of the GNG. Mr Giani referred to ongoing obligations : six of their number may have a further role to play in finalising the duly elected 5 Singhs; the day to day administration must be completed by someone; and, importantly, worship has continued at the GNG.[23]Fourthly, Mr Giani submitted that although Cs sought findings as to misconduct by, or at the instigation of or with the encouragement of, his clients and the 2013-2015 MC, no such findings have been made.[24]Fifthly, turning to Mr Khangure QC’s submission that the question of what should happen now should be referred to the CC, Mr Giani submitted that such a course would be premature at this stage, but may be appropriate in due course if the election machinery under the Constitution breaks down. Mr Giani submitted that the guidance required for completion of the 2015 election is set out in the Judgment and should now be followed and to do otherwise would be to usurp the exclusive powers of the congregation.[25]Finally, Mr Giani submitted that the course proposed on behalf of Ds was most consistent with, or did least violence to, the Constitution.[26]The decision as to what happens now is not an easy one to make and both Mr Khangure QC and Mr Giani put forward cogent arguments for the orders their respective clients seek.[27]In the Judgment I did not specify at [66] and [83] that the election was necessarily merely incomplete. Rather I held that it was “… at least incomplete, if not invalid”. I expressed myself in that way because the position within the GNG administratively seems to me to be one of deadlock. On that point at least I therefore have a different view of the Judgment from Mr Giani.[28]In my view, returning responsibility for the due administration and management of the GNG to the 2013-2015 MC would be a recipe for disaster because that MC is at loggerheads and ceased functioning properly in mid-2014 at the latest. The 2015 MC has not been elected so those purportedly elected have no authority to manage the affairs of the GNG. There is a void.[29]These circumstances call for consideration of the provision in the Constitution under the section headed “Themethod of electing the board of five Sikhs” as referred to by Mr Khangure QC : “(6) If due to any particular reason the Committee and the election board of five Singhs are dismissed then Trustees shall take over the charge of administration. They shall name the election board of five proper qualified five Singhs within the 4 weeks. That board in turn shall elect the new committee. This election shall have to be completed within 4 weeks” and the modification of that provision in the order now sought by Mr Khangure QC.[30]In my judgment there are sound arguments for regarding “the Committee” as being “dismissed”. The definition of the words ‘dismiss’ and ‘dismissed’ in the Oxford English Dictionary is wide. Taking the position of the 2015 MC, Ds accept that there is no such MC and those who purported to act as such were wrong to do so. As previously noted, there is strictly nothing to remove or dismiss them from but in every day parlance, and given Ds’ contentions at trial that the 2015 MC was validly in office and their actions were valid, it would be appropriate to regard them as dismissed with retrospective effect. As to their predecessors, the 2013-2015 MC, there is a “particular reason” for their dismissal, namely their ability to function as an MC broke down in 2014. Moreover, those of the 2013-2015 MC who contended that the election of the 2015 MC was valid and handed over to the MC purportedly elected did so in clear disregard or non-observance, and in that sense violation, of the Constitution rendering them subject to “necessary action”. It would be difficult to square these requirements of the Constitution with returning the 2013-2015 MC to office on a caretaker basis. Put another way, the particular circumstances which have occurred point to a tension in the provisions of the Constitution between those relied on by Cs and those relied on by Ds.[31]In addition, I bear in mind the CC’s guidance about internal disagreements and disputes. The position at the GNG is that there are no properly appointed trustees. It is also the case that but for the action of the Trustees an illegitimate MC would have been in office over the period 2015-2017. A further relevant point which arose in this litigation was that GNG’s funds were misused or put at risk, which also points to the appropriateness of referring the issue to the CC for guidance.[32]As to the 2015 5 Singhs, before purportedly electing the MC on 4.5.15, the evening after they had been announced to the congregation, they should have paused to consider the effect of the stifling of any objections – or even the invalid statement by Mr Cheema that objections could be made later in writing - on their position and powers. Their election was obviously at least incomplete. Their disregard of that should not be overlooked and, at least arguably, justifies their dismissal.[33]In addition, and as a yet further complication, chronologically the GNG is at a point in time where the 2015-2017 5 Singhs and MC should have served their term and a new board of 5 Singhs and a new MC should be almost one year into their present term of office (2017-2019). The question therefore arises whether the election processes should now be compressed to result in the direct election of a current serving 5 Singhs and MC. That is a matter best left to guidance from or order of the CC.[34]In my judgment the only practical order to make in the circumstances of this case is that(1) the Trustees are to take over the administration and management of the GNG pending completion of election processes to put in place a current serving MC for the period to May 2019 and(2) the matter of the appropriate processes to follow to elect a current 5 Singhs and a current MC to serve until May 2019 should to be referred to the CC for guidance or order.[35]I make clear that in so ordering I leave to the CC the question of whether the election should be resumed from the position at 2.5.15 or whether the duty of electing 5 Singhs should be delegated to the Trustees or whether some other course should be followed. The CC, rather than the High Court, should be at the forefront of resolving internal disputes such as this within the GNG.[36]Finally, I observe that the banking order may need some modification as it should be the Trustees who take charge of the GNG’s funds on a caretaker basis.