Disqualifying a church pastor from charity trusteeship: Phelps

The First-tier Tribunal (Charity) has dismissed the disqualification appeal from a former church pastor who was banned from being a charity trustee for ten years after the Charity Commission concluded, inter alia, that he had used charitable funds for foreign trips that did not appear to be for charitable purposes.

In Martin C Phelps v The Charity Commission for England and Wales [2019] FTT CA/2019/0004, Mr Phelps was not a trustee of the Rhema Church London (‘the Charity’) but was employed as its pastor. In July 2017 he was suspended by the Interim Manager appointed by the Commission, pending investigation of alleged disciplinary breaches and serious misconduct. He was ultimately dismissed in November 2018 following an independent panel disciplinary finding of serious and gross misconduct. He appealed, unsuccessfully, to an independent disciplinary appeal body, then brought an equally unsuccessful application for unfair dismissal to an Employment Tribunal [7].

Mr Phelps appealed against a varied Order of the Commission made under s.181A and s.337(6) of the Charities Act 2011 disqualifying him from being a charity trustee in relation to all charities – and consequently, from holding office or employment, paid or unpaid, in a charity that involved the exercise of senior management functions – for a period of ten years. The appeal was determined on the papers, without a hearing. He argued that, since the Commission’s review decision (which had resulted in the original Order being varied), five of the nine grounds for making the original Order had been excluded, that the Commission had misunderstood or misrepresented the remaining four grounds and that its conclusion had “simply been incorrect” [5].

The Tribunal determined the appeal by reference only to the four grounds referred to in the Order:

  • unauthorised use of the Charity’s credit cards;
  • the use of funds of the charity for overseas trips without authorisation;
  • that Mr Phelps had influenced members of the Charity to attend a meeting on 19 July 2017 in breach of the terms of his employment suspension; and
  • that he had not allowed inspectors to have access to all parts of the Charity’s property at Rose Lawn, in defiance of a court order requiring him to do so [6].

The Commission argued that all the relevant criteria for making the Order under s.181A(6) of the Act had been met and that it was appropriate to make the Order by reference to the four grounds set out above. Mr Phelps, however, disputed that there had been any wrongdoing or misconduct or mismanagement on his part.

The Tribunal concluded:

  • that Mr Phelps had ignored the specific instructions of the Interim Manager on unauthorised use by him of the Charity’s credit cards [24];
  • that there was considerable doubt, on the evidence, that a number of overseas trips led by Mr Phelpsto Italy, Austria, France and Greece were for a charitable purpose and that there was “a marked lack of documentation in connection with those trips, including a paucity of detailed itineraries and budgets” and that that particular issue of misconduct and mismanagement was proved [25];
  • that the invitation to members of the Charity to attend a meeting on 19 July 2017 had been in breach of the terms of his suspension, which had included a prohibition on communicating with any employee, trustee, contractor, congregation or other stakeholder of the Charity without written authorisation from the Interim Manager [26]; and
  • that he had obstructed the Interim Manager in permitting access to the property of the Charity at Rose Lawn despite the need to have it valued with a view to selling it – to the extent that the Interim Manager had had to obtain an injunction to be afforded adequate and proper access [27].

On the evidence and on the balance of probabilities, the Commission had been correct and justified in taking action that had resulted in the making of the Order [28]. Mr Phelps had placed the Charity in significant financial and reputational risk, he had not displayed the requisite honesty and integrity demanded of a person in his position in the management of the Charity’s assets, he was unfit to discharge the duties of a trustee or to hold a senior management position in any charity and, by his conduct, he had damaged public trust and confidence in charities generally [31]. The ten-year suspension had not been disproportionate [33].

Appeal dismissed unanimously [34].

Cite this article as: Frank Cranmer, "Disqualifying a church pastor from charity trusteeship: Phelps" in Law & Religion UK, 14 October 2019, https://lawandreligionuk.com/2019/10/14/disqualifying-a-church-pastor-from-charity-trusteeship-phelps/

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