Holding the Charity Commission’s feet to the fire: Atwal

Not so much about “religion” as about charity law and what happens when the Charity Commission refuses to act on serious allegations of mismanagement…

Atwal & Anor v Charity Commission for England and Wales [2024] EWHC 3451 (Ch) was an application under s.115 Charities Act 2011 for the permission of the Court to bring charity proceedings relating to the Sikh Gurdwara in Wednesfield, Wolverhampton, the Charity Commission having refused to do so [1]. The Commission had refused on act in the matter on the grounds that

“(a) further efforts should have been made to pursue ADR [Alternative Dispute Resolution] before pursuing expensive litigation; and (b) that the Commission has all the necessary powers to take action against the proposed defendants and the Court should allow the Commission to do its job” [3].

The claimants were concerned about the trustees’ management and control of the Gurdwara and its funds: they pointed to a failure, “going back years”, to register it as a charity and to breaches of duty, including failures to provide accounts and allowing private benefits to accrue to the trustees or persons associated with them [6]. The claimants also said that 85 percent of the members of the congregation wanted the trustees to be removed – which the defendants disputed [7].

The issue was not whether the Commission had a theoretical power to address some or all of the claims, but whether it would, in fact, take any action. It was argued for the claimants that the Commission’s past inaction meant that there could be no confidence that it would act if permission were refused. For the Commission, it was argued that it could not take action while there remained the prospect of the matters going to court, but that if the prospect of court proceedings were removed and permission was refused, “the Commission will be bound to act because it has a duty to do so and it will act” [14].

So far, so confusing; however, Michael Green J decided that he had to cut the Gordian Knot, as follows:

  1. “… the conundrum is, do I have sufficient confidence in the Charity Commission that if I refuse permission outright, it will effectively resolve the issues with this charity. Or do I think that it will not really act unless its feet are held to the fire. I am afraid I have concluded the latter.
  2. To date, the Commission has shown a remarkable disinterest in even getting the Charity registered which is a step that should have been taken ages ago and which I do not see is dependent on any finding of misconduct or is affected by the section 115 application. If the Commission is not prepared to act on that, I find it difficult to see that it will act with any urgency if all the pressure is off by my refusal of permission.
  3. I consider that the claim as drafted has at least a reasonable prospect of success and it is brought in good faith by the claimants in order to take back control of the Charity to the members and donors, from the trustees, who are behaving unsatisfactorily and possibly much worse than that. It is likely to be in the best interests of the Charity for the trustees to be removed.

[…]

  1. Heavy reliance is placed on section 115(3) of the Act which requires the Commission not to authorise the taking of charity proceedings where it can be dealt with under its powers. I know that the Commission has relied on that for the purposes of refusing consent, and properly so. While that is a very relevant factor for the Court in considering whether to grant permission under section 115(5), it is perhaps of even more relevance to the Court whether the Commission will actually use those powers in this case.
  2. As I have said, I am not sufficiently confident that it will and I do not think it right to leave the claimants in limbo with the limitation clock ticking and the prospect of having to incur the further costs of making another application in a few months’ time when they find that the Commission has not acted sufficiently to address all these problems.
  3. I am also concerned about the registration of the CIO and the Commission’s apparent lack of action in that respect.
  4. In all the circumstances, I am satisfied that the least worst or least unsatisfactory course is to give permission for these charity proceeding but I want there to be every opportunity for this to be resolved without resort to court. Accordingly, I, like the claimants want the Commission to act and to act promptly by using its powers to get the Charity registered, resolve the governing documents issue and what is to happen to the CIO. However that can be achieved, whether by the appointment of an interim manager or new trustees is of course a matter for the Charity Commission itself. But it surely must act and to encourage it to do so, I will give permission but subject to a stay on those proceedings when issued, to allow for both the Commission to act and for further attempts at mediation in accordance with the principles outlined in Churchill v Merthyr Tydfil [2023] EWCA Civ 141.
  5. … If the Commission decides not to act, arguably in breach of its duties to do so, then the claimants will unfortunately have to proceed with the litigation.
  6. The issue of the stay can be brought back to court by any party including the defendants at any time if it is working unfairly or should be removed or varied but that is what I will order and I hope that a suitably worded order can be drafted to reflect my decision.”

Cite this article as: Frank Cranmer, "Holding the Charity Commission’s feet to the fire: Atwal" in Law & Religion UK, 4 February 2025, https://lawandreligionuk.com/2025/02/04/holding-the-charity-commissions-feet-to-the-fire-atwal/
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One thought on “Holding the Charity Commission’s feet to the fire: Atwal

  1. There are a number of situations where the Faith Workers Branch of Unite has been approached by members employed by small trustee bodies from what we might call ‘minority’ faiths who do not appear to be operating in accord with either charity or employment law. It is a real concern if the Commission are so dilatory in exercising their powers that potential abuses can run unchecked for many years – as is the claim in this case.

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