Home Information Cases Choudhury v Stepney Shahjalal Mosque and Cultural Centre Ltd (2015)

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Choudhury v Stepney Shahjalal Mosque and Cultural Centre Ltd (2015)

Summary

Proceedings concerning the trustees of a company limited by guarantee that was a registered charity were charity proceedings under the Charities Act 2011 s.115(2) that required permission from the Charity Commission or the court. The proceedings were stayed and an interim injunction preventing a trustee election was continued pending a decision on permission.

Facts

The court was required to determine whether an interim injunction obtained by the applicants should be continued. 

The first respondent was a company limited by guarantee and was a registered charity which owned and managed a mosque. The applicants and the second to fourth respondents had all been directors of the company and trustees of the charity. The trustees had a difference of opinion and had divided into two sides. Each side said that the effect of decisions made at a series of meetings was that other side had been expelled. The applicants issued the instant proceedings seeking various relief. The respondents called an election to appoint new trustees as the board had reached the end of its term. They terminated the applicants' membership of the company, which meant that they could not participate in the election or stand for re-election. The applicants obtained a without notice interim injunction to restrain the holding of any meetings. 

The respondents argued that (1) the proceedings should be stayed because permission had not been obtained from the commission to bring charity proceedings as required by the Charities Act 2011 s.115(2); (2) if the proceedings were stayed, CPR r.25.10 required that the injunction should be set aside unless there were exceptional circumstances, and that having the election was the best way to resolve the issues surrounding the future conduct of the charity. 

Held

(1) Permission was required from the commission or the court before proceedings could be brought. The definition of trust in s.353 included a company limited by guarantee. Charity proceedings included debates about trustees, Muman v Nagasena [2000] 1 W.L.R. 299 applied. Accordingly, the proceedings would be stayed. (2) Under CPR r.25.10 the court had a discretion to order that an injunction should continue when proceedings were stayed. It was not necessary to find exceptional circumstances; it was better characterised as something to be taken into account when considering the overriding objective and in dealing with cases justly. The court's jurisdiction to grant an interim order included a power to make an interim order pending an application for permission to the commission. In the instant case, if the applicants were free to participate in the election the injunction would not be ordered to continue. However, if there was no order, there was a great risk that matters would escalate and that the charity's assets would be dissipated. The best way to preserve the assets was to order that neither side could call a meeting or election until the Charity Commission had decided whether to give permission. 

Judgment accordingly

Chancery Division
Birss J
Judgment date
12 February 2015
References

LTL 16/2/2015

Previous Members

duncan-mccombe,Duncan McCombe

Practice areas

trusts-and-settlements,Trusts & Settlements