Dec 1;
2024 Jan 31
The claimant, a member of the executive council of an unincorporated charitable association registered with the Charity Commission, sought, inter alia, the appointment of a receiver in respect of the affairs of the charity: (1) to discharge the functions of the charity’s electoral commission for the 2024 presidential election; and/or (2) to undertake an investigation into the financial affairs of the charity relating to very substantial donations from a single donor. It was not in dispute that the court had the power to appoint a receiver under section 37 of the Senior Courts Act 1981 and as an aspect of the court’s inherent supervisory jurisdiction over charities. The claimant contended that the correct test was whether an appointment of a receiver was in the best interests of the charity. The first to sixth defendants, who were the charity’s trustees, contended the appointment of a receiver was a draconian remedy which should only be granted where the interests of the charity required this and no lesser remedy would properly protect the interests of the charity.
On the claim—
Held, claim dismissed. The principles to be applied when deciding whether to appoint a receiver in respect of a trust applied equally to a charity, and the benevolent approach which the courts took to charities would also feed into the decision. In deciding whether to appoint a receiver, the court needed to be satisfied that that was necessary or clearly desirable and in the best interests of the charity because something had gone seriously wrong in its operation or management which was not being and/or could not be effectively addressed by its current trustees, or there was a clear risk that would happen, having made due allowance for the fact the trustees were volunteers performing a public service. In the ordinary course of events, and where a charity was not already publicly in crisis, appointing a receiver would be likely to have a negative effect on its public perception, which it was appropriate to bear in mind when deciding whether to appoint one. In the circumstances of the present case it was not appropriate to appoint a receiver, either to conduct the presidential election or to investigate financial matters (paras 200, 201, 203, 372, 469, 470).
Jonathan Davey KC and Matthew Smith (instructed by Womble Bond Dickinson (UK) LLP) for the claimant.
Robert Pearce KC and Matthew Mills (instructed by DAC Beachcroft LLP) for the first to sixth defendants.
The seventh defendant, the Attorney General, did not appear and was not represented.