Introduction

Bhamani & Ors v. Sattar & Ors ([2021] EWCA Civ 243) is a significant case adjudicated by the England and Wales Court of Appeal (Civil Division) on February 26, 2021. The case revolves around internal disputes within Wembley Central Masjid, a charitable organization providing religious and community services in the London Borough of Brent. The central issue pertains to whether the charity trustees (Claimants) have the unilateral right to exclude certain long-standing worshippers (Defendants) from the Masjid premises without breaching their duties as charity trustees.

The Claimants sought an injunction to restrain the Defendants from entering the Masjid premises, arguing their entitlement to possess and control access as trustees. Conversely, the Defendants defended against the injunction, asserting that the Claimants were misusing their trustee powers to silence opposition, thereby acting against the Masjid's charitable purposes.

Summary of the Judgment

The High Court initially dismissed the Claimants' application for summary judgment, accepting that the Defendants raised factual issues regarding the misuse of trustee powers that necessitated a full trial. The Claimants appealed the decision. Upon review, the Court of Appeal upheld the High Court's ruling, determining that the Claimants did not have the absolute right to exclude individuals from the Masjid premises if such exclusion did not align with the charity's purposes. The Court emphasized that trustees must exercise their powers to further the charity’s objectives and not for collateral or ulterior motives.

All four grounds of the appeal were dismissed:

• Ground 1: Incorrect dismissal based on an unpleaded defense.
• Ground 2: Incorrectly allowing a defense based on misuse of trustee powers.
• Ground 3: Misclassification of the defense as charity proceedings.
• Ground 4: Incorrect assessment of the defense's prospects of success.

Analysis

Precedents Cited

The Judgment extensively referenced prior cases to underpin its reasoning:

• Muman v Nagasena [2000] 1 WLR 299: Established that management committees of charities acting as trustees have the authority to manage the charity’s affairs, including controlling access to premises.
• Bisrat v Kebede [2015] EWHC 840 (Ch): Clarified that individuals regularly benefiting from a charity’s services are considered "interested persons" and can challenge trustees’ actions.
• Re Courage Group's Pension Schemes [1987] 1 WLR 495: Affirmed that trustees must exercise powers solely to further the trust's purposes.
• Harries v Church Commissioners [1992] 1 WLR 1241: Reinforced that trustees must act in alignment with the trust's objectives.
• EasyAir Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch): Highlighted scenarios necessitating full factual investigations beyond summary judgments.
• Rendall v Blair (1890) 45 Ch D 139: Distinguished between enforcing common law rights and charity proceedings.

Legal Reasoning

The Court’s decision was grounded in the principle that charity trustees are fiduciaries obligated to act in the best interests of the charity, strictly adhering to its stated purposes. Any action that deviates from furthering the charity's objectives constitutes a breach of duty.

The key points in the Court’s reasoning included:

• Trustee Obligations: Trustees must utilize their powers to advance the charity’s aims as outlined in its constitution, not for personal or factional interests.
• Limited Authority to Exclude: Excluding individuals from the premises is permissible only if it serves the charity’s purposes. Absolute exclusion rights without aligning actions to charitable objectives are unacceptable.
• Defense Viability: The Defendants could validly argue that the trustees were misusing their powers, thereby providing a legitimate defense against the injunction.
• Non-Charity Proceedings: The act of raising a defense does not transform the proceedings into charity proceedings, thereby not necessitating Charity Commission authorization.

The Court also clarified that while trustees have broad powers, these are not unfettered and must always align with the charity's objectives. Misuse of these powers to silence opposition or to favor a particular group undermines the charitable purpose and breaches fiduciary duties.

Impact

This Judgment has profound implications for charity law and the governance of charitable organizations:

• Enhanced Accountability: Trustees must demonstrably align their actions with the charity’s objectives, ensuring that exclusions or other significant decisions are justified within the scope of the charity’s purposes.
• Protection for Beneficiaries: Individuals who benefit from or have a direct interest in a charity can challenge trustees' decisions, promoting greater transparency and fairness in charitable administration.
• Legal Precedent: Establishes a clear precedent that trustees cannot exercise their powers for ulterior motives, reinforcing fiduciary responsibilities within charities.
• Charity Commission Oversight: Although this case did not transform the proceedings into charity proceedings, it underscores the role of the Charity Commission in overseeing and regulating trustees’ compliance with their duties.

Future cases involving internal disputes within charities will reference this Judgment to determine whether trustees have adhered to their fiduciary duties and whether their actions conform to the charity’s objectives.

Complex Concepts Simplified

Charity Trustees

Charity trustees are individuals or committees responsible for managing a charity’s operations and ensuring it meets its objectives. They hold fiduciary duties, meaning they must act in the best interests of the charity, avoid conflicts of interest, and use their powers appropriately.

Summary Judgment

A summary judgment is a court decision made without a full trial, typically because there is no dispute over the key facts of the case. It is often sought to expedite the legal process when one party believes there is no genuine issue to be tried.

Fiduciary Duties

These are legal obligations that require trustees to act honestly and in good faith with a view to the best interests of the charity. Trustees must manage the charity’s affairs responsibly and must not allow personal interests to conflict with their duties.

Injunction

An injunction is a court order that either prohibits a party from performing a specific action or compels them to perform it. In this case, the Claimants sought an injunction to prevent the Defendants from entering the Masjid premises.

Trespass

Trespass refers to the unauthorized entry onto someone else's property. The Claimants argued that the Defendants were trespassing by entering the Masjid premises against their directive.

Conclusion

The Bhamani & Ors v. Sattar & Ors Judgment elucidates the critical balance trustees must maintain between exercising their authoritative powers and adhering strictly to the charitable purposes of their organization. By ruling that trustees cannot unilaterally exclude members without ensuring such actions align with the charity’s objectives, the Court reinforces the accountability and fiduciary responsibilities incumbent upon charitable trustees.

This case underscores the judiciary's role in safeguarding the integrity of charitable operations, ensuring that internal governance disputes do not derail the foundational purposes of charitable entities. It sets a clear precedent that trustees must act within their granted powers and remain true to the charity’s mission, thus providing a vital reference point for future disputes within the charitable sector.