Trustees of Mountain of Fire and Miracles Ministries International v Charity Commission for England and Wales

Factual and Procedural Background

The Charity, a large Pentecostal religious organization registered with the Charity Commission for England and Wales since 2003, operates through numerous local branches in the UK. Following concerns about misconduct and mismanagement, including financial losses and governance failures, the Charity Commission opened a statutory inquiry in March 2018. In August 2019, an Interim Manager was appointed under section 76 of the Charities Act 2011 ("the Act").

In September 2021, the Charity Commission varied the Initial Order to allow the Interim Manager to manage the Charity to the exclusion of the trustees, except for religious services and ministry. The trustees appealed this 2021 Order, challenging the legality, procedural fairness, and rationality of the Interim Manager's actions and decisions. The appeal sought to set aside the 2021 Order, maintain a status quo involving cooperation between the Interim Manager and trustees, and replace the Interim Manager due to a breakdown in confidence.

The Charity Commission defended its decision, asserting that the statutory criteria for the 2021 Order remained met and that both it and the Interim Manager acted legally, fairly, and reasonably. The matter proceeded to a First-tier Tribunal hearing, which included extensive evidence and submissions from witnesses, including the Interim Manager, trustees, and a Charity Commission investigator.

Legal Issues Presented

1. Whether the Tribunal has jurisdiction to hear the appeal against the 2021 Order made under sections 76(3)(g) and 337(6) of the Charities Act 2011.
2. Whether the appointment of the Interim Manager to act to the exclusion of the trustees was proportionate, lawful, and in the best interests of the Charity.
3. If the Interim Manager's appointment is to continue, what terms and powers should govern that appointment.

Arguments of the Parties

Appellant's Arguments

• The actions of the Interim Manager and his agents were generally unlawful.
• The operations and actions of the Interim Manager were procedurally unfair.
• The decisions of the Interim Manager were generally irrational.
• The 2021 Order should be set aside to restore a status quo where the Interim Manager works with the trustees rather than to their exclusion.
• The Interim Manager should be replaced due to a breakdown in confidence.
• The appeal should operate as a stay of execution of the 2021 Order.

Respondent's (Charity Commission's) Arguments

• The statutory criteria for the 2021 Order were and remain met, justifying the Interim Manager's exclusive management powers.
• The Charity Commission and Interim Manager acted legally, fairly, and reasonably throughout.
• The Tribunal's jurisdiction extends to reviewing the decision under section 76(6) but not decisions made under sections 78 or 337(6) of the Act.
• The Interim Manager's appointment and powers are necessary to protect the Charity's property and ensure proper governance.

Table of Precedents Cited

Court's Reasoning and Analysis

The Tribunal carefully examined the statutory framework under the Charities Act 2011, particularly sections 46, 47, 50, 76, 78, 319, and 337, to determine its jurisdiction and the proper scope of its review. It concluded that it had jurisdiction to hear the appeal against the 2021 Order as a new order made under section 76(3)(g), following a review under section 76(6), and that the trustees had standing to appeal.

The Tribunal found that the Charity had experienced significant misconduct and mismanagement, including financial losses, poor governance, and inadequate control over branches and assets. The Interim Manager's appointment was justified to protect the Charity’s property and ensure compliance with legal and regulatory obligations.

However, the Tribunal observed that the 2021 Order, which gave the Interim Manager exclusive management powers to the exclusion of the trustees (except for religious services), had proven ineffective in practice. The Interim Manager remained reliant on trustees’ cooperation to manage the Charity’s affairs, revealing a contradiction between the Order’s terms and practical realities.

The Tribunal noted deficiencies in the Charity's governance, the lack of clarity and criteria for the contraction strategy of branches, and the absence of timely recommendations from the Interim Manager as required by the Initial Order. It expressed concern about the Interim Manager's inability or unwillingness to take robust action during the appeal period and the potential for the Charity to be wound up without proper inquiry reporting and stakeholder consultation.

Consequently, the Tribunal concluded that while continuation of the Interim Manager’s appointment was appropriate, the 2021 Order’s terms required amendment. It was necessary to quash parts of the Order that excluded trustees from management, mandated a contraction strategy without clear criteria, and deferred governance improvements, and to remit these matters to the Charity Commission for reconsideration.

Holding and Implications

The Tribunal’s final decision was to allow the appeal in part.

The Tribunal quashed those parts of the 2021 Order, including the Schedule, that:

• Appointed the Interim Manager to the exclusion of the trustees, except for religious services and ministry;
• Required implementation of a strategy for the orderly contraction of the Charity's branch structure;
• Deferred making or implementing recommendations about governance improvements.

The 2021 Order was remitted to the Charity Commission for a fresh decision on the quashed parts, to be modified in accordance with the Tribunal’s findings of fact and law, and otherwise as the Commission sees fit.

The Tribunal made recommendations for urgent governance reforms, including amendments to the Charity’s constitution to ensure independent and stable trusteeship, prioritization of effective systems and controls by the Interim Manager, and cooperation between trustees and the Interim Manager in governance improvements.

No new precedent was established; the decision primarily affects the parties by requiring the Charity Commission to reconsider and revise the 2021 Order to reflect practical realities and legal standards.