Hussain & Anor v Wycombe Islamic Mission and Mosque Trust Ltd & Anor

The court applied the Duomatic principle and held that the 2001 constitution was validly adopted by the unanimous assent of the company's members. The judge found that prior to August 2001 the only members of the company were the five original subscribers and that those who voted in the 2001 election thereby became registered members. The draft trust deed prepared by Faizal Siddiqui and the processes convened by factional groups and religious leaders did not, in law, bind the company or its wider membership. On that basis the court concluded there was currently no properly authorised management committee able to effect a transfer of the mosques' assets and directed that the court should make arrangements under section 306 Companies Act 2006 for elections to appoint a management committee.

The claim concerned long-standing factional disputes about the management of three mosques owned by a company limited by guarantee. The claimants sought declarations about the company's constitution, membership and management; and, if necessary, an order under section 306 Companies Act 2006 to convene a general meeting to appoint directors (the management committee).

Background and parties:

• The company was incorporated in 1983 with five subscribers. Two rival local factions (the Seva and Thara groups) had effectively controlled mosque affairs for many years.
• A contested process produced a 2001 "constitution" which provided for elections and other changes; elections were held in August 2001 and again in 2003. Subsequent attempts to replace company governance with a trust governed by a Supervisory Council were advanced by the Thara faction and by a draft trust deed prepared by a barrister engaged after mediation by a religious leader, Pir Alludin Siddiqui.

Nature of the claim / relief sought: Declarations as to (inter alia) who are members of the company, whether the 2001 constitution was validly adopted, whether any valid board (management committee) existed, and, if no valid board existed, an order to convene a general meeting under section 306 Companies Act 2006 to appoint directors.

Issues framed:

• Who were the members of the company at the time of the 2001 constitution?
• Was the 2001 constitution validly adopted despite defective formal procedures?
• Whether the settlement process and the involvement of Pir Siddiqui (including the Tomlin schedule) or the consultation by Faizal Siddiqui produced any legal obligation binding the company or its members to transfer assets to a trust?
• Whether there was a valid management committee in office and, if not, whether the court should invoke section 306 Companies Act 2006 to order and regulate elections.

Court's reasoning and conclusions:

• On membership, the judge accepted that the five subscribers were the only members prior to the 2001 process; there was no register of members and no reliable evidence that others were admitted under the original articles.
• Applying the Duomatic principle (and authorities applying it), the court concluded the five members had unanimously assented to the 2001 constitution (taking account of contemporaneous conduct and documentary evidence), so that the constitution took legal effect despite deficient formalities. As a result those who voted in the 2001 election should be treated as registered members, and the committee elected pursuant to that constitution became the company's management committee.
• The court held that neither the Tomlin-scheduled settlement process nor the role of Pir Siddiqui or the consultation and "submission" documents used by Faizal Siddiqui conferred legal authority to bind the company or its wider membership to transfer assets to a trust. The ad hoc group representatives and religious leaders lacked the legal capacity to create such binding obligations for the company or for members who had not authorised them to do so.
• The consequence was that the Faizal Siddiqui draft trust deed did not bind the company; the committees subsequently claimed to govern had no lawful authority to transfer company property; and therefore judicial directions were appropriate to enable elections under section 306 Companies Act 2006 so that a properly authorised management committee could be appointed.

First instance: The court determined key issues in favour of the claimants in part. It held that the 2001 constitution was validly adopted by unanimous assent under the Duomatic principle, that the persons who voted in the 2001 election became members, and that the draft trust deed and related processes did not bind the company or its members. The court found there was consequently no valid management committee able to lawfully transfer the company's mosque assets and ordered that directions be given under section 306 Companies Act 2006 to convene and regulate elections to appoint a management committee.