Shergill v Khaira & Ors

A dispute concerning recognition of a religious successor and that person's asserted entitlement under charity trust deeds to appoint a trustee may be non-justiciable in the English courts. The court should not determine who the successor is where the dispute cannot properly be adjudicated. In hostile litigation seeking to replace trustees, costs ordinarily follow the event. The fact that proceedings concern charity governance does not, without more, justify ordering both sides' costs out of charity assets.

The appellant appealed from an order made by His Honour Judge Cooke in the Birmingham District Registry of the High Court on 12 September 2011. The respondents sought to replace trustees controlling a charity, relying on the asserted entitlement of a claimed religious successor to appoint a trustee under the trust deeds.

The Court of Appeal had held that the dispute was non-justiciable and had expressed no view on who the successor was. At the oral hearing concerning the final order, the court determined costs, payment on account, and the respondents’ application for permission to appeal to the Supreme Court.

1. Disposition. The appeal was allowed and the order made by His Honour Judge Cooke was set aside. On the appellant’s undertaking not to prosecute the counterclaim, the claim was permanently stayed.
2. Justiciability. The court reaffirmed that the dispute was non-justiciable in the English courts. The respondents’ arguments that the matter involved only construction of trust deeds and ordinary questions of fact were rejected. The court had expressed no view on which person was the successor, because that was not a question the court could determine in these proceedings.
3. Costs. The litigation was hostile litigation in which the respondents sought to replace trustees by asserting that a particular person was entitled to appoint a trustee. It was therefore not a case in which both parties’ costs should be paid from charity assets under the second category referred to in Re Buckton [1907] 2 Ch 406. The proper order was that the respondents pay the appellants’ costs of the action and appeal on the standard basis, subject to detailed assessment if not agreed.
4. Payment and permission. The respondents were ordered to pay £80,000 on account of costs within 21 days. Permission to appeal to the Supreme Court was refused. The Court of Appeal considered that the respondents’ arguments were not correct, while recognising that the Supreme Court would decide whether the case was suitable for further appeal.

• Court of Appeal (Civil Division): In [2012] EWCA Civ 1582, the appeal was allowed, the High Court order was set aside, the claim was permanently stayed on undertaking, costs were awarded to the appellants, and permission to appeal to the Supreme Court was refused.
• High Court, Chancery Division: His Honour Judge Cooke made an order in the Birmingham District Registry on 12 September 2011. That order was set aside on appeal; its terms are not otherwise stated in the supplied judgment.