Rai & Ors v The Charity Commission for England and Wales

Permission to bring charity proceedings is determined by the High Court in its own jurisdiction, rather than on appeal from the Charity Commission. The applicant must show a legally sustainable claim, but that is only a necessary condition. The central question is whether litigation is the best, or least worst, course in the interests of the charity as a whole. The court should consider the real dispute, the parties and evidence, the Commission’s expert assessment, alternative dispute-resolution options, and the likely depletion of charitable funds. Internal disputes should not ordinarily consume charitable resources where a practical accommodation remains possible. The court may adjourn the permission application and stay the substantive proceedings to allow that accommodation to be attempted.

Ravidass Sabha was an unincorporated registered charitable association governed by a written constitution. A dispute arose during preparations for overdue elections about a public notice stating that members must believe in, and recognise as the only religious authority, the Shri Guru Granth Sahib. The claimants argued that the notice added conditions which differed from the constitutional membership requirements and might deter eligible applicants.

The Charity Commission refused permission for charity proceedings under the Charities Act 2011, having concluded that the dispute could be resolved internally or through mediation and that litigation would be disproportionate. The claimants applied to the Chancery Division for leave under section 115(5). The central issue was whether litigation about the form of the public notice should proceed in the charity’s interests.

1. Jurisdiction and governing approach. The court exercised its own original jurisdiction under section 115(5) of the Charities Act 2011. It was not acting as an appellate court reviewing the Charity Commission. The Commission’s refusal was nevertheless relevant evidence and was entitled to appropriate respect because of the Commission’s expertise in a multi-factorial assessment.
2. Permission criteria. The claimants had to establish a legally sustainable dispute, but that alone was insufficient. The court had to ask whether commencing litigation was the best, or least worst, course in the interests of the charity as a whole. Relevant considerations included the properly pleaded dispute, proper parties, substantive issues, good faith, alternative resolution, costs, the value of the charity’s assets and rights protected by the Human Rights Act 1998.
3. Application. The challenge to the public notice was legally sustainable. It was arguable that the Constitution required acceptance of the aims and objects, but did not require belief in the Granth or acceptance that it excluded other Holy Scriptures of Shri Guru Ravidass Ji. The dispute was confined to the notice. The wider doctrinal dispute about the Amrit Bani and other management matters was irrelevant to the proposed proceedings.
4. Litigation could expose the charity to costs of approximately £150,000. It could not resolve the underlying doctrinal questions. Any question about whether the notice reflected the Constitution would instead be determined by the usage of the association, applying the approach in Attorney General v Pearson (1817) 3 Mer 353.
5. The permission application was adjourned for two months, with liberty to restore. The earlier proceedings were stayed generally, with liberty to either party to lift the stay. Costs were reserved.