Celestial Church of Christ, Edward Street Parish (A Charity) v Lawson

The constitution of a registered charitable association governs its powers. Extrinsic material may identify the background and meaning of the constitution, but collateral rules cannot be incorporated where they conflict with, or materially expand, the publicly registered governing document. The constitution empowered the Parish’s ruling body to appoint and dismiss its shepherd in charge. A shepherd whose role involved general control and management of the charity’s administration was a charity trustee under Charities Act 2011, s 177, but his status was consequential upon his appointment as shepherd. The spiritual character of the office, the absence of contractual terms and the nature of the duties meant that he was an officer paid a stipend, not an employee. Fair procedure in a charity dispute is fact-sensitive and must be applied consistently with the charity’s objects.

The registered trustees of a religious charity sought declarations that the defendant had ceased to be its shepherd in charge, trustee, member and officer, together with injunctions restraining his use of the Parish’s name and church building. The defendant counterclaimed that he remained shepherd and charity trustee and sought payment said to be due under an employment relationship.

The dispute followed a prolonged division within the congregation. The Parish’s governing constitution referred to the shepherd’s role but did not expressly state who appointed or removed him. The defendant relied on the wider constitution of the Celestial Church and argued that the Pastor alone controlled his appointment. The central questions were the proper construction of the Parish constitution, the defendant’s legal status, and the validity of his dismissal.

1. The Parish was an unincorporated association whose governing relations were contractual. The court could intervene where its governing body acted ultra vires or fundamentally breached fair procedure, but it did not determine theological merits: Shergill v Khaira [2014] UKSC 33.

2. The worldwide constitution could be used as background evidence to identify the Pastor, but it could not affect the interpretation of the Parish’s publicly registered constitution or be treated as incorporated into it. The reasoning in Cherry Tree Investments Ltd v Landmain Ltd [2012] EWCA Civ 736 applied with equal force to charity documentation accessible through the Charity Commission. The Parish constitution and the worldwide constitution also contained material inconsistencies.

3. Articles 5(a) and 2(f) of the Parish constitution, read together, empowered the Parochial Committee, as the ruling body, to appoint and dismiss the shepherd. The consultation requirement could not disable the Committee from acting where the shepherd or Pastor’s representative was the person concerned. The Pastor therefore had no exclusive power of removal.

4. The shepherd’s role in applying the Parish’s income and property under article 12 placed the defendant within the statutory definition of a charity trustee in s 177 of the Charities Act 2011. That status followed, and automatically ended with, his appointment as shepherd.

5. The defendant was an officer, not an employee. The spiritual nature of the office, the absence of written employment terms, the appointment arrangements and the duties stated in the Pastor’s letters were inconsistent with a contract of employment. Article 12 permitted remuneration to be paid as a stipend.

6. Persons acting for a charity had to act in good faith, responsibly and reasonably, and comply with fair procedure so far as consistent with furthering the charity’s objects. The requirements were fact-sensitive. Given the congregation’s polarisation, it was impossible to constitute a wholly neutral internal decision-maker. The Parochial Committee acted within its constitutional role and in what it considered the Parish’s best interests.

7. The defendant had ceased to be a trustee, member and officer. The court also stated that, alternatively, its equitable jurisdiction over charities could remove a person falling within s 177 who was not a trustee in the strict sense.

8. A charity could maintain a passing-off claim despite not trading in the ordinary sense. Its fundraising activities, reputation and goodwill were sufficient. The defendant’s representation that he remained shepherd, or that his activities were those of the Parish, could constitute passing off.

The claim succeeded in substance. The court allowed the defendant an opportunity to give appropriate undertakings instead of immediately granting injunctive relief.