Bhamani & Ors v Sattar & Ors

Charity trustees must exercise their powers to further the charity’s purposes, rather than for an extraneous or ulterior purpose. When trustees seek an injunction excluding individuals whom the charity was established to benefit, those individuals may defend the claim by alleging misuse of the trustees’ powers.

Pleading that defence does not amount to bringing or taking charity proceedings requiring authorisation under section 115 of the Charities Act 2011. On an application for summary judgment, the court assesses whether the defendant has a real prospect of successfully defending the claim by reference to the evidence. A viable defence need not already have been pleaded if amendment remains realistically available.

The appellants were members of the management committee or trustees of an unincorporated mosque charity. They sought a permanent injunction excluding the respondent worshippers from the mosque following disputed disturbances and alleged breaches of its code of conduct.

A Deputy High Court Judge dismissed the appellants’ application for summary judgment in [2020] EWHC 2488 (Ch). He held that the respondents had a realistically arguable defence that the trustees were seeking to silence opposition rather than exercising their powers to further the charity’s purposes. Factual disputes required determination at trial.

The appeal concerned whether that defence was legally available, whether it required authorisation as charity proceedings under section 115 of the Charities Act 2011, whether an unpleaded defence could defeat summary judgment, and whether the defence had a real prospect of success.

1. Appeal dismissed unanimously. The Deputy Judge was entitled to refuse summary judgment because the proposed defence was legally available and raised factual issues requiring investigation at trial.

2. A trustee’s power may be used only for the purpose for which it was conferred. The management committee’s power to control access to the mosque therefore had to be exercised to further the mosque’s charitable purposes, not for its members’ own benefit or an ulterior purpose. That foundational trust-law principle was illustrated by Re Courage Group’s Pension Schemes [1987] 1 WLR 495 and Harries v Church Commissioners [1992] 1 WLR 1241.

3. The mosque existed to provide religious and other benefits for Muslims in the relevant community. Although charitable trusts have no beneficiaries in the private-trust sense, regular worshippers within the class served by the charity were its objects in a looser sense and had a direct, personal interest in its proper administration. When sued to exclude them from worship, they could allege defensively that the trustees were using their powers to silence opposition rather than to further the charity’s purposes. The decision did not establish that such persons could initiate proceedings without complying with the statutory controls governing charity proceedings.

4. The defence did not convert the claim into charity proceedings under section 115 of the Charities Act 2011. Pleading a defence is neither the bringing nor the taking of proceedings. The action remained a claim by the trustees to enforce common-law rights. A counterclaim seeking relief concerning the charity’s administration might be charity proceedings, but no such counterclaim was proposed.

5. Under CPR Part 24, the court assesses the evidence and asks whether the defendant has no real prospect of successfully defending the claim. The inquiry is not confined to the pleaded defence. Where the evidence reveals a genuinely triable defence and amendment cannot be ruled out, the court may refuse summary judgment even though that defence has not yet been pleaded or made the subject of a formal amendment application.

6. The Deputy Judge had been entitled to conclude that the trustees’ purpose could not be resolved on the witness statements. At trial, careful case management should confine the inquiry to secular issues, particularly the respondents’ conduct and whether it justified exclusion. Even if a minor breach technically terminated a licence to enter, permanent exclusion and a permanent injunction did not follow automatically.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously. The refusal of summary judgment was upheld: [2021] EWCA Civ 243.
2. High Court, Business and Property Courts, Property, Trusts and Probate List: A Deputy Judge dismissed the claimants’ application for summary judgment because the proposed improper-purpose defence had a real prospect of success and required factual investigation: [2020] EWHC 2488 (Ch). He accepted revised undertakings and adjourned the alternative application for an interlocutory injunction, but that order was not appealed.