Dr Mohamed H Jaffer v Safder Jaffer & Ors

The High Court dismissed a charity member’s claims concerning a presidential election and refused applications for receivers.

The court held that an election regulator exercising fiduciary functions may reasonably modify or waive procedural requirements where necessary for a smooth and fair election. A declaration of non-compliance requires a material breach, an unreasonable response, and intervention that serves the charity’s best interests.

Appointment of a receiver is an exceptional and draconian remedy. It requires necessity or clear desirability, a serious operational or management failure or clear risk, and the absence of an effective lesser response. The court must also respect the non-intervention principle and adopt a benevolent approach towards volunteer charity trustees.

The claimant brought charity proceedings concerning the World Federation of the Khoja Shia Ithna-Asheri Muslim Communities. He challenged the 2020 presidential election, including the eligibility of the successful candidate and alleged departures from the Constitution and electoral procedures.

He also sought receivers to conduct the forthcoming 2024 presidential election and to investigate substantial donations received from a single Middle Eastern donor and paid mainly to organisations in Iraq and Lebanon. The court considered the effect of resolutions passed by Conference in May 2021, the Charity’s constitutional objects, the responsibilities of its trustees and Executive Council, and whether the charity’s financial affairs required external intervention.

1. Eligibility. “Registered member” in paragraph 2.5 of the SOP meant a person accepted as a member of a Constituent Member jamaat under its local membership rules. It did not mean that the person’s name had to appear on the voter list. The relevant date was when the nomination was received. The successful candidate was therefore eligible, and the election was valid.
2. Election procedures. The Electoral Commission had a limited discretion to modify or waive procedural requirements where this was reasonably necessary to secure a smooth and fair election. The court assessed each alleged departure by considering whether there was non-compliance, whether it was material, whether it was waived or ratified, whether the Commission’s response fell within the reasonable range of fiduciary options, and whether a declaration served the charity’s best interests. Several technical breaches occurred, but none justified a declaration or had substantive legal consequences. The reduction from three election days to two was ratified by Conference.
3. The Constitution took precedence over the SOP where inconsistent. The two Executive Councillors appointed under clause 20.3 of the Constitution were witnesses to the count, not returning officers. Their absence was a material procedural non-compliance, but the Commission acted reasonably in arranging respected independent substitute witnesses in the circumstances.
4. Receiver for the election. Applying the principles at [201]–[203], a receiver was neither necessary nor desirable. There was no serious failure in the 2020 election and no reason to doubt the competence of the current Electoral Commission. Intervention risked serious damage to confidence in the Charity.
5. Charity objects and finances. The Charity’s objects extended to all persons of the Shia Ithna-Asheri faith, not merely Khojas. The donations were applied within the objects and the recipient organisations were properly monitored. The current Office Bearers were required to investigate possible earlier irregularities if such matters came to their attention, but were not required to search for historic breaches by predecessors.
6. ExCo’s financial responsibilities were collective and principally concerned receiving accounts, requesting information, formulating policy, directing and overseeing the trustees, and approving rules. Day-to-day financial management, handling donations and approving payments were primarily responsibilities of the Office Bearers as charity trustees.
7. Financial receiver. Historic informality in due diligence and record-keeping did not establish serious mismanagement or a present serious risk. The MKS Report and subsequent improvements sufficiently addressed the concerns. The application for a receiver was refused. The claim was dismissed.