Purani Swami Dharmanandan Dasji v Daveen Mavji Bhudia & Ors

A managerial scheme for a charity may be made where, having regard to all the circumstances, it is expedient in the charity’s interests to regulate its administration. The court should be slow to thwart the settlors’ or founders’ wishes, but expediency and practicability may carry greater weight once a scheme is required. The governing document is the primary evidence of those intentions. Speculative evidence about what a settlor might have wanted is not relevant. A scheme may comprehensively redraft an unclear or unworkable constitution and may allocate governance powers between the membership, directors and religious office-holders, provided the resulting arrangements are expedient and workable.

The claimant sought a managerial scheme for Shree Swaminarayan Satsang, an English registered charity established in 2001 or 2002 and closely connected with the Bhuj Temple in Gujarat. The existing constitution was unclear about membership, meetings, appointment and removal of directors, amendments, dissolution and the role of the Mahant Swami. Previous proceedings had resulted in a judgment and Tomlin Order, but no scheme was made. The principal issues concerned the appropriate balance between the powers of the charity’s members, directors and the Mahant Swami or Bhuj Temple, and the practical structure of a replacement constitution.

1. Jurisdiction and need for a scheme. The charity was conclusively presumed to be a charity under Charities Act 2011. The court had inherent jurisdiction to make a managerial scheme. The existing constitution was sufficiently unclear and unworkable that a scheme was expedient in the interests of the charity. A comprehensive redraft was appropriate.
2. Applicable approach. The court adopted the approach in Re J W Laing Trust [1980] Ch 143: the court must consider all the circumstances and do what is expedient in the charity’s interests, while being slow to thwart the settlors’ wishes. That caution applied both to deciding whether to make a scheme and to its contents. Once a scheme was necessary, practicability could carry greater weight.
3. Intentions and evidence. The governing document was the primary evidence of the founders’ intentions. Admissible evidence of actual intentions could be considered, but evidence of what witnesses thought a settlor would have wanted in a hypothetical situation was speculative and irrelevant. The court declined to adopt the contrary reasoning of Hutley JA in Phillips v Roberts [1975] 2 NSWLR 207 for a managerial scheme.
4. Governance. The scheme should preserve a strong connection with the Bhuj Temple while preventing excessive concentration of power. The Mahant Swami, or Vice Mahant Swami, should retain specified religious and constitutional powers. The members should appoint the Appointed Directors, retain their existing rights, and approve constitutional amendments subject to the prior or subsequent written consent of the Mahant Swami or Vice Mahant Swami. Procedural safeguards were required for removal, membership termination and meetings.
5. Orders. The court directed the preparation of a comprehensive scheme constitution, with consequential drafting and further directions to follow. The initial Board was to comprise four identified Appointed Directors, subject to co-option and the initial AGM.

First-instance managerial scheme proceedings. The judgment records earlier proceedings before Richard Snowden QC, which ended in a Tomlin Order without determination of the wider constitutional issues. This court directed the preparation of a new scheme constitution.