James Wynne recently succeeded in a claim by the trustees of a charity for permanent injunctions against a former trustee who had been accused of misappropriating the charity’s funds and passing off his activities as those of the charity.
This case arose out of a dispute between the trustees of a religious charity and another trustee who had been appointed as the shepherd in charge of the parish (the defendant). The trustees sought to suspend and then remove the shepherd from his role (and as a trustee) because of their belief that he had misappropriated funds and property and generally was not conducting himself appropriately. Whilst repairs were being undertaken to the charity’s church building after a fire, and the building could not be used, the trustees conducted services in a new building and the defendant conducted services to another section of the congregation at other premises. However, he asserted that he continued to be the shepherd and a trustee of the charity. He purported to remove the existing trustees from their role through the alleged authority of the head of the wider church in Nigeria.
The trustees sought and obtained interim injunctions preventing the defendant from passing off his activities as those of the charity, and preventing him from entering the charity’s church building.
At trial the trustees sought declarations that the defendant had been validly removed and that the interim injunctions be made permanent. They argued that they had the power under the charity’s constitution to appoint and remove their shepherd in charge, and that they had acted within the constitution in removing him. The defendant argued that the power to appoint the shepherd lay with the worldwide head of the church and was unfettered. The central issues surrounded the interpretation of the different constitutions of the charity and the worldwide church.
The court decided that the trustees had the power to remove the shepherd as this fell within their power to further their charitable objects – the defendant’s interpretation would have unnecessarily limited these express powers. It also decided that little weight should be given to a document such as the constitution of the wider church, because it did not form part of the published constitution of the charity which was registered with the Charity Commission. The court made the declarations sought by the trustees and invited (and was given) permanent undertakings by the defendant not to enter the charity’s church building or pass off his activities as those of the charity.
This decision is a useful source of many of the key principles that will apply where a charity is suffering interference with its proper governance or attempts to misappropriate funds or property by third parties.
James was instructed by Paul Nathan, a partner and head of litigation and commercial drafting at Freemans Solicitors.
James Wynne has been described by the directories as “incredibly knowledgeable and clients love him” and “an excellent advocate with a calm demeanour”.