Who can the Court compel to act reasonably? Ethiopian Orthodox Tewahedo Church [2020] EWHC 1493 (Ch)


Publication Date:
29 Jun 2020


Description:
Since 2015 an Ethiopian Orthodox church in Battersea has been occupied by two rival factions of worshippers. After several years of Court intervention the charity which owns the building became a Charitable Incorporated Organisation (‘CIO’). There is a Clergy Council, elected by the members of the CIO, by whom other governors were to be nominated. Each member was obliged by the constitution to ‘exercise his or her powers … in the way he or she decides in good faith would be most likely to further the purposes of the Church” - words mirroring the Charities Act 2011, s.220.
 
A general meeting elected only those clergy preferred by the Claimants and none of those preferred by the Defendants. The Defendants sought to have the vote declared invalid because those voting did so as part of a campaign to seize control of the church, and not exercising their own independent judgment.
 
The Court refused to make the declaration sought. The 2011 Charities Act and the terms of the CIO constitution both depend upon the subjecting state of mind of the voting member; in order for a vote to be set aside there must be evidence that the voters do not believe that their votes will further the purpose of the CIO. In circumstances where the membership was bitterly divided along firmly-held issues of principle which were partly spiritual, partly liturgical and partly political, it was not possible to say any of those members had breached their duty by backing a candidate who shared their views.
 
Comment: The different vehicles available for charities - trust, unincorporated association, private company, CIO - come with different levels of oversight. In Lehtimaki v Children’s Investment  Fund [2018] EWCA Civ 1605 the Court of appeal held that members of charitable companies were subject to fiduciary duties akin to those applicable to members of CIOs, but the court had no jurisdiction to intervene in a member’s actions absent evidence of a breach of trust. The Supreme Court heard an appeal on 14 January this year but has yet to give judgment. It seems odd that such a high-profile decision was not cited in this case, but the two sit well together; the court will only intervene in the voting decisions of members where there is a breach of duty, and the test is a subjective one. Where votes are by secret ballot with no requirement for reasons to be given, it will be almost impossible to mount an effective challenge. In this case, the judge referred to the sermon given shortly before the vote was taken and considered it effectively as a ‘direction to the jury’.

 

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