THE CHARITIES ACT (NORTHERN IRELAND) 2008

THE CHARITIES ACT (NORTHERN IRELAND) 2013

THE CHARITY TRIBUNAL RULES (NORTHERN IRELAND) 2010

 

 

The Charity Tribunal for Northern Ireland

 

     Appeal Reference: 3/16

 

Heard in public in the Tribunal Hearing Centre, Belfast on 27 January 2017

 

 

Before

 

DAMIEN J. MCMAHON

President

LORRAINE MCCOURT

Tribunal Member

RICHARD ROSS

Tribunal Member

 

 

BETWEEN

 

ARTHUR ACHESON

Appellant

 

-and-

 

 

THE CHARITY COMMISSION FOR NORTHERN IRELAND

Respondent

 

-and-

 

 

THE ATTORNEY-GENERAL FOR NORTHERN IRELAND

                                                                                                                        Intervening Party

 

                   

 

The Appellant appeared in person.

 

Ms. Y. Bell, Legal Adviser, on behalf of the Respondent

 

The Attorney-General was not represented at the substantive hearing, his intervention being confined to the submission of a Position Paper and a Supplementary Position Paper.

 

The General Assembly of the Presbyterian Church in Ireland, while not a party, but invited to participate by invitation and direction of the Tribunal, was represented by Mr. S. Gowdy of King and Gowdy, Solicitors.

 

 

                                                                  DECISION

 

1.      The appeal is dismissed.

 

2.      The May Street Congregation of the Presbyterian Church in Ireland is a charity in its own right and is, therefore, required to be entered on the Register of Charities, pursuant to section 16 of the Charities Act (Northern Ireland) 2008.

 

3.      No Order as to costs.

 

 

                                                                 REASONS

 

Background

 

1.      The Respondent made a decision on 5 August 2016 (‘the Decision’) to enter the May Street Congregation of the Presbyterian Church in Ireland (‘the Congregation’) in the register of charities (‘the Register’), pursuant to section 16(2) of the Charities Act (Northern Ireland) 2008 (‘the Act’).

 

2.      The Congregation is a component element of the Presbyterian Church in Ireland, an institution that has been granted religious designation, pursuant to sections 165 and 166 of the Act and the provisions of the Charities Act 2008 (Designated Religious Charities) Order (Northern Ireland) 2016. This means that the Congregation, if a charity in its own right, is exempt from the provisions of sections 33-36 of the Act that empowers the Respondent to suspend or remove trustees of a charity; to appoint an interim manager of a charity or to direct a charity or, for example, a trustee of a charity, to take any action the Respondent might feel expedient in the interests of the charity. It is important to note that religious designation is expressly to cater for faith-based charities, such as the Congregation, that, as part of an overall structure within which the Congregation is a component, there exists, by virtue of that fact, arrangements to sufficiently deal with the matters addressed in sections 33-36 of the Act, including disciplinary, governance and supervisory matters for the protection of the Congregation as a charity. This was of particular importance in the determination of this appeal and featured strongly in the written and oral submissions of the representatives of the General Assembly.

 

3.      The Appellant, on 6 August 2016, filed a Notice of Appeal against the Decision submitting, in essence, that the Congregation was ineligible to be entered on the Register as it was, he submitted, entirely subject to decisions and directions made by the General Assembly of the Presbyterian Church in Ireland (‘the General Assembly’) and, indeed, decisions and directions, to a large extent, made by the South Belfast Presbytery.

 

4.      The Appellant is an elder of the Congregation and a member of the Kirk Session of the Congregation.

 

5.      The Kirk Session of the Congregation made formal application to the Respondent that the Congregation be entered on the Register.

 

6.      The Respondent determined that, for the purposes of the administration of the Congregation as a charity, the members of the Kirk Session of the Congregation would be the trustees of the charity.

 

7.      Section 12(3)(a) and the Table contained in Schedule 3 to the Act provides that a decision by the Respondent to enter an institution in the register of charities pursuant to section 16 of the Act, may be appealed to the Tribunal by a person who is a charity trustee of the institution or by any other person who is or may be affected by the decision. While it may have seemed somewhat incongruous that the Appellant should seek to appeal a decision of which he had been part, while not resigning his position, he was, nevertheless, a trustee and was entitled to file an appeal on that basis. In any event, he was also entitled to file an appeal as ‘a person affected’, as a member of the Congregation. Further, the Respondent took no issue with the standing of the Appellant to file his appeal. The remedy available to a successful Appellant is to quash the decision of the Respondent to enter the institution in the Register and, if appropriate, to remit the matter to the Respondent and direct the Respondent to rectify the Register. (It was, however, noted by the Tribunal that the Appellant had signed a required ‘Trustee Declaration’, pursuant to section 17(2) of the Act, stating that he was willing to act as a charity trustee for the Congregation despite the crux of his appeal being whether the trustees had sufficient control over the Congregation to be its charity trustees. Nevertheless, this appeal was not determined by reference to that seeming added incongruity).

 

8.      The Congregation had charitable tax status under the former regime governing charities in Northern Ireland, having registered with HMRC for that purpose. The Congregation is, therefore, deemed to be a charity pursuant to the provisions of the Charities Act 2008 (Transitional Provisions) Order (Northern Ireland) 2013. It was not the case, therefore that the Congregation did not have charitable status under the former regulatory regime.

 

9.      The constituent parts of the Presbyterian Church in Ireland (the Ecclesiastical Courts), namely, the General Assembly, the individual Presbyteries and the individual Congregations (the Kirk Sessions for these purposes), are entered in the Register, or in the case of the Presbyteries, will be entered in the Register, as charities under the current regime for the registration of charities. This approach was agreed between the Respondent and the Presbyterian Church in Ireland authorities.

 

Intervention by the Attorney-General

 

10.  The Attorney-General for Northern Ireland (‘the Attorney’) intervened in these proceedings. This was confined, however, to the furnishing of a Position Paper. Quite apart from the Attorney expressing a position on the substantive issue, he raised a preliminary point, namely whether the decision taken by the Respondent to enter the Congregation in the Register pursuant to section 16 of the Act, was a decision that an officer of the Respondent could make, as opposed to the decision being made by the Respondent itself. This required, pursuant to Rules 22 of the Rules, a discrete directions hearing to take place. This took place on 22 December 2016, and proceeded as a hearing on a preliminary question of law, pursuant to Rule 14 of the Rules. That hearing was attended by the Appellant and by representatives of the Respondent and the Attorney. The General Assembly was not represented. In advance of the preliminary hearing, the Attorney submitted a Supplementary Position Paper setting out an alternative argument, one endorsed by the Respondent, and accepting that both arguments were valid in the narrow context of a decision to enter a charity in the Register, subject to the alternative being open to argument on good governance practice. The Tribunal decided that the appeal should proceed to substantive hearing.

 

11.  The position of the Attorney on the substantive issue was confined to two issues, namely, whether the Respondent should be directed to consider afresh the issue of whether the Congregation should be separately registered and, secondly, whether the proportionate approach was to direct that the Congregation be included, for registration purposes, in the proposed registration of the South Belfast Presbytery or in the registration of the General Assembly. He submitted that, in considering these issues, the Tribunal, on appeal, was required to ensure that the functions of the Respondent were exercised in accordance with its objectives, functions and duties set put in sections 7, 8 and 9 of the Act. The Attorney submitted that to enter the Congregation on the Register as a separate charitable entity might offend the proper exercise of the Respondent’s statutory functions. Similarly, by reference to section 9 of the Act, the Attorney posited whether to treat the Congregation as a distinct charity was a proportionate approach.

 

12.  The Attorney was not represented at the substantive hearing.

 

13.  The position of the Attorney on the substantive issue was opposed by the Respondent. Its position was set out in its skeleton argument, supplemented by oral submissions at the substantive hearing. In essence, the Respondent’s position was that it had no alternative in law but to enter the Congregation in the Register upon receipt of an application for registration and that this decision followed some three years of discussion with the Presbyterian Church in Ireland authorities, and having regard to its statutory functions, obligations and duties. The Respondent submitted that the only issue was whether the Congregation was a charity in law, that is, that it had a charitable purpose (the advancement of religion in this case) and that the public benefit test was satisfied. The Respondent also submitted that it had not received an application, pursuant to section 1(4) of the Act, that would engage the question of whether the Congregation required to be separately entered in the Register rather than treating it as part of another registered charity within the ambit of the Presbyterian Church in Ireland, such as the General Assembly or the South Belfast Presbytery. However, the Respondent also submitted that even if such application had been made, it would still have been obliged in law, in all the circumstances, to treat the Congregation as a separate charity, submitting that it had no discretion not to enter in the Register an institution that was charitable in law.

 

The Issues

 

14.  The issues for determination in this appeal were:

 

1)      whether the Congregation was a charity in its own right;

2)      even if so, whether it should have been treated as not requiring to be registered and, instead, treated as falling within the registration as a charity of the General Assembly or that of the South Belfast Presbytery;

3)      whether it was proportionate to require the Congregation to be entered in the Register as a separate charity.

 

Is the Congregation a charity in its own right?

 

15.  There was significant common ground between the parties. The following matters were not in dispute:

 

1)      that the Congregation was an institution within the terms of section 180 of the Act;

2)      that the purposes of the Congregation were exclusively charitable, that is that it is established for charitable purposes only, namely, the advancement of religion, purposes that are for the public benefit, and the Congregation is subject, for that purpose, to the jurisdiction of the High Court.

 

16.  As a matter of law, in determining whether an institution is a charity, the test is the charitability of the purposes of the institution – not its activities – subject to the public benefit test also being satisfied.

 

17.  The crucial area of dispute in this appeal was whether the Congregation, as a charity, through its trustees, that is the members of the Kirk Session, had general management and control of the Congregation.

 

18.  This question turned on the contents of the Book of the Constitution and Government of the Presbyterian Church in Ireland (‘the Code’). The Code had been accepted by the Respondent as suitable to be the governing document, or constitution, for the purposes of registering all constituent parts (the three Ecclesiastical Courts) of the Presbyterian Church in Ireland.

 

19.  The Respondent submitted that it required, as an implicit requirement in the definition of ‘charity’ in section 1 of the Act, that, for the purposes of this appeal, the Congregation had to have control over its own governance and finances to be entered in the register. It further submitted that the Code demonstrated, when looked at in the round, a concept approved by the High Court and Court of Appeal, that the Kirk Session had general control and management of the administration of the Congregation.

 

20.  This was disputed by the Appellant. The Tribunal acknowledged the considerable detailed analysis undertaken by the Appellant in his submissions in examining the Code in order to support the crux of his appeal, namely that the trustees, the members of the Kirk session, did not have a sufficient degree of independence of control and management over the Congregation to allow the Congregation to be regarded as a charity.

 

21.  The Appellant relied, in particular (but not exclusively), on his submission that a Kirk Session cannot meet without the presence of a Moderator and that this was something within the exclusive control of another institution. This, however, is not what is provided in the Code; instead, the Code provides that ‘The Kirk Session shall select - … candidates for hearing in a vacant congregation in accordance with the rules.’ This reflects a decision of the Court of Session in Scotland in James Cassie and Other v. The General Assembly of the Church of Scotland and Others (1878) 6 R 221, an authority that was found by the Tribunal to be of high persuasive value in Northern Ireland in determining this appeal. The Tribunal agreed with the submission of the Respondent that other examples can be found in the Code that indicate, on the balance of probabilities, that the Kirk Session, or the Congregation itself, under delegated authority from the Kirk Session, has general control and management over the Congregation, with the superior courts of the Church operating a system of checks and balances to ensure that the doctrine, worship, discipline and government of the Church are adhered to by the Kirk Session.

 

22.  The representatives of the General Assembly, in respect of the issue of ‘control and management’, submitted in particular that the fact that the Congregation was subject to a level of oversight by superior bodies of the Church did not detract from the Congregation being properly found to be a charity in law. It was further submitted that this proposition was supported by the provisions of sections 165 and 166 of the Act and the said provisions of the Charities Act 2008 (Designated Religious Charities) Order (Northern Ireland) 2016. The Tribunal found considerable force in that submission. The Presbyterian Church in Ireland is a designated religious charity. The Congregation is a component part of the Presbyterian Church in Ireland for the purposes of that designation. This means that where, as in this appeal, as determined by the Tribunal, the Congregation is a charity in law in its own right, the fact that the Congregation is subject to supervisory and disciplinary authority of a superior body does not prevent the congregation being a charity in law. Further, it is of significance that the congregation, in its own name cannot apply to be a designated religious charity. Accordingly, if it were not for the fact that the Congregation is a component part of the Presbyterian Church in Ireland, a designated religious charity, it would, as an individual congregation, be subject to all the rigors of sections 33-36 of the Act that could involve the Respondent, for example, in theory at least, suspending or removing members of the Kirk Session (being the charity trustees) or appointing an interim manager in respect of the affairs of the Congregation. Such a vista would be unconscionable but the Congregation as a charity on its own right, is protected from such scenario by the very reason that superior authorities in the Church have a supervisory, governance and other roles in respect of the Congregation – a position that is recognised and is perfectly valid in law.

 

23.  Accordingly, the Tribunal was satisfied that the Congregation was a charity and, therefore, the trustees of the charity were obliged in law to apply to the Respondent to have the have the charity entered in the Register. Section 16(20 of the act states that ‘Every institution that is a charity under the law of Northern Ireland must be registered in the register of charities’. The Register is maintained by the Respondent.

 

Should the Congregation instead of being entered in the Register as a charity in its own right have been subsumed within the registration as a charity of one or both of its superior authorities?

 

24.  This was not an issue raised by the Appellant. It was an issue raised by the Attorney. The Respondent did not agree with the Attorney’s position and the representatives of the General Assembly took a similar position.

 

25.  This issue revolved around the statutory provision contained in section 1(4) of the Act. This provides that the Respondent may either direct that the Congregation be treated as a part of a superior body of the Presbyterian Church in Ireland or be treated as a distinct charity in its own right. This is a permissive power and is not a statutory requirement. Neither the Appellant, nor any other person or body, raised the exercise of this permissive power as something that should be considered in this case. The appellant was solely concerned with the question of whether the Congregation was capable of being a charity in its own right in law.

 

26.  The Respondent submitted that it had no discretion other than to register the Congregation as a charity if it was, in law, a charity. The Tribunal agreed with that submission and found that the Respondent had properly approached the issue of whether the Congregation should be entered in the Register in its own right, having regard to the Respondent’s statutory functions contained in sections 7, 8 and 9 of the Act. The Tribunal did not find that the Respondent incorrectly applied those functions in making its decision to enter the Congregation in the Register. 

 

Was it proportionate to enter the Congregation in the Register in its own right?

 

27.  The Tribunal accepted that it was an overarching consideration whether the Respondent (and, on appeal, the Tribunal) was proportionate in deciding that the Congregation should be entered in the Register in its own right rather than as part of the entry of a superior body of the Presbyterian Church in Ireland.

 

28.  This issue is closely linked to the issue immediately previously addressed in this decision.

 

29.  Again, the Appellant did not raise this issue. It was, however, raised by the Attorney.

 

30.  The Respondent simply submitted that it acted in a proportionate manner in making its decision to enter the Congregation in the Register in its own right; indeed, the Respondent submitted that it had no choice but to make this decision once it was established that the Congregation was a charity in law in its own right.  The Tribunal agreed that, in all the circumstances, the entry of the Congregation in the register, in its own right, was a proportionate exercise of the statutory powers and, indeed, was the only option open to the Respondent and, on appeal, to the Tribunal.

 

Conflict of Interest

 

31.  The Appellant was particularly concerned to raise this issue as a reason why the Congregation should not be entered in the register in its own right. However, there is always potential for conflicts of interest to arise in any given circumstances, including conflicts of interest involving trustees of a charity: it is simply impossible to legislate for there never being conflicts of interest. The Tribunal simply did not accept that an alleged potential for a conflict of interest top arise among the members of the Kirk Session, the trustees of the Congregation, a charity, was any reason to decline to enter the congregation in the Register once it was shown to be the case that the Congregation was a charity. In any event, the issue of a potential conflict of interest among the trustees of a charity was not relevant to whether or not a charity should be entered in the Register. It was to be expected that the charity would simply manage any real or potential conflicts of interest.

 

32.  Accordingly, this appeal was refused. The Congregation is a charity in law and must, therefore, be entered in the Register.

 

Note: Since this decision is a final disposal of the Appellant’s appeal, a party may, if he or it considers that there is an error of law in the decision, apply to the Tribunal in writing within 28 days of the date upon which the Tribunal sends notification of this decision to him or it for permission to appeal to the High Court of Justice in Northern Ireland stating the grounds upon which he or it intends to rely before the Court.

 

 

 

Signed

 

 

 

Damien J. McMahon

President

 

 

 

Lorraine McCourt

Tribunal Member

 

 

 

Richard Ross

Tribunal Member

 

 

Date: 20 February 2017