Case No: UT-2016-0149

UPPER TRIBUNAL (TAX AND CHANCERY CHAMBER)

Cardiff Civil and Family Justice Centre

2 Park Street
Cardiff
CF10 1ET
BEFORE:

MR JUSTICE NEWEY

BETWEEN:
JONATHAN BISHOP APPELLANT
on behalf of CROCELS COMMUNITY MEDIA GROUP

- and -

THE CHARITY COMMISSION FOR ENGLAND AND RESPONDENT

WALES

Legal Representation
None Known

Other Parties Present and their status

Mr Jonathan Bishop for the Claimant

Judgment
Judgment date: 18 January 2017
Transcribed from 11:03:56 until 11:19:51

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Number of folios in transcript 28

Number of words in transcript 1,986
Mr Justice Newey:

1. I have before me an application for permission to appeal against a decision made by

the First-tier Tribunal (Charity) on 18 July 2016. The decision concerned an
application by Mr Jonathan Bishop on behalf of Crocels Community Media Group,
which I shall simply call “Crocels”, for constitution as a charitable incorporated
organisation, or “CIO”, and registration as a charity. The Charity Commission
refused that application and the First-tier Tribunal, or “FTT”, upheld its decision.
Crocels, through Mr Bishop, wishes to appeal to the Upper Tribunal.

2. Under Section 208 of the Charities Act 2011, the Charity Commission must refuse an
application for constitution as a CIO if it is not satisfied that the proposed CIO would
be a charity. The meaning of “charity” is nowadays explained in the opening
sections of the 2011 Act. Among other things, the institution in question must be:

“… established for charitable purposes only…”

and, for a purpose to be a “charitable purpose”, it must fall within one of the
descriptions given in Section 3.

3. Crocels’ objects clause is set out in paragraph 3 of the FTT’s decision. The principal
objects specified are first:

“Improving fraternity between nations”,

secondly:

“Advancing the understanding and promoting the cause of peace”

and thirdly:

“Innovating for the abolition or reduction of standing armies.”

Crocels is to achieve its aims by, among other things:

“attempting to persuade politicians and other decision-makers to

adopt the charities values and policies.”

4. The Charity Commission concluded that Crocels’ objects were not exclusively
charitable and the FTT agreed. The FTT said this in paragraphs 18 to 21 of its
decision:

“18. As to the first object, we are satisfied that the decision of Rowlatt J
in Anglo-Swedish Society remains good law and that we are bound by it
as a matter of legal precedent. We are not persuaded that it has been
superseded by subsequent legislation, as the descriptions of charitable
purposes in the Act do not include the promotion of fraternity between
nations. We conclude that the first object is not a charitable purpose
falling within the descriptions of charitable purposes in the Act and
neither is it analogous to any recognised charitable purpose.

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 19. As to the second object, we are satisfied that, although the
advancement of conflict resolution is listed as a description of a
charitable purpose in the Act, this is a purpose quite distinct from
advancing the understanding and promoting the cause of peace as
described in the objects of [Crocels]. The object as drafted would appear
to meld a potentially charitable purpose (advancing education on the
subject of peace) with a political purpose, within the meaning given to
that term by Slade J in McGovern, namely seeking to change
Government policy by promoting a cause. We conclude that the second
object is not a charitable purpose because it is not only a charitable
purpose.

20. Turning to the third object, the purpose of innovating for the abolition
or reduction of standing armies is, in our judgement, a clear political
purpose within the meaning given to that term by Slade J in McGovern.
We conclude that the third object does not express a charitable purpose
because it necessarily involves seeking to change Government policy.

21. As noted above, [Crocels] has an express power, albeit within the
objects clause, to attempt “to persuade politicians and other decision-
makers to adopt the charities (sic) values and policies”. This provision
would inevitable raise concerns even if the objects were exclusively
charitable. As we have concluded that they are not it would appear to
permit [Crocels] to operate as a non-charitable pressure group rather than
to undertake ancillary political activities as a means of furthering a
charitable purpose.”

5. One of the main criticisms of the FTT’s decision which has been advanced by Mr
Bishop, who has both put in written submissions and appeared today, is that the FTT
focused on the wording of Crocels’ objects clause rather than on what Crocels
actually does. What the organisation does, Mr Bishop says, should count for more
than what it says that it is going to do. I do not think, however, that there is any real
prospect of an appeal succeeding on that basis. In R (Independent Schools Council) v
The Charity Commission for England and Wales [2011] UKUT 421 (TCC) [2012]
Ch 214, the Upper Tribunal explained in paragraph 188:

“…the question whether an institution is “established” for charitable

purposes only is to be answered by deciding, as a matter of construction,
whether its purposes (a) fall within one of the description of purposes
listed in section 2(2) and (b) satisfy the public benefit test. The ordinary
meaning, and we would suggest generally the most natural meaning, of
the word “established” is directed to what it is that the institution was set
up to do, not to how it would achieve its objects or whether its
subsequent activities are in accordance with what it was set up to do.
Further, section 2(2) itself more naturally reflects that ordinary meaning
than an interpretation which looks at activities. It lists descriptions of
purposes, not categories of activity. Moreover, the public benefit as it
was understood prior to the 2006 Act was also directed to what the
relevant trust or institution was set up to do, not on how it operated. The
incorporation of the previously understood meaning of “public benefit”
into the 2006 Act is another indicator that “established” is to be
interpreted as we have stated.”

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6. The Upper Tribunal was there dealing with the Charities Act 2006, but the reasoning
must apply equally to the Charities Act 2011.
7. Mr Bishop suggested that considerations of proportionality indicated that Crocels’
eligibility for registration as a charity should be judged by what it is to do rather than
its objects, but it seems to me, having regard to the wording of the 2011 Act and the
relevant case law, that a tribunal necessarily has to focus on the wording rather than
what the institution proposes to do. Here, Mr Bishop stressed that the intended
activities would be charitable. Assuming that to be the case, then the answer is to
bring the objects into line with what is intended to be done. If the position is, as the
FTT concluded, that the objects clause is not limited to exclusively charitable
purposes, the mere fact that what Crocels wishes to do in practice would be eligible
for charitable status cannot suffice.

8. Mr Bishop also took issue with the significance that the FTT attached to the decision
of Mr Justice Rowlatt in Anglo-Swedish Society v Commissioners of Inland Revenue
(1931) 16 TC 34. That case concerned an organisation set up to promote a:

“… closer and more sympathetic understanding between the English and

Swedish peoples…”

It was held not to be charitable, Mr Justice Rowlatt saying:

“There may be many trusts to influence general opinion the results of

which influence may be very good, but where the immediate trust is only
to influence general opinion in favour of some theory or view or
aspiration, or whatever it may be, I cannot myself see that the statute of
Elizabeth is looking to that sort of thing at all.”

9. The FTT considered that the Anglo-Swedish Society case remains good law and
indicates that Crocels’ first object is not a charitable purpose. I do not think that
there is any real prospect of Mr Bishop persuading the Upper Tribunal to arrive at a
different conclusion were an appeal to be pursued.

10. Nor do I think that there is any real prospect of Mr Bishop successfully challenging
the FTT’s view that Crocels’ objects include political purposes, and so cannot be
exclusively charitable. That a political purpose is not charitable is clear from, for
example, the decision of Mr Justice Slade in McGovern v Attorney General [1982]
Ch 321. Mr Justice Slade explained in his judgment (at 340) that trusts for political
purposes include:

“… trusts of which a direct and principal purpose is either (i) to further

the interests of a particular political party; or (ii) to procure changes in
the law of this country; or (iii) to procure changes in the law of a foreign
country; or (iv) to procure a reversal of government policy or of
particular decisions of governmental authorities in this country; or (v) to
procure a reversal of government policy or of particular decisions of
governmental authorities in a foreign country.”

11. In the present case the objects include both:

“promoting the cause of peace.”

Page 4 of 5
 and:

“Innovating for the abolition or reduction of standing armies”,

and Crocels is to achieve its aims by among other things:

“attempting to persuade politicians and other decision-makers to

adopt the charities values and policies”.

There is, in my view, no real prospect of the Upper Tribunal concluding in the
circumstances that Crocels’ objects do not include political purposes.

12. When refusing permission to appeal on paper, Mrs Justice Rose said in paragraph 14
of her decision:

“A purpose was ‘political in nature’ according to Slade J where it sought

to persuade a country’s government to alter its policies or administrative
decisions. Similarly here, even though Crocels may be right in assuming
that all Governments want to reduce the cost of war in financial and
human terms, the achievement of that goal depends on persuading
Governments to take different decisions giving this priority. Crocels may
argue that their intention is only to bring this about by education and
research - the objects of the body as drafted go much further than that.”

I agree.

13. In the course of his submissions this morning Mr Bishop took me to the
Transparency of Lobbying, Non-Party Campaigning and Trade Union
Administration Act 2014 which, as he pointed out, includes a reference to CIOs. I do
not think, however, that that Act bears on the circumstances in which an institution is
to be viewed as exclusively charitable for the purposes of the Charities Act 2011 or,
hence, on when an institution should be accepted as a CIO.

14. In the end, despite Mr Bishop’s helpful submissions, it seems to me that an appeal
would not have a real prospect of success and, accordingly, that I should refuse
permission to appeal. As I indicated earlier, the remedy, assuming that what Crocels
wishes to do could be regarded as charitable, is to come up with revised objects
rather than to pursue an appeal which could not have a real prospect of succeeding. I
shall not, therefore, grant permission to appeal.

This Transcript has been approved by the Judge.

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