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Charity – application for permission to appeal - refused IN THE UPPER TRIBUNAL TAX AND CHANCERY

Charity – application for permission to appeal - refused









The Chamber President, the Hon Mrs Justice Rose

DATE: 18 November 2016 UPON the application of the Appellant for permission to appeal and UPON reading the papers before the tribunal The application IS DISMISSED


1. The Appellant seeks permission to appeal against the decision of the First-tier Tribunal (General Regulatory Chamber) (Charity jurisdiction) issued on 29 June

  • 2016. The First-tier Tribunal comprised Principal Judge McKenna with Ms

Elizabeth and Ms Park. They issued their decision after considering the matter on the papers. The background to the application is as follows. On 20 July 2015

Crocels Community Media Group (‘Crocels’) applied for constitution as a Charitable Incorporated Organisation and registration as a charity under s 207 of the Charities Act 2011 (‘the Act’). Crocels’ objects clause reads

“The object[s] of the CIO are, for the public benefit,

• Improving fraternity between nations, including through:

The advancement of citizenship and community development The advancement of the arts, culture, heritage and science The advancement of amateur sport The advancement of environmental protection and improvement The prevention or relief of poverty

• Advancing the understanding and promoting the cause of peace through:

The advancement of education The advancement of conflict resolution and reconciliation The advancement of equality and diversity The promotion of religious and racial harmony

• Innovating for the abolition or reduction of standing armies, including through:

The advancement of health and saving of lives The advancement of human rights The promotion of the efficiency of the armed forces of the crown The promotion of the efficiency of the police, fire and rescue services and/or ambulance services It will achieve these aims by facilitating the publication of academic research facilitating the holding of academic and other conferences facilitating debate and discussion facilitating the creation and management of information sources, including libraries and search engines facilitating the development of hardware and software facilitating news gathering and reporting facilitating community regeneration multimedia education by attempting to persuade politicians and other decision-makers to adopt the charities values and policies.”

  • 2. The Charity Commission decided on 7 October 2015 to refuse to constitute the proposed CIO and refused further to enter it onto the register of charities. The stated reason for refusing was that Crocels did not appear to be established for exclusively charitable purposes for public benefit. In particular, the proposed objects of improving fraternity between nations, advancing the understanding and promoting the cause of peace, and innovating for the abolition and reduction of standing armies were not recognised charitable purposes and the fact that in each case these objects were intended to be furthered by means which consisted of the descriptions of charitable purposes in the Act did not thereby make the objects themselves charitable.

  • 3. The Tribunal noted at the outset of its decision that its role was to “consider afresh” the Charity Commission’s decision (see section 319 (4) (a) of the Act) and therefore effectively to re-determine the registration application. It followed that the Tribunal was not concerned to establish whether the Charity Commission acted unreasonably in public law terms in refusing Crocels’ application.

  • 4. The Tribunal summarised the statutory framework for the registration of charities focusing on the definition in section 2(1) of the Act of a “charitable purpose” as one which falls within section 3(1) of the Act and is for the public benefit. The Tribunal considered the issue in the case was a point of law and that the evidence filed by the Appellant did not assist it in coming to its conclusion.

  • 5. The Tribunal considered each of the objects in turn. As to the first, ‘improving fraternity between nations’ the Tribunal held that they were bound by the decision of Rowlatt J in Anglo Swedish Society v IRC (1931) 47 TLR 295 which held that promoting international friendship or understanding is not a charitable purpose. The Tribunal rejected the contention that that case had been superseded by subsequent legislation and held that it was still good law. As to the second object, advancing the understanding and promoting the cause of peace, the Tribunal considered this was a purpose quite distinct from advancing conflict resolution, one of the charitable purposes in the Act. The Tribunal referred to the decision of Slade J in McGovern v Attorney General [1982] Ch 321 and held that the purpose expressed in Crocels’ constitution “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.” It was not therefore only a charitable purpose.

  • 6. As to the third object, innovating for the abolition or reduction of standing armies, the Tribunal held that it was clearly a political purpose because it necessarily involves seeking to change Government policy. The Tribunal added:

“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 inevitably 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.”

  • 7. Having reached those conclusions on the issue of charitable purpose, the Tribunal did not need to consider the question of public benefit or the various other issues raised by the Appellant although they addressed some of them briefly.

  • 8. On 3 August 2016 Judge McKenna refused permission to appeal.

  • 9. In the Notice of Appeal to the Upper Tribunal dated 9 August 2016 Crocels submits that the Charity Commission and the First-Tier Tribunal did not understand the way Crocels works. Its mission does not require any changes in government policy regardless of the political complexion of the Government. Crocels contends that its objects cannot be compared to those of the Anglo- Swedish Society. This is because, it argues, the aim of Crocels is not to prevent war but to provide debate on how war can be conducted so as to reduce its impact on human life and how it can more efficiently be carried out. Since all Governments want to carry out their military operations in a way that is more cost effective and results in fewer human casualties whether military or civilian, there is no need to change Government policy in order to achieve Crocel’s objects.

    • 10. The Appellant has also served Additional Submissions dated 14 September 2016. In those submissions, Crocels asserts that in deciding whether the objects of Crocels are charitable the Commission is required to look at the actual activities of Crocels as have been carried out for the last 11 years and not simply the wording of the objects: “What the organisation does should count for more than what it says it is going to do”. It argues that it should not be assumed that non-charitable activities will be pursued just because the wording of the objects leaves open this possibility.

    • 11. The Appellant then analyses in detail the objects of the Anglo-Swedish Society as set out in the judgment in 1931. It compares the implications of the words used in those objects with the way the words are used in Crocels’ objects. It argues that the aim of Anglo-Swedish Society was to change the opinions of journalists, whereas Crocels is not seeking to change opinions of its service users, simply to provide greater opportunity for discussion and debate around them. The submissions also seek to compare how the Anglo-Swedish Society used its capital and allocated travelling allowances with how Crocels uses its funds. The Appellant further asserts that the Commission failed to consider how a CIO operates differently from the Anglo-Swedish Society of the 1930s. The Anglo- Swedish Society was, Crocels submits, a group of people trying to dodge income tax as the organisation’s bank account was in the name of the trustees. By contrast, if Crocels is allowed to form as a CIO its aim is not to avoid paying tax but to create an entity that is used solely for charitable purposes and legally distinct from its for-profit activities.

    • 12. In my judgment, these Grounds of Appeal do not have any prospect of success. As to the test to be applied, it is clear from the Upper Tribunal’s decision in The Independent School Council v The Charity Commission [2011] UKUT 421 (TCC) that the question whether an institution is ‘established’ for charitable purposes only as required by section 1(1) of the Act must be determined by looking at the body’s constitution and not how it has operated in practice. Thus in paragraphs 187 onwards the Upper Tribunal held that a school which as a matter of its constitution can admit students whatever their ability to pay, but as a matter of

fact does not do so would still be considered as established for charitable purposes only. This is because, the Upper Tribunal there held, under the law prior to the 2006 Act, that whether a trust or institution which had a written constitution was a charity was to be ascertained by reference to that constitution. It was not permissible to look at the subsequent activities of the institution to ascertain its status. The Upper Tribunal went on to hold that the position under the Charities Act 2006 was no different.

“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.”

13. I agree with the Tribunal in this case that the same must apply to the 2011 Act. The Tribunal did not therefore err in focusing on the wording of Crocels’ objects rather than on its activities in deciding whether the body was established for charitable purposes only.

14. I do not consider that the close contextual comparison of the wording of the objects of the Anglo-Swedish Society assists Crocels. The Tribunal also decided that the second and third objects were wholly or partly political and hence precluded registration of Crocels. Slade J held in McGovern that where the object of the trust was to procure the abolition of torture or inhuman and degrading treatment, that had to be construed in its context as a trust of which one of the purposes was to procure the passing of appropriate legislation and thus it was a trust for a political purpose. 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.

15. If Crocels is dissatisfied with this decision, he has the right under the Upper Tribunal Rules (se Rule 22(4)) to apply for my decision to be reconsidered at a hearing.

fact does not do so would still be considered as established for charitable purposes only. This

Mrs Justice Rose

RELEASE DATE; 24 November 2016