Jaffer v Jaffer: UK Court Decides That Members Of Unincorporated Charities May Be Fiduciaries

• Published date: 15 July 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Charities & Non-Profits , Arbitration & Dispute Resolution
• Law Firm: Withers LLP
• Author: Mr Chris Priestley and Claire Harris

In charity proceedings relating to the election and appointment of trustees in an unincorporated charity, a recent decision has confirmed that members of unincorporated charities are fiduciaries. The decision in Jaffer v Jaffer [2021] EWHC 1329 (Ch) follows the Supreme Court's 2020 decision in the Children's Investment Fund Foundation (CIFF) case, that members of a charitable company have a fiduciary duty to act in the best interests of the charity.

Jaffer v Jaffer concerned a disputed election in the World Federation of the Khoja Shia Ithna-Asheri Muslim Communities, an unincorporated charity. The charity's constitution specified that a president would be elected in a stand-alone election and three 'Office Bearers' would then be elected at a conference of members, with a further two being appointed by the newly-elected president. The president and the Office Bearers are the charity trustees for the purposes of charity law.

An election for the president was held in January 2020, producing a clear winner by a substantial margin; Safder Jaffer. A conference was to be held in March 2020 to elect the Office Bearers, but did not take place due to the outbreak of Covid-19. Furthermore, complaints were made about the conduct of the presidential election and the eligibility of Safder Jaffer. To resolve the inability of the conference to meet, the Charity Commission made an order in June 2020 that a conference should be held by June 2021 and in the meantime, the current Office Bearers should continue in post. However, the Office Bearers all resigned and held a meeting to appoint interim Office Bearers.

As a result, complaints were made to the Charity Commission about the appointments. The Commission stressed the need for disputes to be resolved internally and initially refused permission for the claimant, a member of the charity, to bring court proceedings until a mediation was carried out. The mediation was unsuccessful and in the meantime, the claimant successfully applied to the court to bring proceedings seeking to appoint a receiver to oversee a fresh...