REF/2008/0837/0841

ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY
LAND REGISTRATION ACT 2002

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

BETWEEN
(1) MIAN KHAN
(2) MAZHAR ABBAS SHAH
(3) INAYAT ALI
(4) MOHAMMAD ASHRAF
Applicants
and
(1) AHMED KHAN
(2) TALIB MOHAMMED
(3) MOHAMMED TALIB KHALIL
(4) AHMED MOHAMMED HANIF
Respondents

Property Address: Medina Mosque, St George’s Road, Bolton

Title Numbers: GM263931, GM886321 and GM833594

Before: Mr Simon Brilliant sitting as Deputy Adjudicator to HM Land Registry

Sitting at: Victory House, 30-34 Kingsway, London WC2B 6EX 

On: 21 January 2011

Applicants’ Representation:	Mr Marcus Flavin of counsel.
 
Respondents’ Representation:	Mr Michael Morgan, solicitor.

DECISION

Applications to alter the proprietorship register – dispute as to the properly appointed trustees of a charity – one party directed to commence court proceedings under section 110(1) of the Land Registration Act 2002 – proceedings struck out for failure to obtain consent of the Charity Commission – whether consent of the Charity Commission required to proceed with the reference to the adjudicator – what directions should be given following the striking out of the court proceedings. 

Rendall v Blair (1890) 45 Ch D 139

Introduction

1.	The Madina Mosque and Muslamic Community Centre, Bolton (“the centre”) is a voluntary unincorporated association.  It is also a registered charity, number 1051556. 

2.	Like in the case of any voluntary unincorporated charity, provision is made in the constitution for the title to land held by the members in trust for the centre, which is not vested in the Official Custodian for Charities, to be vested either in a custodian trustee or in a certain number of individuals appointed as holding trustees.    

3.	Historically, the centre occupied premises at 128 St George’s Road, Bolton (“the St George’s Road premises”).  This is a row of houses registered under three separate titles, GM263931, GM886321 and GM833594.

4.	In the 1990’s there was a suggestion that a new mosque should be built in Bolton.  As a result a new mosque was opened in Gower Street in September 1997.  A dispute has arisen as to whether the St George’s Road premises should now be sold or should be retained.  The members of the centre have split into two factions over this issue.

5.	The current registered proprietors of each of the titles comprising the St George’s Road premises (“the current registered proprietors”) are not party to these proceedings.  The current registered proprietors hold the St George’s Road premises on trust for the members of the centre.

The first dispute

6.	The applicants’ case is that by a transfer in form TR1, dated 31 December 2007, (“the transfer”) the St George’s Road premises were transferred by the current registered proprietors to the applicants as trustees for the centre.  

7.	By an application in form AP1 dated 18 February 2008 (“the first original application”) the applicants applied to Land Registry, on the basis of the transfer, to be registered as the proprietors of the St George’s Road premises.

8.	The respondents objected to the first original application.  They claim that the current registered proprietors had resigned as the holding trustees in 2000, and that they, the respondents, were the current lawful holding trustees.  They relied upon a deed of appointment dated 22 August 2007 (“the August 2007 deed of appointment”).

9.	The dispute (“the first dispute”) was referred to the adjudicator under section 73(7) of the Land Registration Act 2002 on 13 June 2008.  It is reference 2008/837.

The second dispute

10.	By an application in form AP1 dated 21 February 2008 (“the second original application”) the respondents applied to be registered as the proprietors of the St George’s Road premises.  This was on the basis that they had been appointed trustees, in place of the current registered proprietors, by the August 2007 deed of appointment.

11.	By a letter dated 14 March 2008 the applicants’ solicitors objected to the second original application. They disputed the genuineness of the August 2007 deed of appointment, and in return relied upon a later deed of appointment, dated 26 September 2007.

12.	The dispute (“the second dispute”) was also referred to the adjudicator under section 73(7) of the Land Registration Act 2002 on 13 June 2008.  It is reference 2008/841.

The direction to commence court proceedings

13.	Both references have been dealt with together.

14.	On 30 September 2008 the adjudicator made a direction under section 110(1) of the Land Registration Act 2002.  This provides that in proceedings on a reference under section 73(7), the adjudicator may, instead of deciding a matter himself, direct a party to the proceedings to commence proceedings within a specified time in the court for the purpose of obtaining the court’s decision on the matter.  

15.	The applicants were directed to commence court proceedings on or before 28 October 2008 to determine whether the applicants or the respondents were entitled to be registered as the proprietors of the St George’s Road premises.

16.	The applicants did not commence court proceedings by that date.  On 29 December 2008 the adjudicator ordered that, unless such proceedings were commenced by 19 February 2009, the registrar would be directed to cancel the first original application and to give effect to the second original application.  In other words the respondents would be registered as the proprietors of the St George’s Road premises.

17.	On 30 January 2009 the applicants commenced a Part 8 claim in the High Court in Manchester (“the Manchester proceedings”) against the respondents seeking a declaration that the applicants were the lawful trustees and entitled to be registered as proprietors of the St George’s Road premises.  An order was asked for that Land Registry should give effect to the order and amend the titles of the St George’s Road premises in the register accordingly.

18.	Rule 7 of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003 provides:

(1)	In this Part – 

"the date that the matter before the court is finally disposed of" means the earliest date by which the court proceedings relating to the matter or on the relevant part (including any court proceedings on or in consequence of an appeal) have been determined and any time for appealing or further appealing has expired;

"the relevant part" means the part of the matter in relation to which the adjudicator has directed a party under section 110(1) to commence court proceedings; and

"the final court order" means the order made by the court that records the court's final determination (on appeal or otherwise).

(2)	A party who has been directed to commence court proceedings under section 110(1) must serve on the adjudicator – 

(a)	within 14 days of the commencement of the court proceedings, a written notice stating – 

(i)	that court proceedings have been issued in accordance with directions given by the adjudicator;	

(ii)	the date of issue of the court proceedings;

(iii)	the names and any known addresses of the parties to the court proceedings;

(iv)	the name of the court at which the court proceedings will be heard; and

(v)	the case number allocated to the court proceedings;

(b)	within 14 days of the date of the court's decision on any application for an extension of time, a copy of that decision; and

(c)	within 14 days of the date that the matter before the court is finally disposed of, a copy of the final court order.

19.	Rule 8 of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003, as amended, provides:

(1)	This rule applies where the adjudicator has directed a party under section 110(1) to commence court proceedings for the court's decision on the whole of the matter.

(2)	Once he has received notice under rule 7(2)(a) that court proceedings have been issued, the adjudicator must adjourn all of the proceedings before him pending the outcome of the court proceedings.

(3) 	Subject to paragraph 4, once the adjudicator has received a copy of the final court order in accordance with rule 7(2)(c) and unless the court directs otherwise, the adjudicator must close the proceedings before him without making a substantive decision.

(4)	Before closing the proceedings in accordance with paragraph (3) the adjudicator may make an order either with or without a hearing and either with or without giving prior notice to the parties if—

(a)	such order is necessary, in addition to the final court order, to implement the decision of the court; and 

(b)	the adjudicator would have had the power to make such order if the adjudicator had made a substantive decision in relation to the proceedings.

20.	Accordingly, the proceedings before the adjudicator were adjourned under rule 8(2).

The court proceedings

21. 	On the face of it both sides required the court’s decision.  The respondents were not just interested in defeating the applicants’ claim to become the registered proprietors of the St George’s Road premises, but the respondents themselves were seeking to become the registered proprietors of the St George’s Road premises.

22.	Unfortunately, the Manchester proceedings were a disaster and were struck out with indemnity costs.  Accordingly, there has yet to be a judicial determination on the merits of which persons, if any, should be registered as the proprietors of the St George’s Road premises in place of the current registered proprietors.

23.	What happened in the Manchester proceedings was as follows.  On 13 February 2009 the respondents filed an acknowledgment of service indicating an intention to defend. On 26 February 2009 the district judge ordered the respondents to file and serve a witness statement by 31 March 2009 and listed the matter for a case management conference on 30 April 2009.

24.	Shortly before that hearing, on 21 April 2009, the respondents’ solicitors wrote to the applicants’ solicitors stating that they had been reminded by counsel that section 33 of the Charities Act 1993 required court proceedings to have the consent of the Charity Commission (“the commission”).

25.	Section 33 provides as follows:

(1)	Charity proceedings may be taken with reference to a charity either by the charity, or by any of the charity trustees, or by any person interested in the charity, or by any two or more inhabitants of the area of the charity if it is a local charity, but not by any other person.

(2)	Subject to the following provisions of this section, no charity proceedings relating to a charity (other than an exempt charity) shall be entertained or proceeded with in any court unless the taking of the proceedings is authorised by order of [the Commission].

(3)	[The Commission] shall not, without special reasons, authorise the taking of charity proceedings where in [its opinion] the case can be dealt with [by the Commission] under the powers of this Act other than those conferred by section 32 above.

(4)	This section shall not require any order for the taking of proceedings in a pending cause or matter or for the bringing of any appeal.

(5)  	Where the foregoing provisions of this section require the taking of charity proceedings to be authorised by an order of [the Commission], the proceedings may nevertheless be entertained or proceeded with if, after the order had been applied for and refused, leave to take the proceedings was obtained from one of the judges of the High Court attached to the Chancery Division.

(6) 	Nothing in the foregoing subsections shall apply to the taking of proceedings by the Attorney General, with or without a relator, or to the taking of proceedings by [the Commission] in accordance with section 32 above.

(7)	Where it appears to [the Commission], on an application for an order under this section or otherwise, that it is desirable for legal proceedings to be taken with reference to any charity (other than an exempt charity) or its property or affairs, and for the proceedings to be taken by the Attorney General, [the Commission] shall so inform the Attorney General, and send him such statements and particulars as [the Commission thinks] necessary to explain the matter.

(8)	In this section “charity proceedings” means proceedings in any court in England or Wales brought under the court's jurisdiction with respect to charities, or brought under the court's jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes.

26.	It has been held that proceedings brought without the authority which ought to have been obtained are not a nullity, but should be stayed to see if the necessary authority could be obtained.

27.	Neither side has suggested that the Manchester proceedings were not charity proceedings within the meaning of section 33(8).  The High Court, as a court of equity, has an inherent jurisdiction to interfere in the management and administration of a trust.

28.	These statutory provisions with regard to the taking of charity proceedings are concerned with jurisdiction over the domestic aspects of an institution, not with issues lying between the institution and outsiders.  Charity proceedings relate to the constitution and administration of a charity, which are internal matters, as opposed to disputes over contract, tort or property rights between a charity and a third party.  

29.	The issues in these proceedings are very much concerned with the internal domestic aspects of the centre.  There are rival constitutions, rival minutes, rival trustees, and rival policies.

30.	The reason that access to the court in matters of the administration of charitable trusts is restricted is because problems arising in the administration of charitable trusts, as distinct from questions as to the validity of the trust themselves, are the prime concern of the commission.

31.	At the case management conference on 30 April 2009 the district judge stayed the Manchester proceedings for three months.  No doubt this was to enable the applicant’s solicitors to seek the consent of the commission.  The order provided that if there was no application to extend the stay, or for further case management, by 21 August 2009, the claim would be automatically struck out.

32.	The stay was subsequently extended until 13 January 2010 and the date for complying with the unless order was subsequently extended until 20 January 2010.  The applicants failed to comply with it and the Manchester proceedings were automatically struck out.  The district judge awarded the respondents indemnity costs on 13 May 2010.

The adjourned proceedings of the adjudicator 

33.	The adjudicator was duly informed of the striking out order.

34.	If the automatic striking out of the Manchester proceedings constituted a final court order, in accordance with rule 7(2)(c) of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003, the adjudicator would have to close the proceedings before him without making a substantive decision, unless it was necessary to make an order, in addition to the final court order, to implement the decision of the court. 

35.	Assuming that is correct, as both sides were seeking to establish their respective positions in the Manchester proceedings, the striking out should be treated as a failure of both their cases.  It would follow that I should direct the registrar to cancel both original applications

 36.	I do not, however, regard a procedural striking out as a final court order, in accordance with rule 7(2)(c).  I agree with Mr Flavin that an automatic striking out for want of prosecution is not a final determination of the matter.

37.	The question now to be answered is what should the adjudicator do in these circumstances?  It was suggested to the parties in a letter from the adjudicator’s office dated 5 January 2011 that the failure properly to prosecute the Manchester proceedings might have been a breach of the unless order to commence court proceedings made on 29 December 2008.

38.	I do not consider that the correct course.  As I have already explained the Manchester proceedings were not a nullity, so the unless order was complied with.

39.	In my judgment the better approach, giving effect to the overriding objective as required by rule 3(3) of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003, is to say that there is discretion when court proceedings have ended in a striking out prior to a determination of the real issue.

40.	There may be cases where the more just course is to allow the proceedings to carry on, and for the adjudicator to give case management directions.  In other cases the failure of a party in the court proceedings to obtain a determination on the merits should be taken as a failure to establish that party’s case before the adjudicator.

41.	I propose to adapt the latter course in these proceedings.  Even now the applicants have failed properly to explain why they were unable to prosecute the Manchester proceedings with dispatch.  Although the applicants were the claimants, the respondents, as defendants, should have counter-claimed in respect of the second dispute, but did not choose to prosecute or seek the commission’s permission to such a counter-claim.  The respondents have failed to explain why they did not do this. 

42.	The effect will be that I will direct the registrar to cancel both original applications.  Having both sides’ original applications dismissed was the alternative and least preferred option of Mr Flavin, who wanted to persuade me that the proceedings should be allowed to continue before the adjudicator.

43.	I can see no useful purpose in keeping the present proceedings alive.  Mr Morgan has indicated that they have been overtaken by events.  If the applicants wish to make a new original application, they are free to do so.

44.	I must now raise two further matters of concern.  The first relates to the failure of the applicants’ solicitors to provide proper disclosure of their dealing with the commission.  It is a mystery as to whether the commission has given, refused or not yet decided whether to give permission.  Mr Flavin accepted these documents should have been in the court bundle.

45.	In a letter, dated 24 January 2011, written since the hearing Mr Morgan suggests that the commission has refused permission, and suggests that correspondence not yet shown to me is now submitted or enquiries are now made of the commission.

46.	I do not see why all necessary enquiries could not have been made before the hearing or why there should be any further delay.  As they were parties to the Manchester proceedings I do not understand why the respondents’ solicitors could not have kept themselves fully informed throughout of what the commission was doing, by corresponding with the commission.  After all, the respondents needed the commission’s consent to succeed on the second dispute.

47.	Finally, Mr Flavin raised at the hearing an argument that the adjudicator was a court for the purposes of 33(8) of the Charities Act 1993, and that the commission’s consent was required for the proceedings before the adjudicator.  No authorities, texts or commentaries were cited in support of this proposition.

48.	It is regrettable that an important and difficult point such as this was raised only on the day of the hearing.  The point was taken for the very first time, somewhat obliquely in the final lines of Mr Flavin’s skeleton argument, which itself was only served on the day of the hearing.  The parties had originally been given notice by letter dated 21 October 2010 that there would be a hearing at some time in the future, and skeletons were ordered by that letter to be served five working days before the hearing.  Notice of the hearing date was given on 4 November 2010.  

49.	It is true that the hearing was erroneously adjourned by the adjudicator’s office on 17 December 2010, which led to the applicants’ solicitors cancelling their instructions to counsel, but this error was corrected by a letter sent out on 5 January 2011, over two weeks before the hearing.

50.	I have considered this argument as it goes to jurisdiction.  There is no doubt that the adjudicator can be considered a court for several purposes.  The adjudicator is subject to the supervision of the Administrative Justice and Tribunals Council.

51.	The adjudicator is a listed tribunal for the purposes of schedule 7 of the Tribunals, Courts and Enforcement Act 2007. By virtue of this, the adjudicator falls within the definition of a court for the purposes of the Courts and Legal Services Act 1990 and the Legal Services Act 2007. 

52.	The Adjudicator is also a scheduled tribunal for the purposes of the Tribunals, Courts and Enforcement Act 2007 s 30.  

53.	However, section 33(8) is concerned with proceedings brought under the court’s jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes. Unlike the High Court in the Manchester proceedings, the adjudicator, being a creature of statute, has no inherent jurisdiction to administer a trust.  Neither does his statutory jurisdiction, to be found in section 108 of the Land Registration Act 2002, extend to the administration of a trust for charitable purposes.  

54.	This does not mean he could not decide who was entitled to be the registered proprietor of a given property in the course of a dispute referred by the registrar, but such a decision would not be made in proceedings ... brought under the court’s jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes.

55.	Even if I am wrong on that, it would not alter my decision in these proceedings.  The original applications should be cancelled for the reasons I have already given. 

Conclusion

56.	I shall direct the registrar to cancel both original applications.  There have been no winners in these references, only losers.  Unless either side wishes to make submissions to the contrary, I propose to make no order as to costs.  Any submissions to the contrary must be in writing and served on the other side and filed with the adjudicator by 4.0pm 10 February 2011.

Dated this 27th day of January 2011

BY ORDER OF THE ADJUDICATOR TO HM LAND REGISTRY