THE CHARITY COMMISSION

Constitution and Functions

The Charity Commission. The Charity Commission for England and Wales is a statutory body regulated by the Charities Act 1993 with functions under that and other Acts. (See the Charities Act 1993 s.lA (added by the Charities Act 2006 s. 6(l)). Prior to 27 February 2007, all regulatory powers and duties were vested in the statutory offices of the Charity Commissioners for England and Wales, but on this day the office of Charity Commissioners was abolished and the functions, property, rights and liabilities of the Charity Commissioners transferred to a newly established body corporate, the Charity Commission for England and Wales: see the Charities Act 1993 s.1A(1) (as so added); and the Charities Act 2006 s.6(3), (4). Any enactment or document has effect, so far as necessary, for the purposes of or in consequence of the transfer effected by s.6(4), as if any reference to the Charity Commissioners for England and Wales or to any Charity Commissioner for England and Wales were a reference to the Charity Commission for England and Wales: s.6(5).

In Welsh, the Commission is known as ‘Comisiwn Elusennau Cymru a Lloegr’: Charities Act 1993 s.1A(2) (as so added).

Anything which has been done, or has effect as if done, by or in relation to the Commissioners, and is in effect immediately before the coming into force of the Charities Act 2006 s.6 is to be treated as if done by or in relation to the Commission: Sch 2 paras. 1, 3(1). Anything, including legal proceedings, which relates to anything transferred by s.6(4) and is in the process of being done by or in relation to the Commissioners, may be continued by or in relation to the Commissioners: Sch 2 para. 3(2). However, nothing in s.6 or Sch 2 para. 3 affects the validity of anything done by or in relation to the Commissioners: Sch 2, paras. 1, 3(3). ‘Commissioners’ means the Charity Commissioners for England and Wales, and includes any person acting for them by virtue of the Charities Act l993 Sch 1 para. 3(3) (repealed): Charities Act 2006 Sch 2 para. 3(4).

The Charity Commission is a designated regulator for the purposes of the Regulatory Enforcement and Sanctions Act 2008: see Sch 5).

The functions of the Charity Commission are performed on behalf of the Crown (Charities Act 1993 s.1A(3) (as added) and, in the exercise of its functions, the Commission is not subject to the direction or control of any Minister of the Crown or other government department. (Charities Act 1993 s. 1A(4) (as added). However, s.1A(4) does not affect any provision made by or under any enactment or any administrative control exercised over the Commission’s expenditure by the Treasury: s.1A(5) (as so added).

The Commission has a number of statutory objectives (see the Charities Act 1993 s.1B), functions (see the Charities Act 1993 s.1C) and duties (See the Charities Act 1993 s.1D). The Commission has the power to do anything which is calculated to facilitate, or is conducive or incidental to, the performance of any of its functions or general duties (Charities Act 1993 s.1E(1) (added by the Charities Act 2006 s.7).

However, the Commission must not exercise functions corresponding to those of a charity trustee in relation to a charity or otherwise be directly involved in the administration of a charity. (Charities Act 1993 s.1E(2) (as added). However, this does not affect the power of the Commission to give directions as to action to be taken or as to application of charity property under ss.19A-19B: s.1E(3) (as so added)).

Statutory objectives. The Charity Commission has the following statutory objectives: (Charities Act 1993 s.1B(1) (added by the Charities Act 2006 s.7):

  • the public confidence objective (Charities Act 1993 s.1B(2)(1) (as added) which is to increase public trust and confidence in charities (Charities Act 1993 s.1B(3)(1) (as added);
  • the public benefit objective (Charities Act 1993, s.1B(2)(2) (as added), which is to promote awareness and understanding of the operation of the public benefit requirement (Charities Act 1993 s.1B(3)(2) (as added). ‘Public benefit requirement’ means the requirement in the Charities Act 2006 s. 2(1)(b) that a purpose falling within the Charities Act 1993 s.2(2) must be for the public benefit if it is to be a charitable purpose: Charities Act 1993, s.1B(4) (as added);
  • the compliance objective (Charities Act 1993, s.1B(2)(3) (as added), which is to promote compliance by charity trustees with their legal obligation in exercising control and management of the administration of their charities (Charities Act 1993, s.1B(3)(3) (as added);
  • the charity resources objective (Charities Act 1993, s.1B(2)(4) (as added), which is to promote the effective use of charitable resources (Charities Act 1993, s.1B(3)(4) (as added); and
  • the accountability objective (Charities Act 1993, s.1B(2)(5) (as added), which is to enhance the accountability of charities to donors, beneficiaries and the general public (Charities Act 1993, s.1B(3)(5) (as added).

General statutory functions. The Charity Commission has the following statutory general functions (Charities Act 1993, s.1C(1) (added by the Charities Act 2006 s.7):

  • determining whether institutions are or are not charities (Charities Act 1993, s.1C(2) para 1 (as added));
  • encouraging and facilitating the better administration of charities (Charities Act 1993, s.1C(2) para 2 (as added));
  • identifying and investigating apparent misconduct or mismanagement in the administration of charities and taking remedial or protective action in connection with misconduct or mismanagement therein (Charities Act 1993, s.1C(2) para 3 (as added));
  • obtaining, evaluating and disseminating information in connection with the performance of any of the Commission’s functions or meeting any of its objectives (Charities Act 1993, s.1C(2) para 5 (as added)), including, among other things, the maintenance of an accurate and up-to-date register of charities (Charities Act 1993, s.1C(3) (as added)); and
  • giving information or advice, or making proposals, to any Minister of the Crown on matters relating to any of the Commission’s functions or meeting any of its objectives (Charities Act 1993, s.1C(2) para 6 (as added)) including among other things, complying, so far as is reasonably practicable, with any request made by a Minister of the Crown for information or advice on any matter relating to any of its functions (Charities Act 1993, s.1C(4) (as added).

As from a day to be appointed (The Charities Act 1993 s.1C(2) para. 4, (5) come into force by order made under the Charities Act 2006 s.79(2). ‘Public charitable collection’ and ‘public collections certificate’ have the same meanings as in the Charities Act 2006 Pt 3, Ch I: Charities Act 1993 s.1C(5) (as so added).

General duties. The Charity Commission has a number of statutory general duties (See the Charities Act 1993 s.1D(1), (2) (added by the Charities Act 2006 s.7). So far as is reasonably practicable, it must, in performing its function, act in a way which is (1) compatible with its objectives, and which it considers most appropriate for the purposes of meeting those objectives (Charities Act 1993, s.1D(2) para. 1 (as added)) and (2) compatible with the encouragement of all forms of charitable giving, and voluntary participation in charity work (Charities Act 1993, s.1D(2) para. 2 (as added)). In performing its functions, the Commission must have regard to: (a) the need to use its resources in the most efficient, effective and economic way (Charities Act 1993, s.1D(2) para. 3 (as added)); (b) so far as relevant the principle of best regulatory practice, including the principles under which regulatory activities should be proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed (Charities Act 1993, s.1D(2) para. 4 (as added)); and (c) in appropriate cases have regard to the desirability of facilitating innovation by or on behalf of charities. (Charities Act 1993, s.1D(2) para. 5 (as added)). In managing its affairs the Commission must have regard to such generally accepted principles of good corporate governance as it is reasonable to regard as applicable to it. (Charities Act 1993, s.1D(2) para. 6 (as added)).

Jurisdiction. Any institution which is a charity within the statutory definition (See the Charities Act 1993 s.96(1), (2). As to territorial limitations on the operation of the Charities Act 1993 (which does not generally extend to Scotland or Northern Ireland) see s.100(2)-(4) (amended by the Charities Act 2006, ss.23(5), 75(1), Sch. 8 para. 176); and cf Re Duncan, Re Taylor’s Trusts (1867) 2 Ch App 356; Construction Industry Training Board v A-G [1973] Ch 173, [1972] 2 All ER 1339, CA.) is subject to the jurisdiction of the Charity Commission, but many of the specific powers given to the Commission are not exercisable in relation to exempt charities (See e.g. the Charities Act 1993 s.3A(2)(a), s.8(1)), s.9(4), s.33(2), s.38(7). However, note that a number of these powers are as from a day to be appointed exercisable in relation to exempt charities. It may direct that institutions established for special charitable purposes of or in connection with a charity be treated for all or any of the purposes of the Charities Act 1993 as part of that charity or as forming a distinct charity (Charities Act 1993 s.96(5) (amended by the Charities Act 2006 Sch 8 para. 173(4)). They may also direct that for all or any of the purposes of the Charities Act 1993 two or more charities having the same charity trustees are to be treated as a single charity.

An appeal against a decision of the Commission not to give such a direction in relation to an institution or charity lies to the Tribunal at the instance of the Attorney General and the trustees of the institution or charity concerned. The Tribunal has the power to quash the decision and, if appropriate, remit the matter to the Commission.

Specific functions under the Charities Act 1993. The Charity Commission has a number of specific functions and powers under the Charities Act 1993 which are dealt with elsewhere in this title:

  • the duty to maintain the central register of charities and duties in relation to registration;
  • the power to exchange information with regard to institutions treated as charitable;
  • the jurisdiction to make schemes, to appoint and remove trustees and officers and to make vesting orders in relation to charities;
  • the power to make common investment schemes or common deposit funds;
  • the power to authorise beneficial transactions;
  • the power to authorise ex gratia payments etc;
  • the power to give directions about dormant bank accounts;
  • the power to give advice to charity trustees;
  • the power to determine membership of a charity;
  • the power to provide for the enrolment and preservation of documents belonging to charities;
  • the power to order the taxation of a solicitor’s bill of costs for work done for a charity;
  • powers to take legal proceedings and compromise claims;
  • the requirement of its consent to the taking of charity proceedings;
  • the requirement of its consent to the expenditure of charity money on promoting legislation in Parliament;
  • the requirement of its consent to certain dispositions of charity property;
  • the power to relieve trustees and others from liability for breach of trust of duty;
  • the power to amend certificates of incorporation;
  • the power to dissolve defunct incorporated bodies;
  • the requirement of its consent for certain matters relating to charitable companies;
  • the duty to establish and maintain a register of charity mergers and associated duties;
  • as from a day to be appointed, the duties and powers relating to the registration and constitution of charitable incorporated organisations.

Power to Act for Protection of Charities

Power of Charity Commission to bring proceedings with respect to charities. Except that it cannot present a petition for the winding up of a charitable company (i.e. under the Charities Act 1993 s.63(1)), the Charity Commission may exercise the same powers with respect to the taking of legal proceedings with reference to charities or the property or affairs of charities, or the compromise of claims with a view to avoiding or ending such proceedings, as are exercisable by the Attorney General acting ex officio (Charities Act 1993 s. 32(1), (2) (s.32 amended by the Charities Act 2006 Sch 8 para. 124). The practice and procedure to be followed in relation to any such proceedings are in all respects, and in particular as regards costs, the same as if they were proceedings taken by the Attorney General acting ex officio (Charities Act 1993 s.32(3) (as amended)). No rule of law or practice is to be taken to require the Attorney General to be a party to any such proceedings (Charities Act 1993 s.32(4)). Although these powers are exercisable by the Commission of its own motion, they are exercisable only with the agreement of the Attorney General on each occasion (Charities Act 1993 s.32(5) (as amended).

Power to institute inquiries. The Charity Commission may from time to time institute inquiries with regard to charities or a particular charity or class of charities, either generally or for particular purposes (Charities Act 1993 s.8(1) (s.8 is amended by the Charities Act 2006 Sch 8 para. 102). As to determining the matters in respect of which the power conferred by the Charities Act 1993 s.8 may be exercised see s.28(9). The Commission may either conduct such an inquiry itself or appoint a person to conduct it and make a report to the Commission: s.8(2) (amended by the Charities Act 2006 Sch 8 para. 102). This power and the related powers under the Charities Act 1993 s.69 and s.18 have been used in a few cases: see Report of the Charity Commissioners for England and Wales for 1964 (HC Paper (1965-66) no. 8) paras. 53-61; Report of the Charity Commissioners for England and Wales for 1970 (HC Paper (1970-71) no. 409) paras. 50-52; Report of the Charity Commissioners for England and Wales for 1971 (HC Paper (1971-72) no. 269) paras. 90-96; Report of the Charity Commissioners for England and Wales for 1972 (HC Paper (1972-73) no. 259) para. 80; Report of the Charity Commissioners for England and Wales for 1979 (HC Paper (1979-80) no. 608) paras. 24-36; and Report of the Charity Commissioner for England and Wales for 1980 (HC Paper (1980-81) no. 332) para. 31). No such inquiry may extend to any exempt charity (Charities Act 1993 s.8(1). For the purposes of any such inquiry evidence may be taken on oath, and the person conducting the inquiry may for that purpose administer oaths, or may instead of administering an oath require the person examined to make and subscribe a declaration of the truth of the matters about which he is examined: s.8(4). However, as from a day to be appointed, such an inquiry may extend to an exempt charity where this has been requested by its principal regulator (Charities Act 1993, s.8(1) (as amended) prospectively amended by the Charities Act 2006 Sch 5 para. 2).

For the purpose of any such inquiry, the Commission, or a person appointed by it to conduct the inquiry; may direct any person (Charities Act 1993 s.8(3) (as amended 2). As to directions of the Commission generally see s.90. As to the service of directions see s.91:

  • to furnish accounts and statements in writing with respect to any matter in question at the inquiry, being a matter on which he has or can reasonably obtain information or to return answers in writing to any questions or inquiries addressed to him on any such matter, and to verify any such account, statement or answer by statutory declaration (Charities Act 1993 s.8(3)(a));
  • to furnish copies of documents in his custody or under his control which relate to any matter in question at the inquiry, and to verify the same by statutory declaration (Charities Act 1993 s.8(3)(b)); and
  • also to attend and give evidence or produce any such documents (Charities Act 1993 s.8(3)(c). A person may not be required in obedience to a direction under s.8(3)(c) to go more than ten miles from his place of residence unless the expenses of his attendance are paid to him: see s.8(5).

Where an inquiry has been held under these provisions, the Commission may either cause the report of the person conducting the inquiry or such other statement of the results of the inquiry as it thinks fit to be printed and published or publish any such report or statement in some other way which is calculated in its opinion to bring it to the attention of persons who might wish to make representations about the action to be taken (Charities Act 1993 s.8(6) (as amended).

An application for the review of a decision of the Commission to institute an inquiry under these provisions with regard to a particular institution lies to the Tribunal at the instance of the Attorney General, the persons who have control or management of the institution and, if a body corporate, the institution itself (Charities Act 1993 s.2A(4)(a), Sch 1C paras. 3, 4(1) (2), Table Cols 1, 2 (added by the Charities Act 2006, s.8(1), (3), Sch 4). The Tribunal has the power to direct the Commission to end the inquiry (Charities Act 1993 s.2A(4)(a), Sch 1C, Table Col 3 (added by the Charities Act 2006, s.8(1), (3), Sch 4).

An application for the review of a decision of the Commission to institute an inquiry under these provisions with regard to a class of institutions lies to the Tribunal at the instance of the Attorney General, the persons who have control or management of any institution which is a member of the class of institution and, if a body corporate, any such institution (Charities Act 1993 s.2A(4)(a), Sch 1C paras. 3, 4(1), (2), Table Cols 1, 2 (added by the Charities Act 2006, s.8(1), (3), Sch 4). The Tribunal has the power to do any of the following: (a) direct the Commission that the inquiry should not consider a particular institution; (b) direct the Commission to end the inquiry. (Charities Act 1993 s.2A(4)(a), Sch 1C, Table Col 3 (added by the Charities Act 2006, s.8(1), (3), Sch 4)).

Offences in connection with inquiries. Persons wilfully giving false evidence on oath before an inquiry are guilty of perjury (see the Perjury Act 1911 s.1).

Any person who knowingly or recklessly provides the Charity Commission (For these purposes, references to the Commission includes references to a person conducting an inquiry under the Charities Act 1993 s.8; s.11(4) (s.11 amended by the Charities Act 2006 Sch 8 para. 105) with information which is false or misleading in a material particular is guilty of an offence (Any person guilty of an offence under the Charities Act 1993 s.11 is liable on summary conviction to a fine not exceeding the statutory maximum, and on conviction on indictment to a term of imprisonment not exceeding two years or to a fine, or both: s.11(3)) if the information was provided in purported compliance with a requirement imposed by or under the Charities Act 1993, or in other circumstances in which the person providing the information intended or could reasonably be expected to have known, that it would be used by the Commission for the purpose of discharging its functions under that Act (Charities Act 1993 s.11(1) (as amended)). Any person who wilfully alters, suppresses, conceals or destroys any document which he is or is liable to be required, by or under the Charities Act 1993, to produce to the Commission is likewise guilty of an offence (Charities Act 1993 s.11(2) (as amended)). No proceedings may be instituted for either of the above offences except by or with the consent of the Director of Public Prosecutions (Charities Act 1993 s.94(1), (2)(b).

Persons who disobey orders calling for information or documents (i.e. under the Charities Act 1993, s.9(1)) may be dealt with as for disobedience to an order of the High Court (See the Charities Act 1993 s.88).

Power to call for documents. The Charity Commission may by order (Charities Act 1993 s.9(1) (amended by the Charities Act 2006 Sch 8 para. 103). A person guilty of disobedience to an order of the Charity Commission under the Charities Act 1993 s.9(1) may on the application of the Commission to the High Court be dealt with as for disobedience to an order of the High Court; see s.88(a)):

  • require any person to furnish it with any information in his possession which relates to any charity and is relevant to the discharge of the Commission’s functions or of the functions of the official custodian for charities (Charities Act 1993 s.9(1)(a) (amended by the Charities Act 2006 Sch 8 para. 103);
  • require any person who has in his custody or under his control any document which relates to any charity and is relevant to the discharge of the Commission’s functions or of the functions of the official custodian for charities: (a) to furnish it with a copy of, or extract from, the document; or (b) unless the document forms part of the records or other documents of a court or of a public or local authority, to transmit the document itself to the Commission for its inspection (Charities Act 1993 s.9(1)(b) (amended by the Charities Act 2006 Sch 8).

The Commission may without payment keep any such copies or extracts (Charities Act 1993 s 9(3) (amended by the Charities Act 2006 Sch 8)). Where an original document transmitted to it for inspection relates only to one or more charities and is not held by a person entitled as a trustee or otherwise to the custody of it, the Commission may keep it or deliver it to charity trustees or other persons who are so entitled (Charities Act 1993 s.(3) (amended by the Charities Act 2006 Sch 8)).

Until a day to be appointed, no person properly having the custody of documents relating only to an exempt charity (Charities Act 1993 s.9(3) (amended by the Charities Act 2006 Sch 8)) may be required to transmit to the Commission any of those documents or to furnish any copy of, or extracts from, any of them (Charities Act 1993 s 9(4) (amended by the Charities Act 2006 s 6(5); and prospectively repealed by the Charities Act 2006 Sch 5).

An appeal against a decision of the Commission requiring a person to supply information or a document under these provisions lies to the Tribunal at the instance of the Attorney General and any person who is required to supply the information or document (Charities Act 1993 s.2A(4)(a), Sch 1C). The Tribunal has the power to do any of the following: (i) quash the order; (ii) substitute for all or part of the order any other order which could have been made by the Commission (Charities Act 1993 s.2A(4)(a), Sch 1C).

Power to inspect records. Any member of staff of the Charity Commission (including the official custodian for charities even if he is not a member of staff of the Commission). (Charities Act 1993 s.9(6)), if so authorised by it, is entitled without payment to inspect and take copies of or extracts from the records or other documents of any court, public registry or office of records, for any purpose connected with the discharge of the functions of the Commission or of the official custodian for charities (Charities Act 1993 s.9(2)). These rights, in relation to information recorded otherwise than in legible form, include the right to require the information to be made available in legible form for inspection or for a copy or extract to be made of or from it (Charities Act 1993 s.9(5)).

Power to enter premises and seize documents etc. A justice of the peace may issue a warrant if satisfied, on information given on oath by a member of the Charity Commission’s staff, that there are reasonable grounds for believing that each of the following conditions is satisfied (Charities Act 1993 s 31A(1)):

  • that an inquiry has been instituted (i.e. under the Charities Act 1993 s.8) by the Commission Charities Act 1993 s.31A(2)(a));
  • that there is on the premises to be specified in the warrant any document or information relevant to that inquiry which the Commission could require (i.e. under the Charities Act 1993 s.9(1) to be produced or furnished (Charities Act 1993 s.31A(2)(b)); and
  • that, if the Commission were to make an order requiring the document or information to be so produced or furnished, the order would not be complied with or the document or information would be removed, tampered with, concealed or destroyed (Charities Act 1993 s.31A(2)(c)).

Such a warrant authorises the member of the Commission’s staff who is named in it to do the following:

  • to enter and search the premises specified in it (Charities Act 1993 s.31A(3)(a));
  • to take such other persons with him as the Commission considers are needed to assist him in doing anything that he is authorised to do under the warrant (Charities Act 1993 s.31A(3)(b));
  • to take possession of any documents which appear to fall within head (2) above, or to take any other steps which appear to be necessary for preserving, or preventing interference with, any such documents (Charities Act 1993 s.31A(3)(c));
  • to take possession of any computer disc or other electronic storage device which appears to contain information falling within head (2) above, or information contained in a document so falling, or to take any other steps which appear to be necessary for preserving, or preventing interference with, any such information (Charities Act 1993 s.31A(3)(d));
  • to take copies of, or extracts from, any documents or information falling within head (c) or (d) above (Charities Act 1993 s.31A(3)(e));
  • to require any person on the premises to provide an explanation of any such document or information or to state where any such documents or information may be found (Charities Act 1993 s.31A(3)(f));
  • to require any such person to give him such assistance as he may reasonably require for the taking of copies or extracts as mentioned in head (e) above (Charities Act 1993 s.31A(3)(g)).

Entry and search under such a warrant must be at a reasonable hour and within one month of the date of its issue (Charities Act 1993 s.31A(4)). The member of the Commission’s staff who is authorised under such warrant must, if required to do so, produce the warrant and documentary evidence that he is a member of the Commission’s staff for inspection by the occupier of the premises or anyone acting on his behalf (Charities Act 1993 s.31A(5)).

The member of the Commission’s staff who is authorised under such a warrant must make a written record of the date and time of his entry on the premises, the number of persons (if any) who accompanied him on to the premises, and the names of any such persons, the period for which he (and any such persons) remained on the premises, what he (and any such persons) did while on the premises, and any document or device of which he took possession while there (Charities Act 1993 s.31A(6). If required to do so, he must give a copy of the record to the occupier of the premises or someone acting on his behalf (Charities Act 1993 s.31A(7)). Unless it is not reasonably practicable to do so, the member of the Commission’s staff who is authorised under such a warrant must comply with these requirements before leaving the premises (Charities Act 1993 s.31A(8)).

Where possession of any document or device is taken under these provisions, the document may be retained for so long as the Commission considers that it is necessary to retain it (rather than a copy of it) for the purposes of the relevant inquiry, or the device may be retained for so long as the Commission considers that it is necessary to retain it for the purposes of that inquiry, as the case may be (Charities Act 1993 s.31A(9)). Once it appears to the Commission that the retention of any document or device has ceased to be so necessary, it must arrange for the document or device to be returned as soon as is reasonably practicable to the person from whose possession it was taken, or to any of the charity trustees of the charity to which it belonged or related (Charities Act 1993 s.31A(10)).

A person who intentionally obstructs the exercise of any rights conferred by a warrant under this section is guilty of an offence (Charities Act 1993 s.31A(11). Such a person is liable on summary conviction to imprisonment for a term not exceeding three months, a fine not exceeding level 5 on the standard scale, or both. However as from a day to be appointed (i.e. the day on which the Criminal Justice Act 2003 s.281(5) comes into force) such a person is liable on summary conviction to imprisonment for a term not exceeding 51 weeks.)

Investigation and audit of charity accounts. In the case of a charity which is a company the Charity Commission may by order require that the condition and relevant accounts (‘Relevant accounts’ means accounts required to be audited under the Companies Act 2006 Pt 16; Charities Act 1993 s.69(1A) (added by SI 2008/527; and amended by SI 2008/948)) of the charity for such period as the Commission thinks fit be investigated and audited by an auditor appointed by it (Charities Act 1993 s.69(1) (amended by the Charities Act 2006 Sch 8 and SI 2008/527). The auditor must be a person eligible for appointment as a statutory auditor under the Companies Act 2006 Pt 24; Charities Act 1993 s.69(1A) (amended by SI 2008/948)). The Commission must pay the expenses of the audit, including the remuneration of the auditor (Charities Act 1993 s.69(3) (amended by the Charities Act 2006 Sch 8, para 154).

The auditor has a right of access to all books, accounts and documents relating to the charity which are in the possession or control of the charity trustee or to which they have access (Charities Act 1993 s 69(2)(a)). The auditor is entitled to require from any past or present officer or employee of the charity, such information and explanation as he thinks necessary for the performance of his duties (Charities Act 1993 s 69(2)(b)). If a person fails to afford to the auditor any such facilities, the Commission may by order give to that person or to charity trustees for the time being direction as it thinks appropriate for securing that the default is made good. (Charities Act 1993 s.69(4) (amended by the Charities Act 2006 Sch 8 para. 154).

At the conclusion or during the progress of the audit, the auditor must make such reports to the Commission about the audit or the charity’s account or affairs as he thinks the case requires, and must send a copy of any such report to the charity trustees (Charities Act 1993 s 69(2)(c) (amended by the Charities Act 2006 Sch 8 para. 154).

An application for a review of an order of the Commission requiring such an audit (i.e. under the Charities Act 1993 s 69(1)) lies to the Tribunal at the instance of the Attorney General, the director of the company, the company itself and any other person who is or may be affected by the order (Charities Act 1993 s 2A(4)(a), Sch 1C para. 1(1), (2), Table Cols 1, 2 (added by the Charities Act 2006 s 8(1), (3), Sch 4). The Tribunal has the power to do any of the following: (1) quash the order and, if appropriate, remit the matter to the Commission; (2) substitute for the order any other order which could have been made by the Commission; (3) add to the order anything which could have been contained in an order made by the Commission (Charities Act 1993 s 2A(4)(a), Sch 1C Table Col 3 (added by the Charities Act 2006 s 8(1), (3), Sch 4).)

An appeal against an order giving directions for securing a default in respect of the provision of information and explanation to an auditor (i.e. under the Charities Act 1993 s.69(4)) lies to the Tribunal at the instance of the Attorney General, in the case of directions given to a person, that person in the case of directions given to charity trustees, those charities and (if a body corporate) the charity of which they are charity trustees, and any other person who is or may be affected by the direction (Charities Act 1993 s.2A(4)(a), Sch lC para. 1(1), (2), Table Cols 1, 2 (added by the Charities Act 2006 s 8(1), (3), Sch 4). The Tribunal has the power to do any of the following: (a) quash the order; (b) substitute for the order any other order which could have been made by the Commission; (c) add to the order anything which could have been contained in an order made by the Commission (Charities Act 1993 s.2A(4)(a), Sch 1C Table Col 3 (added by the Charities Act 2006 s.8(1), (3), Sch 4).

Power to protect charities from mismanagement. Where, at any time after it has instituted an inquiry (i.e. under the Charities Act 1993 s 8), the Charity Commission is satisfied (Charities Act 1993 s 18(1) (amended by the Charities Act 2006 Sch 8 para. 111(2)) that there is or has been any misconduct or mismanagement (As to the meaning of ‘misconduct or mismanagement’ see the text to notes 20-21.) in the administration of the charity (Charities Act 1993 s.18(1)(a). Section 18 does not apply in the case of an exempt charity: s.18(16). However as from a day to be appointed s.18(16) is substituted by the Charities Act 2006 Sch 5 para. 6 and the provisions of the Charities Act 1993 s.18(1)-(3) apply in relation to an exempt charity and s.18(4)-(6) apply in relation to such a charity at any time after the Commission has instituted an inquiry under s.8 with respect to it and the other provisions of s.18 apply accordingly. At the date at which this volume states the law no such day had been appointed) or that it is necessary or desirable to act for the purpose of protecting the property of the charity or securing a proper application for the purposes of the charity of that property or of property coming to the charity (Charities Act 1993 s 18(1)(b)) it may of its own motion do one or more of the following things, namely (Charities Act 1993 s.18(1) (amended by the Charities Act 2006 Sch 8 para. 111(2)). A person guilty of disobedience to an order of the Commission under the Charities Act 1993 s.18 requiring a transfer of property or payment to be called for or made, may on the application of the Commission to the High Court be dealt with as for disobedience to an order of the High Court: see s.88. The powers of the Commission under s.18 to remove or appoint charity trustees of its own motion includes power to make any such order with respect to the vesting in or transfer to the charity trustee of any property as the Commission could make on the removal or appointment):

  • by order suspend any trustee, charity trustee, officer, agent or employee of the charity from the exercise of his office or employment pending consideration being given to his removal, whether these provisions or otherwise;
  • by order appoint such number of additional charity trustees as it considers necessary for the proper administration of the charity;
  • by order vest any property held by or in trust for the charity in the official custodian for charities, or require the persons in whom any such property is vested to transfer it to him, or appoint any person to transfer any such property to him;
  • order any person who holds any property on behalf of the charity, or of any trustee for it, not to part with the property without the approval of the Commission;
  • order any debtor of the charity not to make any payment in or towards the discharge of his liability to the charity without the approval of the Commission;
  • by order restrict, notwithstanding anything in the trusts of the charity, the transactions which may be entered into, or the nature or amount of the payments which may be made, in the administration of the charity without the approval of the Commission;
  • by order appoint an interim manager who must act as receiver and manager in respect of the property and affairs of the charity;
  • by order direct the charity trustees, any trustee of the charity, any officer or employee of the charity or, if a body corporate, the charity itself to take any action specified in the order which the Commission considers to be expedient in the interests of the charity;
  • The Commission must, at such intervals as it thinks fit, review any order made by it under these provisions, other than one appointing additional charity trustees or one directing action it considers expedient (i.e. under the Charities Act 1993 s.19A(l), (2)), and if it appears to them that it would be appropriate to discharge the order in whole or in part they must so discharge it, whether subject to any savings or other transitional provisions or not (Charities Act 1993 s.18(13) (amended by the Charities Act 2006 Sch 8 para 111(10)).

    Further, if both heads (1) and (2) above are satisfied, the Commission may of its own motion do either or both of the following things (Charities Act 1993 s.18(2) (amended by the Charities Act 2006 Sch 8 para 111(3)):

    • by order remove any trustee, charity trustee, officer, agent or employee of the charity who has been responsible for or privy to the misconduct or mismanagement or has by his conduct contributed to it or facilitated it (Charities Act 199 3 s 18(2)(i) See Scargill v Charity Comrs (4 September 1998, unreported), Ch D, noted in (1998) 12 TLJ 254);
    • by order establish a scheme for the administration of the charity (Charities Act 1993 s.18(2)(ii)).

    For these purposes, misconduct or mismanagement extends, notwithstanding anything in the trusts of the charity, to the employment for the remuneration or reward of persons acting in the affairs of the charity, or for other administrative purposes, of sums which are excessive in relation to the property which is likely to be applied or applicable for the purposes of the charity (Charities Act 1993 s 18(3)).

    Where the Commission makes such an order removing a person from his office or employment under the above provisions, and that person is a member of the charity (Charities Act 1993 s.18A(1)(b)), then, if the misconduct or other relevant conduct on the part of the parson takes place on or after 18 March 2008 (i.e. the day on which the Charities Act 1993 came into force: Charities Act 2006 Sch 10 para. 4), the Commission may also make an order terminating his membership of the charity and prohibiting him from resuming it without the Commission’s consent (Charities Act 1993 s.18A(3)). If an application for the Commission’s consent under s.18A(3)(b) is made five years or more after the order was made, the Commission must grant the application unless satisfied that, by reason of any special circumstances, it should be refused: s.18A(4) (as so added)).

    An appeal against an of the order of the Commission under heads (1) to (7) or (a) to (b) above lies to the Tribunal at the instance of the Attorney General, the charity trustees of the charity, the charity itself (if a body corporate), any person suspended by the order, and any other person who is or may be affected by the order (Charities Act 1993 s 2A(4)(a), Sch 1C para 1(1), (2), Table Cols 1, 2 (added by the Charities Act 2006 s.8(1), (3), Sch 4)). The Tribunal has the power to do any of the following: (i) quash the order in whole or in part and, if appropriate, remit the matter to the Commission; (ii) substitute for all or part of the order any other order which could have been made by the Commission; (iii) add to the order anything which could have been made by the Commission (Charities Act 1993 s 2A(4)(a), Sch 1C, Table Col 3 (added by the Charities Act 2006 s.8(1), (3), Sch 4)).

    An appeal against an order of the Commission under head (8) above lies to the Tribunal at the instance of the Attorney General and any person who is directed by the order to take the specified action (Charities Act 1993 s 2A(4)(a), Sch 1C para 1(1), (2), Table Cols 1, 2 (added by the Charities Act 2006 s 8(1), (3), Sch 4)). The Tribunal has the power to quash the order and, if appropriate, remit the matter to the Commission (Charities Act 1993 s 2A(4)(a), Sch 1C Table Col 3 (added by the Charities Act 2006 s 8(1), (3), Sch 4)).

    An appeal against a decision of the Commission to discharge, or not to discharge an order (i.e. under the Charities Act 1993 s 18(13)) following a review lies to the Tribunal at the instance of the Attorney General, the charity trustees of the charity to which the order relates, the charity itself (if a body corporate), any person suspended by it and any other person who is or may be affected by the order (Charities Act 1993 s 2A(4)(a), Sch 1C para 1(1), (2), Table Cols 1, 2 (added by the Charities Act 2006 s 8(1), (3), Sch 4)). The Tribunal has the power to do any of the following: (A) quash the decision and, if appropriate, remit the matter to the Commission; (B) make the discharge of the order subject to savings or transitional provisions; (C) remove any such savings or transitional provisions; (D) discharge the order in whole or in part, whether subject to any savings or other transitional provisions or not (Charities Act 1993 s 2A(4)(a), Sch 1C Table Col 3 (added by the Charities Act 2006 s.8(1), (3), Sch 4)).

    Power to appoint interim manager for a charity. The Charity Commission may appoint (The Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, make the provisions detailed in this paragraph with reference to the Charity Commissioners: by virtue of the Charities Act 2006 s.6(5) this takes effect as a reference to the Charity Commission) to be interim manager in respect of the property and affairs of a charity such person, other than a member of its staff, as it thinks fit (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg 5(1)). The order appointing him may make provision with respect to the functions to be discharged by the interim manager appointed by the order, and those functions are to be discharged by him under the supervision of the Commission (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg 5(2)). In connection with the discharge of those functions any such order may provide for the interim manager appointed by the order to have such powers and duties of the charity trustees of the charity concerned, whether arising under the Charities Act 1993 or otherwise, as are specified in the order, and for such powers or duties to be performed by the interim manager to the exclusion of the charity trustees (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg. 5(2)(a). The Commission has the same power to advise an interim manager as it has to advise charity trustees (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg. 5(2)(b). The text refers to a report which may be made under the Charities Act 1993 s.8: Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg. 5(2)(b); Interpretation Act 1978 s 17(2)(b), and it may apply to the High Court for directions in relation to any particular matter arsing in connection with the functions of the interim manager (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg 5(2)(c)). The High Court may on such an application give such directions, or may such orders declaring the rights of any persons, whether before the court or not, as it thinks just, and the costs of any such application must be paid by the charity concerned (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg. 5(3)).

    Regulations made by the Minister (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg. 5(3)(a)) may make provision with respect to the appointment and removal of persons appointed in accordance with these provisions, the remuneration of such persons out of the income of the charities concerned and the making of reports to the Commission by such persons (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg. 5(3)(b)). Such regulations may, in particular, authorise the Commission to require security for the due discharge of his functions to be given by a person so appointed, to determine the amount of such a person’s remuneration and to disallow any amount of remuneration in such circumstances as are prescribed by the regulations (i.e. changes to his strategy as last set out in a report in accordance with the Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg. 5(2)(c) or reg. 5(3)(c) see reg 5(3)(c)).

    An appointed person must make a report to the Charity Commission not later than three months after the date when he ceased to hold office as such setting out (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg. 5(4), which is expressed to be subject to reg. 5(5)): (i) an estimate by him of the total value of the property of the relevant charity on that date (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg. 5(4)(a)); and (ii) a summary of the discharge by him of the functions conferred on him by or by virtue of the relevant order during the period ending with that date and beginning with either the date of his appointment, or if that date is more than 12 months before the date when he ceased to hold office as an appointed person, the day immediately after the last anniversary of his appointment (Charities (Receiver and Manager) Regulations 1992 SI 1992/2355, reg. 5(4)(b). Regulation 5(4) does not apply where an appointed person ceased to hold office one month or less after an anniversary of his appointment and a report had been made to the Charity Commission in accordance with heads (a)-(c) in the test in respect of that anniversary: reg. 5(5).

    Power to direct application of trust property. Where the Charity Commission is satisfied that a person, or persons, in possession or control of any property held by or on trust for a charity is, or are, unwilling to apply it properly for the charity and that it is necessary or desirable for the purpose of securing a proper application of that property for the purposes of the charity (Charities Act 1993 s.19B(1) (s.19B added by the Charities Act 2006 s.21)), it may by order direct the person or persons concerned to apply the property in such manner as is specified in the order (Charities Act 1993 s.19B(2)). Such an order may require action to be taken whether or not it would otherwise be within the powers exercisable by the person or persons concerned in relation to the property (Anything done by a person under the authority of such an order must be deemed to be properly done in the exercise of these powers: Charities Act 1993 s.19B(4)). This does not affect any contractual or other rights arising in connection with anything which has been done under the authority of such an order: s. 19B(5) (as so added)), but may not require any action to be taken which is prohibited by any Act of Parliament or expressly prohibited by the trusts of the charity (Charities Act 1993 s.19B(3

    An appeal against such an order lies to the Tribunal at the instance of the Attorney General and any person who is directed by the order to apply the property in the specified manner (Charities Act 1993 s 2S(4)(a), Sch 1C para 1(1), (2), Table Cols 1, 2 (added by the Charities Act 2006 s 8(1), (3), Sch 4)). The Tribunal has the power to quash the order and, if appropriate, remit the matter to the Commission (Charities Act 1993 s.2A(4)(a), Sch 1C Table Col 3 (added by the Charities Act 2006 s 8(1), (3) Sch 4)).

    Power to remove and appoint charity trustees. The Charity Commission has power to remove a charity trustee by order made of its own motion :

    • where, within the last five years, the trustee:
      • having previously been adjudged bankrupt or had his estate sequestrated, has been discharged; or
      • having previously made a composition or arrangement with, or granted a trust deed for, his creditors, has been discharged in respect of it;
    • where the trustee is a corporation in liquidation;
    • where the trustee is incapable of acting by reason of mental disorder within the meaning of the Mental Health Act 1983;
    • where the trustee has not acted and will not declare his willingness or unwillingness to act; or
    • where the trustee is outside England and Wales or cannot be found or does not act, and his absence or failure to act impedes the proper administration of the charity.

    The Commission may by order made of its own motion appoint a person to be a charity trustee of a charity:

    • place of a charity trustee removed by the Commission under these provisions or otherwise;
    • where there are no charity trustees, or where by reason of vacancies in their number or the absence or incapacity of any of their number the charity cannot apply for the appointment;
    • where there is a single charity trustee, not being a corporation aggregate, and the Commission is of opinion that it is necessary for the proper administration of the charity to increase the number;
    • where the Commission is of opinion that it is necessary for the proper administration of the charity to have additional trustee because one of the existing charity trustees who ought nevertheless to remain a charity trustee either cannot be found or does not act or is outside England and Wales.

    An order for the appointment or removal of a charity trustee or trustee for charity, or for vesting or transfer of property under these powers, has the same effect as a similar order made on the application of the charity or of other persons.

    An appeal against an order of the Commission removing a charity trustee lies to the Tribunal at the instance of the Attorney General, the charity trustee, the remaining charity trustees of the charity of which he was a charity trustee, the charity itself (if a body corporate) and any other person who is or may be affected by the order. An appeal against an order of the Commission

    APPEALS TO THE TRIBUNAL

    Appeals to the Tribunal. The Tribunal has jurisdiction (Until 1 September 2009 this Tribunal was the Charity Tribunal. However the Charity Tribunal was abolished and its functions transferred to the First-tier Tribunal and the Upper Tribunal: see the Transfer of Functions of, the Charity Tribunal Order 2009, SI 2009/1834, art 2. The following offices held before 1 September 2009 are also transferred (1) the office of the President of the Charity Tribunal appointed under the Charities Act 1992 Sch 1B para 1(2)(a) now holds the office of deputy judge of the Upper Tribunal and transferred-in judge of the First-tier Tribunal; (2) a legal member of the Charity Tribunal appointed under Sch 1B para. 1(2)(b) now holds the office of) to hear and determine appeals against any of the following decisions, directions or orders of the Charity Commission, which are dealt with elsewhere in this title and include:

    • a decision to enter or not enter an institution in the register of charities or to remove an institution from the register;
    • a decision not to make a determination in relation to particular information contained in the register;
    • a direction requiring the name of a charity to be changed;
    • a decision to institute an inquiry with regard to a particular institution or class of institutions
    • an order requiring a person to supply information or a document;
    • an order made under its concurrent jurisdiction with the High Court;
    • an order or decision made under its powers to act for the protection of charities;
    • an order made in relation to any land vested in the official custodian in trust for a charity and which is subject to the Reverter of Sites Act 1987;
    • a direction under its power to give directions about dormant bank accounts in relation to an account held in the name of or on behalf of a charity;
    • an order for the taxation of a solicitor’s bill;
    • a decision not to make certain orders in relation to land or a mortgage of land held by or in trust for a charity;
    • an order requiring the accounts of a charity to be audited;
    • an order giving directions to the charity trustees for the time being of the charity concerned, or to the person who caused the default, for securing that the default of failing to afford to an auditor or independent examiner or examiner any facility to which he was entitled under certain provisions is made good;
    • a decision to request charity trustees to prepare an annual report for a charity;
    • a decision to dispense with the annual return requirements in relation to a charity or class of charities;
    • a decision to grant, or not to grant, a certificate of incorporation to the trustees of a charity, or to amend, or not to amend, such a certificate;
    • an order which dissolves a charity which is an incorporated body;
    • a decision to give, or withhold, consent for certain matters in relation to a body corporate which is a charity;
    • an order requiring that a person affords any facility to which he is entitled under certain provisions to an auditor in relation to a charity which is a company and which is being investigated and audited by order of the Commission;
    • a decision to waive, or no to waive, a person’s disqualification as charity trustee or trustee for a charity;
    • an order requiring the repayment of remuneration received by a disqualified charity trustee or trustee for a charity;
    • an order requiring a trustee or connected person to repay, or not to receive, remuneration;
    • a decision to notify charity trustees that it objects to a resolution of the charity trustees in relation to certain transfers of property;
    • a decision not to concur with a resolution of charity trustees to spend capital;
    • a decision to withhold approval for the transfer of property from trustees to a parish council;
    • a decision not to give a direction as to whether certain institutions are to be treated as forming part of a charity or as a distinct charity, or whether two or more charities are to be treated as a single charity, for the purposes of the Charities Act 1992, in relation to an institution or a charity;
    • as from a day to be appointed, a decision to grant, or not to grant, an application for the constitution of a Charitable Incorporated Organisation (‘CIO’) and its registration as a charity, or for the conversation of a charitable company or a registered society into a CIO and its registration as a charity, or for the amalgamation of two or more CIOs and the incorporation and registration as a charity of a new CIO as their successor;
    • as from a day to be appointed, a decision to confirm, or not confirm, a resolution passed by a CIO for the transfer of its undertaking;
    • as from a day to be appointed, a decision to refuse to register an amendment to the constitution of a CIO;
    • as from a day to be appointed, a decision to give or withhold consent under provisions of the Companies Act 2006.

    An appeal may be brought by the Attorney General or any person specified for each appeal in the Charities Act 1993, and the Commission is the respondent to such an appeal. However, where an order, decision or direction gives effect to a decision of the Tribunal deciding a question referred to the Tribunal by the Commission or the Attorney General, no appeal may be made in respect of that order by a person who was at any stage party to the proceedings in which the question was referred.

    In determining an appeal the Tribunal must consider afresh the decision, direction or order appealed against, except in relation to an appeal under head (5) above. In such an appeal, it must consider whether the information or document in question (a) relates to a charity; or (b) is relevant to the discharge of the functions of the Commission or the official custodian and may allow such an appeal only if either (a) or (b) is satisfied.

    The Tribunal may take into account evidence which was not available to the Commission.

    The Tribunal may dismiss the appeal or, if it allows the appeal, exercise any of the powers as specified for each of the decisions, directions and orders above. Where this includes the power to remit a matter to the Commission, the power is to remit the matter generally or for determination in accordance with a finding made or direction given by the Tribunal.