16 May 2019
Summary of judgment - McKee and Ors v Charity Commission
COURT DECIDES CHARITY COMMISSION CANNOT DELEGATE DECISION MAKING FUNCTIONS TO STAFF
Summary of
Judgment
Madam Justice McBride,
sitting today in the Chancery Division of the High Court, held that the Charity
Commission cannot lawfully delegate its decision making functions to its staff
acting alone.
The Court was dealing with
three appeals all of which raised the same question of law (“the key issue”) namely
whether the functions attributed to the Charity Commission for Northern Ireland
(“the Commission”) by the provisions of the Charity Act (Northern Ireland) 2008
(“the 2008 Act”) can lawfully be discharged by employees of the Commission
acting alone[1]. The appeals had been determined by the
Charity Tribunal (“the Tribunal”). In
two of the appeals, the Tribunal found that employees of the Commission could
make decisions but in the third appeal, it held that the Commission could not
delegate the discharge of its decision making functions to a member of
staff. Madam Justice McBride commented
that it was therefore vitally important, not only for the workings of the
Commission, but also for the work of charities in Northern Ireland and for the
public at large that the key issue is now determined by the High Court.
The Commission was
established as a non-departmental public body sponsored by the Department for
Communities (“the Department”) and became operational from 1 June 2009. Seven part-time Commissioners have been
appointed. The statutory background and
relevant legislative provisions in Northern Ireland are set out in paragraphs
[50] – [62] of the judgment. As well as
the provisions of the 2008 Act, the judgment also considers section 19 of the
Interpretation Act (Northern Ireland) 1954 (“the 1954 Act”) which deals with
the interpretation of words in legislation establishing or providing for the
establishment of a body corporate (such as the Commission). The 2008 Act provides the Commission with
very wide and extensive powers, including certain functions which were
previously the sole preserve of the High Court.
The Court considered the
legislative provision establishing the Charity Commissioners for England and
Wales (the Charities Act 2011 (“the 2011 Act”)). It was not in dispute that the decisions
which are the subject of the appeals in this jurisdiction can lawfully be made
in England and Wales by a member of the Commission’s staff who is duly
authorised. This is because the Act
establishing the Commission in E&W made a number of specific provisions in
respect of staff and the Commission’s power to regulate its own proceedings which
are not specifically provided for in the 2008 Act.
Submissions of the Parties
Counsel for the Commission
submitted that section 19 of the 1954 Act by explicitly empowering it to
regulate its own procedure and business and by giving it power to employ such
staff as it finds necessary for the performance of its functions, thereby
enables the Commission to delegate its decision making functions to staff. It was claimed there is nothing in the 2008
Act which evinced a contrary intention or otherwise constrained the Commission
from adopting internal processes which permitted regulation of its procedures
to allow staff to discharge its decision making functions. Counsel further submitted that, in the event
that the court found the legislative provisions did not give the Commission an
explicit power to delegate its decision making functions to staff, the court
should find that there was an implied delegation in accordance with a number of
authorities.
The Attorney General,
however, submitted that upon a plain interpretation the statutory provisions do
not grant an express power to the Commission to delegate its decision making
functions to a member of staff acting alone.
In particular the right to regulate its own procedure and to employ
staff granted by section 19 of the 1954 Act does not encompass a right to
delegate decision making. Further even
if section 19 did encompass such a wide power of delegation it was constrained
by the provisions of Schedule 1 to the 2008 Act which expressly limited
delegation to a Committee comprising at least one Commissioner. The Attorney General contended that a power
of delegation should not be implied and that the fundamental nature of a
statutory corporation is not such that discharge of functions by the staff is
inherently lawful.
Determination
Madam Justice McBride said
that determination of the key issue is first and foremost a question of
statutory interpretation.
She firstly considered section 19 of the 1954 Act. Section 6(8) of the 2008 Act applies section
19 of the 1954 Act to the Commission and as a consequence all the rights and
powers set out in section 19 are vested in the Commission, being a body
corporate. This includes the right of
the Commission to regulate its own procedure and business and the right to
employ such staff as may be found necessary for the performance of its
functions. Madam Justice McBride noted
that one of the objects of the 1954 Act was to reduce the “gobbledygook” in
other Northern Ireland Acts so that they can be “confined to essentials without
the tedious repetition of phrases which are only necessary to avoid
misunderstanding”. Accordingly, she
rejected the submission that the court should only have regard to section 19 in
the event that the provisions of the 2008 Act were ambiguous or there is a gap
in its provisions. Despite researches by
counsel, they were unable to find any relevant authority in relation to the
interpretation of the provision of section 19.
Referring to the
definitions of “to regulate” and “to delegate”, Madam Justice McBride said she
was satisfied that the powers given to the Commission by section 19(1)(a)(v)
“to regulate” its own procedures do not give the Commission an express power
“to delegate” any of its decision making functions to staff. Further, she considered that the power given
by section 19(1)(a)(v1) to “employ such staff as may be found necessary for the
performance of its functions” is not a provision which gives the Commission an
express power to delegate functions to staff:
“Rather it simply provides that the Commission has power to employ staff
to assist it in carrying out the functions of the Commission. I therefore reject the Commission’s
submission that this provision gives it an express power to delegate its
functions to staff.”
Madam Justice McBride
commented that even if section 19 were to be interpreted in the manner
contended by the Commission and the
Department, it would mean that the Commission would have a “blank cheque” to
delegate all the functions entrusted to it by the 2008 Act to other persons or
bodies when it so wished. Effectively
this would mean that the Commission could abdicate all its decision making
responsibilities in favour of other persons or bodies:
“I consider that
the language used in section 19 does not accord with such a broad
interpretation. I further consider that
it was not the legislature’s intent that the Commission should be able,
pursuant to the provisions of section 19, to delegate all its decision making
functions to its staff.”
Core to the Commission’s
case was the submission that section 19 was equivalent to the provisions in
England and Wales which everyone accepted permitted staff acting alone to make
decisions. Madam Justice McBride however
did not agree. She referred to
paragraphs 8 and 9 of Schedule 1 to the 2011 Act which expressly permit the
performance of the Commission’s functions by staff and the delegation of
functions to a Committee and said these would not have been necessary if it had
been considered that section 19 permitted such an interpretation. The judge commented that the provisions of
the 2011 Act, rather than supporting the Commission’s case actually lend
further support to the view that the 2008 Act does not grant the Commission an
express power to delegate its functions to staff. She said this was consistent with the
presumption against superfluous drafting.
Madam Justice McBride then
considered the express provisions relating to delegation granted by Schedule 1
to the 2008 Act. Paragraph 9 makes
express provision for delegation of the Commission’s functions by Committees
which may include persons who are not members of the Commission and provides
that it can set a quorum for meetings of the Commission or a Committee. The judge considered that to be a provision
which prescribes or limits the powers given by section 19. She said the use of the word “may” in
paragraph 9 simply means this procedure is not mandatory. The Commission, if it so wishes may discharge
its functions through the entire Commission or it may choose to discharge its
functions through a Committee. Madam
Justice McBride said she was satisfied that the provisions of Schedule 1
paragraph 9, being express powers, set the high water mark of the extent to
which the Commission can delegate its powers.
She was also satisfied that the provisions of Schedule 1 paragraph 4
regarding the employment of staff do not make any express provision for
delegation of statutory functions to them including the delegation of the
Commission’s decision making functions.
The Commission submitted
that sections 9 and 10 of the 2008
Act were consistent with its interpretation of section 19, namely that it had
been granted wide powers to regulate its own procedure. Section 10 states that the Commission has
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”. Madam Justice McBride commented that section
10 therefore permits the Commission to take any steps which would have the
effect of assisting, helping or otherwise easing the Commission in the
discharge of the functions entrusted to it.
She did not consider, however that section 10 could be interpreted as a
general “escape” clause from the other statutory controls set out in the 2008
Act and could not be otherwise interpreted to overrule the express provisions
in the 2008 Act which deal with delegation.
She concluded that section 10, being general and incidental in nature,
must yield to the specific and express powers granted by paragraph 9 of
Schedule
1. The judge further commented
that section 10 speaks to “what” the Commission can and cannot do in making the
performance of its functions easier: “It
says nothing about “who” carries out the functions. I am therefore satisfied that section 10
being silent on the issue of “who” discharges functions cannot assist the
Commission in the case it seeks to make.”
Section 9 of the 2008 Act imposes general duties on the Commission including
that in performing its functions it must have regard to the need to use its
resources in the most efficient, effective and economic way and to be
accountable and consistent. The
Commission claimed that in order to do this it was not only empowered but
obliged to delegate decision making functions to staff. Madam Justice McBride rejected this
argument. She said it was difficult to
see how consistent and accountable decisions could be made if the Commissioners
were not themselves involved in decision making. She considered that the only way in which
consistency and the oversight required by section 9 could be met is by
Commissioners being involved in decision making either as a body corporate or
by delegating these decisions to a Committee which must include at least one
Commissioner or to a quorum of Commissioners.
Reading the provisions of the 2008 Act separately and in its entirety,
Madam Justice McBride found that the Commission does not have power to delegate
its statutory functions to staff acting alone.
The Commission further
contended that an interpretation of section 19 that did not permit delegation
of functions would place an unacceptable workload upon the Commission having
regard to the limited number of Commissioners and the breadth of functions they
had to undertake. There was no evidence
before the court about the workload of the Commission and the judge said she
was therefore not satisfied on the basis of the evidence that the Commission is
in fact overburdened. She said that if
it is, there are steps it can take to deal with this including regulating its
procedures so that staff can assist it in making its decisions (for example by
carrying out investigations and conducting preparatory work for the
Commissioners) or requesting that the legislation is changed to allow it to
delegate its functions to staff.
The Attorney General relied
on the provisions of section 6 of the 2008 Act in support of his interpretation
of section 19. Section 6 sets out the
qualifications a Commissioner should have including expertise in charities and
financial matters. Madam Justice McBride
commented that it was difficult to see why the 2008 Act specifically requires
the Commissioners to have such expertise if they could then delegate all their
functions to staff. She accepted that
Commissioners in England and Wales with similar qualifications and experience
are entitled to delegate their functions to staff but noted that the factual
background there was different as staff previously acted as lay commissioners.
Implied Delegation
The Commission and the
Department submitted that in the event that the court found that the 2008 Act
did not make express provision for delegation of functions to staff, the court
should find there was implied delegation.
The Attorney General and the appellants rejected this submission. Madam Justice McBride considered the relevant
authorities on this matter and accepted that the court can in certain
circumstances find there is an implied power to delegate to staff but in so
doing it must consider a number of factors:
- There
is strong presumption against interpreting a grant of legislative power as
empowering delegation. The judge
said that in this case the Commission has been given power to carry out a
number of functions and the legislature has conferred an express power to
delegate some of those functions to a Committee: “In these circumstances I consider that
there is a strong presumption against implying a power to delegate to
staff”;
- There
is a tendency to adopt a more restrictive approach to implied authority to
delegate in the case of proceedings of courts and cases involving other
“judicial” and “disciplinary” powers.
The judge said the powers given to the Commission under the 2008
Act are very extensive and considered that many are akin to judicial and
disciplinary powers;
- A
strict approach is likely to be taken if the power is conferred on the
holder of a public office because of the personal qualifications and
experience that the office holder is expected to have. The judge considered that the
Commissioners’ qualifications and experience should contribute to the
Commission’s decision making functions rather than just being limited to
policy making decisions;
- There
is no evidence before the court that the workload is such that delegation
is inevitable, indeed the evidence indicates that the workload of the
Commission is “modest”.
Madam Justice McBride said
that for these reasons she considered that a strict approach to implied
delegation should be taken and she found that there is no implied power to
delegate to staff. She said that if she
is wrong in this finding, the court then has to consider the extent to which
the Commission would be entitled to delegate its powers and in particular
whether there is an implied power to delegate the particular functions arising
in the three appeals under consideration.
The judge said that by introducing the 2008 Act the legislature had
thought it important that there be proper oversight of changes to a charity’s
objects and constitution and that an implied power to delegation would not
extend to such matters. She found that
even if there was an implied power to delegate some functions it would not
extend to the decisions in the present appeals.
Statutory Corporation
The Commission submitted
that an incorporated body is a body corporate and as such can act through its
directors or employees. It submitted it
is bound not only by the actions of a director or an employee acting with actual
authority but, in most cases, is bound even by the actions of a director or
employees with ostensible or apparent authority. The Commission contended that as a body
corporate it enjoyed a separate legal identity and could act through
individuals at different levels or through a committee or individuals and both
had the same power to act through employees.
It was further submitted that every decision was the decision of a body
corporate whether done by the Board or Committee or by a member of staff.
Madam Justice McBride,
however, said she had found that the 2008 Act did not grant the Commission an
express power to delegate to staff and that there is no implied power of
delegation. Accordingly the only way in
which the Commission can carry out its decision making functions is either when
it meets as a complete body or acts in accordance with the powers set out in
paragraph 9 of Schedule 1 to the 2008 Act.
Conclusion
Madam Justice McBride
dismissed the appeal brought by the Commission against Mr Caughey and granted
the appeals in McKee, Hughes and Crawford.
NOTES TO EDITORS
1.
This summary should be read together with the
judgment and should not be read in isolation. Nothing said in this
summary adds to or amends the judgment. The full judgment will be
available on the Judiciary NI website (www.judiciary-ni.gov.uk).
[1]
The appeals were: Trevor McKee and Joseph Hughes v Charity Commission; Charity Commission
v Sean Caughey; and Robert Crawford v Charity Commission and Trevor McKee