This case of Cifci and Others v Erbil and Others (2012) concerned an unincorporated charity for the Alevi community based in London and it emphasised the importance of good administration in evidencing governance decisions.
The charity adopted a constitution in 1994, under which all persons over the age of 18 and working in London had the right to be members of the charity. An attempt was made to change the constitution in 2006, significantly restricting the eligibility for membership and extending the objects clause. A dispute then arose in 2009 that ultimately required the court to consider whether the constitution prepared in 2006 had been effectively adopted. It was held that as there was no evidence that the new constitution was ever approved by the members at an AGM or EGM (as would have been required in order to change the constitution), the Charity remained governed by the 1994 document.
In reaching its decision, the court considered the charity’s normal practices and found it to be almost bureaucratic in its usual administration and record keeping. However, many of the charity’s internal documents, including the file that was meant to contain minutes of the relevant meetings and also copies of the purported final constitution document, were missing. This indicated to the court that the new constitution was never approved by the members. In addition, the court found it inconceivable that the charity would omit to send a copy of the final adopted constitution to the Charity Commission, when an earlier letter from the Charity Commission showed that the charity had previously been in communication with the Charity Commission on the very subject of its constitution. This again suggested there was no agreed final constitution to forward to the Charity Commission.
The court placed significant weight on the charity’s administrative shortcomings at the time when the new constitution was purported to be agreed. Consequently, in coming to its decision that the 2006 constitution had not been approved, the court highlighted the crucial merits of good record keeping and communication with the Charity Commission in avoiding and resolving governance and constitutional disputes.
This case shows that without the correct administrative evidence, it will be difficult for the Charity Commission or the court to find that a disputed document ever existed. Consequently, where important decisions such as amending a charity’s governing document are being made, it is imperative that detailed notes are taken and securely filed, that relevant copies of important final documents are retained and that constitutional changes are reported to the Charity Commission. The effects of not following such administrative procedures can otherwise be most undesirable for a charity.