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Case study

The one with
a charity in conflict

We advised a Church charity in relation to a long-standing dispute with a former trustee over the ownership of a church building.  The church building was important to our client as it represented the central hub of their worship and it was having a significant impact on the congregation and the charity itself leading to concerns about loss of income and loss of the ability to utilise the church building.

The dispute had occasionally raised itself for over 30 years as both parties believed that they were the rightful owners of the church building, with the trustee asserting a constructive trust over the property whilst the charity held the church in their trustees’ names.

It was alleged by the defendant trustee that when the property was bought in 1980 that the Trustees of the charity agreed that they held it on trust for the complainant and that whilst they were named as owners at the land registry the beneficial owner was the complainant.  This was disputed by our client who stated that the property was never held on trust and had always been their property and they were the legal and beneficial owners.

Due to the passage of time the documentation was sparse and unfortunately people who may have had recollections of the events at the time were no longer able to assist having passed away.  This meant that our charity client were faced with a severe lack of objective evidence and reliable recollections and had to build their arguments based on inference and information held by third parties.

The complainant advanced arguments of (1) a resulting trust and (2) a common intention to create a constructive trust (3) propriety estoppel.   We prepared pre-action correspondence and amongst other issues raised an abuse of position against the former trustee, a defence of laches (akin to a limitation defence) alleging the former trustee had waited too long to raise their complaint and finally that there was a conflict of interest in respect of the installing of trustees and the financial dealings of the charity on the part of the former trustee.

The former trustee sought to claim the entire ownership of the church building leading to a risk of the charity having to expend tens of thousands of pounds to challenge that claim.

Our approach enabled a favourble resolution through mediation for our charity client which will help them deploy the benefit of the church building for charitable purposes in the future having secured certainty in the litigation and avoided significant risk of spending large sums on court proceedings which may not have been recoverable due to the former trustee’s financial position.

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