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||Neutral Citation Number:  EWCA Civ 1247
||Case No: B5/2016/2363 & B5/2016/2364
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE GUILDFORD COUNTY COURT
HER HONOUR JUDGE RAESIDE
B00GU210 & B00GU2103
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
SIR TERENCE ETHERTON, MR
LADY JUSTICE ARDEN DBE
LORD JUSTICE LLOYD JONES
|| MRS JANET WATTS
||(1) MRS ANN STEWART
(2) MRS SHEILA HARRIS
(3) MRS RUTH PRICE
(4) MRS ELIZABETH WOLSEY
AS TRUSTEES OF THE ASHTEAD UNITED CHARITY
(A REGISTERED CHARITY)
||THE SECRETARY OF STATE FOR COMMUNITIES AND LOCAL GOVERNMENT
||First Interested Party
||THE CHARITY COMMISSION FOR ENGLAND & WALES
||Second Interested Party
||NATIONAL ASSOCIATION OF ALMSHOUSES
||Third Interested Party
Mark Wonnacott QC, Toby Vanhegan and Riccardo Calzavara (instructed by Arkrights Solicitors) for the Appellant
Stephen Hockman QC and Nicholas Ostrowski (instructed by Gullands Solicitors) for the Respondents
Oliver Jones (instructed by the Government Legal Department) for the First Interested Party (intervening by written submissions only)
Chris Willis Pickup (Head of Litigation, Charity Commission) for the Second Interested Party (intervening by written submissions only)
Alex de Jongh (solicitor, Bates Wells Braithwaite) for the Third Interested Party (intervening by written submissions only)
Hearing date: 15 November 2016
HTML VERSION OF JUDGMENT APPROVED
Crown Copyright ©
SIR TERENCE ETHERTON, MR:
- This is the judgment of the court, to which all the members have contributed.
- This appeal arises in proceedings by the respondents, the trustees ("the Trustees") of the Ashtead United Charity ("the Charity") against the appellant, Mrs Janet Watts, for possession of an almshouse occupied by her at 34, The Haven, Ottways Lane, Ashtead, Surrey ("the Property").
- It raises issues relevant to the status of some 35,000 almshouse residents of some 1,700 almshouses, and, in particular, whether all or some of them occupy the almshouses as licensees or as tenants with security of tenure.
- The appeal is against two orders of Her Honour Judge Raeside in the County Court at Guildford. The first is dated 20 January 2016 ("the January order") and gave effect to her decision on preliminary issues that, among other matters, Mrs Watts did not occupy the Property as a tenant, and she did not have a defence based on discrimination compared with other occupiers of public sector and social housing accommodation in breach of Article 14 of the European Convention on Human Rights ("the Convention") when read with Article 8 of the Convention.
- The second order of the Judge is dated 11 May 2016 ("the May order"), by which she ordered Mrs Watts to give up possession of the Property by 9 June 2016 and to pay damages in respect of her occupation until possession was delivered up. It followed a trial in which the Judge found that (1) Mrs Watts was acting in breach of the terms of her appointment; (2) the Charity, acting through its Trustees, did not owe a fiduciary duty to people who are, or could be, objects of the Charity, including Mrs Watts; (3) there had been no breach of any fiduciary duty in choosing to terminate Mrs Watts' occupation of the property; and (4) the proceedings were not "charity proceedings" under section 115 of the Charities Act 2011.
- The principal object of the Charity is the provision of almshouse accommodation in three properties comprising a total of 14 residential flats.
- The Charity's governing instrument is a Scheme of Arrangement registered with the Charity Commission for England and Wales ("the Charity Commission") in April 1996 ("the Scheme"). The following are relevant sections of the Scheme in the part of the scheme headed "Relief In Need":
"27 Relief in need (1) The Trustees shall apply the income of the Charity applicable for relief in need in relieving either generally or individually persons qualified as aforesaid who are in conditions of need, hardship or distress by making grants of money or providing or paying for items, services or facilities calculated to reduce the need, hardship or distress of such persons."
"29 Almshouses. The almshouses belonging to the Charity and the property occupied therewith shall be appropriated and used for the accommodation of residents in conformity with the provisions of this Scheme."
"31 Qualification of residents.
(2)(a) The residents of the almshouses
shall be poor single women of not less than 50 years of age who are inhabitants of the area of the ancient parish of Ashtead with a preference for such women who have been employed in domestic service."
"32 Contributions. The Trustees may make it a condition of appointing or permitting someone to reside
that they shall
contribute a weekly sum towards the cost of maintaining the almshouses
but the amount of the weekly sum shall not be such as to cause hardship."
"38 Absence from Almshouses. The Trustees shall require that any resident who desires to be absent from the almshouses for more than 28 days in any one year shall obtain the prior consent of the Trustees or of some other officer of the Charity to be nominated by them."
"39 Rooms not to be let. No resident shall be permitted to let or part with the possession of the room or rooms allotted to him or her or except with the special permission of the Trustees to allow any person to share the occupation of the same or any part thereof."
"41 Setting aside appointments (1) The Trustees may set aside the appointment of any resident who in their opinion-
(a) persistently or without reasonable excuse either disregards the regulations for the residents or disturbs the quiet occupation of the almshouses or otherwise behaves vexatiously or offensively; or
(b) no longer has the required qualifications;
(c) has been appointed without having the required qualifications;
(d) is suffering from mental or other disease or infirmity rendering him or her unsuited to remain a resident.
(2) Upon setting aside the appointment of a resident the Trustees shall require and take possession of the room or rooms occupied by him or her."
"42 Regulations The Trustees may prescribe from time to time such reasonable regulations as they consider expedient for the management of the almshouses and the welfare of the residents but so that the same shall not be at variance or inconsistent with any of the provisions of this Scheme."
Mrs Watts' occupation of the Property
- Mrs Watts was allocated the Property pursuant to a letter of appointment dated 29 September 2004 ("the Appointment Letter"). The terms of the Appointment Letter were as follows so far as relevant:
"ASHTEAD UNITED CHARITY
LETTER OF APPOINTMENT
Dear Mrs. Watts,
I am pleased to advise you that the trustees of Ashtead United Charity have considered your application for accommodation and have decided to appoint you as a beneficiary of the Charity, with effect from 18th October 2004.
You have been allocated accommodation in The Haven, 34 Ottways Lane, Ashtead, Surrey KT21 1PA.
A Weekly Maintenance Contribution of £33-42 is payable in advance each Monday towards the upkeep of the dwelling, and this figure may be increased annually upon one month's notice. Each resident is responsible for paying Council Tax and may wish to claim Housing Benefit to help with housing costs. (preferably £144-82 per calendar month).
The apportioned rent for the period 18-31 October 2004 is £65-40 and should be paid before the starting date of the 18th October. Thereafter the monthly rent of £144-82 should be paid on the first of every month.
The following regulations for the residents are to ensure the smooth running of the almshouses:-
7. The residents must permit reasonable access for inspection of the almshouse and for repairs and redecoration to be carried out.
9. The residents should not vacate their dwellings for more than a total of twenty eight days in any one year without the prior consent of the trustees and should inform the trustees/warden if they will be away for more than a week at a time. The warden should be advised if you are away overnight
11. At the end of a tenancy four weeks' notice, in writing to the secretary, is required.
13. Neither the resident(s) nor any relation of his/hers/theirs will be a tenant of the charity or have any legal interest in his/hers/their almshouse.
14. The trustees may take such steps as they think proper in the administration of the trust and for the residents' welfare, and any alteration to the rules will be notified in writing to each resident.
15. Residents may expect to continue in occupation for as long as they need the accommodation and can look after themselves. If health deteriorates they must be willing to accept advice and guidance from time to time, either from their own doctor or a medical consultant appointed by the trustees. The trustees will also consult with the next of kin, Social Services etc to make arrangements as necessary.
16. Pets must not be kept without the written consent of the trustees.
17. Visitors are not permitted to stay in an almshouse, except with the consent of the trustees.
18. The trustees reserve the right to require a resident or resident to vacate their dwelling and move, either temporarily or permanently, to another almshouse belonging to the same charity.
19. All complaints or queries by the residents should be addressed to the designated trustee in the first instance. The resident's attention is drawn to the availability of the Housing Association Tenants Ombudsman Service. This service is available, through the secretary, to resolve disputes and complaints, which cannot be settled by the charity.
20. The trustees retain the power to set aside a resident's appointment for good cause, e.g. in the case of serious misconduct or if there is a breach of the regulations.
- Mrs Watts signed the Appointment Letter under the text:
"I understand the terms of Appointment explained in this letter and agree to abide by the Conditions of Tenancy"
She inserted the date 1.10.04 by her signature.
- At the date of the January order and the May order the rate of weekly maintenance contribution payable in respect of the Property was £260 per month.
- Under cover of a letter dated 12 August 2014 the Trustees served a notice on Mrs Watts to quit the Property on 16 September 2014.
- The proceedings for possession were issued on 10 May 2015.
- On 23 June 2015 District Judge Bell directed that there be a trial of the following preliminary issue: "On what legal basis [Mrs Watts] occupies [the Property] and, if necessary, whether Gray v Taylor  1 WLR 1093 remains good law".
- The Judge heard that issue on 18 November 2015. She handed down her judgment on 6 January 2016. She held that Gray v Taylor was binding on her; there was no material distinction between that case and the present proceedings; and, accordingly, Mrs Watts occupies the Property as an appointee made by the Trustees and has a licence to occupy as a beneficiary of the Charity and has not been granted a lease.
- The Judge also rejected the public law defences relied upon by Mrs Watts, including, in particular, that Mrs Watts was discriminated against as compared to the occupiers of public sector and social housing and so her rights under Article 14 of the Convention, when read with Article 8, were breached.
- By her January order the Judge gave directions for a trial on the question whether the Trustees had breached their fiduciary duties in seeking Mrs Watts' eviction.
- That trial took place on 18 March 2016. She handed down judgment on 11 May 2016. She made findings of fact on the evidence that Mrs Watts had acted in an anti-social manner and in breach of the terms of the Appointment Letter in swearing, spitting and becoming aggressive to contractors, such that contractors would no longer enter the property; shouting, swearing and complaining about the neighbour who lived downstairs to the extent that (on one occasion) the police had to be called; making a great deal of noise late at night and early in the morning so as to cause a disturbance; singing loudly; cooking in the early hours; running her taps all night; all of which conduct caused the neighbour downstairs to move out; hoarding large amounts of junk in the property (particularly old clothes, newspapers and magazines) which were both a fire hazard and unhygienic; throwing rubbish and food from her window; emptying her rubbish bins onto the grass and smearing her bins with various substances; making a nuisance in the garden including pulling up shrubs; and leaving her rubbish in the street of an adjoining road.
- The Judge was satisfied that Mrs Watts was given numerous warnings about her behaviour and the state of her flat; and that, in spite of this, Mrs Watts' behaviour did not change, and Mrs Watts was continuing to cause a disturbance to her neighbours. The Judge said that it was her clear finding that the decision to terminate Mrs Watt's appointment was a reasonable decision for the Trustees to make. There is no appeal against those findings of fact.
- The Judge also held that the Trustees did not owe any fiduciary duties to Mrs Watts because the trustees of a charity do not owe any fiduciary duties to the objects of the charity. There has been no appeal against that finding.
- The Judge also dismissed the defence that the proceedings had been commenced in breach of the requirement in the Charities Act 2011 section 115 that no charity proceedings may be commenced unless the taking of the proceedings is authorised by order of the Charity Commission, no such order having been given in the present case. The Judge held that these are not charity proceedings within section 115.
- The Judge consequently made the May order for possession of the Property.
- There are three grounds of appeal:
(1) Gray v Taylor was decided per incuriam and is not binding, and Mrs Watts is a periodic tenant of her home, as well as being an object of the Charity;
(2) the occupiers of almshouse accommodation are entitled to security of tenure by virtue of Article 14 of the Convention when read with Article 8 of the Convention;
(3) the Judge had no jurisdiction to decide the claim because the proceedings are "charity proceedings" within section 115(8) of the Charities Act 2011 and no authorisation for them has been given by the Charity Commission or a Chancery High Court judge as required by section 115(2) and (5).
- The Trustees have issued a respondent's notice to uphold the order for possession on the further ground that Mrs Watts did not have exclusive possession of the property.
- The Secretary of State for Communities and Local Government intervened at a time when Mrs Watts was seeking a declaration to the effect that paragraph 12 of Schedule 1 to the Housing Act 1985 is contrary to Article 14 of the Convention (when read with Article 8) by reason of its exclusion of secure tenancy status for the occupants of almshouses, on the basis that such exclusion is discriminatory. That relief is no longer claimed. For that reason, the Secretary of State was not represented and made only written submissions at the hearing of the appeal.
- Permission to intervene on the appeal has also been given to the Charity Commission and the National Association of Almshouses on terms that they are restricted to filing written submissions only.
Appeal Ground 1
- The submissions of Mr Mark Wonnacott QC, for Mrs Watts, on the first ground of appeal can be simply stated. He submitted that Mrs Watts had exclusive possession of the Property, and in consequence she has always been a tenant of the Property. He submitted that, even if she occupied the Property in her capacity as a beneficiary of the Charity, she entered into occupation as a tenant at will and, on payment of the periodic sums due under the Appointment Letter, her tenancy at will became a periodic tenancy. He submitted that Gray v Taylor was decided per incuriam and was wrong in holding that the appellant occupier of an almshouse in that case was a not a tenant because she occupied the almshouse, not as tenant, but as a beneficiary under the trusts of the charity which owned the almshouse.
- We do not accept that Mrs Watts had exclusive legal possession of the property.
- Mr Wonnacott's starting point on this issue was that Lord Templeman (with whom all the other members of the Judicial Committee agreed) in Street v Mountford  1 AC 809 was correct when he said (at page 818E) that there can be no tenancy unless the occupier enjoys exclusive possession, but he was plainly wrong when he said:
"an occupier who enjoys exclusive possession is not necessarily a tenant. He may be
an object of charity"
- Mr Wonnacott submitted that it is elementary that, if a person is allowed by the owner to take up exclusive possession of a property, a tenancy arises. He said that, if a person is given permission to take possession without any agreed duration of possession, a tenancy at will is created. He referred to Coke on Littleton (19th ed.) (1832), especially passages stating the difference between a tenant at will and a tenant at sufferance, the former being a person who entered the property with permission and the latter being someone who holds over without right: see also Megarry & Wade, "The Law of Real Property" (8th Edition) paragraph 17-105.
- Mr Wonnacott's attack on that part of the speech of Lord Templeman is bold, not least because he was unable to refer us to any authority or scholarly commentary in support of his criticism.
- The short answer to his point is that there is a distinction between legal exclusive possession or a legal right of exclusive possession, on the one hand, and a personal right of exclusive occupation, on the other hand: see Windeyer J in Radaich v Smith (1959) 101 CLR 209 at 222 approved by Lord Templeman in Street v Mountford at page 827. Legal exclusive possession entitles the occupier to exclude all others, including the legal owner, from the property. Exclusive occupation may, or may not, amount to legal possession. If it does, the occupier is a tenant. If it does not, the occupier is not a tenant and occupies in some different capacity. In the reported cases, including the passage in Street v Mountford which Mr Wonnacott has criticised, the expression "exclusive possession" does not refer to legal possession but to exclusive occupation. In Woodfall on Landlord and Tenant Vol 1 para 1.1023 this is referred to as "de facto exclusive possession".
- In Allan v The Overseers of Liverpool (1873-74) LR 9 QB 180 Blackburn J described a lodger in a house as a person who, although he has the exclusive use of rooms in the house, in the sense that nobody else is to be there, is not in exclusive occupation because the landlord had his own servants to look after the house and the furniture, and such a lodger could not bring ejectment or trespass, the maintenance of the action depending on the possession.
- In Errington v Errington  1 KB 291 the question was as to legal status of a son and daughter-in-law, who had been let into occupation of a house owned and provided by the father, on terms that if they continued in occupation and duly paid the instalments of the mortgage on the house until the last one was paid, he would then transfer the property to them. The son and his wife occupied the house and paid the instalments but, following the death of his father, the son went to live with his widowed mother, with the wife continuing to occupy the house and to pay the instalments. The mother brought an action for possession against the daughter-in-law. The Court of Appeal held that the daughter-in-law and her husband were licensees, entitled under a personal contract to occupy the house for so long as they paid the instalments to the building society.
- Denning LJ said (at page 298):
"The result of all these cases is that, although a person who is let into exclusive possession is prima facie to be considered to be a tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy. Words alone may not suffice. Parties cannot turn a tenancy into a licence merely by calling it one. But if the circumstances and the conduct of the parties show that all that was intended was that the occupier should be granted a personal privilege, with no interest in the land, he will be held to be a licensee only."
- Somervell LJ said (at page 294) that for the reasons given by Denning LJ:
"there is no legal obstacle to holding that as licensees [the son and daughter in law] are entitled to retain exclusive possession so long as the instalments are paid".
- It is clear that in those passages the distinction is being made between legal possession in the sense we have described and exclusive occupation.
- We consider it is quite clear that the Appointment Letter did not grant legal exclusive possession to Mrs Watts. Mr Wonnacott emphasised parts of the Appointment Letter which are consistent with an intention to create a tenancy, such as the reference to the "apportioned rent" and the requirement in paragraph 11 for the service of a four week notice to the secretary "at the end of a tenancy". At the end of the Appointment Letter the text stated that Mrs Watts agreed "to abide by the Conditions of Tenancy".
- It is well established, however, that resolution of the issue whether an occupier is a licensee or a tenant is not necessarily determined by the labels or language used by the parties. It turns on the intention of the parties having regard to all the admissible evidence. In the memorable words of Lord Templeman in Street v Mountford (at page 819):
"If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect of the agreement by insisting that they only created a licence. The manufacture of a five-pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade."
- The references to a tenancy and to rent in the Appointment Letter have been explained in the Trustees' evidence as due to the fact that the Trustees are lay volunteers. More important, in the present case there are express provisions in the Appointment Letter which quite plainly point away from the grant of legal exclusive possession and a tenancy. They include paragraph 13 (the resident shall not be a tenant or have any legal interest in the almshouse), paragraph 18 (Trustees have the right to require a resident to vacate their dwelling and move, either temporarily or permanently, to another almshouse belonging to the Charity), paragraph 17 (visitors are not permitted to stay in an almshouse except with the consent of the Trustees), paragraph 9 (residents should not vacate their dwellings for more than a total of 28 days in any one year without the prior consent of the Trustees and should inform the Trustees/warden if they will be away for more than a week at a time), and paragraph 20 (the Trustees can set aside a resident's appointment for good cause, for example in the case of serious misconduct or if there is a breach of the regulations).
- It is also relevant that in the present case, as in Gray v Taylor, there was no question of the Trustees trying artificially to colour the Appointment Letter as licence rather than a tenancy in order to disguise the true nature of the relationship. The Trustees could only properly discharge the trusts of the Charity, which limited its objects to those in need, hardship or distress, if a personal revocable licence was granted (which could be revoked if, for example, the occupier no longer became qualified under the Scheme because they became wealthy).
- Mr Wonnacott then advanced the proposition that, since Mrs Watts was in occupation of the property in her capacity as a beneficiary of the Charity, authority shows that she entered as a tenant at will. He said that if she entered as a tenant at will, then on payment of the periodic sum due under the Appointment Letter, she became a periodic tenant: Megarry & Wade, "The Law of Real Property" (8th Edition) paragraph 17-105 (where a person occupies land as a tenant at will and rent is paid and accepted on some regular periodic basis, a periodic tenancy may be inferred).
- On the status of an occupying beneficiary having the status of a tenant at will, Mr Wonnacott referred to Earl of Pomfret v Lord Windsor (1752) 2 Ves Sen 472. In that case Lord Hardwicke LC held that an occupying beneficiary under a settlement, who was in possession by permission of the trustees, was a tenant at will to the trustees.
- Mr Wonnacott pointed out that in "A treatise on Possession of Land" by John Lightwood (1894) at page 165 it is said that a "cestui que trust" who holds as a tenant at will might renounce the title of his trustee and hold adversely to him, giving as authority the Earl of Pomfret case. The analogy was made with a mortgagor who was tenant at will to the mortgagee.
- Mr Wonnacott also referred to "An Introduction to English Legal History" (4th Edition) by J H Baker at page 644 which describes one of the most important kinds of tenant at will as being a beneficiary under a use.
- We do not accept the proposition that, if and insofar as Mrs Watts was a beneficiary of the Charity, her occupation was that of tenant at will of the trustees. The status of a beneficiary occupying trust property will depend upon the terms and conditions on which the occupation was permitted. The beneficiary may be the tenant for life under a settlement. The terms of the trust may expressly permit the trustees to grant a tenancy or a licence to a beneficiary on particular terms. If a beneficiary is permitted to occupy trust property without any express terms stated or agreed and without any governing provision of the trust instrument to throw light on those terms and conditions, the occupation status of the beneficiary will depend upon the proper conclusion to be drawn from all the admissible evidence as to whether it was intended that the beneficiary should occupy as licensee or in some other capacity. In the present case, for the reasons we have given, the terms on which Mrs Watts was permitted to occupy the property excluded the grant of legal possession. There is simply no scope in those circumstances to infer the grant of a tenancy at will.
- For those reasons, we hold that Mrs Watts was granted a personal licence to occupy the Property on the terms of the Appointment Letter. It is not strictly necessary in the circumstances to consider the validity of Gray v Taylor, which the Judge considered to be binding and is said, on behalf of Mrs Watts, to have been decided per incuriam and is wrong. As that issue is, however, placed at the heart of Ground 1 of the appeal, it is right that we should address the point.
- In Gray v Taylor the trustees of an almshouse charity, with powers to permit occupation of its almshouses by poor persons of good character who were not less than 60 years of age, granted the defendant the right to occupy a flat in the charity's almshouse, where she enjoyed exclusive occupation and paid a weekly sum towards the cost of maintaining the almshouse and for essential services. The written conditions of occupancy, given to the defendant when she took up occupancy and which she signed, stated expressly that residents were licensees and not tenants. In March 1997 the trustees terminated her appointment on the ground that her behaviour was vexatious and disturbed the quiet enjoyment of the almshouse, and gave her notice to vacate the flat. The defendant claimed that she was an assured tenant within section 1 of the Housing Act 1988, that her tenancy could not be brought to an end except by an order of the court and that no grounds had been established by the trustees to entitle them to an order for possession. The judge held on a preliminary issue that the defendant did not occupy the flat as an assured tenant.
- In dismissing the defendant's appeal, Sir John Vinelott, giving the leading judgment in the Court of Appeal, with which the other two members of the Court agreed, (and having referred to Street v Mountford, Allan v Liverpool Overseers and Errington v Errington) said as follows:
"A person who is selected as an almsperson becomes a beneficiary under the trusts of the charity and enjoys the privilege of occupation of rooms in the almshouses as a beneficiary. It is, in my judgment, wholly immaterial that, in this case, Mrs. Taylor pays a weekly sum towards the cost of maintaining the almshouses and the essential services therein
There is no need to resort to a tenancy to explain the almsperson's right to exclusive possession of the rooms; and, inasmuch as the grant of a tenancy might obstruct or fetter the performance by the trustees of their duty to provide accommodation for deserving persons, it would be wrong for them to grant a tenancy".
- Nourse LJ said as follows at 1099C:
"At the time when the trustees grant an almsperson a right of occupation there exists between them the relationship of trustee and beneficiary. It is only by reason of that relationship that the trustees have the power to grant the right. But the power does not allow them to grant a right which would or might infringe the objects of the charity by permitting the grantee to remain in occupation after he or she has ceased to qualify as a beneficiary. On this analysis, it is clear that the almsperson's occupation and his or her right to exclusive possession are referable to a legal relationship other than a tenancy. Therefore the case falls outside the general category identified in Street v. Mountford
- The Judge was entirely correct to hold that Gray v Taylor is not materially distinguishable from the present case and (subject to Appeal Ground 3) was binding on her. The Court of Appeal in that case was not presented with the more elaborate arguments that have been advanced to us by Mr Wonnacott, including, in particular, his attack on Lord Templeman's analysis of exclusive possession in Street v Mountford and the relevance of the Earl of Pomfret case. For the reasons we have given in dismissing those arguments, Gray v Taylor was correctly decided on its facts because the terms of the charitable trusts and the terms on which the defendant was let into occupation showed that she was never intended to have legal possession and was only ever granted a personal licence to occupy her flat in the almshouse. That is precisely the situation on the facts of the present case.
Appeal Ground 3
- It is convenient to take Appeal Ground 3 next. We dismiss this ground of appeal for reasons which can be stated very shortly.
- Section 115(2) provides that, subject to the subsequent provisions of the section, no charity proceedings relating to a charity are to be entertained or proceeded with in any court unless the taking of the proceedings is authorised by order of the Charity Commission.
- Section 115(8) provides that the expression "charity proceedings" means (a) the court's jurisdiction with respect to charities, or (b) the court's jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes. It is not suggested, on behalf of Mrs Watts, that these proceedings fall within (a). It is said that they fall within (b).
- We consider that submission is, with respect, plainly wrong. These proceedings are not to do with the internal administration of the Charity. They are for possession of the Property pursuant to the terms of a written contractual licence: comp. Rendall v Blair  45 Ch D 139. Furthermore, there has been no appeal against the Judge's finding that the Trustees did not owe fiduciary duties to Mrs Watts.
- Accordingly, the Judge was correct on this issue also.
- By way of a postscript on this issue, it should be mentioned that the Charity Commission has drawn attention to what it has described as its visitatorial jurisdiction in relation to the Charity under clause 46 of the Scheme, which is as follows:
"Questions under the Scheme. Any question as to the construction of this scheme or as to the regularity or the validity of any acts done or about to be done under this Scheme shall be determined by the Charity Commission upon such application made to them for the purpose as they think sufficient."
- The Charity Commission was not requested to make any visitatorial determination under clause 46 of the Scheme in relation to the matters in issue in these proceedings. No written or oral submissions have been made to us on behalf of the Trustees or Mrs Watts as to clause 46 or any visitatorial jurisdiction of the Commission.
Appeal Ground 2
- Mrs Watts submits that Gray v. Taylor is no longer good law because its effect is to give rise to a breach of her Article 14 rights when read in conjunction with Article 8 of the Convention. She submits that this court is not bound by Gray, without need for recourse to Young v. Bristol Aeroplane Co. Ltd.  KB 718 (See C plc v. P  EWHC 1226 (Ch);  Ch 549 at .) On this basis Mrs Watts submits that she is entitled to the protection of an assured tenant under the Housing Act 1988.
- Article 8 of the Convention provides:
"Article 8 Right to respect for private and family life
1. Everyone has the right to respect for his private and family life, his home and his correspondence.
2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."
Article 14 of the Convention provides:
"Article 14 Prohibition of discrimination
The enjoyment of the rights and freedoms set forth in this European Convention on Human Rights shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status."
- In the proceedings before the County Court it was conceded on behalf of Mrs Watts that the Charity was not a public authority within section 6 of the Human Rights Act 1998 ("HRA 1998"). The judge observed that this was an entirely realistic concession. In her view, "the factual matrix relating to this almshouse" as set out in the Trustees' skeleton argument below would make it impossible to argue with success that the Charity was a public authority. Before us, Mr. Toby Vanhegan, for Mrs Watts, did attempt to advance a line of argument on the basis that the Charity should be considered a public authority. Objection was made by Mr. Stephen Hockman QC, for the Trustees. We heard Mr. Vanhegan's submission de bene esse and reserved the question whether Mrs Watts should be permitted to advance this line of argument on appeal, contrary to the concession made below.
- We consider that the question of the status of the Charity is a mixed question of fact and law. Had this been raised as an issue below, it would have been necessary for the court to hear evidence as to the nature of the Charity. In the event, however, the issue was not raised and the judge proceeded on the basis of Mrs Watts' concession which was consistent with the unchallenged account given in the Trustees' skeleton argument. In these circumstances it is not appropriate for her to seek to reopen the issue and we refuse permission to withdraw the concession.
Article 8 ECHR
- In this case Mrs Watts does not contend that there is a potential infringement of her rights under Article 8, considered in isolation. We consider that this concession was correctly made. In Manchester City Council v. Pinnock  2 AC 104 the Supreme Court concluded that if domestic law in the United Kingdom is to be compatible with Article 8, where a court is asked to make an order for possession of a person's home at the suit of a local authority, the court must have the power to assess the proportionality of making the order and, in making that assessment, to resolve any relevant dispute of fact. It emphasised, however, that this conclusion related to possession proceedings brought by local authorities and was not intended to apply where the person seeking the order for possession is a private landowner.
- This point was raised directly in McDonald v. McDonald  UKSC 28;  3 WLR 45 where possession was sought by a person who was not a public authority. The Supreme Court held that, while the jurisprudence of the Strasbourg court did provide some support for the notion that Article 8 was engaged when the court was asked to make an order for possession in favour of a private landlord, there was no support for the proposition that the judge could be required to consider the proportionality of the order which he would have made under the provisions of the applicable legislation. Accordingly, where, as in the present case, the claimant is not a public authority there has been no potential actionable interference for the purposes of Article 8.
Article 14 ECHR in conjunction with Article 8
- This aspect of the Mrs Watts' case is founded, rather, on Article 14 considered in conjunction with Article 8. She submits that her removal would be an infringement of her Convention rights under Article 14 considered in conjunction with Article 8 because it would amount to discrimination against her on the ground of a protected characteristic.
- Under the Convention scheme Article 14 has no free-standing, independent operation so as to prohibit discrimination. It seeks to secure the enjoyment of Convention rights and freedoms without discrimination on any of the stipulated grounds. While its application does not require the demonstration of an infringement of a Convention right or freedom, the subject matter of the alleged discrimination must fall within the ambit of one or more of the substantive provisions of the Convention.
The ambit of Article 8 of the Convention
- The first question which must be addressed, therefore, is whether the present situation falls within the ambit of Article 8 so as to engage the protections of Article 14. Mrs Watts submits that since this is a possession claim and therefore concerns her right to respect for her home and private life, it falls within the ambit of Article 8 for the purpose of engaging Article 14. The Secretary of State for Communities and Local Government, intervening as an interested party, accepts that the exemption of residents of almshouses from secure and/or assured tenancy status falls within the ambit of Article 8 so as to engage Article 14, even though there is no interference for the purposes of Article 8 considered in isolation. However, the Trustees submit that, as this case is concerned not with a public authority but with a dispute between private parties, Article 14 is not engaged.
- Mrs Watts relies, first, on Larkos v. Cyprus (1999) 30 EHRR 597. There the applicant to the European Commission of Human Rights, relying on Article 14 in conjunction with Article 8, complained that, as a government tenant, he had been discriminated against in the enjoyment of his home because, unlike a private tenant renting from a private landlord, he was not protected from eviction on the expiry of his lease. The Commission concluded that there had been a violation of Article 14 taken in conjunction with Article 8. The question whether the dispute fell within the ambit of Article 8 was not expressly addressed. However, we note that the decision to evict him from his home was made by a public authority because the landlord was the Government of Cyprus.
- Mrs Watts relied, next, on Manchester City Council v. Pinnock (Nos. 1 and 2)  2 AC 104 where, as we have seen, the Supreme Court concluded that, in order for domestic law within the United Kingdom to be compatible with Article 8, where a court is asked to make an order for possession of a person's home at the suit of a local authority the court must have the power to assess the proportionality of making the order. In those circumstances Article 8 was directly engaged. However, the case says nothing about whether a dispute falls within the ambit of Article 8 for the purposes of engaging Article 14 in circumstances where the person seeking to evict the resident is not a public authority. On the contrary, Lord Neuberger was at pains to emphasise (at ) that nothing in the decision was intended to bear on cases where the person seeking the order for possession was a private landowner. The same is true of Hounslow LBC v. Powell  UKSC 8;  2 AC 186 on which Mrs Watts also relied.
- In Secretary of State for Defence v. Blake  EWHC 2945 (Ch) the court was directly concerned with whether Article 14 was engaged in conjunction with Article 8. Burton J. considered (at ) that Article 14 was available to be applied because it was "in the ambit" of Article 8. However, that was, once again, a case where the landlord seeking possession of the home was a public authority.
- In Southward Housing Co-operative Ltd. v Walker  Ch 443 the defendants, tenants of a fully mutual housing association, the claimant, argued that the security of tenure provisions of the Housing Act 1985 and the Housing Act 1988 should, pursuant to section 3 of HRA 1998, be read as providing them with a secure or assured tenancy because they would otherwise be excluded from those protections to which other tenants were entitled, contrary to Article 14. The defendants maintained that the case fell within the ambit of Article 8 so as to engage the protections of Article 14, even though there was no actionable interference for the purposes of Article 8 itself. Hildyard J. noted (at ) that both the claimant and the Secretary of State for Communities and Local Government accepted that the exemption of fully mutual housing associations from secure and assured tenancy status fell within the ambit of Article 8 for this purpose. The judge went on to conclude that there was no discrimination as a consequence of a qualifying status under Article 14 and that in any event the difference of treatment was justifiable.
- In opposing Mrs Watts' contention that the present proceedings fall within the ambit of Article 8 for the purpose of engaging Article 14 the Charity places particular reliance on a passage later in the judgment of Hildyard J. in Southward where he addressed the question whether non-proportionality under Article 8 or Article 14 in combination with Article 8 could be raised as a defence to a possession action even if the claimant were not a public body acting as such. He concluded, referring to the decision of the Court of Appeal in McDonald v. McDonald  Ch 357 that they could not. So far as Article 8 alone is concerned, he considered that the court was not entitled to subject a private landlord to considerations of proportionality in the private act of seeking possession from a defaulting tenant. A tenant of a private landlord could not defend a claim for possession on the basis that it would not be proportionate to make a possession order against him pursuant to Article 8. He continued:
" I agree with the claimant that this conclusion must apply mutatis mutandis to an argument founded on articles 8 and 14 or A1P1 of the ECHR. This aspect of the defence must therefore be rejected."
- In our view, this passage does not assist the Charity. First the judge was not here addressing the question whether the proceedings fell within the ambit of Article 8. Secondly, he was considering a submission by which the defendants sought to raise a proportionality defence in a horizontal situation so the relevance of Article 14 is not entirely clear. Thirdly, the line of argument was founded on the premise that by virtue of section 6(3)(a) of HRA 1998 the court is a public authority and must act to avoid a breach of the defendants' human rights. Here, however, the court is merely providing a forum for the determination of civil rights in dispute between the parties. (See Di Palma v. United Kingdom (1986) 10 EHRR 149 at p. 155; Wood v. United Kingdom (1997) 24 EHRR CD 69; Harrow London Borough Council v. Qazi  1 AC 983, per Lord Millett at ; McDonald v. McDonald per Lord Neuberger and Baroness Hale at .)
- In the Court of Appeal in McDonald v. McDonald  EWCA Civ 1049,  Ch 357, Arden LJ addressed directly the question whether Article 8 was engaged where a possession order was sought by a private landlord:
"What is not in dispute
There is no doubt that article 8.1 is engaged. It is not in dispute that a person may have a home for the purposes of article 8 without having any proprietary right, and indeed she may have a right to respect for her home even if her occupation is not lawful. The existence of a home in Strasbourg jurisprudence is identified with "efficient and continuing links" in terms of the social and psychological attachment or bond that develops with one's accommodation, and neighbourhood, rather than simply with the concept of a roof over one's head: see generally my judgment in Harrow London Borough Council v Qazi  HLR 14, reversed on other grounds  1 AC 893. There is nothing in article 8 to exclude a home that is or was let to the applicant by a private landlord. The landlords in this case are private citizens."
However, as Arden LJ explained, the tenant had to go further than to say that Article 8 was engaged. She had to say that any interference with her Article 8.1 right would be disproportionate under Article 8.2. To do this she had to show that the Strasbourg court applies the proportionality test to a possession claim by a private landlord. The tenant was unable to do so.
- When McDonald v. McDonald reached the Supreme Court, Lord Neuberger and Baroness Hale, in a joint judgment with which the other members of the Supreme Court concurred, addressed the question whether Article 8 is engaged when a private sector landlord seeks an order for possession of a tenant's home. They began by expressing a preliminary view in the course of which they observed:
"40 In the absence of any clear and authoritative guidance from the Strasbourg court to the contrary, we would take the view that, although it may well be that article 8 is engaged when a judge makes an order for possession of a tenant's home at the suit of a private sector landlord, it is not open to the tenant to contend that article 8 could justify a different order from that which is mandated by the contractual relationship between the parties, at least where, as here, there are legislative provisions which the democratically elected legislature has decided properly balance the competing interests of private sector landlords and residential tenants. In effect the provisions of the Protection from Eviction Act 1977 , section 89 of the Housing Act 1980 and Chapters I and IV of the 1988 Act, as amended from time to time, reflect the state's assessment of where to strike the balance between the article 8 rights of residential tenants and the A1P1 rights of private sector landlords when their tenancy contract has ended. (It is true that the balance was initially struck in statutes enacted before the 1998 Act came into force in 2000. However, the effect of those statutes has not only been considered and approved in government reports since 2000, as mentioned in para 19 above, but they have been effectively confirmed on a number of occasions by Parliament, when approving amendments to those statutes since 2000).
41 To hold otherwise would involve the Convention effectively being directly enforceable as between private citizens so as to alter their contractual rights and obligations, whereas the purpose of the Convention is, as we have mentioned, to protect citizens from having their rights infringed by the state. To hold otherwise would also mean that the Convention could be invoked to interfere with the A1P1 rights of the landlord, and in a way which was unpredictable. Indeed, if article 8 permitted the court to postpone the execution of an order for possession for a significant period, it could well result in financial loss without compensation - for instance if the landlord wished, or even needed, to sell the property with vacant possession (which notoriously commands a higher price than if the property is occupied)."
They then undertook a comprehensive survey of the relevant Strasbourg jurisprudence and concluded:
"59 In these circumstances, while we accept that the Strasbourg court jurisprudence relied on by the tenant does provide some support for the notion that article 8 was engaged when Judge Corrie was asked to make an order for possession against her, there is no support for the proposition that the judge could be required to consider the proportionality of the order which he would have made under the provisions of the 1980 and 1988 Acts."
- The question as to when Article 8 is engaged therefore remains unclear on the authorities. However, for the purposes of the present case we are prepared to proceed on the assumption that its facts do fall within the ambit of Article 8 for the purposes of engaging Article 14.
Is there discrimination on the ground of a protected status of the appellant?
- Article 14 provides that Convention rights and freedoms shall be secured "without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status." In Kafkaris v. Cyprus (2008) 49 EHRR 35 the Strasbourg court held that Article 14 "safeguards persons who are in analogous or relevantly similar positions against discriminatory differences in treatment that have as their basis or reason a personal characteristic ("status") by which persons or a group of persons are distinguishable from each other" (at ). In order to succeed on this ground Mrs Watts has to show that she has been discriminated against on the basis of a protected characteristic which falls within the concept of "other status" in Article 14.
- Mrs Watts submits that, when read with Article 8, Article 14 prohibits discrimination against her on the basis of her status as an almsperson and/or as the object of a charity. Mr. Vanhegan submits that in this jurisdiction a very wide meaning has been given to the words "or other status" so as to include the status of being homeless (R (RJM) v. Secretary of State for Work and Pensions  1 AC 311 at -). He submits that the characteristics to which it applies need not be immutable as is apparent from the fact that being married is a qualifying status (P (A Child)  UKHL 38;  1 AC 173).
- In R (RJM) v. Secretary of State for Work and Pensions Lord Neuberger observed at -:
"41 It is unnecessary to decide whether, and if so when, it may be appropriate in some cases not to consider the "status" issue as an entirely self-contained question. (However, having seen in draft the opinion of my noble and learned friend, Lord Walker of Gestingthorpe, I agree with what he says in para 5.) In any event, in the present case, I am content to adopt the approach which has been consistently taken in article 14 cases by this House, when the issue has arisen. Accordingly, it is necessary to decide whether homelessness can fairly be described as a "personal characteristic" as that expression was meant in Kjeldsen 1 EHRR 711 and in Kafkaris 12 February 2008. In my view, it is.
42 First, it seems clear that "a generous meaning should be given to the words 'or other status'", per my noble and learned friend, Lord Hope of Craighead, in Clift  1 AC 484 , para 48. To similar effect, at para 4.14.21 of Lester & Pannick, Human Rights Law and Practice , 2nd ed (2004), it is stated that the ECtHR applies "a liberal approach to the 'grounds' upon which discrimination is prohibited". That appears to me to be entirely in accordance with the approach one would expect of any tribunal charged with enforcing anti-discrimination legislation in a democratic state in the late 20th, and early 21st, centuries."
- Lord Walker stated (at ) with reference to the expression "personal characteristics" in the Strasbourg case law:
"The other point on which I would comment is the expression "personal characteristics" used by the European Court of Human Rights in Kjeldsen, Busk Madsen and Pedersen v Denmark (1976) 1 EHRR 711 , and repeated in some later cases. "Personal characteristics" is not a precise expression and to my mind a binary approach to its meaning is unhelpful. "Personal characteristics" are more like a series of concentric circles. The most personal characteristics are those which are innate, largely immutable, and closely connected with an individual's personality: gender, sexual orientation, pigmentation of skin, hair and eyes, congenital disabilities. Nationality, language, religion and politics may be almost innate (depending on a person's family circumstances at birth) or may be acquired (though some religions do not countenance either apostates or converts); but all are regarded as important to the development of an individual's personality (they reflect, it might be said, important values protected by articles 8, 9 and 10 of the Convention). Other acquired characteristics are further out in the concentric circles; they are more concerned with what people do, or with what happens to them, than with who they are; but they may still come within article 14 (Lord Neuberger instances military status, residence or domicile, and past employment in the KGB). Like him, I would include homelessness as falling within that range, whether or not it is regarded as a matter of choice (it is often the culmination of a series of misfortunes that overwhelm an individual so that he or she can no longer cope). The more peripheral or debateable any suggested personal characteristic is, the less likely it is to come within the most sensitive area where discrimination is particularly difficult to justify. There is an illuminating discussion of these points (contrasting Strasbourg jurisprudence with the American approach to the Fourteenth Amendment) in the speech of Baroness Hale of Richmond in AL (Serbia) v Secretary of State for the Home Department  1 WLR 1434 , paras 2035."
- Mrs Watts relies on Larkos v. Cyprus where adverse treatment of Crown tenants by comparison with other tenants was held to be discrimination within Article 14. However, it does not appear that the issue of qualifying status was expressly addressed in that case.
- In the joined cases of Secretary of State for Defence v. Nicholas and Secretary of State for Transport v. Blake  EWHC 2945 (Ch) Burton J. recorded (at (ii)) that there was no disagreement between counsel that differential treatment as between Crown tenants and other tenants is capable of being discrimination on the ground of "other status" within Article 14. In the appeal in Nicholas  1 WLR 2116 the qualifying status invoked by Mrs. Nicholas was that of the spouse or former spouse of a Crown licensee. Although the Secretary of State for Defence did not concede that there was a relevant status, Lewison LJ noted (at ) that counsel for the Secretary of State did not strenuously argue to the contrary. Accordingly that court proceeded on the assumed basis that her status as the spouse or former spouse of a Crown licensee potentially engaged Article 14.
- The point was, however, considered in detail by Hildyard J. in Southward (at -). The question there was whether any difference in treatment accorded to the claimant by reason of the exemption of fully mutual housing association tenancies from statutory protections that might otherwise apply was based on a ground prohibited by Article 14. Hildyard J. accepted that a generous meaning should be given to the words "or other status" and that it should not be too closely limited by the grounds which are specifically prohibited in Article 14. He considered that personal characteristics constituting prohibited grounds are generally concerned with innate and immutable characteristics, not with what people do or what happens to them. In his view, it was difficult to describe that which was said to occasion the differential treatment as a personal characteristic. The characteristic was not innate but acquired, it had nothing to do with what the person is, as distinct from what that person had chosen to do. The choice made was most unlikely to reflect or to have affected the person's character. Furthermore the circumstances of fully mutual housing association tenants differed greatly. Referring to Lord Walker in R (RJM) v Secretary of State for Work and Pensions, he considered that any circle was far from the centre. So far as authority was concerned, no case, including Larkos v. Cyprus, came close to recognising the status of being a tenant of a housing association that is fully mutual (as opposed to some other housing association) as being a prohibited ground for the purposes of Article 14. Accordingly, he concluded that any differential treatment or discrimination was not the consequence of any "other status" such as to bring the case within Article 14.
- In seeking to determine whether Mrs Watts has a qualifying characteristic, we are faced not with a binary choice but with the need to place the particular characteristics on which Mrs Watts relies at the appropriate point on a sliding scale. However, the following features strongly suggest that the Mrs Watts status as an almsperson is not a qualifying characteristic for the purposes of Article 14. First, the fact that Mrs Watts is resident in an almshouse is a matter of choice on her part. She has chosen to live there as opposed to seeking accommodation provided by a housing association, a public authority or a private landlord. It is not an innate characteristic but one which has been acquired. Secondly, there is here a danger of defining a qualifying personal characteristic by the very differential treatment of which Mrs Watts complains, an approach against which Lord Bingham warned in R (Clift) v. Secretary of State for the Home Department  1AC 484 at . (c.f. the observation of Hildyard J. in Southward at  that there may now, notwithstanding the observation of Lord Bingham in Clift, be some interplay between the reasons for differential treatment and whether the differential treatment is indicative of some personal characteristic or "other status".) Thirdly, as Mr. Oliver Jones submits on behalf of the Secretary of State, there is no evidence before the court as to the factors or qualities that are said to be common to all residents of almshouses so as to permit the court to conclude that residence in an almshouse is a characteristic so central to a person as to attract the protection of Article 14. Once again, however, it is not necessary to come to a concluded view on this point because of the conclusion to which we have come on the issue of objective justification.
Justification for any difference of treatment
- On behalf of Mrs Watts it is submitted that there is no justification for the differential treatment suffered by almspersons. It is submitted that it is not a proportionate means of achieving a legitimate aim. A comparison is drawn with other categories of social housing and it is submitted that there is no good reason why an almsperson should be denied the protections granted to the occupiers of any other form of social housing.
- In approaching the issue of justification we have firmly in mind the wide margin of appreciation accorded to contracting States in implementing social and economic policies in matters concerning housing. Thus in Blecic v. Croatia (2005) 41 EHRR 13 the Strasbourg court observed:
"State intervention in socio-economic matters such as housing is often necessary in securing social justice and public benefit. In this area, the margin of appreciation available to the state in implementing social and economic policies is necessarily a wide one. The domestic authorities' judgment as to what is necessary to achieve the objectives of those policies should be respected unless that judgment is manifestly without reasonable foundation. Although this principle was originally set forth in the context of complaints under article 1 of Protocol No. 1
the state enjoys an equally wide margin of appreciation as regards respect for the home in circumstances such as those prevailing in the present case, in the context of article 8. Thus the court will accept the judgment of the domestic authorities as to what is necessary in a democratic society unless that judgment is manifestly disproportionate to the legitimate aim pursued."
- The history of legislation in this jurisdiction concerning residential tenancies has involved a process of balancing and rebalancing of the respective interests of owners and occupiers of property. As Mr. Jones points out on behalf of the Secretary of State, the Housing Act 1988 represented a key step in making it easier for landlords to obtain possession of their properties from tenants. An important consideration underlying this change was that if the balance were weighted too heavily in favour of securing the protection of tenants, there would be a reduced incentive to rent properties and the available housing stock would be reduced.
- In the context of almshouses the exclusion of security of tenure for almspersons has been in place for many years. Parliament has not required the grant of assured shorthold tenancies to almspersons. In Gray v. Taylor this court concluded that the grant of a tenancy would be inconsistent with the duty of the trustees to provide accommodation for deserving persons and that the relationship was one of licensor and licensee. We consider on the basis of the material before us that not only is this the correct characterisation as a matter of domestic law but it also fairly balances the competing interests of the Charity and the resident in a manner which would not be achievable if residents had the status of tenants. In the present case the Scheme, approved by the Charity Commission, under which the Charity is required to operate provides, inter alia, that the residents in the almshouses belonging to the Charity shall be poor single women of not less than 50 years of age. If the almspersons were entitled to security of tenure this would be inconsistent with the performance by the Trustees of their duties under the Scheme because it would be impossible to ensure that only qualifying persons occupied the almshouses. In terms of HRA 1998, which came into force in 2000 after the decision in Gray v. Taylor, the denial of security of tenure to almspersons is clearly justifiable as a proportionate measure which secures a fair balance between the interests of charities and current and future almspersons.
- For these reasons the appeal will be dismissed.
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