[2024] UKUT 349 (LC)

Mr Manning urged the Tribunal to look at the way the rules are intended to operate, which is as the FTT described; the general meeting takes all the management decisions and the management committee, far from actually taking any management decisions, merely implements those decisions.

Mr Manning’s reading of rule 30 is therefore different from that of the appellant. The word “discuss” means “make” or “take” so that, as the FTT said, rule 30 provides for all management decisions to be taken by the general meeting and indeed reserves those decisions to it. It should be read alongside rule 44, which provides for decisions to be taken on a one-vote-per-member basis.

The language of rule 48, Mr Manning argued, is different. The emphasis is on what happens day-to-day and on executive functions rather than on decision-taking. Rule 69 therefore provides examples of things that the committee can do, which are purely day-to-day matters that it is impracticable to have the general meeting do.

And rule 69 then has to be read in conjunction with rule 30. Because rule 30 reserves management decisions to the general meeting, those decisions are “by these rules … required to be exercised by the-operative in general meeting”. Therefore insofar as any of the matters listed (a) to (i) are management decisions, the committee has to refer the actual decision to the general meeting. It can draft a letter of appointment for a managing agent, for example, but it cannot decide to appoint one; it can draft the terms of a new occupation licence, so that the general meeting does not have to do so, but it then has to put those terms to the general meeting for decision. The use of the word “determine” in paragraph 69(c), in the context of the terms of a letting or sale, cannot mean that the committee decides for itself without reference to anybody else; it means that the committee can produce a draft, upon which the members in general meeting will decide.

The same goes for other functions that the rules give to the management committee. All management decisions are taken by the general meeting under rule 30, and in those instances where the committee is given a decision-making power that is not a management decision. Thus rule 12 provides:

“The committee may within their absolute discretion and in accordance with the procedure which may be laid down from time to time by the Co-operative in general meeting admit or refuse to admit any person to membership of the Co-operative save that such person must be a licencee or prospective licencee of the Co-operative.”

Mr Manning explained that the general meeting decides the procedure for admitting members, and that is a management decision; the actual admission of an individual is done by the committee – and has to be, so that personal details are not shared in the general meeting – and is not a management decision. Equally, the removal of a committee member by the committee under rule 57(b) is not a management decision. The decision to appoint another officer under rule 76 is either not a management decision, or is subject to rule 30 so that the actual decision is taken by the general meeting and the committee merely implements that decision; but in Mr Manning’s view appointing an officer it is not a management decision.

Mr Manning pointed out that if management decisions can be taken by the committee as well as by the general meeting, there is a potential problem of conflicting decisions. What if the committee decides to raise a rent and the general meeting decides not to? There is no provision in the rules to resolve that conflict. But that does not arise; all management decisions are reserved to the general meeting by rule 30 and the management committee merely implements those decision.

Mr Manning asked rhetorically what is the purpose of the general meetings if they are simply a talking-shop to discuss management decisions rather than to take them. And what is the purpose of the elaborate provisions for convening the meetings and for their quorum and procedure if they are not making management decisions? Mr Manning observed that in two previous decisions the FTT has held that the respondent’s rules satisfy the requirements of paragraph 2B(2)(b), although he acknowledged that those decisions do not create a precedent.

Finally Mr Manning expressed the view that if the respondent’s constitution does not meet the requirements of paragraph 2B, no fully mutual co-operative society could do so since this, he said, was a typical set of rules.