Generally the court does not tell trustees whether or how to exercise their discretionary powers or upset a previous exercise merely because it would not itself have chosen to exercise a power at all or would have exercised it in a different way. The English Court of Appeal has now re-affirmed that principle and held that it applies equally to charity trustees and others owing fiduciary duties to the charity: see Lehtimäki v The Children’s Investment Fund Foundation (U.K.) [2018] EWCA Civ 1605 at [62]. The court refused to direct a fiduciary to vote in favour of making a large grant when he was acting in good faith, responsibly and reasonably in declining to support it.
Some offshore courts have been pretty interventionist in telling trustees what to do. It will be interesting to see whether this decision makes a difference.
Nicholas Le Poidevin, Q.C.
New Square Chambers