The Supreme Court has handed down an important decision in Lehtimaki and others v Cooper  UKSC 33, following decisions from the High Court and the Court of Appeal in 2017 and 2018 respectively. This appeal considers whether the court has jurisdiction to direct members of a charitable company on how to exercise their powers absent breach of fiduciary duty and will have interesting implications with regards to the role of members within charitable companies.
The Children’s Investment Fund Foundation ("CIFF") is a charitable company with more than $4 billion in assets, that help children in developing countries. It was founded by Sir Christopher Hohn and Ms Jamie Cooper in 2002, but difficulties arose in management when their marriage broke down. These proceedings stem from the steps they took to resolve those difficulties. The couple agreed that in exchange for a grant of $360 million to Big Win Philanthropy ("BWP"), a charity founded by Ms Cooper, she would resign as a member and trustee of CIFF.
CIFF’s members had to approve the grant to BWP. CIFF had three members, two of whom, namely Sir Christopher and Ms Cooper, had to recuse themselves from the vote. Thus, only Dr Marko Lehtimaki could vote on the proposal.
The Chancellor of the High Court held that the grant would be in CIFF’s best interests and ordered Dr Lehtimaki to vote for the resolution approving the grant.
Dr Lehtimaki appealed against that order, and the Court of Appeal allowed the appeal holding that, in the absence of a breach of fiduciary duty, the court could not direct Dr Lehtimaki on how he should exercise his powers.
Ms Cooper appealed to the Supreme Court and sought an order requiring Dr Lehtimäki to vote in favour of the resolution. The Supreme Court allowed the appeal and makes an order requiring Dr Lehtimäki to vote in favour of the resolution for three reasons.
1) Dr Lehtimäki is a fiduciary when acting as a member of CIFF.
2) The Court can direct Dr Lehtimäki to vote in favour of the resolution.
3) The Companies Act 2006, s 217 does not prevent the court from directing a member to vote.
Lord Pannick QC acted for Ms Cooper.
The full judgment is available here.