Mark Mullen appeared for HM Attorney General before the Court of Appeal in Lehtimäki v The Children’s Investment Fund Foundation (UK) and others  EWCA Civ 1605.
In the claim, the claimant (‘CIFF’), a company limited by guarantee and a registered charity, sought approval of the making of a grant of $360 million to a new charity established by one of its directors.
CIFF was founded by Sir Christopher Hohn, and his then wife, Ms Jamie Cooper. It had assets in excess of $4 billion and its charitable activity was focused on children’s health in the developing world. As a result of the breakdown of the relationship between Sir Christopher and Ms Cooper, the charity encountered governance difficulties and, to resolve these, it was agreed that Ms Cooper would found a new charity, Big Win Philanthropy (‘BWP’), and retire as a director of CIFF. Subject to the approval of the Court, CIFF would make a grant of $360 million to BWP and it was further agreed that Sir Christopher would cause a further $40 million to be donated to it. If the grant were to be approved by the Court, Ms Cooper agreed that she would donate a further $40 million to the new charity.
The Chancellor, at first instance, approved the grant in the exceptional circumstances of the case, but determined that it would constitute a ‘material benefit’ to Ms Cooper such as to require the approval of the Charity Commission under the terms of CIFF’s constitution. It further constituted a payment to a director for loss of office for the purposes of sections 215 and 217 of the Companies Act 2006 and would thus require approval by a resolution of members of the company, with the prior consent of the Charity Commission.
The Chancellor went on to consider the nature of the interest of a member of a charitable company and whether such a member could be directed to vote in favour of a resolution approving the payment of the grant under 217 of the Companies Act 2006.