The charity was an incorporated body created by a Royal Charter granted in 1718. The governor and directors sought to exercise a power conferred on them by the charter to amend the byelaws to enable the directors’ professional firms to be remunerated for their services to the charity. The Court considered the obligations of its officers.
Held: The directors of the corporation in question were, although not technically trustees, in the same fiduciary position as trustees in respect of the corporation’s affairs, and were therefore within the scope of a rule of law which debarred trustees from receiving payment for their services. The governor, deputy governor and directors of a charitable corporation were ‘as much in a fiduciary position as trustees in regard to any acts which are done respecting the corporation and its property’ and that they were, ‘to all intents and purposes, bound by the rules which affect trustees’. It would be illegal if the directors used the property for their own purposes ‘and not for the purposes of the charitable trust for which the property is held’, and he also referred to it being a ‘great change’ if it were thought proper for a provision enabling remuneration to be charged ‘to be inserted in a document regulating a charitable trust’.
Danckwerts J said: ‘It is said by [Counsel for the directors] that it is the corporation which is trustee of the property in question, and that the governor and directors are not trustees. Technically that may be so. The property of the charity is, of course, vested in and held by the corporation.’
Danckwerts J
[1951] Ch 567
England and Wales
Cited by:
Cited – Von Ernst and Cie SA v Inland Revenue Commissioners CA 1979
The assets of a corporate charity were held on charitable trusts: ‘We were referred to certain authorities which give support to the view that a company incorporated for exclusively charitable purposes is in the position of a trustee of its funds or . .
Cited – The Children’s Investment Fund Foundation (UK) v Attorney General and Others ChD 9-Jun-2017
The court considered the propriety of a payment made by a charitable company to a director for her loss of office. The charity was to transfer a substantial sum to a new charity headed by the departing director.
Held: The court approved the . .
Cited – Lehtimaki v The Children’s Investment Fund Foundation (UK) and Others CA 6-Jul-2018
A charity established by H and W wanted to transfer part of its fund to a new charity headed by W in return for her resignation from the first charity on the breakdown of the marriage. Court approval was sought for a transfer, but the remaining . .
Cited – Lehtimaki and Others v Cooper SC 29-Jul-2020
Charitable Company- Directors’ Status and Duties
A married couple set up a charitable foundation to assist children in developing countries. When the marriage failed an attempt was made to establish a second foundation with funds from the first, as part of W leaving the Trust. Court approval was . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 August 2021; Ref: scu.652835 br>