When Is A Fraud On A Power Actually A Fraud?

Fraud on a power is a well-established trust doctrine and one that crops up frequently in contentious trust applications both onshore and offshore.  As such, it is always useful to have an aide-mémoire of the basics and also remind ourselves where, what may at first appear to be a fraud, is, in fact, perfectly acceptable.

As per Lewin 29-289:

1. the donee of a beneficial power may exercise it as he pleases;
2. the donee of a power of any other kind must not misuse it;
3. where the power is non-fiduciary a person is under no obligation to exercise it but where they do they must do so for a proper purpose; and
4. the donee of a fiduciary power is under an obligation to consider exercising its power and if it does so it must do so for a proper purpose.