Reported decisions on the circumstances in which the protector of a trust may be removed from office by the court are few and far between, and have previously been confined to the most extreme situations – for example those in which the protector had misappropriated trust funds, or else was pursuing claims against the trust.
Now the recent decision of the Royal Court of Jersey in The Matter of The A and B Trusts [2012] JRC 169A, which was handed down in 2012 but can only now be made public, has shed considerable new light on the circumstances in which a Protector may be removed, and on the appropriate test.
The facts of the case cannot fully be reported for reasons of confidentiality, but they can be summarised as follows. The applicants comprised the majority of the adult beneficiaries of two Jersey trusts. They sought the removal of the protector on a number of grounds, but principally that he mistakenly believed his role to be to act as the living guardian of the (deceased) settlors' wishes and that he was accordingly either uninterested or hostile towards them. They also alleged that he had failed on a number of specific occasions properly to supervise the actions of the trustee or to ensure that the interests of the beneficiaries remained paramount.
The court had regard to the decision of Lord Blackburn in Letterstedt v Broers and held that – as with a trustee – the appropriate test was whether the continuance of the protector 'would be detrimental to the execution of the trusts'. It went on to hold that the power to remove was not confined to exceptional circumstances, and that where mutual hostility and distrust had led to a breakdown in relations between protector and beneficiaries which was detrimental to the execution of the trusts, this would suffice for removal in the absence of any other solution.
The court concluded that in this case although the protector had acted in all times in good faith, he bore much of the responsibility for the state of affairs. It therefore removed him from office and appointed a replacement protector.
Fraser Robertson and Jared Dann of Appleby's Jersey office acted for the successful beneficiaries.
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