"The judgment in the Matter of the Representation of C, D, E, and F and in the Matter of the A and B Trusts said that as a matter of Jersey law, the considerations regarding removal of a protector apply in broadly the same manner as those for trustees. Simply, while “not a jurisdiction to be exercised lightly,” a trustee or protector will be removed where its continuance in office “would be detrimental to the execution of the trusts”, Withers said in a statement.

The case relates to two discretionary trusts which both appointed the same protector.  After the settlors’ deaths, the relationship between the beneficiaries and the protector “irretrievably broke down” and the “overwhelming majority” of the beneficiaries wanted the protector to step down.  The court suspended the protector’s powers and ordered his removal from office, the law firm said in a commentary.

The Jersey court held that protector misunderstood duties to beneficiaries. The protector’s insistence on the trustees following the settlors’ wishes as he understood them, irrespective of the wishes and best interests of the overwhelming majority of the beneficiaries, was of particular concern to the court.

Clarity

The court decision clarifies that a protector’s duty can be “no higher” than to see that trustees have “due regard” to the settlor’s wishes, Withers said.  

Dawn Goodman, a partner at Withers, and Fraser Robertson, a partner at Appleby Jersey, represented the beneficiaries. Andrew Holden, a member of XXIV Old Buildings and author of “Trust Protectors”, advised. 

“We are very pleased with the Court’s decision. It is a triumph for common sense, not only in this case but more broadly in terms of defining the responsibilities of a trust protector.  The judgment sets out helpful guidance on how protectors should discharge their duties - and when their actions may disqualify them from the position,” Goodman said.

“The guidance set out in today’s judgment will be invaluable in situations where tensions surface between protector and beneficiaries. It is a sad fact of life that relationships that govern the formation of a trust do not always remain harmonious, but the lessons from this case should help families, trustees and protectors understand each other’s positions better and avoid the need for drawn-out court battle,” Goodman said.

Ogier acted for the trustees, while the protector was represented by Carey Olsen, the statement added.