In The Representation of Erinvale PTC Limited [2021] JRC 241

In these connected proceedings, the trustee sought Directions from the Court as to whether it ought to resign as trustee or whether it’s Directors ought to step down, in the face of repeated serious criticisms from one of the beneficiaries. 

In effect the hearing took the form of a trustee removal application and it was those principles that the Court applied.

Over three days the court heard the allegations put, including not least the finding in the previous application where the trustee had been found to be unreasonable in not adding B as a beneficiary in her own name. 

The trustee denied the allegations and, supported by the other beneficiaries, did not feel it necessary or appropriate to step down.  

The Court considered briefly the issue of whether it had the jurisdiction to order the removal or resignation of some or all of the directors of the trustee PTC. The directors had indicated that if the Royal Court had signified that it would be desirable for such a resignation to take place, they would have complied without the need for an order. The Court was satisfied that it had the power as part of its inherent jurisdiction as part of its supervisory power to indicate such a desire if appropriate. Further, whilst the issue was not therefore considered in depth, the Court went on to observe that it was at least arguable that if necessary the Court could have gone a step further and directed the trustee of the holding purpose trust to exercise its powers as shareholder to remove directors of the underlying  PTC. 

In addition to dismissing the accusations, the Court was clearly influenced by the disruption and additional cost that would be incurred by a change of trustee at this stage of the overarching matrimonial proceedings. 

The Court directed Erinvale to remain as trustee and for the directors to remain in office. The welfare of the beneficiaries as a whole and the competent administration of the settlement in their favour dictated that the status quo should be maintained. Nor would it be desirable for the directors to resign.

The costs of the Representation will be resolved early in 2022. 

Simon Franckel

Advocate Simon Franckel is the founder of Franckel Law. Simon’s expertise includes litigation, contentious and non-contentious trusts, contentious probate, professional negligence and insolvency.

He has significant experience in a wide range of matters, both in court and out, including trust and funds disputes on behalf of trustees, beneficiaries’ settlors and protectors.