The Protector Who Will Not Consent

The deed makes Clare's consent a condition of the trustee exercising those powers. If consent is required and is not given, the trustee cannot proceed without committing a breach of trust. The beneficiary's suggestion that the trustee 'simply proceed' is therefore wrong. The question is whether Clare's refusal is valid and whether she has exercised her power properly.

A protector is not always a fiduciary, but where the consent power is conferred for the benefit of the trust, Clare is likely to be subject to fiduciary duties. She must act in good faith, for a proper purpose, and with regard to the beneficiaries' interests. She must not act capriciously, for an improper personal advantage, or under a conflict. She is not necessarily obliged to give reasons, but a blanket refusal without reasons is harder to defend if challenged. The trustee should ask for her reasons, provide the information she needs, and record the request and refusal. If Clare's own beneficial interest or her son's role affects the decision, she should not treat the consent as a personal veto.

The trustee should separate the two transactions. The loan is the more conflicted: it would benefit the borrower company, whose director is Clare's son, and Clare is a beneficiary. The trustee must check whether the beneficiary's father or his company is within the class of beneficiaries. If not, the loan may be an indirect benefit to a non-beneficiary and outside the trust's purposes, even if it helps the grandchild's family. A second charge is weak security; the trustee should obtain a valuation, loan terms, repayment schedule, and independent legal advice.

For the investment policy change, the conflict is less direct but still relevant. Clare's consent should be sought on the merits, with an explanation of risk, expected return, and the needs of the grandchildren. The trustee should not offer Clare a personal advantage in exchange for consent. If Clare refuses, the trustee should document the reasons and consider whether the refusal is a proper exercise of her power. It may also consider appointing an independent protector or applying to court, but only after attempting to resolve the matter.

The trustee should first negotiate. It can provide further information, invite Clare to a meeting, propose conditions or a revised proposal, and ask for her reasons. Mediation may help. If the deed permits, the trustee could seek the appointment of an additional trustee or an independent protector, but Clare's consent may be needed for trustee changes, so that route may be blocked. The beneficiaries could also apply to court in their own right.

Before applying, the trustee should weigh the strength of its case, the likely cost, delay, and impact on family relationships. It should obtain a written opinion on whether Clare's refusal is a breach of her duties or a proper exercise of her power. It should also consider whether the court application is for directions, removal of the protector, or approval of a specific transaction. The trustee should protect its position on costs, possibly by seeking Beddoe-style approval, and should keep the beneficiaries informed. Litigation should be a last resort, not a way of bypassing a lawful consent requirement.