The ‘Narrower View’ described the Protectors’ role as ‘to satisfy themselves that the proposed exercise of a power by the Plaintiffs (as trustees of the X Trusts) (or any of them) is an exercise which a reasonable body of properly informed trustees is entitled to undertake and, if so satisfied, to consent to the same.’
The ‘Wider View’ described the Protectors’ role as one ‘to exercise an independent discretion as to whether or not to give consent to a proposed exercise of power by the Plaintiffs (as trustees of the X Trusts) (or any of them) which requires the protectors’ consent, taking into account relevant considerations and disregarding irrelevant considerations so that the protectors might withhold their consent to a proposed exercise of power by the Plaintiffs even if the proposed exercise of power was an exercise of power which a reasonable body of properly informed trustees was entitled to decide upon (the latter being a relevant factor, but not the only relevant factor, for the protectors to take into account)’.
The trust deeds generally contained clauses typical for offshore trusts, including: ‘The Trustees shall not exercise any power to appoint, distribute or pay any part of the Trust Fund to or for the benefit of any member of the Appointed Class or any Beneficiary without obtaining the prior written consent of the Protectorate, nor, if the Trustees’ consent is required for any appointment of capital, shall they give their consent without the prior written consent of the Protectorate.’
Much turned on the precise wording of the other clauses and the inferences to be drawn about intention. In finding that a contextual reading of the trust deeds favoured the Narrower View, Kawaley AJ referred to three indicators in the drafting as particularly relevant:
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The Evolution of the “Watchdog” Role of Protectors