Appointors and Guardians have provided safeguards to protect beneficiary interests in trusts. As courts adjudicate family disputes, we may see the actions of Appointors and Guardians more readily regulated through the laws of fiduciary duties.
Traditionally, the Appointor of a trust has the power to appoint and remove the trustee and the Guardian has the right to veto the otherwise wide powers of the trustee, such as to appoint and remove beneficiaries, make corpus distributions or resettlements, vary the trust terms and vest the trust.
The separate offices of Appointor and Guardian may be held by different people providing checks and balances to safeguard the trust from various hazards relating to the trustee, the beneficiaries or the trust property.
It is common practice to amalgamate the powers in the Appointor such that the scope and obligations of that fiduciary duty may be unclear and dependent on the terms of the trust and the powers to be exercised.
It has also become increasingly common practice to appoint a corporate Appointor or corporate Guardian with perpetual life to permit a larger number of individuals to participate in the decision making within the regulation of the corporations law.
Traditionally, the positive powers of the Appointor have been considered fiduciary while the veto or consent powers of a Guardian are considered personal, thus the distinction between the offices (Rawson v Perlman  1 Butterworths OCM 31).
However, some Guardians are granted positive powers, such as to set trustee remuneration or appointing auditors.
It is not whether an Appointor or Guardian is a fiduciary as a result of their office, but whether a particular power is subject to fiduciary obligations.
Where the power is to be exercised for the benefit of a class of persons, the power is likely to be fiduciary. Where the power is to be exercised for the benefit of the donee to protect the donee’s own interests as beneficiary, the power is likely to be personal (Re Z Trust  CILR 248).
A fiduciary power usually imposes the duty to:
exercise the power for or in the best interests of the beneficiaries;
act in good faith;
take in account relevant matters and not irrelevant matters; and
act impartially between the beneficiaries, unless the trust instrument provides otherwise.
The particular scope of the fiduciary power would be dependent on the terms of the trust instrument, but generally:
The power to appoint and remove a trustee is fiduciary (Scaffidi’s Case  WASCA 146;  HCA 48).
The power to veto or consent to the disposition of trust assets is personal (Rawson v Perlman).
The power to veto or consent to the variation of the trust instrument is personal (Re Z Trust).
The positive power to amend the trust instrument is fiduciary (Re Internine and Intertraders Trusts  JLR 236).
Accordingly, a court may invalidate the exercise of a fiduciary power by the Appointor or the Guardian where the exercise of the power has breached the above fiduciary duties.
Independent Appointors & Guardians
It is common practice to appoint an independent Appointor or Guardian (e.g. family friend or accountant) as part of the succession planning for the trust.
In choosing a person with suitable business and financial acumen, empathy for the family and interpersonal skills, consideration should also be given to the fiduciary obligations being assumed by the person.
An independent Appointor or Guardian must exercise all powers (including powers of veto or consent) as a fiduciary because they are appointed to act independently and not in their own interest.
Similarly, a corporate Appointor or corporate Guardian is not acting in its own to protect its entitlements under the trust so must exercise all powers (including powers of veto or consent) as a fiduciary.
A court may set aside the exercise of a power in breach of these fiduciary obligations.
Removal of Appointor & Guardian.
It is less clear whether the court can remove an Appointor for breach of fiduciary obligations.
The courts may have inherent jurisdiction or jurisdiction under the Trustee Act 1958 to remove an Appointor or Guardian for the welfare of the beneficiaries and the competent administration of the trust even if acting in good faith (In re the A & B Trust  JRC 169A).