The claim was made as Mr Royle launched a legal challenge against the size of the pay-off the club gave him.
Royle's barrister, Jonathan Harvie QC, said: "It was felt that Mr Royle had become incompetent in his duties."
Royle further demonstrated his incompetence when he admitted to the court that he did not understand the rules governing promotion and relegation because he had not even read them.
"I'm a layman in these things," he said. "I wouldn't kid anyone that I'm an expert on the rules and I've never read them."
The case is proceeding