Ratio Decidendi
A trustee exemption clause that excludes liability for gross negligence is not contrary to public policy and is enforceable, though the court should construe such clauses strictly.
Facts
Beneficiaries of a trust brought claims against the trustee company for negligent management of trust assets. The trustee relied on an exemption clause in the trust deed.
Judgment Summary
The Privy Council held that the exemption clause was valid and enforceable. While acknowledging that trustee exemption clauses should be construed strictly, they are not inherently contrary to public policy.
Key Quotes
"There is no rule of public policy which prevents a settlor from exempting a trustee from liability for negligence."
— Lord Clarke
Subsequent Treatment
Applied
Considered in Law Commission recommendations on trustee exemption clauses.