The efficacy of anti-Bartlett clauses that protect trustees from liability for loss-making trust investments has been upheld by Hong Kong’s Final Court of Appeal in Li v DBS Bank (Hong Kong) Limited  HKCFA 45.
DBS Trustee HK (Jersey) Limited (DBS) was the sole trustee of a trust holding shares in an investment company. The investment company suffered significant losses in the 2008 financial crisis, as a consequence of a number of risky investments made on the instructions of one of the settlors of the trust. The case concerned the liability of DBS for its failure to supervise the company's investments. DBS was protected by 'anti-Bartlett' clauses in the trust deed, which provided that the trustee was under no duty to supervise investments, nor to interfere in the business or management of the company. Despite this provision, DBS had been found liable in the lower courts for its failure to adhere to its "high-level supervisory duty" to monitor the business of the trust's company when it made the investments.
The Court of Final Appeal overturned this finding. It held that the high-level supervisory duty was inconsistent with, and expressly excluded by, the anti-Bartlett clause. To hold otherwise would "introduce an amorphous and ill-defined basis for undermining a legitimate arrangement consciously adopted by the parties, exposing the trustees to unanticipated risk of liability and sowing confusion as to the extent of their duties".
A similar conclusion would likely be reached in New Zealand, as the Trusts Act 2019 will only void an indemnity clause that seeks to exempt trustees from liability for dishonesty, wilful misconduct, or gross negligence.
See the Court's decision here.