The Court of Appeal in Bonham & Anor v Fishwick & Anor allowed the trustees of a settlement to rely on an exoneration clause that exempted them from liability for breach of trust, except in the case of “wilful and individual fraud or wrongdoing”. It was argued that the trustees had committed wilful wrongdoing in their decision to grant an option allowing a third party to purchase shares that formed part of the assets of the trust settlement. This was on the basis that the trustees had not followed legal advice that the trustees had no power to do this.

In the Court of Appeal, Mummery LJ rejected the argument that there had been wilful wrongdoing as he found that the trustees had not acted against the legal advice received. The Court also commented that the trust deed contained wide empowering powers allowing trustees to grant the option.

Mummery LJ concluded that the exoneration clause was a complete defence as there was no wilful wrongdoing.