Case No CHANI 97/0951/CMS3
Neutral Citation Number: [1998] EWCA Civ 661
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM ORDER OF MR JUSTICE JONATHAN PARKER

Royal Courts of Justice
Strand
London WC2

Date: Wednesday, 8th April 1998

B e f o r e:

LORD JUSTICE MILLETT

LORD JUSTICE WALLER

LORD JUSTICE CHADWICK

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BOGG and Others

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RAPER and Others

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 (Handed down judgment prepared by
Smith Bernal Reporting Limited, 180 Fleet Street,
London EC4A 2HD
Tel: 0171 831 3183
Official Shorthand Writers to the Court)
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MR J MARTIN QC and MR P KNOX (Instructed by Rowe & Maw of London, London Agents for Stockdale Reid of Tyne & Wear) appeared on behalf of the Appellant

MR A STEINFELD QC and MR A TRACE (Instructed by Barlow Lyde & Gilbert of London) appeared on behalf of the First, Third, Fourth, Fifth and Sixth Respondents

MR K ROWLEY (Instructed by Wansbrough Willey Hargrave of Leeds) appeared on behalf of the Second Respondent
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J U D G M E N T

LORD JUSTICE MILLETT:

Introduction

1.	This is another case concerned with the meaning and effect of a trustee exemption clause. The subject was recently considered by this Court in Armitage v Nurse [1997] 3 WLR 1046. The wording of the relevant clauses is not the same, and there are two other differences in that the present case is concerned with a will and not a settlement and reliance is placed on the fact that the parties who seek to rely upon the clause are the persons who are alleged to have been instrumental in its inclusion in the will.
2.	The appeal is brought by the Plaintiffs from an Order of Jonathan Parker J., the Vice-Chancellor of the County Palatine of Lancaster made on 5th February, 1997 when he allowed an appeal by the First and Third to Sixth Defendants and dismissed a cross-appeal by the Plaintiffs from an Order of District Judge Bullock, struck out the Amended Statement of Claim against those Defendants and dismissed the Action against them.

Background

3.	The appeal is concerned with the estate of the late John Thompson Bogg deceased (“the Testator”) who died on 1st January 1989 survived by the three Plaintiffs, being his widow Anne and their two children Lucy and Katie.  The Testator was also survived by two children of a previous marriage.
4.	By his will (“the Will”) dated 30th September 1988 which was proved on 28th August 1989, the Testator appointed the First Defendant Mr. Raper, a solicitor, and the Fourth Defendant Mr. Groves, an accountant, to be his executors and trustees.  He settled his residuary estate on trusts for the benefit of the Plaintiffs and the two children of his previous marriage.  The Testator had previously made a Discretionary Settlement (“the Settlement”) dated 7th January 1986 in favour of his issue, including Lucy and Katie.  Mr. Raper and Mr. Groves were the trustees of the Settlement.
5.	The Testator’s estate was sworn for probate at a sum in excess of £8 million.  By far the most valuable asset of the estate was the Testator’s controlling interest in a company called Hekla Holdings Ltd. (“Hekla”).  Hekla was the holding company of a group of companies which traded in commercial vehicles and static caravans besides carrying on a number of associated businesses.  The Testator was Chairman and one of the two Directors of Hekla at the time of his death. He was the founder of the business and the chief executive of the group. His shareholding was valued for probate at more than £6 million. The Testator’s fellow Director was a Mr. Robin Gray, who held 20% of the issued share capital.  The Testator held 78.3%, and the remaining 1.7% was an asset of the Settlement. Within a few days after the Testator’s death Mr. Raper was appointed a Director of Hekla and of each of its subsidiaries, and Mr. Gray became Chairman in the Testator’s place.
6.	By the end of 1990, that is to say two years after the Testator’s death and 18 months after the Inland Revenue account, the shares in Hekla had become worthless.  In the draft estate accounts prepared by Mr. Raper and Mr. Groves in March 1991 for the period ending December 1990 their value was recorded as £1. At the same time the value of five of the six other shareholdings in private companies held by the estate at the time of the Testator’s death had also been reduced to nothing. The total value of all six holdings was entered in the Inland Revenue account at £1,176,630.  One of the holdings was sold for approximately £83,000, but the value of the other five holdings which were retained was written down in the estate accounts for the period ending December 1990 to £1 each.  The Plaintiffs complain inter alia that no indication of any problems was given to them until November 1990 and that even now they have received no proper explanation of the causes of these catastrophic losses.  An application for early discovery of trust documents was made but resisted by the Defendants and refused by the District Judge.

The proceedings

7.	The Plaintiffs commenced the present proceedings in May 1995. They allege that the actions of Mr. Raper and Mr. Groves, or more accurately their failure to take appropriate action, constituted a breach of their duties as executors of the Testator’s estate.  
8.	The Second and Third Defendants are firms of solicitors. Mr. Raper was a partner of the Second Defendant firm until some time in 1991 and of the Third Defendant firm thereafter.  The Plaintiffs claim that those Defendants are vicariously liable for the losses for which Mr. Raper is responsible.  The Fifth and Sixth Defendants are firms of accountants.  Mr. Groves was a partner of the Firth Defendant firm until some time in 1990 and of the Sixth Defendant firm thereafter.  The Plaintiffs claim that those Defendants are vicariously liable for the losses for which Mr. Groves is responsible.  The Defendant firms deny that Mr. Raper or Mr. Groves were guilty of breach of duty but, even if they were, they deny that they can be held vicariously liable for the losses caused thereby;  but this issue is not presently before us.

The Plaintiffs’ allegations

9.	The Plaintiffs’ principal allegation is that Hekla’s collapse was caused by the failure of Mr. Raper and Mr. Groves to exercise proper control over Hekla’s business, to keep themselves informed of its financial position, or to take adequate steps to prevent the value of the estate’s interest in Hekla from being destroyed.  They complain that Mr. Raper and Mr. Groves failed to appoint a chief executive in succession to the Testator, and left the management of Hekla to Mr. Gray without any adequate supervision or control when there was reason to doubt his honesty. It is alleged that at the time of the Testator’s death he was subject to investigation by the police on suspicion of offences involving dishonesty and that in November 1989 he was charged on four counts of corruption and one count of conspiracy on which he was convicted and sentenced to a term of imprisonment in May 1991. It is only fair to add that it is not alleged that the offences had anything to do with Hekla or that the Testator was unaware of the existence of the criminal investigation when he made the Will.
10.	The Plaintiffs allege that Mr. Raper and Mr. Groves “caused or allowed” Hekla to lend or guarantee very large sums of money without security to a number of unprofitable and untried companies resulting in losses of some £4 million by the end of 1990. These are correctly pleaded, not as positive breaches of trust, but as particular instances of the failure of Mr Raper and Mr Groves to exercise proper control over Hekla’s business. Mr Groves was not a Director of Hekla and cannot have “caused” it to enter into the transactions in question, though by failing to prevent them he may be said to have “allowed” them. Mr Raper was a Director of Hekla, and in that capacity may have “caused” it to enter into the transactions and suffer loss. But he is not charged with breach of duty as a Director. He is charged with breach of duty as an executor, and the estate consisted of the shares in Hekla, not its assets. Accordingly, the breach of duty with which he is charged is properly characterised, not as a positive misapplication of the estate assets, but as a failure to protect their value.        
11.	The Plaintiffs’ complaints can best be understood by reference to the duties of trustees of a controlling shareholding. These were expounded by Brightman J in Bartlett v Barclays Trust Co. Ltd. [1980] Ch. 515 at p. 532:
	  “The bank, as trustee, was bound to act in relation to the shares and to the controlling position which they conferred, in the same manner as a prudent man of business.  The prudent man of business will act in such manner as is necessary to safeguard his investment.  He will do this in two ways.  If facts come to his knowledge which tell him that the company’s affairs are not being conducted as they should be, or which put him on enquiry, he will take appropriate action. Appropriate action will no doubt consist in the first instance of enquiry of and consultation with the directors, and in the last but most unlikely resort, the convening of a general meeting to replace one or more directors.  What the prudent man of business will not do is to content himself with the receipt of such information on the affairs of the company as a shareholder ordinarily receives at annual general meetings.  Since he has the power to do so, he will go further and see that he has sufficient information to enable him to make a responsible decision from time to time either to let matters proceed as they are proceeding, or to intervene if he is dissatisfied.”
In that passage Brightman J was considering the duty of ordinary non-specialist trustees. He expressly approved the observations of Cross J in Re Lucking’s Will Trusts [1968] 1 WLR 866 at p. 874 where he said:
	“...trustees holding a controlling interest ought to ensure so far as they can that they have such information as to the progress of the company’s affairs as directors would have. If they sit back and allow the company to be run by the minority shareholder and receive no more information than shareholders are entitled to, they do so at their peril.”
Although Mr Raper was a Director of each of the companies in the Hekla group, the gist of the Plaintiffs’ complaints is that he and Mr Groves “sat back and allowed the company to be run by” Mr Gray.
12.	The Plaintiffs also allege that Mr Raper and Mr Groves failed to take any steps to protect the estate’s interest in the unlisted companies in which the estate had substantial shareholdings. The Plaintiffs’ case, here as in the case of Hekla, is of inactivity and failure to take appropriate action. Throughout they allege negligence; they expressly disclaim any allegation of fraud or dishonesty.
13.	Lucy and Katie also sued as beneficiaries under the Settlement for the loss in respect of the investment in Hekla.

The proceedings below
14.	The Testator died as long ago as January 1989.  Although it is alleged that assets of the estate worth some £7 million at the date of his death had been rendered worthless by December 1990, proceedings were not brought until May 1995.  The allegations pleaded in the Amended Statement of Claim are numerous and wide-ranging.  They cover a large number of transactions over many years and are not confined to matters which occurred after the Testator’s death.  It would be a complex and costly action to try and would place a heavy burden on all parties.
15.	Accordingly, in September 1996 by separate but concurrent applications the Second Defendant alone and the other Defendants together applied to strike out the Statement of Claim under RSC Order 18 Rule 19 and the inherent jurisdiction of the Court. They contended that, assuming for the purpose of the application that all the allegations pleaded in the Statement of Claim were true, the Plaintiffs’ claims were bound to fail because they fell within the terms of trustee exemption clauses in the Settlement and Will respectively.  These clauses were not in identical form and fell to be considered separately. 
16.	The District Judge allowed the principal claim (that is to say the claim in respect of the alleged failure to exercise proper control of Hekla) to stand on the ground that it was not clearly covered by the exemption clause in the Will; but he struck out the other claims in respect of the Testator’s estate and the claims for breach of trust in relation to the Settlement.  The District Judge gave the Plaintiffs leave to amend the Statement of Claim generally and to give effect to his order.
17.	The Plaintiffs duly produced an Amended Statement of Claim. The First and Third to Sixth Defendants appealed to the Vice-Chancellor against the District Judge’s refusal to strike out the whole of the Statement of Claim and the Plaintiffs cross-appealed for leave to reintroduce the claims which the District Judge had struck out. The Second Defendant did not appeal.  
18.	Before the Vice-Chancellor the Plaintiffs advanced three contentions:-
	(1)	On their true construction neither of the exemption clauses relied on was effective to exempt the Defendants from liability for negligence (“the construction issue”);
	(2)	Even if it purports to do so, no clause can exempt a trustee from liability for gross negligence (“the gross negligence issue”);
	(3)	Mr. Raper and the firms vicariously liable for his wrongdoing were not entitled to rely on the exemption clause contained in the Will because Mr. Raper had acted for the Testator in the drawing up of his Will and it was to be inferred that in breach of his duty to the Testator he failed to explain the effect of the exemption clause to him (“the breach of duty issue”).
The breach of duty issue was raised for the first time in the Reply.
19.	The Vice-Chancellor allowed the appeal of the First and Third to Sixth Defendants and dismissed the Plaintiffs’ cross-appeal.  He rejected all three of the Plaintiffs’ contentions, and held that “it was plain and obvious” that all the allegations pleaded in the Amended Statement of Claim fell within the terms of the exemption clauses in the Settlement and Will respectively;  that none of the provisions of those clauses was contrary to public policy; and that the Reply introduced a new cause of action which it was inappropriate to include in a Reply, but that in any event it was based wholly on inference unsupported by any pleaded facts from which the necessary inference could be drawn and as such was embarrassing.  
20.	The Vice-Chancellor adopted the customary test which is applied on applications to strike out the pleadings in an action and asked himself whether “it was plain and obvious” that the Plaintiffs’ claims were doomed to fail. With respect I do not think that that was the right test in the present context. The Vice-Chancellor had to decide whether the claims pleaded in the Amended Statement of Claim fell within the terms of the relevant exemption clause. That involved (i) construing the clause in question and (ii) examining the allegations in the pleadings to see if they came within the clause as the Court construed it. The first process raised a pure question of construction of a written instrument. The Vice-Chancellor was in as good a position as the trial judge would be to decide what the clause meant. It was inappropriate to consider whether the Plaintiffs had an arguable case on construction; the Vice-Chancellor should simply have construed the clause and decided what it meant. The second required the nature of the allegations to be analysed, but if their nature was obscure so that it was not clear whether they fell within or outside the ambit of the exemption clause they should be struck out as embarrassing. 
21.	The Vice-Chancellor struck out the Amended Statement of Claim against the First and Third to Sixth Defendants and dismissed the action against them.  The Second Defendant has since applied for leave to appeal out of time from the order of the District Judge.  Its application is in abeyance pending the outcome of the present appeal. With the consent of the other parties it appeared by Counsel before us and has been treated as if it were a party to the appeal (with the attendant risk as to liability for costs). I gladly acknowledge both the assistance which Counsel for the Second Defendant gave us and the brevity of his remarks.

The issues on the appeal

22.	The Plaintiffs have not pursued their claims for breach of trust in relation to the Settlement. After the Vice-Chancellor gave judgment, this Court decided Armitage v. Nurse (supra).  In the light of that decision, they have not argued the gross negligence issue, though they formally keep this issue open to argue in a higher Court.  (In this connection it is to be observed that the Appellate Committee of the House of Lords refused leave to appeal in Armitage v. Nurse. That is no indication that the Committee thought that Armitage v Nurse was correctly decided, but it may be an indication of the likely fate of an application for leave to appeal to raise this issue.) The Plaintiffs maintain that the Amended Statement of Claim should not have been struck out and that the Reply is not embarrassing or inadequately pleaded. 
23.	Since the hearing before the Vice-Chancellor the Plaintiffs claim to have discovered that Mr Groves played a much greater part in the preparation and execution of the Will than had been thought. Accordingly they seek leave to amend the Reply to include allegations against him corresponding to those made against Mr Raper on which the breach of duty issue is based. 
24.	Two questions thus fall for consideration in this appeal:
	(1)	Whether on the true construction of Clause 12 of the Will of the Testator, Mr. Raper and Mr. Groves are exonerated from liability for any loss to the Testator’s estate caused by the acts and omissions pleaded in the Amended Statement of Claim.
	(2)	Whether the Vice-Chancellor was right to dismiss the action notwithstanding the allegations contained in the Reply.

The Construction Issue

Clause 12 of the Will
25.	Clause 12 of the Will is in the following terms:
		“In the professed execution of the trusts and powers hereof, no trustees (other than a trust corporation) shall be liable for any loss to the trust premises arising by reason of any improper investment made in good faith or for the negligence or fraud of any agent employed by him or by any other trustee hereof, although the employment of such agent was not strictly necessary or expedient, or by reason of any mistake or omission made in good faith by any trustee hereof or by reason of any other matter or thing except wilful or individual fraud or wrongdoing on the part of the trustee who is sought to be made liable”.
The origin of the clause
26.	The clause is clearly taken directly or indirectly from a precedent book. A clause in materially identical terms is to be found in the current edition (1997) of The Encyclopedia of Forms and Precedents Vol. 40(1) at p. 440, but with a proviso which not only excludes a trust corporation from the ambit of the Clause but also prevents it from operating to exonerate a professional person who is appointed a trustee from liability for acts or defaults in the exercise of his profession. This reflects a real distinction between the position of a professional trustee for whom any exclusion of liability may be thought to be inappropriate and that of a professional man such as a solicitor or accountant who is appointed a trustee and for whom it may be thought appropriate to provide a limited degree of protection from liability but only in respect of acts or defaults in matters falling outside the scope of his professional expertise. 
27.	With the difference of a single word the concluding words of Clause 12 reproduce verbatim the concluding words of the clause in the Encyclopedia of Forms and Precedents and a very similar clause in the Precedents published by the Conveyancer. Both precedents, which are almost certainly derived from a common source, conclude with the words
	“...any matter or thing except wilful and individual fraud or wrongdoing on the part of the trustee who is sought to be made liable” (my emphasis).
In Clause 12 the word “and” appears as “or”.
The proper approach to construction
28.	There was some debate before us as to the approach which the Court should adopt when construing an exemption clause of this kind. It was common ground that the clause should be restrictively construed and that anything which was not clearly within it should be treated as falling outside it; see Armitage v Nurse (supra) at pp. 1057H-1058A and the cases there cited which indicate that liability can be excluded only by clear and ambiguous words. But Counsel for the Plaintiffs went further than this, and invoked the rules of construction which are applied to contractual exclusion clauses, citing Canada Steamship Lines v R [1952] AC 192 at 208 and The Emmanuel ‘C’ [1983] 1 Ll.R. 310. In the last-mentioned case (which was not in fact concerned with an exclusion clause but with a condition precedent for recovery) Bingham J summarised the law in four propositions. It is sufficient to quote two of them:  
	“1.	Since it is inherently improbable that one party to a contract should intend to absolve the other party from the consequences of the latter’s own negligence, the Court will presume a clause not to have that effect unless the contrary is plainly shown by clear words or by implication.....
		“4.	Where the words used are wide enough to cover negligent as well as non-negligent acts or omissions but practically speaking the clause lacks substance if it is not construed as covering negligent acts or omissions, the Court may in the circumstances of a given case infer that the parties intended the clause to cover negligence (as in The Raphael) but it need not do so (see Hollier’s case).  All depends on the proper inference to be drawn in the instant case.”

29.	In Chitty on Contract (27th. Ed.) Vol 1 para. 14-009 it is pointed out that there are two related principles in play:
	“First, since the party seeking to rely on an exemption clause bears the burden of proving that the case falls within its provisions, any doubt or ambiguity will be resolved against him and in favour of the other party. Secondly, as in the case of any other written document, in situations of ambiguity the words of the document are to be construed more strongly against the party who made the document and now seeks to rely on them.”

30.	In the case of a contract these two principles march together, for it is assumed that the party responsible for the inclusion of the exemption clause is the party able to rely on it. In the case of a will or settlement, however, the two principles point in different directions. The document is the unilateral work of the testator or settlor through whom the beneficiaries claim. There is no inherent improbability that he should intend to absolve his executors or trustees from liability from the consequences of their negligence. They accept office on the terms of a document for which they are not responsible, and are entitled to have the document fairly construed according to the natural meaning of the words used. 
The Clause
31.	The Clause has four limbs.  It exonerates the trustees from any loss to the estate arising by reason of:
	(1)	any improper investment made in good faith;
	(2)	the negligence or fraud of any agent employed by any of the trustees;
	(3)	any mistake or omission made in good faith;  or
	(4)	any other matter or thing except wilful or individual fraud or wrong-doing on the part of the trustee who is sought to be made liable.
32.	Although the Clause is expressed as a trustee exemption Clause which exonerates the trustees from liability for losses arising from their acts or omissions in the professed execution of the trusts and powers of the Will, it has not been suggested that it does not apply to exonerate the executors from losses caused to the estate from breach of their duties as executors.
33.	 The Defendants rely on the third and fourth limbs of the Clause, submitting that all the allegations against them are allegations of “omissions made in good faith” or “other matters or things except wilful or individual fraud or wrong-doing on the part of the trustee who is sought to be made liable”. 
Omissions made in good faith
34.	I agree with the Vice-Chancellor that these words cover negligent omissions. The Plaintiffs submit that the word “omissions” is apt to cover both negligent and non-negligent or inadvertent omissions, and that in an exemption clause the word should be construed restrictively so as to cover the latter only. They rely strongly on Canada Steamship Lines v R (supra), but that case was concerned with a contractual exemption clause which was found to have potential application to relieve against claims not founded on negligence. Three examples of such claims were given in argument, and the submission that they were fanciful and remote and would not have been within the contemplation of the parties was expressly rejected. 
35.	Exclusion of liability for “errors and omissions” does not exclude liability for positive breaches of trust (see Rae v Meek (1889) 14 AC 558); but as I have explained none is alleged in the Amended Statement of Claim. In the absence of some positive breach of trust on the part of a trustee, the beneficiaries’ claim would normally be for an account on the footing of wilful default. On the taking of such an account, a trustee is accountable not only for the trust funds in his hands, but also for those which he would have received if he had acted with proper diligence.  The standard of diligence is much the same as that which is required of a person who is subject to a common law duty of care.  It is, therefore, not surprising that in the present case the Plaintiffs have been unable to give any example of an inadvertent omission which could found a claim against a trustee in the absence of negligence or due diligence on his part. I would not feel justified in saying that there could never be a claim, but I am persuaded that this limb of the Clause would lack practical substance if it did not cover negligent omissions.
36.	There is a further consideration which points in the same direction. Clause 12 does not speak simply of “any omission”, but of any “omission made in good faith.” The natural meaning of these words is “any omission except an omission made in bad faith.” The draftsman expressly limited the operation of the Clause to omissions made in good faith. If he had wished to limit it further by excluding negligent omissions from its scope, he would surely have added the words “and without negligence.”
37.	In agreement with the Vice-Chancellor, I am of opinion that all the allegations pleaded in the Amended Statement of Claim fall within this limb of Clause 12.
“Wilful or individual fraud or wrongdoing”
38.	It is obvious that these words cannot be construed literally. A literal construction would produce four possibilities: (i) wilful fraud (ii) individual fraud (iii) wilful wrongdoing and (iv) individual wrongdoing. But if “wilful” and  “individual” are treated as alternatives, so that the “wrongdoing” does not need to be “wilful” so long as it is “individual”, then the word “wilful” is surplusage. Moreover, if it were not for the concluding words “on the part of the trustee sought to be made liable”, so that the “wrongdoing” would not have to be "individual" so long as it was “wilful”, then the words would cover the dishonest conduct on the part of a fellow trustee. Yet we know from the concluding words that this was not intended.  
39.	These considerations persuaded me at an early stage of the argument that the word “or” where it first appears cannot be read disjunctively. The word “or” in a will can be read as “and” where this is necessary to make sense of the words: see White v Supple (1842) 2 Dr & War 471,474-5 per Sugden LC; Re Llewellyn’s Settlement [1921] 2 Ch. 281, 284-5; Re Hayden [1931] 2 Ch. 333. 
40.	I reached this conclusion before I discovered the source of the Clause and without the assistance of the precedents to which I have referred. My conclusion is, however, fortified by the evidence of those precedents, which provide material on which the Court can take notice when construing a legal document: see Re Follett dec. [[1954] 1 WLR 1430 (reversed on the evidential value of the material which was available at [1955] 1 WLR 429).	 It is gratifying that what appears to have been merely a clerical error in transcription has not affected the meaning to be ascribed to the clause.

Can those responsible for the inclusion of an exemption clause in a will rely on its provisions ?

41.	The Vice-Chancellor in effect struck out the allegations in the Reply on the ground that they introduced a new cause of action which was inappropriate to be included in a Reply and were based on inferences from facts which had not been pleaded. I do not agree that, if well-founded, the allegations introduced a cause of action or were inappropriate to be pleaded by way of Reply. They were pleaded in answer to the Defendants’ reliance on an exemption clause. It would be inappropriate for the Plaintiffs to plead their answer unless and until the Defendants pleaded the clause in their own defence.
42.	In my judgment, however, the Vice-Chancellor was correct to disallow the Reply, since there is without substance. The Plaintiffs’ argument proceeds as follows:
	(1) In assisting the Testator to draw up his will, Mr Raper and Mr Groves were in a fiduciary position, being in a relationship of trust and confidence with him.
	(2) By obtaining the benefit of exemption from the ordinary consequences of their own negligence they obtained a benefit at his expense.
	(3) It was therefore incumbent upon them to prove affirmatively that the Testator had received full and independent advice about the effect of Clause 12 and the wisdom of including it in his Will.
	(4)	Unless they could prove this, they should not be allowed to take advantage of the benefit of the Clause.  
	(5)   A similar result could be arrived at by the doctrine that no man should be allowed to take advantage of his own wrong, whether it be a breach of fiduciary duty or of a common law duty of care.
46.	Although the Plaintiffs’ principal argument was premised on the fiduciary relationship which undoubtedly existed between the Testator and Mr Raper as his solicitor and Mr Groves as his accountant, it was not always clear what was the nature of the breach of fiduciary duty relied on. At times it was variously suggested that there was a conflict of interest and duty; that this was a transaction between fiduciaries and their principal with opposing interests; that the fiduciaries were profiting from their trust; and that they were acting unconscionably in exploiting the relationship to their own advantage. It was even suggested that the Testator should have been advised to take separate and independent advice, presumably from another solicitor, before including the Clause in his Will. The fact that such a solicitor would inevitably be within the class of potential beneficiaries of the Clause was brushed aside; presumably he would disentitle himself from relying on the Clause if he should become an executor or trustee.  
47	The fundamental fallacy in the argument is that Clause 12 does not confer a benefit on the persons responsible for advising the Testator on the contents of his Will. In the first place it does not discriminate between the persons who advised the Testator in connection with his Will and other persons who become executors or trustees and who have had no part in the preparation of his Will. In the second place, it does not confer a benefit on the executors and trustees but defines the extent of their potential liabilities. Unlike a trustee charging clause, it does not enable the executors and trustees to profit from their position; but it protects them from loss thereby. The inclusion of the Clause does not, therefore, conflict with the rule that, in the absence of clear words, a trustee may not profit from his trust.
48	Next, the inclusion of Clause 12 in the Testator’s Will was not a transaction in which the Testator and those advising him had conflicting interests. It was not a transaction in which one would expect the Testator to be separately represented. It was Mr Raper’s duty to advise the Testator as to the terms on which executors and trustees could properly be asked to accept office. He was entitled to tell the Testator that he would himself insist on a wide exemption clause and would not accept office as executor without one; that he would advise Mr Groves to the same effect; and that others might well take the same view. 
49	Finally, it is not the law that a solicitor is not allowed to take a benefit under a will which he has himself procured. Where the benefit is relatively large, he must be able to show (i) that the testator knew and approved of the contents of the will and (ii) that there was nothing in the way of advantage taken or influence exercised by the solicitor. This is sometimes expressed by saying that a person who takes a benefit under a will which he has been instrumental in procuring must affirmatively prove the righteousness of the transaction. 
50	But this a ground for opposing probate. In the present case the Will has been admitted to probate. The Testator must be presumed to have known and approved of the contents of his Will. Even if probate were revoked, this would not affect the consequences of anything done by the executors after probate and prior to its revocation.
51.	Furthermore, the nature and amount of the benefit are critical: see Barry v Butlin (1838) 2 Moo PCC 480, 485. In that case Parke B expressed himself as follows:
	“...if a party writes or prepares a Will, under which he takes a benefit, that is a circumstance that ought generally to excite the suspicion of the Court, and calls upon it to be vigilant and jealous in examining the evidence in support of the instrument, in favour of which it ought not to pronounce unless the suspicion is removed, and it is judicially satisfied that the paper propounded does express the true Will of the deceased....
	“...it cannot be that the simple fact of the party who prepared the Will being himself a Legatee, is in every case, and under all circumstances, to create a contrary presumption, and to call upon the Court to pronounce against the Will, unless additional evidence is produced to prove the knowledge of its contents by the deceased....All that can be truly said is, that if a person, whether attorney or not, prepares a Will with a Legacy to himself, it is, at most, a suspicious circumstance, of more or less weight, according to the facts of each particular case; in some of no weight at all....”

52.	In the present case, it is of no weight at all. It cannot excite suspicion that a solicitor, when drafting a will for a client, even in the contemplation that he may himself be appointed an executor and trustee, should include an exemption clause no wider than many similar clauses found in the precedent books. 
53. The Plaintiffs seek to rely on American authorities, and invite us to follow their lead. But they have been unable to produce any clear authority to show that the American Courts would refuse to allow the draftsman to rely on an exemption clause where there was no reason to think that the testator did not know and approve of its inclusion in the will. Indeed, the contrary is the case. In Scott “The law of Trusts” (4th.ed) pp.393-5, it is made clear that the mere fact that the person named as a trustee was the draftsman of the trust instrument is not sufficient to make an exculpatory provision ineffective. It is, of course, otherwise if the draftsman inserted the provision without calling the settlor’s attention to it and knowing that the settlor did not realise its effect. It is hardly necessary to add that the same is true in our law. 

Conclusion

54	In my judgment neither of the grounds of appeal has been made good. I would dismiss the appeal.
 
LORD JUSTICE WALLER:  I agree.

LORD JUSTICE CHADWICK:  I also agree.

Order:  Appeal dismissed with costs, to include costs of the second respondent.  No proportionment of costs as between appellants.  Leave to appeal was refused