The claimants, beneficiaries under the Settlement in question,
sought disclosure of a wish letter written to the then trustees by
the de facto settlor of the Settlement and setting aside
of the addition of a beneficiary and appointments made to her.
The case provides an analysis of the legal nature of wish
letters in connection with discretionary trusts and whether the
wish letters generally fall within the ambit of the Londonderry
principle (Re Londonderry's Settlement  Ch
918), pursuant to which the process of the exercise of
discretionary powers by trustees is inherently confidential.
Held - Nature of the Claim
The High Court confirmed that the basis for seeking disclosure
of a wish letter is discretionary and not based upon a proprietary
right of beneficiaries.
Held - The Londonderry Principle
The High Court upheld the Londonderry principle under which it
is considered to be in the interests of both the beneficiaries and
trustees of a trust for the exercise by trustees of their
discretionary powers to remain confidential throughout the
Held - Wish Letters
The material "which the settlor desires that the
trustees should take into account when exercising their
discretionary powers" was held by the High Court to
constitute a defining characteristic of wish letters.
Held - Confidentiality and Discretion
Briggs J found it axiomatic that wish letters be regarded
prima facie as confidential, to substantially the same
extent and effect as the process they serve, i.e., the exercise of
discretionary powers by trustees.
The trustees should regard wish letters as confidential and may,
subject to their discretion, maintain, relax or abandon that
confidentiality, as they judge best serves the interests of the
beneficiaries and the due administration of the trust.
The High Court went further to state that the trustees'
discretion continues regardless of a request for disclosure by a
beneficiary or any change in settlor's circumstances. However,
a full disclosure by trustees to the court is necessary when
applying for the court's directions.
Court proceedings may be brought solely for the purpose of
determining whether the disclosure of a wish letter should occur
the trustees surrender their discretion to the court;
the trustees, having exercised their discretion (and refused to
disclose), seek the court's confirmation of their
a beneficiary contests a trustees' decision not to disclose
a wish letter; or
a beneficiary seeks to invoke the discretionary exercise by the
court of administrative powers in respect of the trust.
Held - Burden of Proof
Notably, the High Court decided that where the courts'
administrative discretion is sought to be invoked by beneficiaries,
dissatisfied with trustees' decision not to disclose a wish
letter, the burden of proof rests upon the beneficiaries and
requires a demonstration of a lack of good faith or unfairness on
the part of the trustees.
This English law case provides a broad review of the common law
principles germane to wish letters and will be of persuasive
relevance in other jurisdictions. However, the conclusions are
expressly limited to wish letters in connection with family
discretionary trusts and do not extend beyond letters
contemporaneous with the settlement.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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