Breakspear v Ackland [2009] Ch 32

Facts

• The case concerned the legal treatment of letters of wishes prepared by a settlor to guide the administration of a trust.
• Letters of wishes are non-binding documents, typically accompanying a trust deed, expressing the settlor’s preferences or guidance on the distribution of trust assets.
• In this instance, issues arose regarding whether such letters are confidential and to what extent beneficiaries may access them.
• The dispute required the court to assess how trustees should handle requests for the disclosure of these documents, balancing settlor privacy with beneficiary rights.
• The Court of Appeal was tasked with clarifying the legal framework for confidentiality and disclosure of letters of wishes in the context of trust administration.

Issues

1. Whether letters of wishes prepared by a settlor for trustees are confidential documents within trust law.
2. Whether beneficiaries have a right to access letters of wishes, and under what circumstances disclosure may be warranted.
3. What principles should guide trustees in deciding whether to disclose letters of wishes to beneficiaries.

Decision

• The court held that letters of wishes are generally confidential, reflecting the settlor’s intention to maintain privacy.
• Trustees are not obligated to disclose letters of wishes to beneficiaries unless a compelling reason exists, such as ensuring the proper administration of the trust.
• Trustees must weigh the settlor’s privacy and intentions against the legitimate interests of beneficiaries when considering disclosure.
• Trustees are not required to provide reasons for decisions concerning disclosure, as long as they act in good faith and avoid arbitrary conduct.
• The judgment reinforced that letters of wishes are not legally binding but are influential in guiding trustees’ discretionary powers.

Legal Principles

• Letters of wishes, while non-binding, serve an important practical role in guiding trustees’ administration of trusts.
• The default position is that such letters are confidential; disclosure is the exception, not the norm.
• The decision to disclose rests with the trustees, who must balance settlor privacy with beneficiary interests and act in accordance with their fiduciary duties.
• Trustees’ decisions regarding disclosure should be made judiciously, considering the nature of the trust and potential impact on beneficiaries and family relationships.
• Beneficiaries may only compel disclosure if there is a compelling reason, such as evidence pointing to mismanagement or breach of trust.

Conclusion

Breakspear v Ackland [2009] Ch 32 establishes that letters of wishes given to trustees are generally confidential, with disclosure to beneficiaries only warranted in compelling circumstances, and clarifies the duties and discretion of trustees in managing such documents within the scope of trust law.