SEMESTER II, 2006/2007 SESSION
AHMAD IBRAHIM KULLIYYAH OF LAWS
Programme : Bachelor of Laws Level of : Third
Reading Time : 2.30 p.m. – 2.45 p.m. Date : 4.4.2007
Duration : ( 15 minutes )
Answering Time : 2.45 p.m. – 5.45 p.m. Section(s) : All Sections
Duration ( 3 hours )
Course Title : Equity & Trusts II Course Code : LAW 3711
This Question Paper Consists of 7 Printed Pages With 6 Questions.
INSTRUCTIONS TO CANDIDATES
DO NOT OPEN UNTIL YOU ARE ASKED TO DO SO.
Answer FOUR (4) Questions Only.
Selected Malaysian Statutes on Equity & Trust
Any form of cheating or attempt to cheat is a serious
offence which may lead to dismissal
Statutes should be free from any form of annotation.
Jennifer returned home in July 2005 after she has served as medical officer with United
Nation (UN) in Iraq for 5 years. She went to live with her old aged parents, Brad and
Ally. Jennifer had made a promise to herself that if she returned home safely, she would
spend the rest of her life taking care of her parents until the end of their life. Both her
parents had orally agreed that the parental home and its contents should become hers on
their deaths. No transfer was made during their life times. Her father, Brad died in
January 2006. When her mother, Ally died 6 months later, Jennifer as the sole survivor
took out letters of administration to Ally’s estates, which includes the parental home,
cash and some jewelleries. As an administratrix, she would be entitled to her parent’s
estates but her uncle, Toby, a lawyer opposed on the ground that she was an illegitimate
child and since there was no effectual transfer, Jennifer was not entitled to the estates.
a) Jennifer was devastated since she was sure that the house belonged to her. She
seeks your advice on the above problem. (5 marks)
b) Would your answer be different if the following incidents took place:
i) Jennifer told you that she found a cheque of RM100,000 in a closet, written by
Ally, in her favour. (5 marks)
ii) Before Ally died, she handed over to Jennifer a steel box, which contained the
title to the parental house.
a) Natalie made a will and appointed Nathan as her executor and trustee. She made a
few bequests and when she died her children argued on the validity of the following
'I leave a bulk of my residue in trust for the employees or ex-employees of
my company, Extremely Special Sdn. Bhd. or their relatives or dependants as
my trustee shall in their absolute discretion think fit'.
Advise Nathan as to the validity of the above bequest.
b) Where a voluntary conveyance is made to the wife or child of the donor or to a
person to whom he stands in loco parentis, the presumption is that the gift was
Explain the above statement and support your answer with relevant cases.
a) Bowen LJ in Soar v Ashwell (1893) 2 QB 390 said:
“A person not nominated as trustee may be bound to liability as if he were a
nominated trustee, namely where he has knowingly assisted a nominated
trustee in fraudulent/dishonest disposition of trust.”
Explain the above statement with reference to decided cases.
b) Write short notes on any two of the followings;
i) Labuan Offshore Trust
ii) Protective trust.
iii) Advancement of Education
iv) Evidential Difficulties
a) Bernard’s father died in March 2006. He left in his will RM10,000 to Forever Peace
Society and another RM10,000 to the Riverpeace Society in Sungai Siput. Forever
Peace Society was established in 1956 but in February 2006, it merged with another
society by the name of Aman Global Peace Society. No evidence that the
Riverpeace Society had ever existed.
Advise Bernard as to the enforcement of the above trust based on decided cases.
b) Determine the nature of the following trusts:
i) Suffian Mays left RM1000 for the maintenance of blind and deaf people in the
District of Tuaran. (2 marks)
ii) RM1.5 million to be applied for the benefit of flood victims in Johor and
Melaka. (2 marks)
iii) All my residuary to all pet centres in Tawau and to my favourite cat at my
mother’s house. (2 marks)
iv) RM450,000 to Nobelief Society to be used for the annual celebration of
Malaysian Atheism in Port Dickson. (2 marks)
a) Jenkins J in Re Harari’s Settlement Trust  1 All ER 430 said,
“ …I see no justification for implying any restriction. I think trustees have
powers . . . to invest in any investments which, . . . they honestly think are
Based on the above observation, discuss the principles with regard to the duty of
trustee to invest trust funds.
b) Any appointed trustee needs to strike a balance between the provision of income for
the life tenant and preservation of capital for the remainderman.
Illustrate the above statement in your own words.
a) A trustee who has committed a breach of trust may be able to escape personal
liability by bringing the case within a few defences in the case of Re Pauling’s
Settlement Trust (1964) Ch 303.
Discuss. (7 marks)
b) Two beneficiaries from two trusts come and seek your opinion on how a proprietary
remedy may be exercised in the following situations;
i) Robert had deposited part of his client’s money into his account which also
comprised money from his marriage settlement. He made various payments
from and into the account and also incurred debts. At his death, the account
was sufficient to meet claims from the trustees in the marriage settlement and
the client but not his personal debts.
ii) Taylor used trust funds to pay some of the premium on a life policy which had
been executed in favour of his wife and children. A year later, due to stress,
Taylor committed suicide.