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  1. 1. END-OF-SEMESTER EXAMINATION SEMESTER II, 2007/2008 SESSION AHMAD IBRAHIM KULLIYYAH OF LAWS Programme : Bachelor of Laws Level of : Third Study Reading Time : 9.00 a.m. – 9.15 a.m. Date : 8.4.2008 Duration : ( 15 minutes ) Answering Time : 9.15 a.m. – 12.15 p.m. Section(s) : All Sections Duration ( 3 hours ) Course Title : Equity & Trusts II Course Code : LAW 3711 This Question Paper Consists of 6 Printed Pages With 6 Questions. INSTRUCTIONS TO CANDIDATES DO NOT OPEN UNTIL YOU ARE ASKED TO DO SO. This question paper consists of THREE PARTS with SIX ( 6) questions. Answer FOUR (4) Questions Only. PART A is a compulsory question. Answer any THREE (3) questions from PART B and PART C. REFERENCE ALLOWED Selected Malaysian Statutes on Equity & Trust /Trustee Act 1949 and Labuan Offshore Trust Act 1990 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. APPROVED BY
  2. 2. 2 PART A (COMPULSORY QUESTION) QUESTION 1 In 2004, Air Butterfly Sdn. Bhd, (ABS), an airline company, appointed Greedy Travel and Tours Sdn Bhd (GTT) to act as its general travel agent for the sale of passenger and cargo transportation. The terms of the appointment were set out in a written agreement whereby GTT was required to account to the airline for all amounts received from sales of tickets. For its services, a sales commission will be paid. The money received by GTT was paid to GTT’s ordinary current account, which was controlled by GTT’s managing director, Tam Pan. For the said year the sales of the tickets amounted to RM 20 million. Tam Pan was so excited with the sales. He withdrew RM 15 million from the account without the knowledge of other directors. He contacted his colleague, Chantique, who is a lawyer working in Langkawi to assist him in the investment. Chantique did suspect and curious with Tam Pan action. But Tam Pan assured her that the money shall be returned to GTT after a year. With the money, Chantique purchased a high-rise apartment in Langkawi in her name. GTT failed to pay to ABS the sums due within the time specified and ABS in 2007 terminated the agreement. ABS wishes to bring an action against GTT. Since GTT in December 2007 had become insolvent, ABS wishes to commence a proceeding against Tam Pan as the director of GTT. Advise all parties. (21 marks)
  3. 3. 3 PART B QUESTION 2 Sharmeela, Mohan’s sister is a widow. She has two children Abraham 25 years old and Elizabeth 15 years of age. Abraham got married last year in January to Anuja, a beautiful lady who happened to be the daughter of Sharmeela’s late husband’s best friend, Mokana. Sharmeela, after her son’s marriage decided to buy a house in Taman Permata, Gombak. The purchase price of the house is RM600K. As she is old and illiterate, she decided that the house would be registered jointly in the name of Abraham and Anuja. She paid the full amount of the house. It had been mutually agreed that Sharmeela and her daughter will occupy 2 rooms in the house and Abraham and Anuja occupy the rest of the house. Six months after the marriage, differences arose between Sharmeela and Anuja. Anuja threatened to leave Abraham if Abraham refused to ask Sharmeela and Elizabeth to move out. Abraham was reluctant. Anuja, being disappointed, brings an action against Sharmeela for the possession of the house. Sharmeela refused. Advise all the parties. (13 marks)
  4. 4. 4 QUESTION 3 (a) Mohan is very interested to set up a charitable trust for the disabled children in Kuala Lumpur. Advise him on the law of charity which is relevant to him and the differences if he was to set it up in Malaysia and offshore. (6 marks) (b) Presuming yourself a brilliant chambering student of a prominent legal firm in Kuala Lumpur. You are asked by your superb Master to draft a trust deed for his best friend which includes a clause on “Protective Trust” for his spendthrift daughter and a secret trust for his handicapped uncle. However, he is not sure which type of secret trust he must create. Use all your knowledge in law of trust to complete your task. In your attempt to draft the clauses, discuss also the objectives of these types of trust. Be sure to support your answer with the relevant authorities including the provisions of Offshore trust. (7 marks)
  5. 5. 5 PART C QUESTION 4 (a) “Equity will not perfect an imperfect gift” and “Equity will not assist a volunteer”. Explain the above maxims. Discuss their application in relation to law of trust and the exceptions. (7 marks) b) Concept of Trust in Islam differs from the English Law. Do you agree? Discuss. (6 marks) QUESTION 5 (a) Trustee is a person who stands in a fiduciary relationship to the beneficiaries. Breach of duty as fiduciary will render him liable to the beneficiaries. In light of the above statement discuss the duties of the trustee as fiduciary in relation to trust. (7 marks)
  6. 6. 6 (b) Mohan is keen to invest in both, Unit Trust and Real Estate Investment Trust. Mohan believes he must create a trust document and appoint a trustee and transfer his properties to him, just like a normal express private trust. i) Is this true? Please clarify to him. (3 marks) ii) Advise him also on the concept of these trust. (3 marks) QUESTION 6 (a) There are various differences between a trust that is created in Malaysia and offshore. Cite at least 5 differences. (5 marks) (b) How does the law operates to save charitable trusts from initial failure. Describe and critically assess the law governing the court’s finding of a ‘general charitable intention’. . (8 marks)