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14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 1
CREATION OF TRUST :
THREE CERTAINTIES
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 2
LEARNING OUTCOME
Students will be able to
 appreciate and analyse methods of
cr...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 3
Private Express Trust:
Meaning
An express declaration by the person
who want to ...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 4
Charitable Trust
Private Family Trust
Bare Trust
Fixed Interest Trust
Discretion...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 5
THREE
CERTAINTIES
INTENTION
SUBJECT
MATTER OBJECT
IMPERATIVE
PRECATORY
TRUST
PRO...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 6
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 7
 3 points that must be certain before
an express private trust must be
created
...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 8
KNIGHT V KNIGHT (1840) 3 Beav 148
 “As a general rule, it has been laid down th...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 9
 Secondly, if the subject of the
recommendation or wish be
certain and thirdly,...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 10
Certainty of Intention
 Certainty of intention on part of
 the settlor/testat...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 11
 No particular words are essential
 Imperative words
 Equity looks to the su...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 12
IMPERATIVES
 Clear technical language = one party’s
interest is safeguarded as...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 13
Precatory words
 An expression of hope or desire is not
sufficient.
 Examples...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 14
RE HAMILTON (1895) 2 Ch 270 (Lindley
L.J)
 “You must take the will which you
h...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 15
Lambes v Eames (1871) LR 6 Ch. 597
 Ttor gave his estate to his widow
‘to be a...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 16
Re Adams and The Kensington Vestry
(1884) 27 CH.D 395
 Ttor gave his real and ...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 17
Comiskey v Bowring Hanbury (1905) AC 84
 Ttor left his property to his wife; ‘...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 18
 Peculiar situation : If the intention
to create a trust is clear it will be
u...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 19
PAUL V CONSTANCE (1977) 1 WLR 527
 Mrs Paul lived with Mr Constance as
his wif...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 20
 RE KAYFORD (1975) 1 WLR 279
 De Fonseka v De Fonseka & Ors
[1971] 2 MLJ 155
...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 21
HAMEEDA BEE V MRS P SEENIVASAGAM [1950]
1 MLJ267
- Held : Clear and unequivocal...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 22
KISHABAI V JAIKISHAN[1981] 2 MLJ 289
 - no particular form of expression
is ne...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 23
CERTAINTY OF SUBJECT
MATTER
 Certainty of subject matter falls
under two heads...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 24
EXAMPLES OF SUBJECT MATTER
A bungalow at Kota Damansara
 a bungalow in 5 acres...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 25
PALMER V SIMMONDS (1854) 2 DREW
221
 A ttrix by her will gave her residuary
to...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 26
Kindersley V.C : No trust as there was uncertainty of
subject matter of trust
...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 27
RE GOLAY’S WILL TRUST (1965) 1 WLR
969
 The testator directed his executor ‘
t...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 28
 Ct: Reasonable income; there will
be the yardstick in which the Court
could a...
 Abrahams v Trustee in bankruptcy
of Abrahams [1999] BPIR 637
 Swift v Dairywise Fans Ltd [2000] 1
All ER 320
14/05/14
L...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 30
Labuan Offshore Trust Act 1997
 Section 7(1) A trust is an offshore
where-
 (...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 31
Effect of lack of certainty of subject
matter
 If a settlor failed to specify ...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 32
Certainty of Object
 Object of the trust : Human
 Wife / girlfriend/ mistress...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 33
Certainty of Object
 The Rules :
 Trust must be for human beneficiaries.
 As...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 34
Labuan Offshore Trust Act 1997
 Section 7(1): A trust is an offshore trust
whe...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 35
Re Endacott [1960] Ch 232;
 Evershed MR :
 “No principle has greater sanction...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 36
The test
 Depends upon the nature of trust.
 Need to differentiate between:
...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 37
A Fixed trust
 A trust where the trust instrument
specifies the share which ea...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 38
 Beneficiaries is equitable owner of his
interest.
 The test : the list princ...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 39
What is Discretionary Trust
 It is an express Private Trust.
 A flexible type...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 40
 To -lack prudence in dealing with
money
 The trustees can pay out income or
...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 41
Role of the Discretionary Trust
a) Protect trust property
 A useful device for...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 42
 Allows/enables trustees to provide such
sums as the future circumstances of t...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 43
4) Beneficiary-is not the equitable
owner of the interest
- The beneficial inte...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 44
Trustee & the test
 Need to determine the object with
certainty.
 Failure – B...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 45
Mc Phail v. Doulton (1970) 2 All ER
228.- HOL
 Settlor executed a deed for a f...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 46
 -         Under clause 9(a) it is stated :
The trustee shall apply the net
in...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 47
Judgment
 Ct of 1st
instance: It was power and not a trust.
 COA : It was pow...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 48
Re Baden Deed Trust (No 2)
[1973.] Ch 9.
COA had to apply the test by the HOL i...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 49
 Sachs LJ stated that in applying the
test it is essential to bear in mind
the...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 50
Three kinds of uncertainty
1) Semantic, conceptual or linguistic
uncertainty
2)...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 51
Conceptual Uncertainty
 It is also known as administrative
uncertain/ semantic...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 52
 Effect : Express trust fails.
 It will be held on resulting trust
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 53
Halsbury’s Law of Malaysia.
 “If a trust accords trustees discretion to
elect ...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 54
Cases
 Re Barlow’s Will Trust
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 55
Evidential Difficulties/
Uncertainty
 Language used is precise.
 Trustee will...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 56
Judgment
 a)       Stamps LJ : ‘Relatives” meant next
of kin or nearest blood ...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 57
Administrative uncertainty
 Lord Wilberforce in Mc Phail v Doulton;
 “There m...
14/05/14
LAW OF TRUST (DR.ZURAIDAH
ALI) 58
ESTATE & TRUST AGENCIES (1927) LTD V TUNGKU MERIAM
BINTE ALMARHOUM SULTAN AHMAD...
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Three certainties

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Three certainties

  1. 1. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 1 CREATION OF TRUST : THREE CERTAINTIES
  2. 2. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 2 LEARNING OUTCOME Students will be able to  appreciate and analyse methods of creating a valid trust.  understand the concept of three certainties and how it is different from one another.  apply any of the tests to determine the class of beneficiaries.  differentiate between fixed trust and discretionary trust
  3. 3. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 3 Private Express Trust: Meaning An express declaration by the person who want to create trust during is lifetime Trust Will Other form Deed -writing -verbal
  4. 4. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 4 Charitable Trust Private Family Trust Bare Trust Fixed Interest Trust Discretionary Trust Protective Trust Secret @ Floating Trust Trading Trust Unit & Investment Trust Assets in Unincorporated Associations TYPES OF EXPRESS TRUST
  5. 5. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 5 THREE CERTAINTIES INTENTION SUBJECT MATTER OBJECT IMPERATIVE PRECATORY TRUST PROPERTY BENEFICIAL INTEREST FIXED TRUST DISCRETIONAR Y TRUST Conceptual Uncertainties Evidential Difficulaties
  6. 6. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 6
  7. 7. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 7  3 points that must be certain before an express private trust must be created  1) Certainty of intention  2) Certainty of subject matter  3) Certainty of objects
  8. 8. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 8 KNIGHT V KNIGHT (1840) 3 Beav 148  “As a general rule, it has been laid down that when property is given absolutely to command, recommended or entreated or wished, to dispose of that property in favour of another, the recommendation entreaty, or wish shall be held to created a trust. First, if the words are so used, that upon the whole they ought to be construed as imperative.
  9. 9. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 9  Secondly, if the subject of the recommendation or wish be certain and thirdly, if the objects or persons intended to have the benefit of the recommendations or wish be also certain.
  10. 10. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 10 Certainty of Intention  Certainty of intention on part of  the settlor/testator to create trust
  11. 11. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 11  No particular words are essential  Imperative words  Equity looks to the substance rather than form  Trust may be created without using the word ‘trust’.  It all depends on the construction of the language used.
  12. 12. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 12 IMPERATIVES  Clear technical language = one party’s interest is safeguarded as much as possible.  Words must be imperative in nature in order to construe the essentials to create trust.  Eg: 1) : I direct my trustee…/ I instruct my trustee./ in full confidence that/ fully trusting that/ in firm expectation that/ it is my heartfelt desire that….
  13. 13. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 13 Precatory words  An expression of hope or desire is not sufficient.  Examples: “It is my sincere wish’, ‘ it is my hope…’  There is a need to see and examine the construction of trust as a whole.  To show intention on part of settlor/testator.
  14. 14. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 14 RE HAMILTON (1895) 2 Ch 270 (Lindley L.J)  “You must take the will which you have to construe and see what it means and if you come to the conclusion that no trust was intended you say so, although previous judge have said to the contrary on some wills more or less similar to the one you have construe.”
  15. 15. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 15 Lambes v Eames (1871) LR 6 Ch. 597  Ttor gave his estate to his widow ‘to be at her disposal in any way she may think best, for the benefit of herself and her family.”  By will she gave part of the estate to outsider  Ct: She had been absolutely entitled to the property and the gift was valid.
  16. 16. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 16 Re Adams and The Kensington Vestry (1884) 27 CH.D 395  Ttor gave his real and personal estate to his wife ‘absolutely in full confidence that she will do what is right as to the disposal thereof between my children, either in her life time or by will after her death.”  Ct: No trust. The world absolutely indicated that the property was left to the wife alone.
  17. 17. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 17 Comiskey v Bowring Hanbury (1905) AC 84  Ttor left his property to his wife; ‘in full confidence that she will make such use of it as I would myself and at my death she will devise it to such one or more of the nieces as she may think fit.”  Held : There was a gift to the wife and with trust in favour of the nieces after her death,
  18. 18. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 18  Peculiar situation : If the intention to create a trust is clear it will be upheld although the word trust is not expressly used.
  19. 19. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 19 PAUL V CONSTANCE (1977) 1 WLR 527  Mrs Paul lived with Mr Constance as his wife, He opened an account and told Mrs Paul ; ‘ The money is as much as yours as mine. It was repeated in a nbr of situations.  Held : Effective declaration of trust in favour of the plaintiff (Mrs Paul)
  20. 20. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 20  RE KAYFORD (1975) 1 WLR 279  De Fonseka v De Fonseka & Ors [1971] 2 MLJ 155  Ct : Ct would give effect to the intention of the author of the trust as expressed in the trust instrument.
  21. 21. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 21 HAMEEDA BEE V MRS P SEENIVASAGAM [1950] 1 MLJ267 - Held : Clear and unequivocal language must be used to establish a trust
  22. 22. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 22 KISHABAI V JAIKISHAN[1981] 2 MLJ 289  - no particular form of expression is necessary for the creation of a trust,  if on the whole it can be gathered that a trust was intended;
  23. 23. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 23 CERTAINTY OF SUBJECT MATTER  Certainty of subject matter falls under two heads;  A) trust property –  B) beneficial interest –
  24. 24. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 24 EXAMPLES OF SUBJECT MATTER A bungalow at Kota Damansara  a bungalow in 5 acres of land: Mohan’s holiday get away staying.  a shop lot at Damansara Height  an apartment at Ampang Villa  20 acres of agricultural land at Ulu Yam  cash $1000 million at RHB Bank Jalan Ipoh  Shares in Angkok Ware Composites (M) Sdn. Bhd. worth $ 50million  Jewelleries worth $ 100 million.  Trust property & Beneficial Interest
  25. 25. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 25 PALMER V SIMMONDS (1854) 2 DREW 221  A ttrix by her will gave her residuary to Thomas Harrison “for his own use and benefit as I have full confidence in him, that if he should die without lawful issue he will leave the bulk of my said residuary estate unto B,C, D and E.(certain named persons)”  Whether the subject matter of trust was sufficiently certain
  26. 26. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 26 Kindersley V.C : No trust as there was uncertainty of subject matter of trust  “What is the meaning of the bulk. The appropriate meaning according to its derivation is something which bulges out. It is a popular meaning. When a person is said to have given the bulk of his property, what is meant is not the whole but the greater part and that is in fact consistent with its classical meaning….”
  27. 27. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 27 RE GOLAY’S WILL TRUST (1965) 1 WLR 969  The testator directed his executor ‘ to let Tossy to enjoy one of my flats during her lifetime and to a reasonable income form my other property.”  Whether the gift of income was void for uncertainty?  Held : VALID
  28. 28. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 28  Ct: Reasonable income; there will be the yardstick in which the Court could and would apply in quantifying amount.
  29. 29.  Abrahams v Trustee in bankruptcy of Abrahams [1999] BPIR 637  Swift v Dairywise Fans Ltd [2000] 1 All ER 320 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 29
  30. 30. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 30 Labuan Offshore Trust Act 1997  Section 7(1) A trust is an offshore where-  (b) the trust property does not include any immovable property in Malaysia unless allowed by relevant authorities
  31. 31. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 31 Effect of lack of certainty of subject matter  If a settlor failed to specify the trust property at all – there will be no trust.  If the settlor failed to specify the beneficial shares @ there will be resulting trust for the settlor’s estate.  A (settlor) ----B (trustee) -------C(bene) resulting trust
  32. 32. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 32 Certainty of Object  Object of the trust : Human  Wife / girlfriend/ mistress  Children : Mother &Father, brother /sister  Best Friends  Nephew & nieces
  33. 33. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 33 Certainty of Object  The Rules :  Trust must be for human beneficiaries.  Ascertainable beneficiaries is a must for a trust other than a charitable trust.  Lack of certainty of objects : Trust will be void.  the beneficiaries must be identifiable : they can be given their appropriate shares of their for his beneficial interest.
  34. 34. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 34 Labuan Offshore Trust Act 1997  Section 7(1): A trust is an offshore trust where-  (c)all beneficiaries are qualified persons  Section 8(1) :An offshore trust is created by a will or other instrument in writing including a unilateral declaration of trust….  (2) A unilateral declaration of trust is a declaration in writing by a trust company stating-  (d) the names or information enabling the identification of all beneficiaries.
  35. 35. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 35 Re Endacott [1960] Ch 232;  Evershed MR :  “No principle has greater sanction or authority behind it than the general proposition that a trust by English Law, not being charitable trust, must be ascertained or ascertainable beneficiaries.”
  36. 36. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 36 The test  Depends upon the nature of trust.  Need to differentiate between:  A fixed trust and discretionary trust.  Trustees are given discretion: to carry out of the trust.
  37. 37. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 37 A Fixed trust  A trust where the trust instrument specifies the share which each beneficiary is to take  The beneficial interest of potential beneficiaries are fixed.  Trustee(s) must identify each and every object.
  38. 38. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 38  Beneficiaries is equitable owner of his interest.  The test : the list principle.  Need to know each and every beneficiaries.  Eg: ‘a trust of RM 1,000 to the members of my family in equal share : a fixed trust requiring the trustees to determine all beneficiaries
  39. 39. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 39 What is Discretionary Trust  It is an express Private Trust.  A flexible type of trust- an attractive vehicle for family money.  Trustee has some form of power or discretion.  May involved a wide variety of discretion. And deals with all situations: eg : power of appointments, the power to choose  Trustee has a choice and discretions to exercise to determine the class of object
  40. 40. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 40  To -lack prudence in dealing with money  The trustees can pay out income or capital to any one or more of the beneficiaries entirely at their own discretion.
  41. 41. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 41 Role of the Discretionary Trust a) Protect trust property  A useful device for a settlor who wishes to protect family property against spendthrift.  Prevent and to safeguard the trust fund from dissipation by the beneficiaries- who are financially inexperienced b)       Adaptability to changing circumstances- family, fiscal & economic  -         It lies in its flexibility.
  42. 42. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 42  Allows/enables trustees to provide such sums as the future circumstances of the beneficiaries require  3) The trustees own the trust's property on behalf of the beneficiaries. - The trustees are given discretion as to who shall receive income and / or capital from the trust, and in some cases, what amounts, if any, they shall. - The beneficiaries need not all even be born at the time the trust is created
  43. 43. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 43 4) Beneficiary-is not the equitable owner of the interest - The beneficial interest is in suspense until the trustees exercise the discretion Trustees decide both who shall benefit and what the benefit shall be  Beneficiary cannot claim any right over the interest unlike
  44. 44. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 44 Trustee & the test  Need to determine the object with certainty.  Failure – Breach of trust  Two tests: a) Criterion certainty test b) in and out test  Trustee need to determine whether a person is or is not within the description of relevant class
  45. 45. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 45 Mc Phail v. Doulton (1970) 2 All ER 228.- HOL  Settlor executed a deed for a fund to be held upon trust : in favour of the staff of Matthew Hall Co Ltd and their relatives and dependants.  Whether this is a trust or power?  Void for uncertainty?  If not what is the test
  46. 46. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 46  -         Under clause 9(a) it is stated : The trustee shall apply the net income of the fund in making at their absolute discretion grants to or for the benefit of any of the officers and employees of the company or to any relatives or dependants of any persons in such amounts at such times and or such conditions as they think fit.
  47. 47. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 47 Judgment  Ct of 1st instance: It was power and not a trust.  COA : It was power and not a trust.  HOL : The deed created the trust and not power.  Trustee should not approach their duty in a narrow way. Instead they ought to make a survey of the range of objects or possible beneficiaries as will enable them to carry out their fiduciary duty.
  48. 48. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 48 Re Baden Deed Trust (No 2) [1973.] Ch 9. COA had to apply the test by the HOL in deciding and consider in particular whether the words ‘dependents’ and ‘relatives’ were too uncertain. The test : Can it be said with certainty that any given individual is or is not a member of the class. (HOL test – applied by the Chancery & COA later)
  49. 49. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 49  Sachs LJ stated that in applying the test it is essential to bear in mind the difference between conceptual uncertainty and evidential difficulties
  50. 50. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 50 Three kinds of uncertainty 1) Semantic, conceptual or linguistic uncertainty 2) Evidential uncertainty 3) Administrative uncertainty
  51. 51. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 51 Conceptual Uncertainty  It is also known as administrative uncertain/ semantic, linguistic uncertain  Problem in the vagueness of language used by the testator to express his intention.  It will be administratively unworkable. Eg: ‘someone under a moral obligation  My shorter employee.  For my old friends and business associate  For my fans  For my friends who are good citizens.
  52. 52. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 52  Effect : Express trust fails.  It will be held on resulting trust
  53. 53. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 53 Halsbury’s Law of Malaysia.  “If a trust accords trustees discretion to elect among a class of beneficiaries, it no longer fails if a list of every member of the class cannot be drawn up, it suffices if it is possible to predicate of any proposed beneficiary that he is or is not a member of that class. If there remain a number of persons who cannot be proved to be inside or outside the class, for example old friends of the testator, then the trust fails
  54. 54. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 54 Cases  Re Barlow’s Will Trust
  55. 55. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 55 Evidential Difficulties/ Uncertainty  Language used is precise.  Trustee will have to find evidence to carry out the settlor’s instruction.  It does not invalidate a discretionary trust.  The court is never defeated by evidential uncertainty
  56. 56. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 56 Judgment  a)       Stamps LJ : ‘Relatives” meant next of kin or nearest blood relation.  b)       Megaw LJ : ‘Relatives’ meant dependants from a common ancestor although giving rise to evidential uncertainty.  c)      Sachs LJ : opts for wider meaning of the former and thought that the trustee ought not to pay an individual who failed to prove that he was a relative.
  57. 57. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 57 Administrative uncertainty  Lord Wilberforce in Mc Phail v Doulton;  “There may be a third case where the meaning of the words used is clear but the definition is so hopelessly wide as not to form “anything like a class” so that the trust is administratively unworkable or .. one that cannot be executed. I hesitate to give examples for they may prejudice future cases but perhaps “all residents of Greater London will serve. I do not think that a discretionary trust for “relatives” even of a living person falls within this category.”
  58. 58. 14/05/14 LAW OF TRUST (DR.ZURAIDAH ALI) 58 ESTATE & TRUST AGENCIES (1927) LTD V TUNGKU MERIAM BINTE ALMARHOUM SULTAN AHMAD OF PEKAN & ANOR[1948 - 1949] SUPP MLJ 82  The last question was whether the word "issue" of Tungku Omar and Tungku Meriam comprise all the descendants of Tungku Omar and Tungku Meriam or whether it is limited to their children. Held: in this case the word "issue" was intended to include only the children of Tungku Omar and Tungku Meriam.

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