INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA
SEMESTER I, 2011/2012 SESSION
AHMAD IBRAHIM KULLIYYAH OF LAWS
Programme : Bachelor of Laws Level of : Third
Reading Time : 2.30 p.m. – 2.45 p.m. Date : 08.01.2012
Duration : ( 15 minutes )
Answering Time : 2.45 p.m. – 5.45 p.m. Section(s) : All Sections
Duration ( 3 hours )
Course Title : Equity & Trust II Course Code : LAW 3711
This Question Paper Consists of 8 Printed Pages With 6 Questions.
INSTRUCTIONS TO CANDIDATES
DO NOT OPEN UNTIL YOU ARE ASKED TO DO SO.
ANSWER FOUR (4) QUESTIONS, ONE (1) FROM EACH PART AND
ONE (1) FROM ANY OF THE PARTS
TRUSTEE ACT 1949
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.
Discuss the validity of the following bequests from the will of Thomas Pine, deceased:
(i) ‘RM200,000.00 to my executors on trust in equal shares for my cousins and
nephews.’ Thomas was survived by at least five nieces and nephews, but perhaps
more: one of his brothers emigrated to Iceland many years before, and has not
been heard of since;
(ii) ‘RM200,000.00 to my executors on trust for those to whom they consider I owe a
spiritual obligation in such shares as they in their absolute discretion shall
determine.’ Thomas used to attend Sunday prayers regularly at St Martin church;
(iii) ‘RM200,000.00 to my executors on trust, to be distributed at their absolute
discretion amongst my friends in Melawati Golf Club. In case of doubt, they can
consult Mr. Smallball who will confirm whether a particular individual was a
friend of mine’;
(iv) ‘My executors to distribute 20% of my shares in Genofarm Sdn. Bhd. equally to
each of my children provided he or she is an adherent to the doctrine of the
Catholic Church.’ Thomas was survived by two children, James and Philomena.
James is a vicar at the Ampang Catholic Church while Philomena married to
Ahmad is a devout muslim convert known as Ameenah.
(i) ‘… there is no equity in this court to perfect an imperfect gift’
per Turner LJ in Milroy v Lord (1862) 45 ER 1185
Comment on the importance of the above dictum.
(ii) In 2006, Pak Tulis covenanted with Baca and Fikir that he would pay to
them all royalties he might receive from the publication of a book he was
currently writing to be held on trust for his son Zubair. The book has since been
published and is a runaway success. Pak Tulis has received over RM100,000.00
in royalties. However, he has now had a misunderstanding with Zubair who has
given up his final year law degree course to become a D J with Radio Selangor.
Pak Tulis refuses to transfer anything to Baca and Fikir.
(iii) Rajen took out a life insurance policy, insuring his life for a minimum sum of
RM300,000.00. Although he was named as the beneficiary he told his son Samy
in the presence of Chan, the insurance agent that Samy’s dream of doing a dental
course was now a reality even if he (Rajen) was to die prematurely. A year later
Rajen suffered a heart attack and passed away. Samy has been offered a place at
International Dental University to read dentistry but his mum tells him that she
cannot afford the fees. When Samy inquired about the proceeds of the policy she
told him that his brother Yogi and sister Sonia insist that they want their share of
their late dad’s property including the proceeds of the policy
Anne, a rich property developer, made her will in 2008. She leaves her shares in Build &
Co. ‘to Sam and John equally in the knowledge that you will carry out my hopes.’ In
2007, she told Sam that she wanted both Sam and John to hold the shares on trust for her
illegitimate son, Arnie. Sam had already agreed, although John did not know of this
In the same will, Anne leaves the town house ‘in trust to William and Mary for the
purpose with which they are familiar.’ When Anne had told William and Mary of her
intentions in 2006, they had already accepted her plan of allowing them to live in the
house providing that they would leave it in their wills to the Homeless Charity. Anne died
in 2010, and John wants to claim his shares. However, Sam wishes the shares to go to
Arnie. In addition the Homeless Charity would like to know whether they can expect to
receive the town house when William and Mary die, even though both have denied that
they are bound and have made it clear that they wish to leave the house to their own son.
Advise the parties.
a) Non charitable purpose trusts are to be regarded as anomalous and not to be
b) Consider the validity and type of trust created by the following dispositions found
in the will of Alexander who died in 2010:
(i) $50,000.00 to Sam and John upon trust for such charitable or benevolent
objects as Zack, my trusted friend shall in his absolute discretion select.
(ii) $50,000.00 to the University of London upon trust to establish and
maintain in perpetuity a School of Law Reform.
(iii) $50,000.00 to my trustees for the promotion of physical recreation for
Malaysians in London.
(i) In Re Whitely (1886) 33 Ch.D 347 at 355, Lindley L.J stated:
“The duty of a trustee is not to take such care only as a prudent man would take
of he had only himself to consider; the duty rather is to take care as ordinary
prudent man would take if he were minded to make an investment for the benefit
of other people for whom he felt morally bound to provide”.
Elaborate on the relevance of the above quotation and support your answer
with decided cases.
ii) Taylor, one of the trustees of AT Trust, used trust funds to pay for 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. Swift, the other
trustee also happens to be one of the beneficiaries of AT Trust.
Advise the beneficiaries of the trust.
i) Comment on TWO (2) defences available in dealing with breach of trust as
decided in the case of Re Pauling Settlement Trust  3 All ER 713.
ii) Allen was appointed as the trustee of Asmaradana Trust. He deposited
RM30,000.00 of trust money in his account which was RM10,000.00 in credit. He
then took out RM15,000.00 and used RM10,000.00 to buy shares in CC Sdn.
Bhd. and RM 5,000.00 to buy a brand new camera. A week later, he spent another
RM 10,000.00 on holiday in Europe with his family. He gave RM100.00 to his
son, who used to buy lottery tickets and one of the ticket won RM1.5 million. He
attended an auction of paintings and bought one worth RM5,000.00. The painting
is currently worth RM20,000.00. The shares in CC Sdn. Bhd. on the other hand
are now worth RM60,000.00.
Advise the beneficiaries of Asmaradana trust.