LECTURE 1 (TRUST)

-Halsbury Law of Malaysia: Someone holds property or right for a particular purpose
for someone else. Equitable obligation. Enforceable in HC of MAS.
- 3 parties: Settlor, Trustee, Beneficiaries (roles can overlap for a person, except cannot
all 3 together or trustee cannot be sole beneficiary)
-Settlor transfers legal ownership to trustee.
-Beneficiaries have beneficial ownership.

RE SCOTT
-Duty and obligation of trustee
-Legal ownership over trust property
-Must administer according to instructions of settlor for the beneficiaries
-If no instructions on how to administer, enforce according to principles equity

-For a valid trust, must have 3 certainties:

1) Intention
2) Subject matter
3) Object (beneficiaries)
-Trustee has fiduciary duty towards beneficiaries
-Beneficiaries cannot decide the subject matter by themselves - trust will be invalid

TYPES OF TRUST
1) Express trust
-written in formal manner, trust deed
-instrument must be clear and unambiguous as to intentions of settlor
-Sometimes, trust given in will but not clear. Known as inferred trust.
2) Non-express trust
-Includes: Discretionary trust, Resulting trust
3) Constructive trust
CONTRACT OF TRUST
-Trust is a compulsory obligation. There is no agreement between all parties and is
established solely by settlor.
-Beneficiaries cannot elect to be/not to be beneficiaries.
-Trustees cannot dismiss fiduciary duty.

TRUST VS DEBT
NORBERG V WYNRIB
-Trust is not debt.
-Therefore, trust property is not subject to bankruptcy proceedings.
-Important to identify trust property and separate from debt/personal assets.

TRUST VS BAILMENT
-No legal ownership. Only has possession.
-Bailee will return goods to bailor.

MMC PROCEEDS INC V LEHMAN BROS INTERNATIONAL EUROPE

-Bailor must have legal interest and ownership.
-If not, legal issues arise when bailor claims property from bailee.

TRUST VS POWER
-Power: Discretion to do something
-Trust: Compulsory. Must administer trust.
-For discretionary power, nobody can compel trustee to use the property for benefit of
donee.
-For trust, compulsory to use for interest of beneficiaries.

RE GULBENKIN’S TRUST
-Even if people who can receive benefits are ascertained, cannot compel power to be
exercised for their benefit.
TRUST VS DISCRETIONARY TRUST
-In a discretionary trust, the beneficiaries do not have a fixed entitlement or interest in
the trust funds.
-The trustee has the discretion to determine which of the beneficiaries are to receive the
capital and income of the trust and how much each beneficiary is to receive.
-The trustee does not have a complete discretion. The trustee can only distribute to
beneficiaries within a nominated class as set out in the terms of the trust deed.
-Beneficiaries can only compel the enforcement of the trust