Tutorial 1

1) Explain the circumstances whereby a trustee can be removed from office and the
persons empowered to appoint new trustees.

Pursuant to Section 40(1) Trustees Act 1949, trustee who is dead, out of Malaysia more
than 12 months, refuses to act as one, unfit or incapable to be a trustee, is a minor or has been
removed under the trust deed are implied to be persons unfit to be trustees thus can be
removed. Other than been specified under s40(1), s45(b) of the same Act also specifies
circumstances on when a trustee can be removed namely when he is being imprisoned,
mentally disordered, bankrupt or the corporation dissolved.

“Dead” as been mentioned under s40(1) can be further referred to s40(8)which include a
person nominated trustee in a will predeceased the testator and those relative to a continuing
trustee include a refusing or retiring trustee. Retiring trustee on the other hand has been
explained under s43 as a trustee who is being desirous of being discharged from the trust.

Persons empowered to appoint new trustees has been laid down under s40(1)(a), 40(1)(b),
s40(4) and s40(5). Those appointers may be the lawyer or members of family, the personal
representative if the continuing trustee dead or an executor whom will go to court for an order
for probate to exercise their power to appoint new trustee provided that they did not
renounced probate. If executor intends to renounce, the power of appointment may be
exercised before renouncing probate.
 2) Discuss the requirement of numbers when it comes to appointment of new or
additional trustees and retirement in Malaysia with reference to Trustee Act
1949

1st principle with regards to the appointment of additional trustee under s40(6) is, when
trust deed is silent on appointment of additional trustee, there is no need for such
appointment. Another principle that can be derived from the said provision is, when 1 trustee
has been originally appointed, no additional trustee shall be appointed. However, s40(6) must
be read together with s41(c), where only 1 trustee was originally appointed but has authority
to issue receipts and has authority towards the land, under s40(6), is a trust corporation and a
bare trust, no additional trustee is required to be appointed and vice versa.

For trustee who is desirous of being discharged from the trust, consent of co-trustees as
well as the consent of appointer must be obtained in writing as prescribed in s43. The
circumstances as to when a trustee can retire depend on the situations. If it is bare trust, for as
long as there is 1 trustee, the trustee can retire. If it is personal property which has nothing to
do with land, a trustee can retire for as long as there is another 1 trustee as stated under
s18(2). Lastly, if the trustee said that you do not have to appoint new trustee after retired.
Where only 1 trustee was originally appointed but has the authority to issue receipts for all
capital money, then he cannot be discharged unless replaced by a trust corporation or 2
trustees. Under s43, the reasons why a trustee is required to leave behind a trust corporation
or 2 trustees are because, there is no presumption that the law set up is a bare trust, there is no
guarantee that the trust entails trust property and there is no guarantee that the settlor appoint
or give power to trustee to discharge receipt.
3) State the difference between
a- Advancement- Maintenance
Advancement is higher standard of life while maintenance is the necessity of life.
Charities are allowed under advancement for the B to donate while charities are
not allowed under maintenance. According to Re Clare (1966), charities only fall
under maintenance when B himself felt morally obligated to donate to charity
since it was deemed that the B would definitely used his own funds to satisfy his
moral obligation. However, such moral obligation must come from B himself, not
the trustee.
b- Capital- Income
Capital is modal while income is what you earn from capital (pendapatan)
c- Life Tenant/ Revisionary- Remainder Interest
(Realty-interest in land)
Life Tenant is a possessory interest given to X by settlor for his possession until
his death and while being so, appoint remainder person as remainder interest
whom will takes his place upon the death.
Reversionary interest means any interest which the enjoyment is postponed. It can
be either a vested interest or contingent interest where, a transferee's right to own
and occupy land is subjected to a condition that is placed by the property owner. A
reversionary interest cannot be enjoyed if the condition is violated and the
property upon which the reversionary interest is given will return to the original
owner.
d- Vested- Contingent Interest
Vested interest is created in favour of a person without specifying the time when it
is to take effect, or specifying that it is to take effect forthwith, or on the
happening of a certain event. It does not depend upon the fulfilment of any
condition. It creates an immediate right, though the enjoyment may be postponed
to a future date. Thus, owner’s title is already perfect It Contingent interest is
created in favour of a person, to take effect only on the happening or not
happening of a specified uncertain event, which may or may not happen. Is solely
dependent upon the fulfilment of the condition (after which it becomes vested
interest), so that if the condition is not fulfilled, the interest may fall through.
Thus, the owner’s title is as yet imperfect, but is capable of becoming perfect.
e- Payable-Accumulated Income
Tutorial 2
1) Yusof (settlor) appointed X and Y as trustees for a settlement for his 4 children.
X is tired and wishes to be discharged of his duties and who intends to retire by
the end of 2019. He appoints Fana as a new trustee. Fana is an Indonesian who is
working under contract of 12 months (with option to renew) with Sykt Wina
Bhd. Advise the trustees on the appointment and possible retirement of trustees.

I would advise X and Y that, as trustees, they must act unanimously and majority
decision will not suffice as it will not bind the other trustees who dissent and beneficiary.
Further the majority decision will not be a legal transaction pursuant to Punca Klasik Sdn
Bhd (no2) (1996). In Luke v South Kensington Hotel Co (1879), in case there is a
deadlock or disagreement between the trustees, the intervention of the court may be the
only way to break it by way of application pursuant to s45 Trustees Act. Such application
to court may be made by the trustee or the person who has beneficial and equitable
interest by virtue of s60 TA. Here, for X to discharge from his duties or to appoint Fana
as the new trustee, consent from Y as the co-trustee as well as the 4 children is needed.

With regards to the appointment of Fana as the new trustee, she may not necessarily
have the power to exercise even though she has been appointed as one. This is because,
vesting of powers depends on transfer of legal title from the old trustee, X to Fana, the
new trustee. For Fana’s appointment to be valid, she must be domicile in Malaysia for 12
months continuously when the power of trustee arose. In Re Walker (1901) 1 Ch 259, if
the power has become exercisable when the trustee remained outside of UK, he can be
removed against his will. Here, since Fana has been working under contract for 12
months, there is good possibility that Fana is able to stay 12 months continuously in
Malaysia; her appointment as new trustee may be valid. Since the cut-off date for
application of English Law in Malaysia is on 1956, the case of Re Walker shall be
applied and referred to.

Requirements for retirement of trustee has been laid down in s43 Trustees Act as to
the need of consent of co-trustee and appointer, consent must be in writing and there must
be at least two individuals or trust corporation to act as trustee after the retirement of said
trustee. Since the number of trustee remaining after X retired is only 1, which is Y, s43 is
not applicable since the provision governs retirement of trustee without new appointment.
Before X retire, the number of trustee must be ascertained, depending on two factors
namely, as to the qualifications of Fana as well as the consent of Y on the appointment of
Fana. If Fana’s contract is not renewed, there is possibility that Fana’s appointment is
invalid and if Y did gave his consent for Fana to be appointed as new trustee, she may has
been legally appointed as one and the number of trustees are now 3. X can retire without
new appointment. If vice-versa, then there are only two trustees which are X and Y, thus
X cannot retire.

2) Yusof (settlor) originally appointed Y as trustee for a settlement for his 4

children. Fana, is later appointed as another trustee. Y is tired and wishes to be
discharged of his duties and who intends to retire by the end of 2019. Advise Y as
to whether he can retire and left Fana alone as trustee.

I would advise Y that, under this circumstance, Y may retire and left Fana
alone as the trustee because Y is originally appointed as a sole trustee subject to
several conditions which are, trust created is a bare trust, trust involve s18(1), not
s18(2), trust deed has given power to Y to deals with receipt in s18(2), thus satisfy
s41(2) and if trust instrument does not require number of trustee to be more than one
pursuant to s.40(6).
 Tutorial 3

1- Yusof settled property worth 1 million for his daughter, Sara who is studying law in the
University of Texas in US. Sara is 23 years old and last week emailed the trustee, Dena
to sent her RM 100,000. The purpose of the money is to facilitate her purchase of a
brand new motorcycle to tour the state of Texas after her final exams. Dena sent the
said money to Sara. Advise Dena on any possibility breach of trust. Could your answer
be different if Sara is 19 years old.

I would advise Dena that if there is a power in the trust deed to dispense money to
Sara for purpose of buying motorcycle, then there is no breach of trust. However, problems
arose when the trust deed is silent as to the power of Dena to provide money to Sara. When
this happens, the common law and Trustees Act can be referred to in order to justify whether
Dena has breach the duty as a trustee or not. Since Sara is 23 yrs old, she has passed the age
of minority, thus s38 Trustees Act is not applicable to justify the act of Dena.
Dena may apply the capital money in her discretion for advancement or benefit of
Sara. This is because, Section 37 Trustees Act stated, it is a discretion of trustee to pay
advancement from trust property (capital) in the amount of 10k @ half (vested share) and
after payment constitute part of his share. Summarize given by Dr John is, trustee has been
given by law to pay advancement to the beneficiary from the capital, 10k of his vested share
and his share in the trust property will be reduced proportionately. S37 assumes that trustee
has vested interest.
However, s37 must be supported with cases. Advancement is payment of capital sum
in order to establish a person in life or make permanent provision as in for him Hardy v
Shaw. In Lowther v Bentick, the amount is comparatively large in the context of the recipient
though trust deeds may empower advancements from capital for the benefit of beneficiaries.
Thus, payment of a debt was not for the benefit of a beneficiary, though in special
circumstances payment to him to enable a discharge of debt could amount to a benefit.
In Re Morris, if there is no vested interest, advancement cannot affect the trust fund
directly. It can only affect the trust fund indirectly because you only have contingent interest.
When beneficiary has contingent interest, he cannot touch the trust fund (capital) as you are
not allowed to have it ab-initio. The trust deed is silent as to whether Sara has vested or
contingent interest. So, based on the case of Re Morris, in the event the interest of Sara is
 contingent as opposed to vested, it is not possible for trustee, Dena to pay Sara the amount of
motorcycle from the trust capital because this will affect the trust capital directly.
In order to prevent breach of trust, applying Re Pauling’s settlement, it is important
for the trustee, Dena to be sure that the money claimed, RM100, 000 is used for the purpose
of motorcycle, not other purposes. And what has been sent out cannot be re-claimed.
Benefit can be defined as “financial benefit” which, it is not likely advancement if the
quantum of the beneficiary’s interest is reduced for instance a settled advancement on
protective trust. In the question, the advancement is RM100, 000 is a financial benefit. The
amount of RM100k is justified under s37 (a) because the sum of advancement provided did
not exceed half the amount of 1 million trust property which is RM500k.
If in the event this advancement goes against the Trustees Act and common law, it
doesn’t mean Dena is liable per se, there is still a post of defenses she can use.
With regards to the next issue as to what if Sara is 19 yrs old, s36 applies. The magic
number in s36(1)(a) is 21 yrs old. Here, Sara is 19, thus Dena may pay maintenance in the
form of income to her guardian/ parents. Maintenance means to pay the cost of beneficiary’s
necessity. Here, it can be said that RM 100k is not a valid maintenance because motorcycle is
a luxury, as such, if Dena wanted to pay out for motorcycle, she has to make advancement, if
she still do so, then there is a clear breach of duty under s36 (1)(a).
In deciding whether or not motorcycle is not for just tour, but for classes and as to
whether it is a proper form of maintenance, proviso s36 need to be looked into. Proviso
stated, you must take into account her age, circumstances, does he has any other funds for his
education, transport because transport is a necessity, but here Sara wants to use it for tour.

2- What happen if beneficiary reaches age of majority, 21?

The most important requirement under s37 is, until you have the absolute/ contingent
interest in trust capital, u is not entitled to invoke s37 TA. Not income, income is in s36.
Interest here means equitable or beneficial interest in the trust capital (modal). The
beneficiary, Sara, before asking for advancement must have E&B interest in trust capital.
Second thing is, there is no age limit. Whether Sara is 1 yrs old, 9 yrs old, 99 yrs old, 199 yrs
old, she is entitled to advancement as long as it does not reach the cut-off date (within the
time frame of trust capital). The cut-off date is when the trust matures. The maturity of trust
is when you have absolute interest where the duties of the trustees end. In the event Sara,
beneficiary has an E&B interest in the trust capital, Dena, the trustee can justify her action for
advancing RM100K to Sara as a form of advancement under s37.
 Can we pay maintenance to adults? Under TA, u cannot, but under common law, yes,
trustee may do so. In Re Turner, there is nothing to prevent the trust deed to provide
maintenance for adult beneficiary.
Is it possible to invoke s36? Re Turner said, there is no age limit to pay maintenance.
If u are 33, u may apply for maintenance. Buying a motorcycle does not look like form of
maintenance, but in question is not Msia, it is Texas, a desert country, with limited public
transport. Thus motorcycle is a common form of transport. S37 stated, u must have interest in
the trust capital, but in 36, u must only have interest in the trust property. Once you have
interest in trust property, u can invoke s36. However, there is an age limit in s36 which is 21.
S36 is not applicable as far as maintenance is concern because maintenance, the cut-off line is
21 yrs old.
What happens before u reach 21 yrs old? S36 (1)(a) need to be read together with
proviso 36. In the event Sara has a vested interest in trust property (1 million) under s36 (1)
(a) TA, the trustee may pay out maintenance to Sara, beneficiary provided she has yet to
attain the age of 21. In other words, s36(1)(a) is only relevant when she reaches 19.
What happens when u reach 21 yrs old? Answer is in s36(1)(b) and 36(2)(a)(i)(ii).
What is the difference between those two provisions? 36(1)(b)- “not a vested interest in
income”. 36(2)(a)(i)(ii)- vested interest in the income –entitled to the trust property.
Now, when u hit magic age of 21, there are 2 permutations of duty of trustee, one is in 36(1)
(b) & one in 36 (2). 36(1)(b)- when u reach 21, but has no vested interest, trustee shall pay u
the income provided u have interest in the trust property until when? Till you.. 1) die 2)
failure of interest 3) when u gain the vested interest. The moment u have vested interest, u
will not only get income, u will get income and capital, it shows trust has matures. 36(2)(a)(i)
(ii)- when u reach age of 21 & has vested interest in the trust property, the 1 st permutation is,
when you are married before 21, and you already have vested interest in income and u
entitled to trust prop, u will get your pay out (trust capital + accumulated income) Why there
is accumulation? Because, you may get zero maintenance@ half @ 1/3 of the income. It is
very rare for trustee to pay you everything generated by the trust property and most of the
time; they only pay u a portion. So, because they only pay u a portion, there is a residue
(baki). This residue will have to be accumulated (dikumpul) and invested. It is pay out when
u are married before 21 provided u have those 2 things (either one).
Last permutation is, 36(2)(b)- when reach 21 but not marry but has vested interest &@
entitled to the trust property. This provision must be read together with case of Re Jones Will
Trust Soames v A (1947). In that case, once beneficiary reaches majority the trustee must pay
 the beneficiary his share of income though interest is still contingent. Because s36 not just
refer to vested but also to contingent. If u reach age of 21, but in any other case (u not
married but reach 21), all the residue income has to be accumulated & accredited the same to
the capital of trust fund (seluruhnya dah jadi capital) Capital has increased. Why? Because
you have added the accumulation of the residue of the income. The entire residue will not be
paid, it will be accumulated, invested and accumulated again to the main capital. This will be
held on trust until has been suggested by Re Jones, the date of discharge- the maturity of
trust. You will get your payout as lump sum when u obtain absolute interest. In other words,
if u have vested interest to the income, but u x marry when u reach 21, u will stop getting
income. If u hit 21 and you don’t have vested interest, you still get vested interest until 3
circumstances (die-failure-get VI).
Conclusion:
1) Before 21-mainenance-discretion
2) When reach 21- vested interest in income or not: no- 3 circumst/ yes- kawin@x
kahwin

3- Defences
Under s63 TA, the court may relieve Fana wholly or partly from her personal liability
of granting Sara 100,000 if she managed to prove to the court that she had acted honestly and
reasonably. Honesty here means the good of faith while reasonably is a question of fact of
each particular case. This shows that the burden of proof is on Fana. In Re Kay, the trustee
failed to realize that the estate owed more than 22,000 pounds and relapse some of the money
to the wife of the deceased. Here, court held that, trustee cannot foresee that the healthy estate
would become insolvent, thus not liable for breach of trust. Further, the trustee had acted
reasonably to show the prudence of ordinary businessmen. Even if Fana has proven the
elements of honesty and reasonably, there still a chance that she may be liable under s63
because the said section is only a partial defence.
Under s64 TA, Fana may also rely on this section as it is a full-proof defence. It
works by way of impounding order from the court provided that, Fana can prove that there is
instigation (paksa rela) or request made by Sara for RM100,000 and there is a consent in
writing. Once Fana is able to prove those requirements before the court, Sara (beneficiary)
cannot sue Fana (trustee) for damages. If Sara want to do so, she may only claim such
damages from other non-innocent beneficiaries. Non-innocent beneficiaries here mean
beneficiaries who gave their consent for breach of trust. In Nail v Punther, the court decided
that, beneficiary (sui juris and have full knowledge of breach) consented in breach of trust
during or before the breach, cannot later sue the trustee. Beneficiary who consented to breach
of trust after (consent ex-post facto) it has been committed also cannot sue the trustee.
Other than that, the court in the case of Ramasamy @ Raman a/l Kamachee v
Thayalan a/l S.K. Psalaniyandy [1993] made reference to Section 64 of the Act and said, the
1988 Trust Deed shows that the beneficiaries had agreed to allow the trustees to get the
scheme completed on a pro rata basis and the recalcitrant beneficiaries should not be
permitted to block the whole project by simply refusing to sign the new agreements or having
signed them by refusing to pay unless the contractor knuckles under and accept their
counterproposals. In the circumstances, the Court must step in to save the situation subject to
the protection of the rights of the recalcitrant beneficiaries but only so far as is practicable.
Under s 66 TA, Fana may rely upon it as a general approach of defence. Here, if Fana
follows all the order governs under the trustee act, she will be indemnified. However,
problem may arose because the said provision is too wide and to follow everything in trustee
act, she must comply with all the semantic of the act, which is difficult.
In conclusion, Fana may not be liable for BOT.
Tutorial 4 (investment)

1) T1 and T2 are appointed trustees of a settlement by X. Recently; they decided to

invest in Sykt ABC Bhd forwarding a loan to the company. The loan agreement is
for tenure of 6 years. The value of the security (land is 2 million). The loan is RM 5
million.
Advise T1 and T2 on the feasibility of the investment under Trustees Act &
Common Law.

I would advise T1 and T2 that there is a need for them to diversify their
investment is for what purpose as according to s6(1)(a) of the Trustees Act. The
reason to diversify is because to even out the risks. If T1 and T2 put all the money in a
same investment because if that investment fails, all will fails. Current Portfolio
Theory has been discussed in the case of Nestle v National Westminster Bank. P
contended that trustee failed to invest in a manner that would yield a higher return. It
was held that there is no breach of trust just because they acted less profitably. This is
different from acting wrongly which cause loss. Further trustee demonstrated that its
management is broadly in line with management policies of other trustees of private
family trust. Modern trustees are entitled to be judged by the standard of current
portfolio theory which emphasized the risk level of the entire portfolio rather than the
risk attaching to each investment taken in isolation.
In other word, current portfolio theory means u consider the risk of every
investment taken together pro rata (secara nisbah). For example- Investment A: high
risk, Investment B: low risk. High + Low= Medium. Medium is fine. It is not too high
and not too low. That is current portfolio theory applicable to trustees when it comes
to investment.
Suitability of the investment depends on the trust deed. Certain trust deed is
very specific, what you can do and what you cannot do. [INSERT CASES]
Under s6(2) TA, the power to restrict has been stated in s4 TA. In other
words, trustee cannot invest outside the perview of s4. If trustee do so, there will be a
breach of trust. The restriction is stated under s4(1)(e) TA which is related to loans to
approved company. This is a form of investment because there is interest in ______
from Sykt ABC Bhd to the trustees. Next restriction to be looked into is s4(2)(a) TA.
It stated that no trust fund shall be invested unless the paid up ordinary share capital
 of the approved company is not less than 5 million ringgit. Paid up share capital is the
money that you get from investors (those who buy your company’s shares). In other
words, the company must be a big, healthy and strong company.
Section 4(2)(b) TA meanwhile stated that no trust fund shall be invested
unless the approved company paid a dividend not less than 5% upon such ordinary
share capital during each of the last 3 yrs prior to the time of investment. Dividend
means amount paid every year by the company to the investors from the profits made
by the company. Dividend comes from profit, not capital. No profit, no dividend, no
dividend, no profit. The entitlement for dividend every year if you are the shareholder
depends on the company and the discretion of the directors. Here, Sykt ABC must be
making a profit for 3 consecutive years and for every year the dividend minimum
declared is not less than 5%. Again, this reflects a healthy company.
Under s4(2)(c) TA, no trust fund shall be invested unless the total amount of
borrowings of the approved company from all sources, whether trustee or not,
accepted by the approved company on loan and deposit, and including interest due
and thereon not repaid by the approved company, does not at any time exceed two
thirds of the amount, excluding prospective interest, for the time being is secured to
the approved company from its borrowers.

y ≤ 2/3 x

Total borrowing + Interest due owed by the company

Amount of loan not settled

Amount of loan not settled could be T1 and T2 & it could have been settled. Interest
due is definitely by T1 and T2 owed to the company, Sykt ABC. In other words, this
equation shows that as far as interest is concern and the total borrowing that the
company has settled part of the loan. This is not y=x, it is less than 2/3 of x. Ie. the
accumulation of total borrowing + interest is manageable because it is not inproportion.
In other words, the company has settled part of the loan + interest. Again, it points out
that the company is financially viable. We don’t want that the interest to be so high that
the equation will become y ≥ x as it shows that the company is unhealthy. Because the
interest amount and loan repaid has exceeded the total amount of borrowing + interest.
It means that the company cannot manage to pay its interest due. y=x also reflects an
unhealthy company because it shows that the company has only settled a very small
portion of loan. Thus, equation of y≤ 2/3x is manageable feasible.
Section 13 TA mentioned about the liability for loss by reason of improper
investment. This section talks about security because trustee has given a loan to Sykt
ABC. There is a loan agreement signed between the trustees and Sykt ABC. This is
called an unsecured loan because it is only a contractual agreement. What happens if
Sykt ABC becomes bankrupt? T1 T2 will sue Sykt ABC for the loan. But if Sykt ABC
bankrupt, we called it insolvent in company law. The effect is that trustee can get the
judgment order but you still cannot get the money because the company is broke. So,
whenever you take to get a a borrowing, the best thing to do is to get a secured loan
(cagaran) in form of charge and most people will go for charge in form of land (real
property). So if Sykt ABC goes broke, T1 T2 will foreclose the charge and get back the
money by selling the land. Under s13, when the security is taken, it could be that the
value of land is less than the value of loan, so the amount of deficits need to be paid by
the trustees. Here, T1 gives loan (5 million) to ABC and ABC give charge in form of
land (2 million), deficit = 3 million, 3 million is liable to be paid by T1 T2. There will
be no BOT.
Duty of trustee to get proper advice in choosing investment under s6(2) TA is
only for securities, stocks and shares. John Chuah said T1 T2 need not obtain advice
from bank manager or stock broker as per s6 TA. Then, John Chuah asked, “Isn’t land
here security for the loan?”. The security here is not an investment. The security here is
to safeguard you investment. Securities under s6 are shares, stocks, etc. Here,
investment is loan. Under s6, your investment as far as advice is concern is investment
for securities, so your profit from giving the investment/loan is the dividend. That is
why you need advice from bank manager or stock broker. Here, investment in loan
made is for the interest in the form of security by way of charge (land). The land here is
used not to generate income, it is used to secure the loan and loan is used to generate
income.
Section 12 TA stated that loans and investments by trustees shall not be
chargeable as breaches of trust by the court if the value of the loan and the property
secured is not proportionate (2million-5million) provided s12(1)(a), s12(1)(b) & s12(1)
(c) is satisfied. The court’s role here is to indemnify the trustee from BOT because of
this disproportionate collateral. If the collateral is more than loan, it is great, but here
the collateral is less than the loan, thus it shows that trustee is not doing his job.
Condition in s12(1)(a)- trustee was acting upon report of an able practical qualified
surveyor (QC). However, under s14(3) TA, it stated that trustees not bound to obtain
any report. So, how? The key is s13. Under s14, you do not need to get the report. So, if
it turns out that you have the imbalance equation, trustee need to cover. But if trustee
want full indemnity and don’t want to cover, then it is more wise for the trustee to get
the report ab-inito from able QC as stated in s12(1)(a) for the court to indemnify him
under s12 in case under s43, the land does not appreciate fast enough to cover the
deficiency.
Condition in s12(1)(b)- amount of loan does not exceed two thirds parts of the
value of the property.

 Loan ≤ 2/3 x 2 million = 1.333 million

 5 million is not 4/3 @ 1.333 million
 S12 TA cannot apply
*TI T2 cannot get indemnify from court even though they
have QC report. In other words, they are still not BOT but
they must apply s13 TA
Tutorial 5 (distribution)

1) Rashford who residues in Msia disposed certain properties for benefit of his
daughters, Umairah & Jane. He left 2 mansions in Australia for both of them. He
also disposed 400 shares of Sykt ABC Bhd to his wife. The dispositions are left in a
will dated 18/8/2018. Rashford died last month in Msia. On his death, it transpired
that he had 3 mansions in Australia and 600 shares of Sykt ABC Bhd. He also has
a long lost son named Ruthford. There is no residuary clause in his will.
Advise Rashford.
Would your answer be different if Rashford died in Australia?

I would advise Rashford that for the testacy properties- 2 mansions, 400
shares, Section 2(2) Wills Act applies. This act shall not apply to Muslim. Here, since
Rashford does not professing the religion of Islam, this section applies to him; as such
the disposition of shares of 200 and the 2 mansions are valid. It is governed by Wills
Act.
Meanwhile, for intestacy properties- 1 mansion, 200 shares, Section 4(1)
Distribution Act applies. The law regulating 200 shares which is moveable property
belonging to Rashford is governed by law in Malaysia which is in Distribution Act
because he domiciled in Malaysia at time of his death. Section 4(2) Distribution Act
governs immoveable property namely the mansions disposed by Rashford. These
mansions will be regulated under the Distribution Act notwithstanding where Rasford
dies. As long as it is immoveable property, Section 6 Distribution Act applies which
are 1/3 is for the wife and another 2/3 goes to his daughters and son.

As such, the calculation for distribution of both shares and mansions are as
provided below:-
Shares: wife- 1/3 x 200 shares 1 son = 44.4433
133.33/3
d&s- 2/3 x 200 shares
2 daughters = 88.8866

Mansion: 1/3 (2/3) = 2/9+2/9+2/9+1/3

= 1 mansion
 The issue of the daughters being a muslim and a non-muslim namely Umairah
and Jane upon the disposition made by their father, Rashford who was a non-muslim
can be referred to Section 2(2) of the Disposition Act. It stated that, Muslim’s
distribution shall not be affected by this Act. Here, the provision only applies to the
testator ie.Rashford, not the Beneficiary ie.Umairah. Thus, the disposition made from
non-muslim to Muslim is allowed.
My answer would be different if Rashford died in Australia because pursuant to
Section 4(1) Distribution Act, law in Australia will applies because he domiciled in
Australia at time of death.

2) “Jane” is a 70 y.o. and last week left a will to devise her share of the property
under Rashford’s will to her husband, X. X converted to Islam last year.
Advise Jane.

If Jane is a non-muslim, Wills Act applies and her husband, X whom

converted to Islam last year will get everything. However, if Jane is a muslim, she
canot leave a will to her husband who is also a Muslim. The husband will only get ½ of
everything and the other half will go to baitulmal.
Tutorial 6

1) In 2015, Kelvin executed his will disposing RM30K each to Sitiam & Zeroine, his
fiancé. The testator married his fiancé earlier this year. Soon after the marriage he
was informed by EquiB that his will was revoked via his marriage and Kelvin in a
fit of rage burnt his will since he was under the impression that it was already
revoked anyway. Kelvin suffered a fatal heart attack last week and his estate
actually consisted of RM500K.

Issue is whether the will has been revoked?

Under Section 14 Wills Act, no will shall be revoked unless by destruction of

will or by burning by the testator or other person under the direction of testator and his
presence. There are 2 factors to consider before determining that the will has been
revoked namely the physical destruction of will and animus revocandi (the intention to
destroy will). Both factors provided must be in tandem. Then only, the revocation will
be complete. If burning is symbolic or accidental, it will not do. It must destroy the
signature of the testator. But here, it is not the issue.
The main issue here, is there an animus revocandi (the intention to destroy)? To
determine the intention, the issue of existence of mistakenly belief should be looked
into. There is no revocation if it is made when you’re under a mistaken belief. This is
because, the revocation will become condition. The end result is, the revocation is void
or conditional revocation until that condition is satisfied.
How to make the conditional revocation (void revocation because of mistaken
belief) becomes absolute revocation (valid revocation)? John Chuah said, you need to
look at the timeline. When mistaken belief takes place at time of revocation, it becomes
void. In Re Carey, the court said the will written by the testator is not incorrect. He is a
poor man, has nothing to give, thus our testator was not under mistaken belief. He
revoked the will because he believes that he has nothing to left behind is absolutely
right. Later, before his death, his sister gave him property. The will is still effective.
With regards to the timeline, the court says, until the day he dies, he can received
property. At the point the sister gave him the property; the mistaken belief exists
causing the revocation to be void. In other words, the point of reference is at time of
death. If circumstances change, revocation becomes void and if revocation is void, the
will is valid. Why? Because the sister has gave him property which means he has
something, not poor anymore.
However, there is another situation where conditional void revocation will was
converted into absolute valid revocation will is the case of Re Churchill. In this case,
the will made very clear that all coins go to the university. While the testator was alive,
he sent the coins to the university. This is an inter-vivos transaction. Unfortunately, the
coins never reach the university. The delivery fails. The testator thought that the
delivery was fine. Here, he was definitely under mistaken belief. Thus, when he
revoked the will, the revocation is void (conditional revocation). Later, he decides to
send the coins again directly by himself and the coins reach university. Then only he
died. The court said, here the revocation is void, however, upon him sending the coins
to university the second time, the sending was successful. The conditional revocation
becomes absolute revocation ie the revocation is valid. The will becomes invalid.
Because, after the initial revocation, he did something extra, just like in Re Carey
where sister gave property.
In other words, court said that your intention from Day 1 is to send the coins
where at the end of the day, your revocation becomes valid. Why will is revoked?
Because, coins has been sent to university. Why we need to send the coins again? It
will be redundancy. These two cases above-mentioned has illustrated post-events that
has converted conditional revocation into absolute revocation. There is continuing
intention to send the coins.
In our present situation, there is no mistaken belief under Section 14 on part of
Kelvin as the act of him burning the will was under the impression that it was already
revoked anyway. The revocation is valid (absolute) and the will has been destroyed. No
valid will.
A will expressed to be made in contemplation of marriage must be made in
order to invoke proviso Section 12 of the Wills Act. In Sallis v Jones, the testator
made a will ‘in contemplation of marriage’ but had not proposed to her, though there
was a lady in mind. There was no particular lady mentioned in the will. His wife died in
1927 but the testator married in Nov 1927. The court held that the will is revoked and
the proviso did not apply ie. the lady in mind was not mentioned and the proposal was
not made yet. In other words, reference to marriage was made to generally. Here,
Kelvin only left property to his fiancé, there is no solemnization clause. Should the will
be written as follow, “this will is written because I am getting married to Zeroine”, then
 only it became solemnization clause and can be invoked because it has been expressly
stated.
To make the clause, the word wife cannot be used because it signifies that you
have already married. Next, the time period must not be too long ie. 5 years- Sallis v
Jones. Lastly, marriage must be legal in Malaysia ie. Marriage between Muslim &
Non-Muslim = void, thus Section 12 did not apply.
Here, will is revoked by marriage under Section 12 since there is no term
indicating in contemplation of the marriage.
As for the issue where Kelvin suffered a fatal heart attack and his estate actually
consisted of RM500K, the will is invalid. There is no will. RM500K goes to intestacy.
Because he already married his wife, so the wife got everything. This is a moveable
property, thus the only condition is Kelvin must suffer heart attack in Malaysia
applying Section 4(1) Distribution Act.

2) Explain the type of gifts:-

a- RM30000 to X= general
b- 5 silver bracelets to Y from my safe box in MBBPJ= demonstrative legacy
c- Earrings to Faqihaha= general
d- All my land to Akila= general (land) *despite the word ‘my’
e- My house from my land in Petaling Jaya= demonstrative
f- My house in Subang Jaya= specific

Specific- property must exist in part of testator’s estate- the personal property of the
testator-can be separated from the estate (possession of testator/testatrix
ab-initio)
General- everything that is not specific
Demonstrative- identifiable source
Devise (Legacy of devise) - land, immoveable property
Tutorial 7

1) In his will dated 12/12/2018, Mr Spidey disposed his properties in the following
manner-
a- All my 10 gold bars in my safe vault at my PBB PJ Jalan SS15/4W for the
benefit of my son/ daughter.
On his death, the safe only contained 2 gold bars. 3 gold bars were removed
without the knowledge of Spidey by his maid whilst 2 other were sent for
polishing. The remaining gold bars were sold by Dr Strange who was acting
under a Power of Attorney from Spidey.

*Issue 1- 3 gold bars removed without knowledge of Spidey.

If the removal is without consent, without knowledge, there is no ademption.

No ademption means, you can still get the gift. However, if the gold bars are not
there, the process of tracing will be going through. However, tracing has its own
limits. If the whereabouts of gold bars were not known, the gift has lapse,
eventhough there is no ademption because you don’t know where on earth gold bars
are, unless you can trace. The leading case is Jenkins v Jones where testator
disposed farm stock to his son. Later, he became insane and incapable of managing
his affairs. The son converted the stock into money prior to his father’s demise. The
court held that the conversion did not adeemed the stock as conversion was done
without consent. However, in Re Jeffery, Weatherston J stated that there is no
ademption if the subject matter of the legacy is not in existence at the date of
testator’s death because it had been disposed against his wishes or without his
knowledge or tortuously. Even if there is no ademption, again, it is subject to the
rules of tracing. It will be a counter-productive to ademption. Ademption doesn’t
mean you get your property. You only get property when it can be traced.
 *Issue 2- 2 other were sent for polishing

In Re Johnston, the testatrix left the whole contents of his house- address
stated-, the issue concerns a box normally stationed in his house, but when he was
away, the box would be deposited in a bank. At his death, the box was in the bank.
The court held that the box of jewel was not adeemed by the temporary removal.
It’s imperative that the box was in the house when the will was made. Also, in Re
Heilbronne, the testator bequeathed ‘my bank deposit at the Midland Bank’ to his
nurse. Shortly before his death the testator drew a cheque of 100 pounds from his
current account as he never had a deposit account to pay for the expenses and
instructed the bank to pay the remaining balance to the executor. It was held that the
sum held by executor when testator died passed under the bequest to the nurse since
it had been removed for a temporary purpose. In contrary with Re Johnston and Re
Heilbronne’s case is the case of Re Zouche where it was held that permanent
removal lead to an ademption of gift. In our present situation, 2 gold bars sent for
polishing were a temporary removal, thus the gift will not be adeemed. Again, if
you cannot trace the gift, it will lapse.

*Issue 3- Dr Strange sold the property

In the case of Banks v National Westminster Bank, it has also been held that
ademption cannot takes place without the consent of the testator or property disposed
without lawful authority. Here, there is lawful authority because Dr Strange acted
under the Power of Attorney given by Spidey. At the end of the day, the gift is
adeemed. He acted lawfully, not cautiously. What Dr Strange did is legal thus the
removal and selling of the remaining gold bars is to be deemed as an expressed
authority which is done with consent. As a result, the proceeds of sale cannot be given
to the beneficiaries because ademption applies.
b- RM 400,000 for the benefit of my issues namely Steve Rogers and Iron Man in
equal proportions.
It transpired that Spidey had a son & a daughter. The latter is residing in
Africa and has an affinity for super heroes. Spidey in his last days also
indulges in fantasy of heroism to alleviate his pain of cancer.

*Issue- no one name Iron Man. Is that his daughter? Description in the will is
controversial and ambiguous. It doesn’t make sense. Will the gift lapse or is it a valid
disposition? How do we construct the will?

Eccentric Testator Rule

In Re James, Buckley J stated that a testator is allowed to be capricious and eccentric

(uncommon/abnormal/irregular) in the making of a will. In Abbot v Middleton, in
cases when ordinary meaning principle is not applicable, then the court may adopt the
meanings which reflect the least capricious (inconsistent/unstable) consequences.
Here, ordinary words of “Iron” means iron and “Man” means man. When they are
being put together, it means something else, and thus, you need to choose
interpretation that gives the least capricious result. So when you interpret meaning in
the will to give the least capricious result, Iron Man must be given reference to the
proper human being. The most capricious result would be to interpret Iron Man as
flying around or the super powers.

Falsa Demonstrative Rule

In the case of Ryall v Hannam, John, the illegitimate son of Elizabeth Abbott
was awarded the estate despite wrong description in the will which provide for
‘Elizabeth Abbott a natural daughter of Eliza Abbott’ when there is no such person
existed. Thus, wrong description does not harm the validity of the will. It is not fatal
to the disposition. Testator is allowed to add wrong decisions and even eccentric
decisions. Meanwhile, Re Gifford stated, the falsa demonstrative rule does not apply
if the property that has been wrongly described was not in the possession of the
testator at the time the will was made. This is the limit of falsa demonstrative rule.
Falsa rule does not apply if the property is not in possession of the testator.
 Thus, if 400k is not in the possession of the testator when the will is made,
falsa rule cannot be applied. However, this must be countered by selling the 400k
(general gift), it is not a specific gift. As such, even if you don’t have 400k when the
will is made, it is fine. You can sell the other assets at a later date and get the money
and use it for the 400k. The case of Re Gifford only works when the property is
specific. If it is a general disposition like 400k, Re Gifford doesn’t really have
repercussion to the disposition.
Re Mayell is another illustration of the falsa rule. The testator devised 2
properties “no.19 and no.20 Castle Street” but only owned no.39 in Castle Street but
two (no.19 & 20) in Thomas Street. The court held that house no.39 passed under the
will as the rule of falsa is applied. Even if the description of the will is wholly
incorrect, as in the case of Re Price (1932), since the intention was clear, the will is to
be deemed as valid. However, in NSCPP v Scottish NSCPP, if the name used is the
registered legal name, like NSCPP, then the court will never touch it. The intention
became irrelevant because NSCPP is an establish association. You cannot change or
rewrite the will. NSCPP v Scottissh NSCPP is another case to the limits of the falsa
rule.

Armchair Principle

Armchair principle is when the court puts themselves in the testator’s position.
In the case of Boyes v Cook, court could place itself in testator’s armchair and
consider the circumstances by which he was surrounded when he made his will.
Moreover, in Allgood v Blake, the court again can put itself in the position of testator
and to consider all material facts and circumstances known to the testator when it
comes to the words used in the will in order to interpret the said words by looking at
the facts/ circumstances which were in the mind of the testator. There are two types of
extrinsic evidences namely direct and circumstantial evidences. Circumstantial
evidences are obtained from the surrounding circumstances convinced by the
witnesses when the testator had died.
The leading case of armchair principle of extrinsic evidence is Re William.
Extrinsic evidence may be used to help interpret different possible meanings of words
used by the testator provided the meaning is capable of bearing the context of the will.
If the meaning is one which the word/ phrase cannot bear then it would tantamount to
re writing the will. Here, the possible meaning of the words of 400k to Iron Man
(Kelvin’s child), could be or refer to the daughter or iron man in the comic or it could
be nobody, so extrinsic evidence is allowed to be used provided the meaning is
capable of varying in the context of the will. Here it is capable because the daughter
has an affinity for the superheroes and the father also indulges in the fantasy of
superheroes. In other words, it runs in the family.
In Re William, it has also been stated that extrinsic evidence cannot be used to
give words a meaning which they are incapable of having, only to clarify ambiguity
or when the words are meaningless. Sometimes, the word doesn’t exist. When it
happens, extrinsic evidence cannot be used. Words with two or more possible
meanings can be aided by such evidence to help the courts conclude the correct
construction. If the words cannot mean something despite a liberal interpretation, then
no evidential aid can declare that meaning.
In Charter v Charter, the testator left farm to ‘my son Foster Charter’. He had
3 sons all bearing the name. 1 died before the will was made and 2 other survived the
testator. William settled down 100 miles away and only saw his father occasionally
whilst the other (Charles) stayed and assisted the father in managing the farm. The
court decided that evidence was admitted to show that Charles was intended to take
the farm. The court can ascertain all the facts known to the testator to determine
whether there existed a thing/ person to which the description in the will could be
applied with sufficient certainty. Thus, evidence of relationship is clearly admissible.
In simple words, the case of Charter deals with admitting evidence to show who
deserves to get the money. Here, we have the choice of actual Iron Man or the
daughter. So, evidence will be admitted via the case of charter, to show that if during
Spidey’s lifetime, he is close to his daughter and called her iron man, than that
disposition will be valid because iron man is referring to his daughter.
A good illustration of this is the case of Parsons v Parsons. The testator left
property to his only one living brother whom he called him as EP, when his brother’s
real name was SP. The court admitted the evidence to show that the testator has a
habit to call SP with EP. Similarly, in the case of Lee v Pain, the testator left property
to Mrs & Miss Bowden. The court gave the property to Mrs & Miss Washbourne as
evidence admitted show that the testatrix habitually referred to the Washbourne as
Bowden. Furthermore, in Thorn v Dickens, evidence admitted show that the testator
whom left the property “all for mother” intended it to be for his wife as he habitually
called her “mother”. All cases above-mentioned are the illustrations as to how Iron
Man can be used to construe the gift as to be given to the daughter.

* When the court uses intrinsic evidence to interpret the will, the principle of
construction of will is called the dictionary principle.