LAWS 3331 EQUITY & TRUSTS II

SECTION 1

ASSOC PROF DR MOHSIN HINGUN

WRITTEN SUBMISSION

ALIFF ZAQWAN BIN SHAIFULNIZAM 1918023

Question

Determine on the nature of the trust;

i) Mee Lan left RM 3000 for the maintenance of aged and poor people at Gunung Ledang
ii) RM 888K to be applied for the benefit of the widows and orphaned children of deceased
officers and deceased ex-officers of Polis DiRaja Malaysia (PDRM).
iii) All my residuary to all Kelab Burung Malaysia in Puchong and to my favourite donkey at
my ex-boyfriend’s house.
iv) RM450,000 to David Siggam Society to be used for the annual celebration of Deepavali at
Batu Caves.

Introduction

Generally, a trust can only be created for the benefit of persons but not for purposes unless
such purposes are charitable purposes. A trust created for other than charitable purposes
would be invalid. The reason is that it would be impractical to enforce such trust. This
position is reflected in Leahy v Attorney General for New South Wales 1 which held that a gift
made for purpose would be invalid as purpose cannot sue but if it be charitable, the Attorney
General can enforce it.

Charitable trusts are a form of express trust dedicated to charitable purposes for public
benefit. From this definition, it can be deduced that charitable trust must fulfill the three
certainties, is dedicated to charitable purposes and benefits the public.

The English Statute of Charitable Uses 1601 provides what constitutes charitable purposes.
The modern definition of charitable trust can be found in the dicta of Lord Macnaghten in
Income Tax Special Purposes Commissioners v Pemsel2 which states that charity comprises
four divisions, relief of poverty, advancement of education, advancement of religion and
other purposes beneficial to the community. This principle has been adopted in the local case
Veerasamy Krishnasamy v Janakki Ammal 3 and Re Abdul Guny Abdullasa. 4 In addition, a
charitable trust must benefit the public, as was held in Scottish Burial Reform and Cremation
Society v Glasgow Corp. 5 Thus, in order to determine whether the trusts above are charitable
trusts it must be determined whether the trusts are made for charitable purposes and whether
they benefit the public.

1
[1959] AC 457
2
[1891] AC 531
3
[1947] 1 MLJ 157
4
[1936] MLJ 140
5
[1968] AC 138

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Question i: Mee Lan left RM 3000 for the maintenance of aged and poor people at
Gunung Ledang

The relevant heading of charity is relief of poverty. It must be determined whether the aged
and poor people are in poverty. The meaning of poverty as was held in Re Coulthurt’s Will
Trust6 is to go short in the ordinary acceptance of that term, due regard being had to their
status in life and so forth. In Joseph Rowntree Memorial Trust Housing v A.G. 7, it was held
that aged, impotent and poor people are considered as being in poverty. Thus, it is clear the
aged and poor people, who are given the maintenance, are in poverty.

A question that may be raised is would this trust satisfy the public benefit requirement when
the trust only benefits the poor in Gunung Ledang. In Re Scarisbrick it was held that
charitable trust for the purpose of relief of poverty is not subject to public benefit as long as
benefit for a particular class or persons not specific individuals. In Dingle & Turner8, a trust
was created for the benefit of poor employees of a company, E Dingle & Co. It was held that
it was a charitable trust as it benefits people that fell under a certain description rather than
specific individuals. Similarly, since the trust benefits a class of people which meet the
description which is aged and poor people of Gunung Ledang, this fulfills this requirement.

Therefore, the trust of RM 3000 for the maintenance of aged and poor people at Gunung
Ledang is a valid charitable trust as it is made for the purpose of alleviating poverty.

Question ii: RM 888K to be applied for the benefit of the widows and orphaned children
of deceased officers and deceased ex-officers of Polis DiRaja Malaysia (PDRM).

The legal issue is whether widows and orphaned children are considered as being in poverty
and whether the trust created for their benefit constitutes a charitable trust for the purpose of
alleviating poverty. In Re Coulhurst, a trust was declared for the benefit of widows and
orphans of officers or ex-officers of Coutts & Co. It was held that the trust is charitable and
the trust need not necessarily expressly state that its purpose is to alleviate poverty as the
court would look at the trust as a whole to determine its purpose.

It was also held in the case that the meaning of poverty is wide, does not necessarily mean
destitution and are persons who have to ‘go short’ of something. Based on the definition of
poverty in Re Coulhurst, orphans and widows of bank workers could be regarded as in
poverty. This was also highlighted in an article by University of Reading entitled Charity
law’s transition from ‘poverty’ to ‘financial hardship’. 9 Similarly, widows and orphaned
children of deceased officers and ex-officers of Polis DiRaja Malaysia (PDRM) are

6
[1951] Ch 661
7
[1983] 2 WLR 284
8
[1972] AC 601
9
Wilde, D. and Moore, I. (2021) Charity law’s transition from ‘poverty’ to ‘financial hardship'. Trust Law
International, 34 (4).pp. 249-259. ISSN 0962-2624 Available at http://centaur.reading.ac.uk/95535/

2
considered as in poverty. Although it is not clearly spelled out that the trust is to alleviate
them from poverty, it can be inferred that the trust is created for charitable purposes.

Therefore, the trust of RM 888K to be applied for the benefit of the widows and orphaned
children of deceased officers and deceased ex-officers of Polis DiRaja Malaysia (PDRM) is a
charitable trust as it is made for the purpose of alleviating poverty.

Question iii: All my residuary to all Kelab Burung Malaysia in Puchong and to my
favourite donkey at my ex-boyfriend’s house.

Since the trust, which is made for the benefit of animals, does not fall under the other three
headings of charitable purpose, the question is whether it falls under the fourth heading which
is a trust for other purposes beneficial to the community. In Scottish Burial Reform and
Cremation Society v Glasgow Corporation10, a charitable trust for other purposes must be
beneficial within the spirit of the Preamble to the English Statute of Charitable Uses 1601.
This means that a trust beneficial to the community will not necessarily be charitable trust.

Generally, trust for the benefit of animals could be charitable. In Re Wedgewood11, a trust
was declared for the benefit and protection of animals and it was held that the trust is
charitable because they tend to promote kindness and public morality. However, in Murdoch
v AG (Tasmania) 12, it was held that a gift for the benefit of animals is not charitable per se as
it must benefit the community and such benefit can be perceived if the object of the gift is to
prevent cruelty to animals.

Although the objective and activities of Kelab Burung in Puchong is unavailable in the facts,
it can be assumed from the name of the organization that Kelab Burung is an organization
which educates the public about protection of birds and prevents cruelty to the birds.
Therefore, since the trust to Kelab Burung will protect birds and benefit the public, it is a
charitable trust as it is made for the purpose of benefiting animals which falls under the
heading of other purposes beneficial to the public.

In contrast, the trust to the donkey is only for a specified animal. The animal is located at an
individual’s house and is not for public view. Although the trust benefits an animal, the trust
does not prevent animal cruelty or benefit the public in any way. Therefore, the trust to the
donkey is a non-charitable trust. Nevertheless, the trust would still be valid since trust for the
maintenance of specified animals falls under the exceptions to the non-validity of
non-charitable trusts as was held in Pettingall v Pettingall.13

10
[1968] AC 138
11
[1915] 1 Ch 113
12
[1992] 1 Tas R 117, SC (Tas)
13
[1842] 11 LJ Ch 176

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Question iv: RM450,000 to David Siggam Society to be used for the annual celebration
of Deepavali at Batu Caves.

Since Deepavali is a religious celebration, the issue is whether the trust for the annual
celebration of Deepavali at Batu Caves is charitable under the heading of advancement of
religion. In United Grand Lodge of Ancient Free and Accepted Masonns of England v
Holborn Borough Council14, it was held that advancement of religion means to promote and
sustain the belief. It can be inferred that this includes religious celebrations.

Deepavali is a religious celebration celebrated by Hindus, Jains, Sikhs, and Newar

Buddhists.15
In order to determine whether the trust is made for the advancement of religion, it must be
determined whether the religions that celebrate Deepavali fall under the definition of religion
for the purpose of charitbale trust. In the UK, earlier definitions of religion found in case laws
including Bowman & Secular Society16 confines religion to only monotheistic beliefs.
Nevertheless, Section 3(2)(a) of the Charities Act (UK) has departed from this interpretation
and includes belief in more than one god and also beliefs that do not involve the belief in god
in the definition of religion. In Malaysia, polytheistic beliefs are considered as religion for the
purpose of charitable trust. In AG v Thirpoore Soonderee 17, a trust made for the benefit of a
Hindu Temple was held to be a valid charitable trust. Thus, Hinduism, which is the religious
belief that celebrates deepavali falls under the definition of religion for charitable trust.

Trust made for the advancement of religion must also benefit the public for it to be
constituted as charitable trust. In Re Herrington Gibbs v McDonnel, a trust was made for the
benefit of the saying of masses in public. It was held that public religious activities do confer
a degree of benefit to the public by benefiting those attending them. Thus, since Deepavali
celebration at Batu Caves is a public religious activity, the requirement of public benefit is
fulfilled.

Therefore, the trust to David Siggam Society to be used for the annual celebration of
Deepavali at Batu Caves is a charitable trust as it is made for the purpose of advancement of
religion.

14
[1957] 1 WLR 1080
15
McKeever, A. (2021, November 5). Diwali is the Indian Festival of Lights. here's what to know about
its history and customs. History. Retrieved May 9, 2022, from
https://www.nationalgeographic.com/history/article/diwali-history-customs-indian-festival-of-lights
16
[1945] Ch 16
17
[1874] 1 Kyshe 377

4
Reference

Hingun, M., & Ahmad, W. A. (2018). Equity and trusts in Malaysia. Sweet & Maxwell
Asia.

Wilde, D. and Moore, I. (2021) Charity law’s transition from ‘poverty’ to ‘financial
hardship'. Trust Law International, 34 (4).pp. 249-259. ISSN 0962-2624 Available at
http://centaur.reading.ac.uk/95535/

McKeever, A. (2021, November 5). Diwali is the Indian Festival of Lights. here's what
to know about its history and customs. History. Retrieved May 9, 2022, from
https://www.nationalgeographic.com/history/article/diwali-history-customs-indian-festi
val-of-lights