Equity and Trusts in Malaysia
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1 Equity and Trusts in Malaysia LLB (Hons), Ahmad CLP Paul Linus Andrews LLB (Hons), LLM, CLP MALAYSIA SINGAPORE HONG KONG SWEET & MAXWELL ASIA 2005
2 Contents Preface About the Authors Table of Cases Table of Statutes xvii xxxvii A Trusts Chapter I Introduction to Trusts and Equity 3 Trusts 3 Nature of trust 3 Classifications of trusts 7 Trust in contrast to other legal relationships 9 Trusts and perpetuity period Equity Meaning of equity Application of equitable principles in Malaysia 16 Equitable maxims Protective trust Chapter II Express Private Trusts 21 Creation of express trusts 21 Formalities The requirement of certainty for express private trust 22 Chapter Constitution of Express Trusts 41 Trust must be properly constituted 41 Transfer of property 41 Owner's declaration as trustee 41 Transfer of property to trustee 42 Exceptions to the rule that equity will not assist a volunteer 47 Rule in Strong v Bird 47
3 xii Contents Proprietary estoppel 50 Donatio mortis causa 53 Benevolent construction 55 Chapter Constructive Trusts 57 The nature of constructive trusts 57 Circumstances of constructive trusteeship 60 Fiduciary relationship 60 Strangers as constructive trustees accessory and recipient liability 64 Agreements to create secret trusts 78 Mutual wills 79 Other instances of constructive trusts 80 Vendors of land 80 Acquisition of property by killing 81 Chapter V Resulting Trusts 83 Circumstances of resulting trusts 83 Resulting trust on account of contributions to property 84 A purchases property using his own funds but putting it in the name of B 85 Voluntary transfer 85 A and B participate in a purchase, the funds or part of them being provided by A but tide in the name of B 86 Rebutting resulting trusts 86 Inconsistent evidence 87 Presumption of advancement 88 Proof of illegality to rebut presumptions 92 Resulting trust on account of failure to exhaust beneficial interests Surplus funds 96 Surplus funds on dissolution of unincorporated associations 98 Chapter VI Charitable Trusts 103 Introduction Benefits of charitable trusts 104 Validity 104 Fiscal advantages Enforcement The element of public benefit 106
4 Contents Public policy considerations Exclusively charitable The heads of charity The relief of poverty The advancement of education The advancement of religion 123 Other purposes beneficial to the community Failure of charitable trust and cy-pres 133 Impossibility or impracticably Chapter VII Non-Charitable Purpose Trusts 139 Position of non-charitable purpose trusts 139 Exceptions to non-validity of purpose trusts Maintenance of specific animals 142 Tombs and monuments 143 Other purposes 143 Holding of property by unincorporated associations 144 Chapter VIII Janji, Estoppel and Assignment 151 janji Equitable estoppel Promissory estoppel Proprietary estoppel 160 Estoppel by convention 161 Assignments of choses in action 162 Assignment under the Civil Law Act Equitable assignment 165 Chapter DC Secret Trusts 171 Fully secret trusts 172 Essentials of a valid secret trust 172 Uncertainty in terms of trust 174 Standard of proof Half secret trusts Communication to the trustee before or at the time of the execution of the will Communication to the trustee after the execution will
5 xiv Contents Trusteeship Chapter X Appointment, Retirement, Removal of Trustees and Fiduciary Nature of Trusteeship 181 Appointment of trustees 181 Initial trustees 181 Subsequent appointments Retirement of trustees 185 Express provision 185 Statutory provisions Consent of all beneficiaries 185 Court order 185 Removal of trustees Express provision Statutory powers Court's inherent power 187 Death 189 Disclaimer Number of trustees 190 Vesting of trust property 190 Vesting orders Evidence as to vacancy in a trust 194 Fiduciary nature of trusteeship 194 Remuneration Secret profits Chapter XI Duties and Powers of Trustees 203 Generally 203 Trust instrument and Trustee Act Duty to invest 204 Investment powers 207 Powers supplementary to powers of investment Enlargement of powers of investment 213 Duty to convert 214 Duty to apportion 215 Duty to distribute 216 Protection by way of advertisement Duty to provide accounts and information 217 Delegation by trustees: Employment of agent 222 Maintenance 228
6 Contents xv Advancement 230 Variation of trust 233 Salvage 234 Emergency 234 Power of court 234 Remedies Chapter XII Specific Performance 239 Nature of specific performance 239 When is specific performance available 240 Performance of an act 240 No standard to ascertain actual damage 240 Pecuniary compensation not adequate relief 240 Pecuniary compensation cannot be obtained 246 Specific performance where subject has partially ceased to exist 246 Specific performance of apart of contract 246 Proceedings against the government 248 Power to award compensation 248 Contracts not specifically enforceable 250 Discretionary remedy 258 The exercise discretion 259 For whom enforcement cannot be made 263 Contracts of sale by one with no tide or by a voluntary settlor 264 Against whom contracts cannot be specifically enforced 265 Effect of dismissal of suit for performance 269 Chapter XIII Injunctions 271 Nature of injunctions 271 Overview of types of injunctions 271 Perpetual injunctions 272 Mandatory and prohibitory injunctions 277 Interlocutory (or interim) injunctions 278 The law prior to American Cyanamid 279 The law expounded in American Cyanamid 280 Identification of right 290 Interim mandatory injunction 290 When injunctions cannot be granted 292 Injunction to perform negative agreement 294
7 xvi Contents Erinford type injunction 297 Quia timet injunction 297 Mareva injunction 299 Guidelines for the grant of Mareva orders 300 Chapter Anton Piller Orders, Rectification and Rescission 307 Anton Piller orders 307 Conditions for grant 308 Anton Piller and privilege from self-incrimination 310 Rectification 310 When instruments may be rectified 312 Specific enforcement of rectified contract 314 Rescission When rescission may be adjudged 315 Rescission for mistake 316 Alternative prayer for rescission in suit for specific performance Cancellation of written instruments 316 What instruments may be partially cancelled 317 Appointment of receivers 318 Chapter XV Breach of Trust and Compensation in Equity 319 General 319 Equitable compensation Breach of duty causing direct damage or loss to trust property Unconscionable infidelity or disloyalty 321 Loss attributable to failure to exercise appropriate skill and care 322 of material fact 326 Contributory negligence 329 Measure of damages in particular instances 330 Account of profit 331 Defences for breach of trust 333 Exclusion clauses 333 Acquiescence or consent by beneficiaries 335 Impounding of the beneficiary's interest 336 Statutory power to relieve trustee 336 Proprietary remedies: Tracing in equity 337 Fiduciary relationship 338 Unmixed funds 339 Mixed funds 340 Claim in personam 348 Index 351
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