EQUITY & TRUSTS I (LAW 61904)

MARCH 2023 SEMESTER

TUTORIAL 1 – ELEMENTS OF PROBATE LAW

Question 1.

Abbot and his wife, Abbes had triplets – two boys, Tom and Dick, and a girl, Harriet. Abbes died
before Abbot. All the children are of full age. Harriet is unmarried but is a rich successful
businesswoman. Tom and Dick, on other hand, have failed in every business venture that they
ever undertook, and are more or less penniless.

Abbot’s Will made the following provisions: -

Abbot’s signature appeared at the head of the will and all the legacies mentioned above are set
out after it. Charlie and his friend, Joseph witnessed Abbot’s Will in Abbot’s presence.

The market value of the Taman Hijau house is RM 300,000. The rest of Abbot’s estate is valued
at RM 30 million. It includes four houses that generate an annual rental income of RM 500,000.
Harriet believes that she was the person named in Clause 2 of Abbot’s Will. Neither Charlie nor
Joseph can remember whose name appeared in Clause 2.

Tom, Dick, and Harriet wish to challenge the validity of Abbot’s Will. Advise Tom, Dick and
Harriet:
(i) as to the possible grounds for challenging the validity of the Will;
(ii) the likelihood of such challenges being successful; and
(iii) what would be their rights, if any, if the Will is valid.

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Question 2

Costello’s wife passed away shortly after giving birth to their twin sons Bob and Charlie.
Costello had a history of bouts of mental illness with lucid intervals in between. In January 2019
he was well enough to be released from the mental hospital. In February 2019 he met his
solicitor, Mr. Slacker, and gave him instructions to prepare his Will. Mr. Slacker took down the
instructions but only prepared the draft Will in June 2019. Meanwhile, in May 2019, Costello
was once again admitted to a mental hospital. In July 2019, Mr. Slacker visited Costello at the
mental hospital where he got Costello to sign the Will with himself as a witness. On his way out,
Mr. Slacker remembered that the Will needed to be witnessed by another person. He therefore
got the receptionist at the mental hospital to sign as the second witness to the Will. Costello
remained in the mental hospital right up to the time of his death.

Costello’s Will made the following dispositions:

Charlie wishes to challenge the validity of Costello’s Will. Advise Charlie:

(i) as to the possible grounds for challenging the validity of the Will;
(ii) the likelihood of such challenges being successful; and
(iii) what would be his rights, if any, if the Will is valid.

Question 3

Explain, with reference to statutory provisions and/or case law, whether the following Wills
are valid or not. Where relevant, if the Will concerned is invalid, how would the estate of the
deceased be distributed. [You may assume that the testator concerned died domiciled in
West Malaysia.]

(a) Richard executed a will on 1st July 2010 disposing all his estate valued at RM600,000.00 to
his wife Susan, his daughter Jeanna, and his best friend David, to be divided equally among
them. Richard appointed Robert as an executor to his will. The will was witnessed by David
and Robert. After Richard’s death, Robert sought to propound the will to the court.
Unfortunately, there was a challenge on the validity of Richard’s will by his father, Harold,
on the ground that Richard did not possess adequate mental capacity to execute a will as he
(Richard) was certified to be insane a month prior to the execution of the will.

(b) In January 2016, John made a valid will leaving all his estate to his wife, Julie. In January
2017 he said to his friend, Edward, “I am going to change my will and leave all my money to
my cousin, Joseph. I do not want to do it but lately my uncle’s ghost has appeared to me
several times telling me that I must do it”. After John’s death, a will executed in February

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 2018 was found in which he gave all his money to Joseph. John and Julie do not have any
children. Julie wishes to challenge the validity of the 2017 will.

(c) In 2018, Ah Moon executed a will in which she left all her estate to her husband and her son
in equal shares. She then put her thumbprint at the foot of the will in the presence of the
husband and the son. On the next day, Ah Moon produced the will to Ah Sun, her sister
after which Ah Sun subscribed her name as a witness. Ah Moon and Ah Sun then went to a
neighbour’s house, where Ah Moon, in the presence of Ah Sun, asked the neighbour, Nancy,
to witness her will. The neighbour thereupon subscribed her name as a witness in the
presence of Ah Moon only since Ah Sun went to the washroom. Ah Moon’s husband and
her son are her only surviving next-of-kin.

(d) Zorro made a draft will in which he left his entire estate to his parents, and nothing for his
wife, Catherine. He wanted to execute the will in front of two witnesses, Harry, and Potter,
whom he had asked to come over to his house for that purpose. Instead of putting his usual
signature onto the will he just wrote the words “Macho Man” as he was popularly known
amongst his family and friends. When he did so, only Potter was present with him in the
same room while Harry was in the adjoining room busy watching a movie on Netflix.
There was a window between the two rooms. Harry could have seen Zorro writing his self-
acclaimed description onto the will if he had cared to do so. But Harry did not do so. When
Potter put his signature on the will, only Zorro was present because Harry had gone
downstairs to take something from his car. By the time Harry put his signature onto the will,
Potter had gone home leaving only Zorro with Harry.

TUTORIAL 2 – CERTAINTY OF INTENTION & CERTAINTY OF SUBJECT-MATTER

Question 1.

Adam is a businessman. His wife Tina is not involved in the business. He maintains a business
account into which he deposits all monies received from his clients for his services and from
which he also makes payments for all business expenditure. Many years ago, Adam won RM 1
million from a lottery draw and told Tina that “this money is as much yours as mine. It will come
in handy in our old age”. They were supposed to open a joint bank account into which the
money was to be deposited. Unfortunately, Tina fell ill the next day, and so Adam proceeded to
deposit the money into a new bank account in his sole name. Thereafter Adam, who kept
winning further small sums from the occasional gambling he indulged in paid these winnings
into the account without ever withdrawing any sums therefrom. Adam has now run into
financial difficulties. His creditors (who are all unsecured) claim that they are entitled to be
repaid the debts owed to the from the monies in both of Adam’s bank accounts.

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Advise Tina as to what rights, if any, she may have to the monies in Adam’s non-business
account? How, if at all, would your advice differ if Adam had paid the lottery and his winnings
from gambling into his business account?

Question 2.

‘Just as a person can give, by will, a specified number of his shares of a certain class in a certain
company, so equally, in my judgment, he can declare himself trustee of 50 of his ordinary
shares in MEL or whatever company may be and that is effective to give a beneficial proprietary
interest to the beneficiary under the trust.’ (per Dillon LJ in Hunter v Moss [1994] 1 WLR 452).

Is Dillon LJ’s statement of law consistent with the principles enunciated in Re London Wine Co
(Shippers) Ltd [1986] PCC 121 and Re Goldcorp [1995] 1 AC 74 and do you agree with it?

Question 3

Mrs. Wannabe Settlor wishes to make several gifts to various people via dispositions in an inter
vivos trust deed. However, she is concerned about the validity of some of the proposed trusts
and gifts and accordingly has come to you for advice.

The relevant provisions of the draft trust deed read as follows: -

1. A sum of RM 1 million to my lifelong friend Trusty in full confidence that he will invest the
same in shares in public listed companies and hold the dividends upon trust for my infant
daughter Charity.
2. A sum of RM 5 million to my husband, Wimpy Settlor, for him to use as he sees fit and hold
any money that he has not used within a year of this gift upon trust for charity.
3. A sum of RM 10 million from my sole-proprietorship business account No. 123 with August
Bank Bhd being the money I received as main contractor for a building contract and which I
am holding as a retention sum on trust for my sub-contractor to be paid to my sub-
contractor after the defects liability period for the project expires.

Advise Mrs. Settlor on the validity of the proposed trusts/dispositions.

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TUTORIAL 3 – CERTAINTY OF OBJECTS & CONSTITUTION OF TRUSTS

Question 1

Henrietta has recently died. She had been a long-standing patron of the arts, and for many
years the conductor of the Kuala Lumpur Philharmonic Orchestra (“the KLPO”). She
appointed Amadeus as her sole Executor and Trustee. Discuss whether the objects of the
following dispositions in Henrietta’s Will to Amadeus satisfy the requirement of certainty of
objects.

(a) RM 3 million to be divided equally between everyone involved in the September 2018
performance of Beethoven’s Ninth Symphony by the KLPO.
(b) RM 2 million to be distributed in such shares as Amadeus deems proper between piano
teachers in Kuala Lumpur.
(c) RM 1 million to my friend Wolfgang for the benefit of competent sopranos living in
Kuala Lumpur. Any disputes as to who is a competent soprano are to be resolved by
Marguerite.
(d) RM 100,000 to every old friend of mine but the total amount to be distributed to my
old friends must not exceed RM 10 million.

A video recording of the September 2018 performance by the KLPO of Beethoven’s Ninth
Symphony is available in the archives of the KLPO office. Kuala Lumpur has a population of
around 2 million. Marguerite, a world-famous singing teacher, is the author of the popular
book, Essential Singing Technique for Sopranos.

Question 2

Critically examine the Rule in Milroy v Lord (1862) 4 De GF&J 264 and give your opinion
whether the departure from this Rule in subsequent case law is justified.

Question 3

Mr. Coda, an extremely rich man passed away on 31 st January 2021. On his death his only
surviving relatives were the only two children of Mr. Coda’s late brother, DeNise and
DeNephew.
In the year 2000 Mr. Coda had employed a live-in maid, Madelyn who continued working for
him for a paltry salary up until his demise. But apparently, Madelyn had a unique talent. One
morning, a few days after she had been employed, Madelyn laughingly told Mr. Coda that she
had a dream that if she bought a particular company’s shares on the stock market, she would
make a fortune. Mr. Coda was intrigued. That same day he bought shares in the company that
Madelyn had mentioned. Incredibly, the value of the shares went up. Mr. Coda immediately
sold the shares and kept the profit he had made in a separate bank account. Thereafter, Mr.

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Coda started investing in shares based solely on Madelyn’s dreams and by the time of his death
he had accumulated a profit of RM 20 million from his share trading activities. On a few
occasions during his lifetime Mr. Coda said things like “Madelyn, you have been so good to me.
You know, I have made tons of money following your dreams. I will make sure that you benefit
as well. Just don’t leave me to go work somewhere else. Nobody will take better care of you
than me, and after I am gone, you will be a very rich lady.” Madelyn felt very pleased whenever
Mr. Coda said this to her, and she turned down offers to work elsewhere.
On 21st January 2021, Mr. Coda was diagnosed as having leukaemia. He was told that he did not
have more than 3 months to live. However, ever the optimist he felt that by undergoing
chemotherapy he would be able to fight it off and continue living for at least a few more years.
Nevertheless, he decided to sort out issues relating to inheritance of his property after his
death. He decided that he would make an immediate gift of his bungalow in Kenny Hills, Kuala
Lumpur to DeNise.
On 22nd January 2021, his solicitor Ms. Remiss and DeNise came over to Mr. Coda’s house. Mr.
Coda and DeNise signed the Form 14A (the transfer form prescribed by the National Land Code
1965) relating to the bungalow as transferor and transferee respectively in Remiss’ presence.
The Form 14A clearly stipulated that Mr. Coda was making a gift of the bungalow to DeNise. Mr.
Coda then gave Remiss the document of title to the bungalow along with all other documents
necessary to register the transfer in DeNise’s favour with the relevant land office. Upon
reaching her home, Ms. Remiss noticed that Mr. Coda had signed the transfer form in blue ink
and not black ink as prescribed by the National Land Code 1965. However, since she was going
on a three-week vacation, she took no steps to have the error rectified. Consequently, by the
time she returned from his vacation, Mr. Coda had passed away and the bungalow remained in
Mr. Coda’s name.
On 23rd January 2021, Mr. Coda had executed a Will, appointing Mr. Hangman as his executor,
and leaving his entire estate equally to DeNise and DeNephew. Mr. Coda forgot entirely that
Mr. Hangman in fact owed him (Mr. Coda) RM 5 million.
Mr. Hangman has now obtained probate of Mr. Coda’s Will.
Madelyn claims that she is fully entitled to the RM 20 million in Mr. Coda’s bank account.
DeNise claims that she is solely entitled to Mr. Coda’s bungalow, whilst DeNephew claims
that he has a half-share interest in the bungalow. DeNise and DeNephew claim that Mr.
Hangman must repay the debt he owed Mr. Coda.
Discuss.

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TUTORIAL 4 – NON-CHARITABLE PURPOSE TRUSTS
Question 1
Lim, who died last month, left a will in which he made the following dispositions:
(a) ‘RM 100,000.00 for the erection and maintenance of a statue of my late wife.’
(b) ‘RM 500,000.00 to the Ulu Kelang Recreation Club for the purpose of building a new
clubhouse in accordance with the plans and specifications attached herewith.’ [The Ulu
Kelang Recreation Club is a non-charitable unincorporated association. Its constitution
provides that the members of the Club may at any time pass a resolution with a majority of
75% to utilise or distribute the funds of the Club in accordance with the terms of such
resolution.]
(c) ‘My land at No. 123, Jalan Besar, Kuala Lumpur to my trustees to be maintained and used as
and for the purpose of a recreation or sports ground for the benefit of the employees of
Taylor’s University for the period of 21 years from the date of my death. ".
Advise Lim’s executors and trustees as to the validity of these dispositions. Candidates may
assume that the purposes of the legacies are non-charitable.
Question 2
‘Another feature which negates the supposition that the Foundation is a private trust, is the
absence of any definite object i.e. “somebody in whose favour the court can decree
performance" (see Morice v Bishop of Durham (1803-13) AII ER 451).’ (Per Abdul Hamid
Embong, JCA in Datuk Musa Aman and Others v Tan Sri Chong Kah Kiat [2009] MLJU 987).
Critically examine the rationale of this principle and the situations in which case law has
sought to circumvent it in giving effect to outright gifts or gifts by way of trust for non-
charitable purposes. [Candidates are to disregard the case law relating to the anomalous
exceptions to this principle.]
Question 3
‘…though one knows there have been decisions at times which are not really to be satisfactorily
classified, but are perhaps merely occasions when Homer has nodded, at any rate these cases
stand by themselves and ought not to be increased in number, nor indeed followed, except
where the one is exactly like another.” Per Lord Evershed MR in Re Endacott [1960] Ch 232.
What are the ‘occasions when Homer has nodded’? What limitations has the law placed on
such ‘occasions’?

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TUTORIAL 5 – SECRET TRUSTS
Question 1
Roberta made her will in April 2020. The will was witnessed by Roberta’s niece, Natalie. The will
contained the following clauses:
(a) “I give my house No. 123, Jalan Besar, Kuala Lumpur, to my friend, Charlie”;
(b) “I give RM 50,000 to my sisters, Alice and Agnes, for purposes communicated to them”;
(c) “I give my residuary estate to my daughter, Dorothy”.
Before executing the will, Roberta had told Charlie that she would be leaving him some
property on trust for her niece, Natalie. Roberta told Charlie, “The details would be contained in
a sealed letter which could be found in the top drawer of the bureau in my living room. Here are
the keys to the drawer, but please do not open it until after I have passed away.” Charlie
accepted the keys without saying anything.
After executing the will, Roberta had written separate letters to Alice and Agnes: “I will be
leaving RM 50,000 in my will to you. Will you please hold it on trust for my nephews, Jack and
Joe?” Alice replied: “I will be happy to do so.” Roberta never got a reply from Agnes, who did
receive the letter.
In May 2020 Jack was tragically killed in an accident. Roberta died two weeks later.
Advise the parties as to any entitlement they might have under Roberta’s will. How, if at all,
would your answer differ if Roberta had not given the keys to the drawer to Charlie?
Question 2
‘…the court’s endorsement of the secret trust does not breach the Wills Act or any other
statutory law…It only goes to show bona fide and the true intention of the testator, if the plea
of the secret trust succeeds.’ (Per Hamid Sultan JCA in Chin Huat Yean @ Chin Chun Yean &
Anor v Chin Jhin Thien & Anor [2018] MLJU 1370 at para [11 (c)].

Critically examine the bases upon which secret trusts (fully and half-secret) are said to be
enforceable.

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