CREATION OF TRUST The Validity of the Dispositions

NADRA FATIMA MANNANNAWAL AQILAH BAHARUDIN

IZZAH ZAHIN ALIMAN

Invalid:- The objects (beneficiaries) are incapable of being rendered certain Re Chionh Ke Hu [1964] 1 MLJ 131

“I direct my executor to distribute the remaining thirty shares … amongsuch person professing or practising the Buddhist religion…”the objects is not limited as to the locality or area from which suchpersons may be chosen throughout the whole world whichimpossible to be ascertained.

Hence, it is impossible to identify every each or even make a completelist of all Justin Bieber’s diehard fans specifically who are wearing redshirt every Thursday throughout a country what more the wholeworld! Besides that, every Thursday is also to be vague and uncertainto its perpetuity for there every Thursday a year is (4 weeks x 12months) = 84 Thursdays

Q1. RM 1 million for the benefit of those diehard fans of Justin Bieber who are wearing red shirt every Thursday

Lambes v Eames (1871) LR 6 Ch 597“to be at her disposal in any way she may think best, for the benefit of herself and her family”

What is required is an intent to require the holder of property to carry out the settlor's wishes as opposed to a mere moral or honourable obligation

Invalid trust. Gift

Q2. “to be at her disposal in any way she may think best, for the benefit of herself and her family.” (but gave to persons outside family)

Valid Object of trust? Re Chionh Ke Hu [1964] 1 MLJ 131 McPhail v Doulton [1971] AC 424

- class ascertainableness/given postulant test ‘inhabitants’ conceptual uncertainty (human/animal?)

evidentiary uncertainty (resident-temporary, perpetual?)

Q3. Roger has transferred to Riley RM 100,000 to be distributed to all inhabitant of Sungai Pusu

Palmer v Simmonds (1854) 2 DREW 221- testatrix left “the bulk of my residuary estate” on trust- “Bulk”- something that bulges out; not the whole but

greater part of it- no trust as the word “bulk” was uncertain- For trust to be valid, settlor must made the subject matter

of trust is certain- “person who helped him” – uncertain object

Q4. “to give bulk of his estate to the person who helped him”

Need to determine object with certainty

IRC v Broadway Cottages Trust [1955] Ch 20- a discretionary trust would fail for lack of certaintyof objects if a “complete list” of the potentialbeneficiaries could not be drawn up

Q5. “secure in the knowledge that before her death, anything she has that came from me she will leave to such of my relatives and such of those persons she knows to be my old friends as she should think fit”

McPhail v Doulton [1971] AC 429 / Re Baden's Deed Trusts (No 1)- Mr Baden establish a trust for the benefit of the staff of his company, their relatives and dependents. He granted “absolute discretion” to the trustees to distribute the trust fund as they saw fit.

despite their “absolute discretion” to select the beneficiaries,trustees were not at liberty to refuse to carry out the trust- to be valid, a discretionary trust had to specify an ascertainableclass of cestuis que trust-abandoning the "complete list" test in favour of an "is or is not" test- “relatives “ = descendants from common ancestor / nearestblood relation “dependents” = partly @ wholly dependent onsomeone else

Re Barlow’s Will Trust [1979] 1 WLR 278 – applied McPhail(a) whether the direction to allow members of the family and friends to purchase the pictures is void for uncertainty since the meaning of the word “friends” is too vague to be given legal effect; (b) what persons are to be treated as being members of the testatrix's family.

“friend” (a) the relationship must have been a long-standing one. (b) The relationship must have been a social relationship as

opposed to a business or professional relationship.(c) Although there may have been long periods when circumstances

prevented the testatrix and the applicant from meeting, when circumstances did permit they must have met frequently

“family” – next of kin, related by blood – great niece (beneficiary) trust was valid, because both concepts of friends and family could be given a

workable meaning Halsbury’s Laws of Malaysia

- if list of every member of the class can’t be drawn up, it suffices if it can be proven that he/she is part of the class

Valid. A discretionary trust subject to conditions precedent

NATURE OF TRUST

TEST CONCEPTUAL CERTAINTY

EVIDENTIARY CENTAINTY

FIXED TRUST COMPLETE LIST / /

FIXED TRUST:SUBJECT TO CONDITION PRECEDENT

ONE PERSON SATISFIES

CONDITION

X X

DISCRETIONARY TRUST

ANY GIVEN INDIVIDUAL

/ X (?)

FIDUCIARYPOWER

ANY GIVEN INDIVIDUAL

/ X (?)

TESTS RELATING TO CERTAIN OBJECTS