TRUSTS AND TRUSTEE – CREATION OF TRUST

Woody has a company in which he, his children and four wives have shares. He signed a formal agreement to transfer all of his shares to his three sons (Donald, Bryson, and Alan) out of love and affection. However, Woody did not take any action to effect the transfer of the shares under the formal agreement. Instead, he transferred his shares to his first wife (contrary to the terms of the formal agreement). The first wife later sold his shares to 3rd parties. Woody passed away shortly.

Q: Can the three sons sue the first wife by claiming that the shares are gift from their father pursuant to the formal agreement??

A: No. The gift is imperfect. This is because there was no action by Woody to effect transfer of the shares to the three sons under the formal agreement. It is merely a comfort agreement to keep peace amongst the families at best.

Q: Before the shares are transferred under the formal agreement, can Woody later change his mind and give it to someone else.

A: Yes. There is no equity to perfect an imperfect gift and the law of trust could not be invoked to effectuate an incomplete gift nor could equity assist a volunteer. If Woody would want to transfer the shares and give them to his sons (as per the formal agreement), he would have done it himself. If he hasn’t, Woody can always change his mind and give it to someone else.

Q: Can the three sons claim that the first wife is a constructive trustee holding the shares for them under the formal agreement?

A: No. There was no consideration in the formal agreement. It is out of love and affection. Even if the formal agreement uses the word “forthwith”, as long as Woody did not effect the transfer to the three sons, there is no trust or constructive trust.

 

Sorotan Terkini

PROPERTY LAW – LEGAL IMPLICATIONS OF SALE AND PURCHASE AGREEMENT BREACHES AND THE RIGHT TO OFFSET IN MALAYSIAN PROPERTY TRANSACTIONS

In the realm of Malaysian property transactions, the intricacies of Sale and Purchase Agreements (SPAs) and the enforcement of Liquidated Ascertained Damages (LAD) play pivotal roles in safeguarding the interests of both developers and purchasers. This article delves into the legal framework governing the rights and obligations of parties involved in property transactions, particularly focusing on the consequences of contractual breaches and the conditions under which a purchaser can exercise the right to offset against LAD. Through the examination of relevant case law and statutory provisions, we illuminate the legal pathways available for resolving disputes arising from the failure to adhere to the terms of SPAs, thereby offering insights into the equitable administration of justice in the context of Malaysian property law.

Read More »

WINDING-UP – OFFICIAL RECEIVER AND LIQUIDATOR (“ORL”)

In cases of compulsory winding up, the court would appoint a liquidator under s.478 of the Companies Act 2016 (“CA 2016”) to expeditiously recover and realise the assets of the wound-up company for the distribution of dividends to creditors and administer any outstanding matters involving………..

Read More »

JUDICIAL REVIEW – PROCEDURAL FAIRNESS AND LOCUS STANDI

This excerpt illuminates the foundational principles of judicial review as outlined in Order 53 of the Rules of Court 2012. It highlights the criteria for challenging public decisions on grounds of illegality, irrationality, or procedural impropriety. Central to the discussion is the question of timing in judicial review applications, particularly in cases of procedural unfairness. The practical scenario underscores the significance of a “decision” by the relevant authority as a prerequisite for locus standi, drawing insights from the case of Hisham bin Halim v Maya bt Ahmad Fuad & Ors [2023] 12 MLJ 714.

Read More »

CONTRACT LAW – CONTRACTUAL INTERPRETATION REMEDIES UNVEILED: DECIPHERING CONTRACTUAL CLAUSES AND LEGAL BALANCE

This legal updates explore the principles governing the interpretation of agreements, emphasizing the importance of clarity and unambiguity in contractual terms. It delves into a key issue involving restrictions on remedies for breach of contract, shedding light on the court’s commitment to upholding plain meanings. The illustrative scenario involving shareholders X and Y dissects a pertinent clause, showcasing the delicate balance between restricting remedies and ensuring fairness in legal proceedings.

Read More »

TIME’S UP: NAVIGATING THE 12-YEAR LIMITATION

In the intricate dance of land security and loan agreements, the ticking clock of the limitation period cannot be ignored. This excerpt delves into the critical understanding of how the 12-year limitation period, as prescribed by the Limitation Act 1953, plays a pivotal role in the enforcement of property charges in Malaysia. It elucidates the start time of this countdown and its legal implications, providing a comprehensive guide for both lenders and borrowers in navigating these time-sensitive waters.

Read More »
ms_MYBahasa Melayu
× Bagaimana boleh kami membantu?