ORIGINAL

TEST

SEMESTER 2 SESSION 2020/2021

FACULTY OF LAW AND INTERNATIONAL RELATIONS

DEGREE PROGRAMME

COURSE : LAW OF TRUST

COURSE CODE : LLB 20803
DURATION : 2 HOURS AND 45 MINUTES (including 15 minutes for
scanning & uploading answers)

INSTRUCTIONS TO CANDIDATES
1. There are THREE questions. You are required to choose and answer any TWO questions.
2. All answers must be handwritten, scanned and subsequently uploaded onto Kelip, in PDF
form.
3. Ensure all pages are numbered accordingly and your matric number is written on every
page. Begin each answer on a new page.
4. Support your answer with relevant authorities, cases and statutory provisions.
5. Max number of pages allowed is 9 pages.

Reference allowed

TRUSTEE ACT 1950

This Question Booklet consists of 3 printed pages.

 LLB20503/FUHA/SEMESTER II SESSION 2020/2021

QUESTION 1

Lucy Smith was a successful property developer living in Johor Bharu. She was married to Alex
Liu and had two adult children from her previous marriage, Jonas and Megan. In February 2020,
Lucy decided to transfer a parcel of her land to Jonas, her son, in order for Jonas to make an
independent objection to an application by one of Lucy’s competitors for a development approval.
Jonas did not pay any consideration for the transfer, and it was agreed that he would re-transfer
the land to Lucy after the town planning application was heard. Lucy told Alex and her work
colleague, Sam Ho about this agreement. After the development approval was rejected in April
2020, Jonas refused to transfer the property to Lucy.
In July 2020, Lucy decided to lease a luxury yacht for two weeks for their family holiday. The
charter required her to pay a RM20,000 bond to Luxury Boat Cruise (LBC) which was to be
deposited into LBC’s account. If at the expiration of the charter, the yacht was returned
undamaged and all terms and conditions were complied with, the bond was to be returned. Lucy
posted a copy of the charter agreement, a cheque for RM20,000 and a letter to MyBank,
instructing it to deposit the money into LBC’s general account. Upon the completion of her holiday,
Lucy returned the yacht undamaged, having complied with the charter agreement in all respects.
Unfortunately, before Lucy’s bond was repaid, LBC was placed into liquidation. Before the
liquidation, MyBank set off funds in LBC’s general account, including the RM20,000 deposited by
Lucy, to reduce LBC’s overdraft. No repayment of the deposit was made to Lucy.

Advise Lucy as to her rights over the property and the deposit sum in accordance with the law of
trust.
(30 marks)
QUESTION 2
The Lah family trust was settled by June Lah on 1 September 2019. On 2 September 2019, June
left her home and set out on a mission to assist the Rohingya refugees. The trust instrument
appoints June’s nephew, Adam, Bart and Charlie as trustees. The beneficiaries are June’s
children Justin (17 years) and Lily (16 years).
The trust deed prescribes that there shall be a minimum of three trustees and the trustees are
directed to apply the income of the trust at their discretion, for the proper education of the settlor’s
children until they reach the age of 21 years.
Adam is 23 years of age and has just been declared bankrupt. Upon discovering his appointment
as trustee, he immediately invests some of the trust funds in Telekom shares and an interest-
bearing deposit in Sukahati Bank.

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 LLB20503/FUHA/SEMESTER II SESSION 2020/2021

Bart is 18 years of age and has no interest in acting as trustee, although he is fond of Justin and
Lily and wants to help them out. Charlie is 16 years of age and will do whatever his mother tells
him.
Bart brings Justin and Lily to you for legal advice. He also brings a copy of the trust instrument
which appears to have been signed by Adam and Charlie. The Sukahati Bank is in serious
financial difficulty.

Advise Justin and Lily in relation to capacity, appointment, and possible removal of trustees.
(30 marks)

QUESTION 3

Consider the validity of the following dispositions in the will of Freddie who died early this year:
a. RM50,000 on trust for the preservation of the habitat of the colony of egrets that is threatened
by the work on Sungai Duyong;
b. RM50,000 to provide scholarships to MRSM Kuala Terengganu, my old school, providing that
75% of the money be allocated to the sons of old boys;
c. RM50,000 for the Kuala Terengganu Association for the Homeless, an incorporated charity.
When Freddie died this year, it transpired that the Kuala Terengganu Association for the
Homeless has become defunct two years ago and its premises purchased by the Terengganu
Protection Against Homelessness.

Advise as to the distribution of Freddie’s estate.

(30 marks)

END OF QUESTION PAPER

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