An Overview of Issues in
Charity Litigation in Malaysia * 2001
By Mary George *
Abstract
The Malaysian law of charities consists of a
variety of legislation, both public and private, and case law from local and
foreign jurisdiction. The dearth of written literature is compounded by
the legal breadth of the topic. This article draws together the various
statutes and case law on the Malaysian law of charities by reference to three
additional sources of law regarding the establishment and regulation of
charities, namely, the Companies Act 1965, the Societies Act 1966, and the
Income-tax Act 1961. While essentially a compilation in nature, for
purposes of legal evaluation, this paper also addresses the flaws of the
current system and suggests some changes for reform.
1.
Introduction
Malaysia, comprising West and East Malaysia, is
a federation of 13 states and two federal territories with a parliamentary
system of government based on periodic multiparty elections. The states
of Sabah and Sarawak comprise East Malaysia. Malaysia is a developing
economy and a member of the Commonwealth. For laws passed after
Independence on 31 August 1957, the Constitution is the supreme law of the
land. Laws passed before Independence, which have not been revised or
repealed before this, have power under the Constitution and are deemed to be in
force.
There are several statutes dealing with the law
of not-for-profit organisations. The only not-for-profit-organisation
addressed in this paper is the charity. As far as the law of charities is
concerned, those entities are governed by laws passed both before and after
Independence. The constitutional basis of a charity may vary and could
fall under a trust deed, a society, or a company. The charity may exist
as a trustee corporation. Where applicable its income may be exempt from
the provisions of the income-tax legislation.
This paper discusses the following topics:
1.
description and types of
charity;
2.
sources of the law of
charities;
3.
constitutional bases of
charities;
4.
trusts and the National
Land Code 1965 and charitable trusts over land;
5.
the Pemsel model of classification
of charitable trusts;
6.
the Cy-pres Scheme;
7.
unidentified donors and the
issue of accountability;
8.
income-tax exemption; and
9.
the roles of the
Attorney-General, the Public Trustee Company or Amanah Raya Berhad and ordinary
trustees in the administration of charities.
The constitutional basis of charities in turn
covers those established or registered under (a) federal statutes and state
enactments; (b) the Companies Act 1965 [1] [
and associated Guidelines; (c) the Societies Act 1966 [2] and
associated Guidelines; and (d) the law of trusts and those arising through
wills but governed by the law of trusts.
2.
Descrption and Types of Charity
There are several descriptions, elements of, and
references to the term “charity”. A general survey of the concept shows a
variation from the traditional English trust approach involving the classical public
benefit test and eleemosynary element, to statutory trusts, to varying shades
of philanthropic activities to the latest understanding involving an
organisation that makes profit but does not distribute the same to its
members.
The term “charity” has eluded a standard
definition that encompasses its substantive elements and constitutional bases
under which it arises. Though the legal environment in Malaysia cannot be
said to be encouraging to the establishment of charities, it is not discouraging
either. While the older charitable objectives may be said to be
considerations of religion or salvation, newer beneficent objectives include
education, loyalty to the nation or encouragement of virtues of tolerance or
humanity in mankind towards the animal kingdom. With regard to the last
category, these bequests could also fall under non-charitable purpose trusts
where the human intention is to benefit select categories of animals.
These categories are restricted because the beneficiary is non-human and therefore
could be subject to mal-administration. [3]
“Public benefit,” “benefit of a section of the
public,” “welfare of the people” are some of the phrases used to refer to
charities in Malaysia. The different types of charities include statutory
charities, charitable societies, charitable companies, trust companies,
charitable trusts arising from trust deeds and testamentary charitable
trusts.
3.
Sources of the Law of Charities
3.1
Legislation, Local and Commonwealth Cases
3.1.1
Charitable Trusts, Charitable Societies and Corporations
The primary sources of the Malaysian law of
charitable trusts are the Federal Constitution, local legislation, local cases
and custom and to the extent the law is in pari materia, cases from the United
Kingdom, Singapore and other Commonwealth jurisdiction are admissible.
Under the Federal Constitution, equity and trusts are governed by section 4(e)
(i), Schedule 9, List 1 of the Federal List. Charities, charitable
institutions and trustees excluding wakafs and Hindu endowments are dealt with
under section 15(c ), Schedule 9, List 1 of the Federal List. Hindu
endowments are covered by section IX, 1 –15 (c ). Wakafs are dealt with
under List II of the State List. Charitable trusts in Sabah and Sarawak
are governed by section 15, Schedule 9, List III A of the Supplement to
Concurrent List. What this classification implies is that while the
distribution of powers between the Federal and State Lists is clear, in the
case of the Concurrent List, should a conflict arise, the matter will be
resolved in favour of the Federal Government.
The applicability of English common law and
equitable principles is subject to section 3 of the Civil Law Act 1956, [4] which
provides for a cut-off date for West Malaysia, Sabah and Sarawak. This
section provides that the application of UK common law, rules of equity and
certain statutes, “save so far as other provision has been made or may
hereafter be made by any written law in force in Malaysia, the Court shall in
West Malaysia or any part thereof, apply the common law of England and the
rules of equity as administered in England on 7 April 1956.” In Sabah,
the Court has to apply the common law of England and the rules of equity
together with the statutes of general application, as administered or in force
in England on 1 December 1951. In Sarawak, the court must apply the common
law of England and the rules of equity, together with statutes of general
application, as administered or in force in England on 12 December 1949,
subject however, to sub-section (2) (ii). This proviso states that the
said common law, rules of equity and statute of general application “shall be
applied so far only as the circumstances of the States of Malaysia and their
respective inhabitants permit and subject to such qualifications as local
circumstances render necessary.” Section 3(2) provides that “subject to
the express provisions of this Act or any other written law in force in
Malaysia or any part thereof, in the event of conflict or variance between the
common law and the rules of equity with reference to the same matter, the rules
of equity shall prevail.”
The local trust case law is in turn replete with
English common law, which is applied subject to local legislation and
circumstances. Unlike the Indian Trusts Act 1882, there is no legislation
in Malaysia defining or describing the trust obligation. In Malaysia, a
principal statute that relates to trustees is the Trustee Act 1949 [5] .
It came into force in West Malaysia on 31 December 1965.
There are also several statutes that contain the word ‘trust’ or ‘fund’ or
‘trust fund’. According to the case of Iskandar Gayo v Datuk Joseph
Pairin Kittingan [6] ,
these statutes may merely contain governmental obligations that are
non-justiciable before a court of law. Therefore they are considered as
trusts in a ‘higher sense’.
The applicability of the Civil Law Act 1956 to
local situations has been highlighted in a number of decisions. The
general law is based on judicial precedent. In Warren v Tay Say Geok
& Ors [7] ,
Lord Reid, Lord Hodson and Sir Benjamin Olmerod ruled:
By s.3 of the Civil Law Act 1956 (Act 67) the
Courts of Malaya apply the common law of England and the rules of equity as
administered there, save in so far as other provisions are made by any written
law in force in the Federation. There is a proviso that such law and
rules shall be applied so far only as the circumstances of the States comprised
in the Federation and their respective inhabitants permit and subject to such
qualification as local circumstances render necessary.
Where there is no written law in force in the
Federation, the court will apply the common law of England and rules of equity
as administered in England by virtue of sub-s.(2) of that section. Where
there is a conflict between common law and equity, equity prevails. Privy
Council decisions up to 1984 are binding on the local courts.
By their very nature of perpetual duration,
charities are not subject to the Rule Against Perpetuities. In Malaysia,
the Rule Against Perpetuity is found in Part VII, Sections 17 to 25 of the
Civil Law Act 1956. Property disposed of by Muslims and by the natives of
Sabah and Sarawak are exempted under the Civil Law Act 1956. In this
context, the Singapore case of Hong Kong Bank Trustee (Singapore) Ltd v Tan
Farrer & Ors [8] does
not apply to Malaysia as this case relies on the Accumulations Act of
1800.
4.
Constitutional Basis
The constitutional basis of charities in
Malaysia takes various forms. Statutory charities are established by
statute, federal or state. Charitable companies are registered trustee
corporations under the Companies Act 1965 which may be either:
·
a
registered trust company under the Trust Companies Act 1949 [9] or
·
a
corporation that is a public limited company under the Companies Act 1965 or
under the laws of any other country, which has been declared by the Minister to
be a trustee corporation for the purposes of the Companies Act 1965.
Charitable societies are registered societies
under the Societies Act 1966. Finally, there are the charitable trusts
which arise under trust deeds, whether stamped or unstamped, and through
wills.
4.1
Federal Statutes on Trusts, Funds, Trust Funds, Charities and Charitable Trusts
The secondary sources of the law on trusts,
funds, charities and charitable trusts are highlighted below:
i.
The Trust
Companies Act 1949 provides for the registration and regulation of trust
companies in Malaysia.
ii.
The Trust
(State Legislatures Competency) Act 1949 [10] confers
upon State Legislatures authority to pass laws providing for the establishment
of trusts. This Act only applies to West Malaysia.
iii.
The
Housing Trust Act 1950 [11] constitutes
a Housing Trust for Malaysia and makes provision for the development of land
for housing and for charging development rates in respect of such land.
iv.
The
Trustees (Incorporation) Act 1952 [12] provides
for the incorporation of the trustees of certain bodies or association of
persons. This Act only applies to West Malaysia.
v.
The
National Trust Fund Act 1988 [13] establishes
the National Trust Fund and provides for the management of that Fund and other
matters incidental thereto.
vi.
The
Labuan Trust Companies Act 1990 [14] provides
for the registration of companies as trust companies in Labuan, for the
prescription of their powers and duties and for matters connected therewith or
incidental thereto.
vii.
The
Employees Provident Fund Act 1991 [15] has
nine parts spread over 86 sections of which Part I deals with preliminary
matters and Part II with the establishment and composition of the Board of
Trustees and the Investment Panel. Part III deals with the establishment of the
Employees Provident Fund and Part IV deals with the appointment of officers and
servants, their powers, functions and duties. Part V focuses on the
contributions to the Employees Provident Fund whereas Parts VI, VII and VIII
cover the withdrawal of contributions, offences and proceedings and the power
to make regulations and rules respectively. Part IX deals with repeal and
transitional provisions. The Employees Provident Fund Act 1991 faced a
major amendment in 1995. Amendments were made to ss.2, 4, 13, 24, 26, 27,
30, 31, 33, 34, 35, 36, 37, 43, 44, 45, 47, 48, 50, 51, 54, 55, 58, 63, 65, 66,
72, 73, and the Fourth Schedule was deleted. The following new sections
were also introduced – ss.26A and 26B which deal with the power of the Board to
invest in an approved company; s.37A – provides for the power of the Board to
assess contributions based on information available and s.50A deals with the
additional payment of dividend.
viii.
The
Pensions Trust Fund Act 1991 [16] established
the Pensions Trust Fund and provides for the management of the Fund and other
incidental matters. The Fund is administered by the Accountant-General of
Malaysia, who is responsible for its day-to-day management. The Minister
for Finance can apply the moneys in credit of the Fund to meet the cost of
payment of pension, gratuity or other benefit granted under any written law for
officers of the public service and employees of statutory and local authorities
(s.9). The Fund consists of moneys appropriated from the Federal
Consolidated Fund, the Employees Provident Fund Board, monthly contributions
made by employers and organisations to the Consolidated Fund, any investment of
the Fund and any other source as approved by the Minister (s.8). The
trust fund has a council of trustees known as the Pensions Trust Fund Council
(s.4(1)). They are appointed by the Minister of Finance (s. 4(2)).
They can delegate in writing to any person all or any of their powers and
duties (s. 4(3)). Besides the Trust Council, there is also the investment
arm of the Fund called Investment Panel. The Investment Panel is
responsible to the Minister (s.5). Provisions regulating the appointment,
revocation, resignation, vacation of office, remuneration or allowance and
disclosure of interest of trustees are regulated by the First Schedule to the
Act. All members of the Council and the Investment Panel are deemed to be
public servants within the meaning of the Penal Code (s.7). There are
also guidelines on investment of the Fund (s.10). The Trust Fund has to
bear all administration fees (s.11). The Council is required to keep
accounts and audit the same. It also has to submit an annual report
dealing with the investments of the Fund (s.15).
ix.
The
functions of the Public Trustee Act 1950, [17] an
Act that provided for the appointment of a Public Trustee, now repealed, have
been taken over by a company called the Amanah Raya Berhad (Bhd). set up under
the Public Trust Corporation Act 1995 [18] .
The Public Trust Corporation Act 1995 which came into force on 1 August 1995,
applicable throughout West and East Malaysia, is a significant development in
the law relating to trusts for the following reasons:
·
The Act
has repealed the Public Trustee Act 1950 and all rules made thereunder.
·
Consequent
upon the introduction of this law, a company by the name of Amanah Raya Bhd.
has assumed the role of the Public Trustee and Official Administrator.
This company is incorporated under the Companies Act 1965 and s.3 of the Public
Trust Corporation Act 1995.
·
The Act
features the appointed date system where the Minister may direct different
provisions of the Act to come into force on different dates in different
states. This means that the Public Trustee, a corporation solely
established under the Public Trustee Act 1950 and the Official Administrator a
statutory office established under the Probate and Administration Act 1959 have
ceased to exist.
·
Subject
to the provisions of this Act of 1995, all written laws affecting the Public
Trustee and the Official Administrator in force immediately before the
appointed date, shall, until amended or revoked, continue in force on and after
the appointed date and be construed as if this Act had not been passed.
This Act also states that any reference to the Public Trustee and Official
Administrator shall, unless the context otherwise requires, be construed as
references to the Corporation, and expressions importing such references shall
be construed accordingly.
·
Every
order, appointment and notification made under the Public Trustee Act 1950 and
in force immediately before the appointed date shall, in so far as they are not
inconsistent with this Act of 1995, be deemed to have been made under this Act.
·
The
Probate and Administration Act 1959 [19] had
to be amended accordingly since the Amanah Raya Bhd. set up by the Trust
Corporation Act 1995 assumed the roles of the Public Trustee and Official
Administrator. Hence, no more reference is to be made to the Official
Administrator or to the Public Trustee. All functions and powers of the
Official Administrator are transferred to the Corporation. An amendment
to s.86 of the Act has enabled the Corporation to accept funds which a personal
representative has not been able to dispose of immediately by distribution upon
the conclusion of the administration of the estate of a person dying testate or
intestate.
·
S.19
deals with the payment of a minor’s maintenance and advancement. S.19(1)
deals with maintenance and s.19(2) with advancement.
x.
The
Malayan Railway Provident Fund (Dissolution) Act 1995 [20] repealed
the Malayan Railway Provident Ordinance 1952, dissolved the Malayan Railway
Provident Fund established under the Ordinance and transferred all its
properties to the new privatized entity, Keretapi Tanah Melayu Bhd or the
Malayan Railway Berhad.
xi.
The
Tabung Haji Act 1995 [21] established
the Lembaga Tabung Haji and the salient feature of the Act is that, inter alia,
it acts as a pilgrim organiser (Ss 27 to 36) to persons professing the Muslim
faith. It was published in the Gazette on 16 February 1995. On the
appointed day, it repealed the earlier Act entrusted with such functions, the
Lembaga Urusan dan Tabung Haji Act 1969 [22] and
the corporate body – the Lembaga Urusan dan Tabung Haji established under the
1969 Act ceased to exist by operation of this Act.
On charities and religion, some Ordinances and
Acts in force, are as follows:
1. House to House and Street Collections Act 1947. [23]
2. Cheng Hoon Teng Temple (Incorporation) Act 1949. [24]
3. Girl Guides Act 1953. [25]
4. Visitor of the Christian Brothers’ School (Incorporation)
Ordinance. [26]
5. Lady Superior of the Society of Saint Maur (Incorporation)
Ordinance 1955. [27]
6. Methodist Church in Malaysia Act 1955. [28]
7. Salvation Army (Incorporation) Ordinance 1956. [29]
8. Pure Life Society (Shuddha Samajam) Incorporation Ordinance 1957. [30]
9. Titular Superior of the Brothers of Saint Gabriel (Incorporation)
Ordinance 1957. [31]
Religious and other similar institutions or a
branch of an overseas religious institution when established under an Act of
Parliament have certain advantages such as (i) acquisition of a charitable
status; (ii) income-tax exemption, without the necessity of submitting the
annual balance sheet reflecting a profit and loss statement; (iii) and
exemption from being subject to surprise visits by various governmental officials,
which are requirements of the law under the Companies Act 1965 or the Societies
Act 1966.
4.2 State
Enactments on Trusts, Funds, Trust Funds, Charities and Charitable Trusts
State enactments which contain the word ‘trust’
in them may not be charitable trusts following the ratio decidendi of the case
Iskandar Gayo v Datuk Joseph Pairin Kittingan. They may only be
governmental obligations or trusts in the ‘higher sense’. The State
Heritage Trust Fund Enactment 1990 (Trengganu State Enactment No.2/1990) was
passed in 1990 and it came into force on 6 December 1990. The Enactment
provides for the establishment and management of a fund namely, the Tabung
Pegawai-pegawai Masjid (First amendment) Enactment 1991 or translated as the
Mosque Officers Fund (Kedah State Enactment No.9/91). The first amendment
to the Enactment was passed on 24 August 1991 and it came into effect from 1
September 1991 vide KPU 32/91.
The Tok Kenali Trust Fund Enactment 1992 is a
Kelantan State Enactment [32] [
which established the Tok Kenali Trust Fund and provides for the management of
that Fund and other matters incidental thereto. It is deemed to have come
into force on 1 August 1992.
The Tabung Warisan or Inheritance Fund
(Amendment) Enactment 1993, a Selangor State Enactment (No3/93), inserted new
ss.7A&7B in the Tabung Warisan Enactment 1991,Selangor State Enactment
(No.1/91). It is deemed to have come into force on 1 January 1993.
4.2.1 Laws
of Sarawak and Sabah
The Sarawak Charitable Trusts Ordinance 1994,
Cap.7 repeals and replaces the Charitable Trusts Ordinance. [33] It strives to make better
provisions in the law with respect to the creation, administration and
management of charitable trusts and to provide for matters connected therewith
and incidental thereto. It has 19 sections and a Schedule that deals with
the regulations of the Board of Trustees.
S.2 of the Ordinance is the definition
section. ‘Charitable trust’ is defined as any trust or endowment over
moveable or immoveable property, which is held, administered or managed for the
furtherance of any charitable purpose. ‘Charitable purpose’ means any
purpose relating to the support and advancement of education, religion or
sports and for the relief of poverty and the aged and for purposes, which are
exclusively charitable and for public benefit according to the laws of
Malaysia. ‘Contributor/donor’ means any contributor, donor, benefactor,
testator or provider of any property, which is subject to a charitable trust
and includes any executor or administrator of the estate of such person.
‘Beneficiaries’ mean any institution, person, community or class of persons
deriving or receiving or entitled to any benefit from a charitable trust.
‘Authorised investments’ refer to authorised investments specified in s.4 of
the Trustee Act 1949 and includes any investment authorised by the Board subject
to the trust created under s.3.
S.8 states that no trustee of a charitable trust
shall be personally liable for any act or omission done or committed in good
faith and without gross negligence for any debt, liability, act or omission of
the Board. Further, no trustee of a charitable trust shall be liable for
breach of trust nor for any loss or damage by reason only of his continuing to
hold an investment that has ceased to be an authorised investment. Under
s.9 the Minister has power to institute inquiries either generally or for
particular purposes. The outcome of such an inquiry is dealt with in
s.10. Where misconduct or mismanagement has been disclosed, s.11 provides
the Minister with power to protect the trust property.
The provisions of sections 12 to 19 deal with
additions to trust property, variation of charitable purposes, application to
High Court, winding-up, rules of High Court that apply to any petition under
the Ordinance, rule on locus standi and regulations, and repeal and savings.
The State Legislative Assembly of Sabah passed
the Amanah Rakyat Negeri Sabah Enactment 1990 which provides for the
establishment of a trust fund known as the ‘Amanah Rakyat Negeri Sabah’ meant
for the people of the state and in 1994 passed three amendment enactments to
amend the Sabah Foundation Enactment 1966, the Tun Fuad Foundation Enactment
1976 and the Government Trust Funds Enactment, 1964. The amendments to
the Sabah Foundation Enactment 1966 and the Tun Fuad Foundation Enactment 1976
deal with audit and accounts. The third amendment was to the schedule of
the Government Trust Funds Enactment 1964. The amendment inserted
immediately below the item ‘Inter-Administration Current Fund’ a new item of
‘Maintenance of Roads and Bridges Fund’. This bears some resemblance to
the Preamble to the Statute of Elizabeth 1601.
4.2.2
The Malacca Trust Fund Enactment 1994 and the Perak Foundation Enactment 1994
The Malacca Trust Fund Enactment of 1994
established the Malacca Trust Fund and provides for the management of that
Fund. The objective of the Trust Fund is not specifically stated but it
may be gleaned from the four corners of the Enactment that it is for investment
purposes.
The Perak Foundation Enactment is a well-worded
piece of legislation that promotes a number of charitable purposes for the
nationals of the State as stated in its Preamble, which is set out in the
following terms:
An Enactment to establish the Perak Foundation
for the purpose of improving and furthering the progress of education, sports,
culture and educational facilities in the State of Perak and to encourage and
promote Malaysian consciousness and for the giving of aid to charitable
institutions; for the establishment of a Fund for the carrying out of purposes
of the Foundation; and for matters connected therewith and incidental thereto.
It is uncertain as to whether s.4(k) amounts to
a political trust under the Pemsel model of classification for political trusts
are generally excluded from charities according to the case of Bowman v Secular
Society Ltd. [34]
This Enactment repeals the Perak Foundation Enactment 1979.
4.3. The
Companies Act 1965 as a Basis of Charities and Associated Guidelines
Article 4 of the Companies Act 1965 interprets a
“trustee corporation” as
a. a company registered as a trust company under the Trust Companies
Act 1949; or
b. a corporation that is a public company under this Act or under the
laws of any other country, which has been declared by the Minister to be a
trustee corporation for the purposes of this Act.
The Trust Companies Act 1949 provides for the
registration and regulation of trust companies in Malaysia.
Under the Companies Act 1965, the objective of a
charitable public company has to be usefulness to the community. A
“public company” is interpreted under Section 4, mentioned above, as a company
other than a private company. A “limited company” is interpreted in
Section 4 as a company limited by shares or guarantee. Under Section 4, a
“company limited by guarantee” means a company formed on the principle of
having the liability of its members limited by the memorandum to such amount as
the members may respectively undertake to contribute to the assets of the
company in the event of its being wound up. According to section 4, a
“company limited by shares” means a company formed on the principle of having
the liability of its members limited by the memorandum to the amount (if any)
unpaid on the shares respectively held by them.
The terms of Section 24(2)(a) permit a public
company with limited liability to be formed for the purpose of providing
recreation or amusement or promoting commerce, industry, art, science,
religion, charity, pension or superannuation schemes or any other object useful
to the community. Under this section, such a company is required to apply
its profits if any, or other income in promoting its objects. The section
prohibits the payment of any dividend to its members. The Minister is empowered
to direct that it be registered as a company with limited liability without the
addition of the word “Berhad” to its name, and the company may be registered
accordingly. The distribution of profits to its members changes the
charitable status of the company and the Minister is entitled to change the
name of the company to reflect its profit sharing status. This is done by
revoking the license granted earlier and by changing the name of the company to
Berhad. Section 367 provides that if any person carries on a business
under any name or title of “Berhad” or any of its abbreviations or uses
“Limited” or any of its abbreviations, such person shall, unless duly
incorporated with limited liability, be guilty of an offence under this Act,
the penalty being imprisonment for three years or fifty thousand ringgit or
both. Section 19(2) provides that companies incorporated for the
objectives spelt out in Section 24(2)(a) cannot own land without the license of
the Minister.
Walter Woon points out that the basic idea in a
company limited by guarantee is that the members only have to contribute the
amount that they have agreed to guarantee. According to the terms of
Section 18(1)(e) of the Malaysian Companies Act 1965, the amount to be
contributed to by each member will be stated in the Memorandum of
Association. The advantages of a company limited by guarantee, according
to Woon, is that more often than not, they are not trading companies being
confined to organisations that seek the advantage of incorporation without wanting
to engage in business. This makes this type of company an excellent
choice for the promotion of charitable, scientific, religious or artistic
pursuits. [35]
Trust corporations fulfill several commercial purposes. Section 74(1)
provides that besides the functions listed under the Trust Companies Act, they
are usually appointed as trustees for debenture-holders.
Guidelines
of the Registrar of Companies
The Guidelines of the Registrar of Companies
provide that the name of the company to be incorporated should reflect the
charity and activity of the company. Names that reflect profitable
objectives are unacceptable. Companies may use any of the following
names, such as, Foundation, Institute, Academy, Corporation, Alliance, Federal,
Chamber, Council, Fund, Memorial, and Centre. Charitable companies are
not permitted to use names such as Association, Union, and Society.
Similarly, a name that reflects or bears resemblance to any political party is
also prohibited. The powers of such companies are circumscribed under the
Guidelines, for instance, these companies cannot raise public funds and cannot
acquire or sell land except with the consent of the Minister. The Memorandum
and Articles of Association (M&A) cannot be amended without the consent of
the Minister. These companies can neither set up subsidiaries nor can
they own more than 49 per cent shares in other companies. In the “Model
Memorandum and Articles of Association,” the Guidelines provide that the terms
“Trustees” and “Board of Trustees” are suitable for companies that are named X
Institute, X Fund, or X Foundation; whereas terms such as “Directors” and
“Board of Directors” are suitable for companies that are styled “Academy”,
“Centre”, “Memorial”, “Council” and “Institute”; and terms such as “Member of
the Council/Council Member” and its body “Council” are suitable for a company
referred to as a Chamber. Following the winding up or dissolution of the
company, Clause 10 of the Model Memorandum provides for a scheme very similar
to cy-pres as follows:
If upon the winding up or dissolution of the
…[Foundation/Institute/Chamber/etc] …there remains, after the satisfaction of
all its debts and liabilities, any property whatsoever, the same shall not be
paid to or distributed among the members of the
…[Foundation/institute/Chamber/etc] … , but shall be given or transferred to
some other institution or institutions or organisation having objects similar
to the objects of the …[Foundation/Institute/Chamber/etc] … and having been
approved by the Director-General of Inland Revenue, Malaysia at or before the
time of dissolution and if and so far as effect cannot be given to the
aforesaid provision, to some other Funds of similar organisation [sic] or some
charitable object approved by the Director-General of Inland Revenue, Malaysia.
Clause 11 provides for the limited liability of
each of the members in the event of the company being wound up during the time
that s/he is a member or within one year after he ceased to be a member for
payment of debts and liabilities of the company contracted and to adjust or
indemnify the other contributories amongst themselves, such amount not
exceeding RM 100.00. Clause 12 states that true accounts must be kept of
the sums of money received and expended by the company and once a year, the
accounts have to be examined and the correctness of the balance sheet
ascertained by one or more qualified auditor or auditors.
4.4 The
Societies Act 1966 as a Basis for Charities and Associated Guidelines
The laws applicable to the registration of
societies are the Societies Act 1966 and the Rules of Registration 1984.
The Societies Act 1966 in section 2 interprets “local society’ as “any
society organized and established in Malaysia or having its headquarters or
chief place of business in Malaysia, and includes any society deemed to be
established in Malaysia by virtue of section 4. Section 2 has an
inclusive interpretation of “society” as any club, company, partnership or
association of seven or more persons whatever its nature or object, whether
temporary or permanent. It does not include (i) companies registered
under the Companies Act 1965; (ii) any association constituted under any
written law; (iii) any registered trade union, any association, company or
partnership formed for the purpose of making gain; (iv) any registered
co-operative society, any organisation or association that is part of a school
curriculum, and any “school, management committee of a school, parents’
association or parent-teachers’ association registered or exempted from
registration under any law for the time being in force regulating
schools”. “Benefit” is interpreted as “payment made by a mutual benefit
society for the relief or maintenance of the members or subscribers or on birth
or death in accordance with the rules of the mutual benefit society”.
Section 5(1) of the Act empowers the Minister with absolute discretion to
declare unlawful any society or branch which in his opinion, is used for
purposes prejudicial to or incompatible with the interest of the security,
public order or morality of Malaysia. The Registrar of Societies (ROS) is
empowered under Section 6 A (3) to refuse registration to such a local society.
The reason for refusal may be the unlawfulness of the society under the Act or
any other written law or its likelihood to be used for unlawful purposes or
purposes prejudicial to or incompatible with the peace, welfare, security,
public order, good order or morality in Malaysia. However, religious,
social and cultural activities, women’s organisations, and activities falling
under the sub-heading of advancement of education - choral singing, literature,
dance and local self-defence, joint benefit, all categories of sport including
the game of chess, youth, occupational advancement and generally environment,
consumer related activity, international relations, population associations,
Boy/Girl Brigades, and libraries are excluded from this sub-section.
Politics has also been excluded from charitable
societies. Under section 2 of the Societies Act 1966, “political party”
means:
a. any society which by any of its objects or rules, regardless
whether such object or rule is its principal object or rule, or constitutes
merely an object or rule which is ancillary to its principal object or objects
or to its principal rule or rules, makes provision for the society to
participate, through its candidates, in elections to the Dewan Rakyat, (House
of Commons) or to a Dewan Undangan Negeri (State Legislative Assembly), or to a
local authority, or makes provision for it to seek the appointment or election
of a person proposed or supported by it to the Dewan Negara (House of Lords);
or
b. any society which, notwithstanding anything contained in its
objects or rules, carries on any activity or pursues any objective which
involves its participation, through its candidates, in elections to the Dewan
Rakyat, or to a Dewan Undangan Negeri, or to a local authority, or which
involves its seeking the appointment or election of a person proposed or
supported by it to the Dewan Negara”.
Guidelines
on Charities under the Societies Act 1966
The Guidelines of the ROS provides that
charitable trusts may be registered under the Societies Act 1966 where the
welfare of the public is the dominant concern. In their Information
System, the Department of the ROS has classified charities under the heading of
“Welfare of the People/Population”.
There are 18 categories under this sub-heading
as follows: welfare, human rights, old folks, foundations, associations by the
name of Tow Teong Bernama Lim, Huay Kuang, (which means Chinese originating
from the same place in China) Lion, APEX, Rotary, Jaycees, Y’s men,
Freemason-Grand Lodge, welfare foundations, handicap, orphans, old-age homes,
YMCA, moral uplifting, burial grounds, and women’s social organisation.
An example of a well run charitable society is a Huay Kuang Society. In
the case of the Huay Kuang societies, in practice some of them have been in
existence before 1949 and are very well-administered with their own set of
by-laws. Many of them are exempt from income tax.
A charitable society seeking registration must
fulfill the following criteria:
1. It has to be for not-for-profit.
2. The objective has to benefit the society, for example, the Yayasan
Education Foundation, or it may be of mutual benefit where a certain amount of
compensation is paid upon the death of a member.
3. There must be more than seven members.
4. An inaugural meeting must be held and a resolution passed to form
a charity. This must be followed by the election of a pro-tem committee
and the rules of the association must be passed.
5. The duly completed registration papers must be handed in to the
Registrar’s office together with the required documents.
Charitable societies registered in Malaysia have
a special feature in that the members must be Malaysian. Holders of
Malaysian Permanent Resident status are barred from being members.
However, depending upon the type of society, non-citizens may be members.
While the Societies Act provides that the Registrar is competent to make
decisions on applications for registration of societies, there is, it seems, an
unwritten rule that provides that these powers are limited. In the latter
sense, all applications for registration are subject to the approval of the
relevant ministry and are not the decision of the Registrar of Societies.
For example, in the case of mere organisations such as international
organisations, religious organisations, human rights organisations, they are
required to have the approval of the Home Ministry. Charitable
organisations must have the approval from the Minister of National Unity.
The Registrar of Societies merely acts on orders from the top executives of the
government who are usually members of the Cabinet. [36]
However, the Assistant Registrar of Societies has stated that the Registrar of
Societies is empowered to make all decisions.
Problems
Problems
The Department of the ROS is considered a
security department and is placed under the Minister of Home Affairs.
There are national charities, state charities and local charities with the
maximum number found at the local level. The power of registering a society,
according to the Assistant Registrar of Societies, is solely vested with the
Registrar who has the additional rights of refusal and cancellation. As
far as the ROS is concerned, so long as an organisation has a charitable
objective, it will be registered as one and the name adopted by the charity
such as Foundation (Yayasan) has little implication for the ROS. However,
it is believed that the practice of the ROC in this matter is different
requiring more stringent conditions for the use of the name Foundation
(Yayasan). [37]
With the entry into force of the Sports
Development Act, [38] sports
organisations no longer seek registration under the Societies Act but register
under the Sports Development Act.
One of the frequent public queries directed at
the office of the ROS is on alternative methods of registration of charities
and their legalisation that may be suitable for different types of
organisations. Many organisations do not wish to be governed by ROS rules
but instead want permanent trustees to operate their funds. Therefore, it
is of great interest to the department of the ROS to suggest alternative
methods of charity registration, such as, registration under the Companies Act
or by legislation as a government trust or constitution by a trust deed.
With regard to the last form, the issues of concern identified by the ROS are,
first whether the trust deed will be registered under any public body and if so
what are the various terms in nomenclature that are open to them? Second,
how would the terms of the trust deed setting up the charity be enforced by the
beneficiaries? Third, are such charitable trusts to be registered under
the Attorney General’s Office? Fourth, how would the beneficiaries know
of the existence of the charitable trust and how would they know of a breach of
trust? Lastly, how and in what name would the charitable trust deal with
the bank and third parties? The law in Malaysia is that trusts arising
through trust deeds need not be registered under any particular legal or
non-legal body for their recognition or existence. To make known their existence,
it is advisable for the charities to advertise their objectives through the
local newspapers and constitute themselves as an unregistered association at
the very least. These trusts need not be registered with the Attorney
General’s office. By a public announcement in the local dailies and
through the conduct of annual general meetings and passing of an audited
statement of accounts, almost any association will be able to keep track of its
state of affairs. It is the legal duty of the President, Vice-President,
Secretary and Board of Trustees to administer the trust funds properly.
If there is a breach of trust they will be held liable for that breach.
As an association, the charitable trust will have a name and should be able to
deal with third parties, vulnerable though it may be, at this point. It
is to remove this vulnerability that most lawyers agree to a registered society
or preferably, adopt the company model of a charitable trust.
The Societies Act provides for the collection of
funds from the public so long as they can meet the requirements of the
Act. The House to House and Street Collections Act involves checks by the
police. Solicitation of donations and funds through the setting up of
websites on the Internet do not fall within the terms of the Street Collections
law. This Act needs to be amended to cater to this new form of
solicitation posed by cyber technology. Further, the police have no
enforcement role on the Internet. An alternative is for this aspect to be
governed by the Welfare Ministry, which can lay down guidelines. It,
therefore, becomes important to ascertain what these rules are and how they are
going to be enforced. Similarly, when newspapers raise funds for various
purposes, the question remains what is the legal status of the monies
received? In the eventuality of a dispute, the usual argument is to
impress a constructive holding trust upon such funds.
4.5.
Trust Law as a Basis For Charities
The Trustee Act 1949 unifies the law relating to
trustees and extends the legislation throughout Malaysia. During British
rule, legislation regulating trustees only existed in the Straits Settlements
of Penang, Malacca and Singapore, the Federated Malay States of Selangor,
Pahang, Perak and Negeri Sembilan and in Johore, an Unfederated Malay
State. No such legislation existed in other states. The precursor
of the present Trustee Act 1949 was the Trustee Ordinance 1949. The
Trustee Act 1949, except for section 39(2), applies to trustees of charitable
trusts. Section 39 which deals with “Limitation on the number of
trustees” in sub-section 2 provides that the restrictions imposed on the number
of trustees, that express private trusts may not exceed four trustees in
number, do not apply in the case of property vested in trustees for charitable,
religious or public purposes. In other words, in charitable, religious
and public trusts the number of trustees may exceed four in number, if
necessary. The Trustee Act of 1949 is different from the Indian Trusts
Act 1882 as the latter only applies to express private trusts.
There is no system of double ownership of land
in Malaysia as in England. Under the Malaysian Torrens System of land
ownership, registration is the cornerstone. Trusts over land are
recognized by the National Land Code 1965.
4.5.1
Trusts and the National Land Code 1965: Charitable Trusts Over Land
Based on the maxim that equity follows the law,
English law states that in the operation of trusts, the legal ownership of
trust property is vested in the trustees of the settlement and the equitable
ownership transferred to the beneficiaries. This split in ownership has
been traced down to the nature of double estate ownership of land and chattels
in England. [39]
The application of this maxim to charitable trusts is equally true except that
when a charity is wound up and a cy-pres scheme cannot be applied, then subject
to the law of charities in England, there is “the possibility of a claim by the
Crown to the property as bona vacantia. [40]
In Malaysia, since there is no private or public
trust act, English common law is applied. The express private trust and
the public or charitable trust are little understood in the light of English
common law. This is so because in Malaysia, the National Land Code 1965
stresses that registration is the cornerstone of ownership of land and the
double estate ownership of land found in England is absent here. In this
sense, only selected aspects of English law are applied.
A charity may involve a trust over land in which
case the provisions of sections 344 and 345 of the National Land Code 1965 are
attracted. Section 344 (1) provides that where any land or share or
interest in such a land is transferred in favour of a trustee through a trust
deed or by a court order or by a Collector, the Registrar shall record this in
the memorial of registration. A trustee under this section may be a
person or persons or body or bodies. Section 344 (2) states that the
Registrar is empowered to make additions or amendments to the existing memorial
of registration on the vested shares or interests of the proprietor or co-proprietor
or trustee or trustees when they so apply. Section 344 (3) adds that the
words ‘as trustee/s’ have been included in any memorial of registration
pursuant to sub-section (1) or (2), or the corresponding provisions of any
previous land law, any instrument declaring the trusts to which the land, share
or interest is subject may, upon payment of the prescribed fee, be deposited
with the Registrar for safe custody and reference, and no instrument of dealing
shall be unfit for registration by reason only of the fact that it refers to
any instrument so deposited. Section 344(4) states that sub-sections (1)
and (2) shall have effect subject to the provisions of section 39 of the
Trustee Act 1949 which provides that where any immovable property is vested in
trustees for charitable, religious or public purposes, the number of trustees
may exceed four unlike express private trusts. Section 345 (1) stipulates
that where pursuant to section 344 or the corresponding provisions of any
previous land law, any land, share or interest is registered in the names of
two or more persons or bodies as ‘trustees’, it shall be held by them jointly;
and accordingly, on the death of any one of them or in the case of a body, its
dissolution, the said land, share or interest shall vest exclusively in the
others. In this manner, the legal interest in the property continues.
4.5.1.1
Legal Issues in Charities Based on the Trust Model
One of the very first tasks of the trustees is
to ascertain the nature of the power given to them by the settlor.
Instructions or commands given by the settlor have to amount to a trust power
also known as a duty-power before it can be said that a trustee has neglected
to carry out his duty. This is true for all trusts, and particularly so
in the case of charitable trusts. Lord Eldon distinguished between powers
and duty-powers in Brown v Higgs [41] in
the following terms:
"It is perfectly clear that where there is
a mere power, and that power is not executed, the court cannot execute
it. It is equally clear that wherever a trust is created, and the
execution of the trust fails by the death of the trustee or by accident, this
court will execute the trust. But there are not only a mere trust and a
mere power, but there is also known to this court a power which the party to
whom it is given is entrusted with and required to execute; and with regard to
that species of power the court considers it as partaking so much of the nature
and qualities of a trust, that if the person who has the duty imposed upon him
does not discharge it the court will, to a certain extent, discharge the duty
in his room and place. If the power be one which it is the duty of the
party to execute -- made his duty by the requisition of the will -- put upon
him as such by the testator, who has given him an interest extensive enough to
enable him to discharge it, he is a trustee for the exercise of the power, and
not as having a discretion whether he will exercise it or not; and the court
adopts the principle as to trusts, and will not permit his negligence, accident
or other circumstances to disappoint the interests of those for whose benefit
he is called upon to execute it."
A long line of cases including, in chronological
order, Re Gestetner Settlement [42] ,
Re Coates [43] and
Re Sayer [44]make it clear that, in the
case of a mere power, it is not necessary to ascertain every member of the
class of beneficiaries but only whether a particular praepositus can be
regarded as the object of the power i.e. whether he qualifies to be a member of
the class. A power may be good although in favour of an indefinite
class. On the other hand, where it is impossible to make a complete list
of beneficiaries, a duty-power or a power in the nature of a trust to
distribute to members of such a class is void for uncertainty. In Ogden's
case, all members of the class were identifiable and the trust survived.
After review of these authorities, the Court in Re Chionh Ke Hu, held that that
clause 5 of the testator’s will did not create a valid or binding trust,
charitable or otherwise. Further, a trust cannot be saved by treating it
as a power because, as Lord Evershed MR said in Endacott's case, "the
proposition that if these trusts should fail as trusts they may survive as
powers, is not one which I think can be treated as accepted in English
law". The Court said that it could not write the will for the
testator.
A valid charitable trust must fulfill the
element of public benefit, unless it is for the relief of poverty. The
usual arguments advanced on behalf of a charity are that (1) the trust contains
the element of public benefit; and (2) the administration of the trust is one
which a court of law can undertake, enforce and control. It becomes
critical to the Court to find an element of either purpose or advancement in
the intention of the settlor of the trust. A gift for religious purposes
must fulfill the element of public benefit to be prima facie charitable, and according
to Lord Hanworth MR approving Rowlatt J's observations in Keren Kayemeth Le
Jisroel, Ltd v Inland Revenue Commissioners [45] ,
the trust must advance religion in the sense of "the promotion of the
spiritual teaching of the religious body concerned and the maintenance of the
spirit of its doctrine and observances".
Counsel arguing that an enforceable
non-charitable trust exists will usually rely on the following proposition
contained at page 482, para 804 of Williams on Executors and Administrators, [46] which
reads:
"A gift may be valid even where it is
expressed to be for a specific purpose and there is no person or persons named
as legatee, or where the person named must, by the terms of the will, hold the
gift for some specific purpose; and this is so, even if the purpose stated in
the will is not charitable, provided the purpose is sufficiently defined. But
where the testator expresses his intention vaguely and in effect leaves it to
another to make a will for him, the gift is void for uncertainty. Thus, a
gift of a large income to trustees on trust to apply it to maintain the horses
and hounds of the testator, together with their stables, kennels and buildings,
for a period of 50 years, was held to be valid. A gift of £1,000 to a
trustee, to be applied in such manner as he should in his absolute discretion
think fit towards the promotion and furthering of fox-hunting was also held to
be valid. Similarly, gifts have regularly been held valid, for the
erection of tombs and monuments, where there is no question of uncertainty or
perpetuity; likewise a gift for the erection of a Masonic temple. Such
gifts are valid although there is no person named as beneficiary or cestui que
trust, but in so far as gifts by way of trust are concerned, they are regarded
as exceptional, and the class of objects to be benefited will not be extended".
It is, however, clear that, in all the cases
referred to as authorities for the propositions set out above, these were
purpose trusts in the sense that the purposes of the various gifts were
sufficiently defined.
In a review of the anomalous cases relating to
horses, dogs, graves, monuments and fox-hunting etc. in Re Astor's Settlement
Trusts [47] and
in Re Endacott, decd [48] the
Courts have clearly laid down that the scope of such cases should not be
extended. In these anomalous cases the courts discovered indirect means of
enforcing the execution of non- charitable purposes but held out a caution that
such concessions to human weakness or sentiment should be exercised with
restraint. The principle underlying these exceptional cases is that, not
only must there be non-charitable purposes which a court can control or enforce
but the relevant purposes must be stated in phrases which embody definite
concepts and the means by which trustees are to try to attain them must also be
prescribed with a sufficient degree of certainty. [49]
In the present case, the Court found no purpose
of any kind whether defined, apparent or capable of being inferred. As
Lord Evershed MR said in Endacott's case:
"No principle perhaps has greater sanction
or authority behind it than the general proposition that a trust by English
law, not being a charitable trust, in order to be effective, must have
ascertained or ascertainable beneficiaries. These (anomalous) cases
constitute an exception to that general rule. I add also that, in
my judgment, the proposition stated, in Mr Morris and Professor Barton Leach's
book 'The Rule Against Perpetuities (1956)' (p 308) that if these trusts should
fail as trusts they may survive as powers, is not one which I think can be
treated as accepted in English law." [50]
Further, in Inland Revenue Commissioners v
Broadway Cottages Trust, Jenkins LJ reading the judgment of the Court of Appeal
held:
"In our view, the construction placed on
behalf of the Crown on the above-quoted observations of Tomlin J in Re HJ Ogden
is the right one, and we see no reason for questioning the correctness of those
observations of that eminent judge. On the contrary, Tomlin J's view, which we take
to be that a trust for such members of a given class of objects as the trustees
shall select is void for uncertainty, unless the whole range of objects
eligible for selection is ascertained or capable of ascertainment, seems to us
to be based on sound reasoning, and we accept it accordingly."
4.5.2 The
Pemsel Classification of Charitable Trusts
The Malaysian law of charities has been
influenced by English case law on the subject. According to English case
law, a purpose, in order to be charitable, must fall within the ‘spirit and
intendment’ of the Preamble to the Statute of Elizabeth, Charitable Uses Act
1601. Though the Preamble has been repealed by section 38 of the English
Charities Act 1960, it has in effect been preserved in case law as an index of
charitable purposes. The general legal meaning of charity may be gathered
from the Preamble to the Statute of Elizabeth and cases such as Commissioners
for Special Purposes of Income Tax v Pemsel.[51] In this case, Lord
McNaughten classified charitable trusts under four heads as follows:
1. Trusts for the relief of poverty;
2. Trusts for the advancement of education;
3. Trusts for the advancement of religion;
4. Trusts for other purposes beneficial to the community not falling
under any of the other three heads.
In the following sub-sections, only trusts for
the advancement of religion and other purposes beneficial to the community have
been discussed. This is because many of the cases deal with religious
issues.
4.5.2.2
Advancement of Religion:
Malaysia is a multi-religious society and the
four main religions in Malaysia are Hinduism, Buddhism, Islam, and
Christianity. According to Article 3 of the Federal Constitution, Islam
is the official religion of the State. During British rule, Mohamedan and
Hindu religious and charitable endowments fell within the scope of the repealed
pre-Independence legislation, namely the Mohamedan and Hindu Endowments
Ordinance 1906 [52] which
thereafter came to be known as the Hindu Endowments Ordinance. The State
of Penang was competent to legislate law on "Hindu Endowments" under
item 15(c) of the Federal List in the Ninth Schedule to the Federal
Constitution. All matters connected with Islam fall under state
jurisdiction according to the terms of the Federal Constitution.
(a)
Hinduism: Repealed Religious Legislation
In AG v Thirpooree Soonderee [53] ,
the court said that a gift to a person for the benefit of a temple was a good
charitable gift that the court could carry out. However, a gift of money
to an idol for the benefit of a temple was void as being an absurdity and not a
charity.
In Ramasamy a/l Shanmugham v State Government of
Penang and Government of Malaysia [54] ,
the applicant, a Hindu by religion was the Vice-Chairman of the Hindu Sangam,
Seberang Perai, Penang. In this case, the Supreme Court had to decide
whether the Hindu Endowments Ordinance 1906 [55] was
invalid and void.
The applicant contended that the Mohammedan and
Hindu Endowments Ordinance 1906 the subject-matter of which concerned Hindu
Endowment Boards, charities and charitable institutions, which came into force
on 1 January 1906 was enacted by the British Colonial Government of the Straits
Settlements of Penang and Malacca for purposes of administering Mohammedan and
Hindu religious and charitable endowments. Insofar as it affected Muslim
endowments, the Ordinance was repealed in the State of Penang by the Muslim and
Hindu Endowments Ordinance (Repeal) Proclamation 1967 vide Penang Legal
Notification No 4 dated 23 February 1967 and since that date the statute was
known only as Hindu Endowments Ordinance. By Article 74(1) and item 15(c)
of the Federal List in the Ninth schedule to the Federal Constitution,
Parliament may make laws in respect of Hindu endowments, but there is no
provision in the Constitution of the State of Penang for the State Legislature
to enact laws pertaining to the practice or propagation of the Hindu
religion. It was argued that the Ordinance was anachronistic and
unconstitutional and ceased to be in force on or after Independence Day.
Further, since the State Legislature had no power to enact laws pertaining to
religion other than Islam, the Ordinance was inconsistent with Articles 3, 11
and 12 of the Federal Constitution and was void pursuant to Article 75 which
provides that, "If any State law is inconsistent with a federal law, the
federal law shall prevail and the State law shall, to the extent of the
inconsistency, be void".
The applicant argued on the unconstitutionality
of the Ordinance which was based on the assumption that the Ordinance [SS Cap
175] was a State law, as there was no question that Parliament and not the
Legislature of the State of Penang was competent to legislate on "Hindu
Endowments" under item 15(c) of the Federal List in the Ninth Schedule to
the Federal Constitution. SS Cap 175 being a Straits Settlements
Ordinance was a pre-Independence law. It was in existence even before the
Federation of Malaya Agreement 1948. Under items 74 and 78 of the Second
Schedule to the 1948 Agreement, SS Cap 175, became a federal law, although the
exercise of executive authority of the Ordinance could be conferred on a State
to the extent permitted by the second column of the Schedule. According
to Legal Notification No 152 dated 7 April 1949 in exercise of the powers
conferred by s 3 of the Delegation of Powers Ordinance 1946 and vested in him
by virtue of s 4(d) of the Transfers of Powers Ordinance 1948, the then High
Commissioner delegated to the Resident Commissioner of Penang and Malacca the
exercise of the powers conferred on the High Commissioner by the provision of s
3 of SS Cap 175. Consequently, from 7 April 1949 the executive powers conferred
by s 3 of the Ordinance was transferred to the State, although the Ordinance
itself remained a federal law. This transfer of executive power to the State
was in accordance with Cl 18 of the Federation of Malaya Agreement, which
states:
"Notwithstanding anything in this
Agreement, the High Commissioner may entrust, either conditionally or
unconditionally, to the Government of any Malay State with the consent of His
Highness the Ruler of that State, or to the Government of a Settlement, or to
their respective officers, functions in relation to any matter to which the
executive authority of the Federation extends".
On Merdeka/Independence Day, the federal status
of the Ordinance was extended by Article 162(1) read with Article 160.[56]
After Merdeka Day, the Islamic contents of the
Ordinance, being a State matter under the State List of the Ninth Schedule to
the Federal Constitution, and to bring the Ordinance into accord with Article 3
and Article 74(2), His Majesty the Yang di-Pertuan Agong as Head of the Islamic
religion in Penang under Article 5 of the State Constitution and Article 3(2)
and (3) of the Federal Constitution, were amended in the Ordinance by
proclamation vide Penang Legal Notification No 4 of 1967 referred to
earlier. The proclamation was promulgated by the Yang di-Pertuan Agong
under s 172(1) of the Administration of Muslim Law Enactment 1959 of the State
of Penang after consultation with the Governor in Council, and it repealed SS
Cap 175 insofar as it affected endowments given or to be given, for the support
of any Muslim mosque or shrine or school or for other Muslim pious, religious,
charitable or beneficial purpose.
The Supreme Court was satisfied that the present
application had no merit whatsoever since it was clear that both immediately
before and after Merdeka Day, the Ordinance has always been a federal law, and
the Ordinance being an 'existing law' should in accordance with Article 162(1)
continue to be in force on and after Merdeka Day. However, Senior Federal
Counsel who appeared for the Government of Malaysia argued that the present
application did not come within the ambit of Article 4(3) and (4) of the Federal
Constitution. His submission was adopted by the State Legal Advisor of Penang,
who emphasised that this was the first time the validity of a pre-Independence
legislation was challenged under Article 4. The relevant clauses are
found in Article 4 and Article 128. [57]
The Supreme Court ruled that the exclusive
original jurisdiction of the Supreme Court under Article 128(1)(a) read with
Article 4(3) and (4) must be strictly construed based on the case of Rethana v
Government of Malaysia. [58]
The proceedings for a declaration regarding the invalidity of a law referred to
in the two Articles of the Constitution related only to the validity of any law
made by Parliament or the Legislature of any State, which by statutory
definition must refer to law enacted after Merdeka Day. Such proceedings
for a declaration as to the invalidity of any law under Article 4(4) read with
Article 128(1)(a) must be limited to any law "with respect to which
Parliament or as the case may be, the Legislature of the State has no power to
make laws". Firstly, both Article 4(3) and Article 128(1)(a) do not
employ the words "Federal Law" or "State Law", but they
expressly refer to "law made by Parliament" and "law made by the
Legislature of a State". Secondly, the definition of "Federal
Law" and "State Law" under Article 160 clearly makes a
distinction between existing Federal and State law whose continuity of
operation is being accommodated under Pt XIII of the Constitution (i.e. pre-
Merdeka legislation) and any Act of Parliament or a law made by the Legislature
of a State (i.e. post- Merdeka legislation).
As SS Cap 175 was a 1948 federal, pre-Merdeka,
legislation it could not come within the ambit of Article 4(3) and (4) and
Article 128(1)(a). The Ordinance, not being a law legislated by Parliament or
the Legislature of a State does not come within the exclusive original
jurisdiction of the Supreme Court for the purpose of adjudication on its
validity as envisaged by Article 128(1)(a) read with Article 4(4).
The architect of the Constitution recognised
that not all pre-Merdeka Day legislation could readily be slotted into the
three newly established compartments of legislative powers as provided in the
Ninth Schedule, nor was all such legislation expected to be consistent with the
provisions of the Federal Constitution as required in the case of law passed
after Merdeka Day by Article 4(1). Accordingly, various provisions are
introduced in Article 162 of Pt XIII of the Constitution for modification of
"existing law" to enable them to continue in operation after Merdeka
Day. As alluded to earlier, such 'existing law' is constitutionally
defined as "any law in operation in the Federation or any part thereof
immediately before Merdeka Day". Article 160(6) even empowers any
court or tribunal to apply the provision of any existing law which has not been
modified on or after Merdeka Day, provided it is applied with such
modifications as may be necessary to bring it into accord with the provisions
of the Constitution. Thus, in Assa Singh v Mentri Besar Johor [59] Ong
Hock Thye CJ (Malaya) accepted the argument of Salleh Abas, Solicitor General
(as he then was) who said with reference to Restricted Residence Enactment, a
pre-Merdeka legislation:
"…I agree that, since Article 4 speaks only
of laws passed after Merdeka Day, the validity or otherwise of the pre-Merdeka
Restricted Residence Enactment will have to be considered solely by reference
to article 162”. [60]
The point summed up by the learned Solicitor
General was as follows:
'As to post-Merdeka law, the Constitution is
supreme and if any of that law is inconsistent with the provisions of the
Constitution, to the extent of such inconsistency that law shall be void --
article 4(1). But as regards pre-Merdeka law, such law shall continue to be in
force until repealed; in the meantime its continuity and enforceability is
subject to modification, firstly by a Legislative Act or Enactment or,
secondly, by process of judicial interpretation, the executive order of the
Yang di-Pertuan Agong to modify the same having expired - article 162(1) and
(6). It must be noted that article 162 does not use the expression that the
pre-Merdeka law shall be void to the extent of the inconsistency but, instead,
it expressly states that the law shall continue to be in force'.
In the circumstances, the court was of the
opinion that proceeding for a declaration under Article 4(4) read with Article
128(1)(a) applied only to post-Merdeka law whether Federal or State.
Since SS Cap 175 was a pre-Merdeka law the present application should not have
been brought to the Supreme Court as a court of first instance.
The notice of motion was accordingly dismissed.
(b)
Buddhism
The approach of the courts towards certain
practices in Chinese ancestral worship, namely ‘Sin Chew’ and ‘Chin Shong’, has
been that these are not charitable activities as they cannot fulfill the
element of public benefit. They may be upheld as valid non-charitable
purpose trusts provided the Rule Against Perpetuities is not infringed.
Trusts for Chinese ancestral worship must be distinguished from bequests to
Chinese temples. This point is highlighted with the aid of the following
cases, namely, Re Low Kim Pong’s Settlement Trusts [61] ,
Phan Kin Thin v Phan Kuon Yung [62] ,
Choa Choon Neoh v Spottiswoode [63], Tan Chin Ngoh v Tan Chin
Teat, Tan Chin Hean & Anor. [64]
(1).Land given to a Buddhhist priest for
purposes of a temple and orchard were valid charitable trusts.
In Re Low Kim Pong’s Settlement Trusts, the
deceased through a trust deed conveyed to a Buddhist priest the
following:
i.
12 acres
of land for the construction of a temple to worship certain divinities.
ii.
The
balance of the said 12 acres, if any, for growing an orchard or other purposes
deemed fit by the priest or his successors.
After the construction of the temple, the local
authority required a portion of the remaining land. They contended that
land given for the orchard was not a charity and void as a gift in perpetuity,
or in the alternative, such organisation caused the donor’s intention to fail
and so a cy pres scheme could not be applied. The administrators of the
deed claimed this impugned land. The court, however, held that the whole
purpose of the deed was a good charity.
(2) Gifts
for Chinese Ancestral Worship were Not Good Charities
In Phan Kin Thin v Phan Kuon Yung,, the
principal question raised before the court was, whether a gift of shares of a
Chinese testator’s estate for his father’s ‘Chin Shong’ (ancestral worship) was
a good bequest. The Court held that a bequest for ‘Chin Shong’ was a good
gift and valid as a non-charitable purpose trust provided it was drawn in a way
that did not infringe the Rule Against Perpetuities. However, it was not
a charitable trust. His Lordship Murray-Aynsley ruled:
As regards the bequest to the ‘Chin Shong’ we
have the authority of certain cases from the Colony and one case from the
Federated Malay States (FMS). In the case of Yap Kwan Seng, Sproule J,
held that a bequest of this type was a perpetuity and that the English Rule
Against Perpetuities applied to the FMS. He followed the Colony cases
holding that a bequest of this kind is not a charity. [65]
These cases all avoided declaring that such a
purpose was a superstitious use although in the Colony West v Shuttleworth was
cited in support of the decisions.
In Choa Choon Neoh v Spottiswoode an elaborate
description was given by Maxwell CJ of the ceremonies connected with such a
bequest which may be contrasted with the doctrine of the mass explained in the
judgments of Bourne v Keane, [66] set
out below:
…a distinction must be drawn between the purpose
of the two observances, that one is limited as to its object to the benefit of
a particular person, the other is not so limited, and this is the difference
between what is not and what is a charitable purpose. The result is that
such a bequest is perfectly good like a bequest for the upkeep of a tombstone
provided that the bequest is so drawn that the Rule Against Perpetuities is not
infringed, a matter which should not be beyond the ingenuity by local
conveyances.
In Tan Chin Ngoh v Tan Chin Teat, Tan Chin Hean
& Anor, the Court had to consider an application for the construction of an
indenture made on 26 October 1894 between a certain Lim Loh - the vendor, a
certain Tan Yeok Nee - the Settlor) and a certain Tan Yeok Nee and Tan Tee Kah
- the Trustees, whereby certain leasehold properties in Singapore were conveyed
to the trustees, the purchase money being provided by the Settlor, to be held
upon certain trusts, namely,
1. Trust for maintenance of Joss House or Tok Kheng Tong Temple in
China;
2. Trust for Sin Chew; and
3. Trust for settlor and his assigns.
The settlor died on 21 May 1902 and by his will
directed that his residuary estate should be divided among his ten named
grandsons with the provision that when the youngest grandson attained the age
of twenty-one years, the residuary estate should be converted into money and
divided amongst them. The will took effect from the date of death and
distribution made sometime not later than 1924 or 1925. The plaintiff in
this case was one of the named grandchildren and as such entitled to a share in
the residuary estate and the third defendant was the sole surviving executor of
the will.
The history of the case shows that a summons was
taken out by solicitors for the plaintiff, on 9 September 1941. On 22
September 1941, Aitken J in Chambers appointed the plaintiff to represent the
ten grandsons (including the plaintiff himself) named in the will of the
settlor. Before judgment was delivered, Singapore was captured and the
Court ceased to function. Counsel for one of the defendants died in
internment and another disappeared during the Japanese occupation and it was
not known whether he was alive or dead. When the Court resumed again in June
1946, the plaintiff's present solicitor, asked for judgment. The Court
directed the Attorney General to be joined as the case concerned a public
charity. The Court also felt itself bound to follow the case of Re Haji
Ismail, [67] which
had not been referred to in the course of the argument in 1942. However, the
Attorney General did not wish to be joined. The third defendant could not
be reached. He was cited as the only surviving trustee of the settlor's
will.
Five questions arose for determination before
the Court. The first two questions were concerned with the validity of
the trusts. The Court found that the trusts were not void for repugnancy
as the intention of the settlor in creating the third trust was not to give an
absolute interest in the property to the settlor, but to make a disposition of
the property to take effect at the expiration of the limited and consecutive
periods for which the first and second trusts were created. The reasoning
of the Court is set out below.
The Court considered the first two questions
together where the plaintiff argued that the effect of the trust created for
the third trust period, namely the trust for the settlor, his executors,
administrators or assigns, was to give the settlor an absolute interest in the
property, that it was repugnant to such a gift to say that the donee shall
enjoy it only many years after he has been dead, and that on the proper
construction of the deed the intervening estates must be deleted, the settlor
being deemed to have taken absolutely and immediately; second, he being dead
the property fell into his residuary estate to be distributed as directed by
the will. This construction would nullify the deed and was not adopted by
the Court.
Counsel relied upon the judgment of the Court of
Appeal of the Straits Settlements in the unreported case of Tan Jiak Kim v Tan
Jiak Poh & Ors [68] and
supported this by reference to a number of English cases in which it was held
that a condition inconsistent with a gift is void.
In Tan Jiak Kim v Tan Jiak Poh, a testator bequeathed
his residuary personal estate to trustees as a "reserve fund" upon
trust for his four named sons in equal shares and directed that the reserve
fund should become divisible and payable at the termination of twenty-one years
from the date of death of the survivor of his wife, his said four sons, his
daughters and his three named grandsons. The four sons, in whose favour
the trustees were stood possessed, it seemed could never enjoy possession nor
could the fund ever become divisible among them or any of them as the date
fixed for payment and distribution had to be for a period that extended to at
least twenty-one years after the death of the last survivor of them. The
will then directed a complicated scheme of periodic accumulation and distribution
of income, the main feature of which was that the sons were to enjoy the income
during their lives. There were further directions to cover the
eventuality of a son dying before his share could become due and payable.
Earnshaw J held that after a period of twenty-one years from the death of the
testator, the four named sons were entitled to take the residue absolutely,
share and share alike, and the learned Judge struck out all that was repugnant
to that declaration. This judgment was upheld on appeal. Sir John
Bucknill CJ in the Court of Appeal, held that on the proper construction of the
will there was an absolute gift to the trustees of the reserve fund in trust
for the four sons and the sons therefore took at once. The provision on
postponement of enjoyment was repugnant and therefore deleted.
In the present case, the Court was reluctant to
accept this decision as being binding upon it since it was not relevant to the
present case as it was a case upon the construction of a will where there was
an absolute gift followed by conditions which were held to be repugnant.
The present matter before the Court was the construction of a deed and the
principle to be applied, if there was a repugnancy in a deed was declared by
the Privy Council in the case of Forbes v Git [69] per
Lord Wrenbury in the following terms:
If in a deed an earlier clause is followed by a
later clause, which destroys altogether the obligation created by the earlier
clause, the later clause is to be rejected as repugnant and the earlier clause
prevails ... But if the later clause does not destroy but only qualifies the
earlier, then the two are to be read together and effect is to be given to the
intention of the parties as disclosed by the deed as a whole.
Applying Forbes v Git to the present facts, the
Court held that were it Court to hold that there was a repugnancy in this deed,
that would not advance the plaintiff's case for it was the last clause which
would have to be struck out.
However, in the view of the Court there was no
repugnancy. The first and second trusts were created for limited and
consecutive periods and it was necessary for the settlor to make a disposition
of the property to take effect at the expiration of the second of those periods
if he wanted the property to revert to the use of his estate. The Court
found that this was the settlor's intention in creating the third trust period
and that was the effect of the words used.
On the issue that the period of limitation
mentioned was void for remoteness, the Court was referred to the passage in
Jarman on Wills where the rule is stated as follows:
"It must however be remembered that if a
charitable gift is not immediate but is made conditional upon a future and
uncertain event it is subject to the same rules and principles as any other
estate depending on its coming into existence upon a condition precedent. If
the condition is never fulfilled the estate never arises. If it is so remote
and indefinite as to transgress the limits of time prescribed by the rules of
law against perpetuities the gift failed ab initio." [70]
In the present case, the trusts were not void,
the reasons given by the Court are set out below. On the issue of the
first trust, the Court held that there was a valid trust of the income of the
property for a charitable purpose, namely, the upkeep of a Temple, during the
life of the testator, and that the first trust was not invalid merely because
the settlor had an absolute discretion to apply the income as he thought fit
for the maintenance of or otherwise in connection with the temple. On the
third question as to whether the trust for the second period was void for
remoteness, the Court found that the trust for the second period contained a
charitable gift made conditional upon a future event which was the death of the
settlor, it was certain to occur and therefore it was not void for remoteness.
The deed spoke from delivery and during the life
of the settlor there was a valid trust of the income for a charitable purpose,
namely the upkeep of the temple. The argument was that the first trust
was invalid because the settlor had an absolute discretion to apply the income
as he thought fit for the maintenance or otherwise in connection with the
Temple. English decisions such as Waldo v Caley [71] ,
Horde v Suffolk [72] and
Powerscourt v Powerscourt [73] lent
no support to this view, and the Court held that the rule to be deduced from
these and similar cases was correctly stated in Tudor on Charities as follows:
"Where income for a limited period, as
during the lifetime of a particular person, is directed to be paid to a
particular person to be applied at his discretion for general or special
charitable purposes the Court does not take upon itself the execution of the
trust. Accordingly, in cases of this kind, no scheme is directed but the Court
gives liberty to any of the parties to apply as there may be occasion." [74]
A trust such as this was therefore a valid
charitable trust and the Court would exercise such control as was necessary to
ensure the due performance of it.
The fourth question was concerned with the
enforceability of these trusts. Counsel contended that the objects of the
second trust were to be performed in China, and that whether they were valid
trusts or not depended on the law of China; therefore, though the Courts of the
Colony would see that the trustees here carried out the trusts by managing the
property and remitting the balance of the income to the proper person in China,
yet they could not enquire whether the objects on which the money was to be
spent in China were valid according to Singapore law. He referred to the
case of Ng Eng Kiat v Goh Lai Mui & Ors [75] but
that case was of no assistance to his argument. There, the trust being
impressed upon property situated in China and the limitations being permitted
by that law of that country, it was held that the fact that such limitations
would be illegal by the law of the Colony was immaterial. But the present
case was the converse of that and fell within the rule in Freke v Lord Carbery [76] that
the validity of a testamentary disposition of English leasehold is governed by
the law of England. In that case, the proceeds of sale of a leasehold
house in London were directed by the will of a testator domiciled in Ireland to
be held upon trusts which infringed the English Rule Against Perpetuities, the
Thelluson Act not applying to Ireland. The rule applied to the present
case where the trusts were impressed upon certain leasehold property in the
Colony, the income from which was to be applied to the purposes of the
trust. The Court held therefore that the validity of the trusts must be
determined according to the laws of the Colony.
The Rule Against Perpetuities was part of the
law of the Colony but the period limited did not infringe that rule. The
law in the Colony was that a trust for Sin Chew ceremonies was not a charity
but neither was it void as being for superstitious uses. It was valid if
it did not offend the Rule Against Perpetuities. [77]
It was also well settled that a trust for the upkeep of a temple or joss house
was a trust for the advancement of religion and a good charitable trust. [78]
It followed that the trust for the second period was partly charitable and
partly non-charitable.
The fifth and sixth questions were concerned
with the validity of the trust for the second period which was partly
charitable and partly non-charitable, and whether the difficulties faced by the
Court in the appointment of trustees rendered the trusts unenforceable.
The Court found that in such cases, where the property impressed with the trust
was certain, the trust did not fail but the Court would in default of
appointment by the trustees, apportion the fund between the charitable and the
non-charitable objects equally. Further, there was no evidence of any
practical difficulty in making the appointment in this case and therefore, the
trust was prima facie enforceable.
On the issue of quantum, the plaintiff contended
that the trust was void for uncertainty, for the reason that, although the
trust property and the objects of the trust were certain, there was uncertainty
as to the amount which was to be applied to each of the different objects; that
is, the amount that had to be earmarked for (1) maintenance of the temple, (2)
Sin Chew ceremonies or (3) each person's Sin Chew. In the case of Re
Hadjee Ismail bin Kassim decd [79] ,
referred to above, it was held that the objects of a gift of income being
partly charitable and partly not, the whole gift, including the gifts to
charitable objects, failed for uncertainty as to the subject matter of the
gift.. [80]
The Court decided not to follow Hadjee Ismail's case as the Court concluded
that such a reason existed in this instance.
The Court in the present case concluded that
there was a failure to distinguish between cases where the whole amount of the
gift was left uncertain and those where the whole amount, or the property
impressed with the trust, was certain but the apportionment between different
objects was uncertain.
The Court found the following proposition cited
from Hunter v Attorney General [81]
"where the trustees have a discretion to
apportion between charitable objects and definite and ascertainable objects non-charitable
the trust does not fail; but in default of appointment by the trustees the
Court would divide the fund between the objects charitable and non-charitable
equally". [82]
In Halsbury's "Laws of England" [83] ,
the law as stated is that if the amount of a gift purporting to be made in
favour of a charity cannot be ascertained the gift fails, but when a testator
gives funds to be applied partly for objects which are charitable and partly
for objects which are not charitable, but does not specify the proportions in
which the funds are to be applied for the different objects, the Court will
make an apportionment. [84]
On the issue of the practicalities of the trusts
being performed in China, the Court ruled that there was no evidence that there
was in fact any such difficulty. It was the duty of the trustees to see
to the apportionment of the income and only if and when they failed to do so or
could not do so, that the Court would be called upon. The applicability
of the rule could not be based on the supposition of difficulties that may
never have existed. Accordingly, the Court answered that the trusts were
enforceable and further questions regarding its enforceability were
unnecessary, as the parties were in agreement that the time period limited for
the second trust had not yet run out.
(c) Islam
Wakafs
Wakafs are charitable endowments made by
Muslims. Whitley J in Re Syed Shaik Alkaff, [85] in
defining a wakaf relied on the definition given by Syed Ameer Ali in his book
entitled Mohamedan Law [86] as
follows:
“Wakaf…signifies the dedication or consecration
of property either in express terms or by implication for any charitable or
religious objects to secure any benefit to human beings”.
The Federal Court in Re Haji Embong’s Case [87] ,
a case that dealt with Islamic law in the state of Trengganu, pronounced that a
wakaf is recognized as an established religious Islamic institution. With
reference to the state of Trengganu, the Trengganu Administration of Muslim Law
Enactment No 4 of 1955 deals with two types of wakaf, namely wakaf 'am (general
wakaf) and wakaf khas (special or private wakaf). Section 2 of the Enactment
defines these two wakaf as follows--
‘wakaf am' means a dedication in perpetuity of
the capital and income of property for religious or charitable purposes
recognised by Islamic law, and includes the property so dedicated.
'wakaf khas' means a dedication in perpetuity of
the capital of property for religious or charitable purposes, recognised by
Islamic law, and includes the property so dedicated, the income of which is to
be paid to a person or persons for purposes prescribed in the
wakaf."
The expression "for religious or charitable
purposes recognised by Islamic law" is purposefully not explained in the
Enactment for the objective of the Enactment is only to administer Islamic
law. In The Commissioner for Religious Affairs v Tengku Mariam [88] the
fatwa of the Mufti of Trengganu (gazetted under s 21 of the Enactment) upheld
the validity of a wakaf made in favour of the settlor's family and relatives
with ultimate gifts for religious purposes. Both the High Court and the
Federal Court ruled that the fatwaas were not binding upon the court. The
Court came to this conclusion by following the Privy Council decisions in Abul
Fata Mahomed Ishakv Russomoy Dhur Chowdhury [89] and
Fatumah v Mohamed bin Salim. [90]
The Federal Court held that the doctrine of estoppel had precluded the
beneficiaries from challenging its validity because they had by their conduct
previous to the suit accepted the validity of the wakaf. But Suffian FJ,
as he then was, reaffirmed as did the East African Court of Appeal in
Fatumah'scase, that the decisions of their Lordships of the Privy Council on
wakaf were binding upon the court and suggested that the embarrassing situation
should be rectified by legislation.
On wakafs in India, the Federal Court in Re Haji
Embong’s Case pointed out that according to Mohamed Ahsanullah Chowdhry v
Amarchand Kundu [91] a wakaf for the benefits of the
settlor's family, children and descendants and for charity, would only be valid
if there was a substantial dedication of the property to charitable uses at
some period of time or other. A wakaf is invalid if the primary object is
for the aggrandisement of the settlor's family and the gift to charity is
illusory either because of its small amount or its uncertainty or remoteness of
objective (Abul Fata's Case). Due to dissatisfaction, representations and
protests over this decision by the Muslim scholars and jurists, the Indian
legislature passed the Mussalman Waqf Validating Act, VI of 1913, which was not
given retrospective effect. This was followed by the 1930 Validating Act
saving any invalid family wakaf with the ultimate object for charity whether it
was created before, on or after 1913. The belief that the decision of
their Lordships in Abul Fata's Case was purely confined to Muslim law as
applied in India was rejected by their Lordships in Fatumah v Mohamed bin
Salimin where their Lordships re-affirmed the correctness of their decision in
Abul Fata's case and cleared all doubts as to the scope of their decision being
confined to India only. Their Lordships said that they "cannot
accept the theory ... that the interpretation of the Mohammadan law given by
this Board in a series of cases is confined to the law as applied or
administered in India." [92]
In India, a wakaf disposition in favour of a
stranger is invalid. Indian authors such as Tyabjiand Fyzee, state:-
"...Is poverty a necessary condition for
obtaining benefit from a wakaf? According to Mohammadan law, wakaf may be made
(i) for the affluent and the indigent alike; or (ii) for the affluent and
thereafter for the indigent; or (iii) for the indigent alone. The law does not
insist that a man must necessarily be proved to be poor before he can take the
benefit of a wakaf. Poverty is one of the many qualities that are
recognised as being capable of attracting the benefit of a wakaf, but it is by
no means a sine qua non. Therefore, all persons, regardless of considerations
of wealth, are entitled to come in as beneficiaries. Nevertheless, it is
perfectly correct to say that when all other purposes fail, the relief of the
poor is [sic] ultimate purpose of every wakaf. Thus it is clear that the
objects of a wakaf may be different from the objects of a charitable trust as
understood in English law. [93]
(d)
Christianity
In some cases it has been held that the general
charitable intention of the settlor could be inferred from the trust deed and
hence the charitable trusts were valid and a cy-pres scheme was ordered to give
effect to the settlor’s intent.
In Nai Seng Hiang & Ors v Trustees of the
Presbyterian Church in Singapore Registered & Ors, [94] the
trustees stated in cl (2) of their trust declaration that they held a piece of
land 'upon trust to permit or allow the said land and premises to be used for
the purpose of Christian works, evangelistic, social or otherwise at the
discretion of the Chinese Presbyterian Church of Malaya amongst and for the
benefit of the children of all Hakka speaking Chinese in Singapore and for this
purpose to take all such proceedings as may be necessary to recover possession
of the said land and premises'. The trust dated 18 May 1948, was
established by a certain Mr. AC Jap. The trust property consisted of land
and premises known as No 110, Race Course Road, Singapore.
The trustees, sought the court's directions on
the following questions:
i.
if the
trust contained in cl 2 was a valid, charitable trust; or
ii.
if the
trust had failed, whether the land and premises were to be applied cy-pres, the
donor, Mr AC Jap, having evinced a general charitable intention; or
iii.
if the
trust was void, whether the land and premises were to be held by the plaintiffs
on a resulting trust for the residuary estate of the donor.
The first defendants, a body corporate
registered under s 68(3) of the Trustees Act are regulated by a trust
deed. The second defendant is a widow and sole residuary beneficiary of
the estate of AC Jap, deceased. The Attorney General was joined by virtue
of s 9(1) of the Government Proceedings Act. [95]
Having regard to all the facts and the provisions
of the declaration of trust, the Court was of the opinion that the donor had
clearly and unequivocally evinced a general charitable intention, that
Christian works and evangelistic pursuits were the exclusive purposes with the
other purposes 'social or otherwise' as mere adjectives describing Christian
works or one aspect of them because these words were not free standing as to
import separate objects. Accordingly, the Court ordered a cy-pres scheme
to fulfill the exclusive charitable intent of the donor and directed that the
property be transferred to the first defendants to hold the property upon
trust.
4.5.3
Trust for Other Purposes Beneficial to the Community
In Lam Joon Shu v AG, [96] the
court said that ‘other purposes beneficial to the community’ was a term of art
to which the law attached meaning. In this case, the settlor in his
indenture (1918) set out a trust for the education of Chinese children and
adults of a particular sect in the Chinese language and other languages as the
trustees deemed advisable. Provisions were also made for a students’
residence, and a classroom, lecture room or meeting room for any educational,
charitable or other purposes beneficial to the particular Chinese community or
any other community the trustees deemed fit in Singapore provided however, that
the said premises were not used for any purpose that was inimical to the
welfare or contrary to the laws of the Settlement of Singapore. The
Indenture referred to the term ‘other purposes beneficial to the
community’. Based on this Indenture, a school was set up in 1906.
In 1947, the trustees bought more property and a conveyance was signed by the
four trustees. It stated that the property was held in trust for the use
and benefit of the school. In 1949, another deed was signed which sought
to vary the terms of the 1947 Conveyance. The 1949 deed stated that
one-third of the property was held in trust for the association and the remaining
two-thirds for the school. Another deed followed in 1973, which purported
to release the property from the trusts set up by the 1947 Conveyance and the
1949 deed. It declared that all interests should thereafter be held in
trust for the association. In 1984 the school was closed down. The
issue was whether there was a valid charitable trust and if not, whether a
cy-pres scheme could be applied. The Court of Appeal ruled that a cy-pres
scheme be applied to the two third share of the trust property held on trust
for the school for educational or like charitable purposes as the trustees in
their discretion governed by the association, thought fit. The Court held
that the 1973 deed of purported release was ineffective, as a public charitable
trust once constituted could not be so terminated. The lower courts
ruling on both issues were affirmed.
5.
Cy-Pres Scheme
Pre-Independence
Where the general charitable intention of the
testator cannot be inferred and the trust land has been acquired by the government,
it is unlikely that the Court will uphold a charitable trust. Since
cy-pres cannot be applied it is likely that the trust property will fall into
residue.
In Veerasamy Krishnasamy & Anor v Jannaki
Ammal, [97] two
questions arose for determination out of cl 8 of the will of a certain Mr.
Narainasamy Veerasamy, which provided that certain land and house situate at
Bedok Road, Singapore, was to be held in trust for a period of twenty-one years
after the death of the survivor of the testator’s three sons, and a
grandson. The land was to be used as a family burial ground for the
testator and his family members as deemed fit and proper by his trustees.
During this period, the trustees were authorized to collect rents and profits
of the said land and house and out of such rents and profits were required to
pay the assessment and quit rent (if any) and repairs to the said house were to
be carried out and the balance (if any) paid equally amongst his sons.
The application for a burial ground licence was
refused by the Colonial Secretary. The questions for determination of the
Court were (i) whether the object of the devise contained in cl 8 failed by
reason of that refusal, and the consequent impossibility of carrying out the
trust to permit the land to be used as a burial ground, or whether the trust
could be saved by the application of the cy-pres doctrine and (ii) whether the
trust for the burial ground having failed, the land and house fell into
residue.
On the failure of the objects contained in cl 8
and subsequent application of the cy-pres doctrine, the Court held that it
would only be applicable if a general charitable intention was disclosed. [98]
The Court could see no such intention disclosed in this clause and expressed
the view that the four principal divisions into which the word
"charity" in its legal sense was divided was given by Lord
Macnaughten in the Commissioners for Special Purposes of Income-tax v Pemsel. [99] The
only division which could have any bearing on this case was the last, viz.
"trusts for other purposes beneficial to the community". The
trust permitted the land to be used as a family burial ground for the testator
himself and such members of his family as the trustees thought fit, that is, a
class of beneficiaries that was restricted to certain members of the testator's
family. The Court had no doubt that this was not a charitable trust, and
on this ground ruled that a cy-pres scheme could not be applied to save this
trust, and the trust failed.
The trust also authorised the trustees to
collect rents and profits of the land and house and, after defraying certain
outgoings, to pay the balance to the testator's sons in equal shares. The
next issue was that the trust for the burial ground having failed, whether the
land and house fell into the residue of the estate. The beneficiaries
argued that they were the ‘sons’ mentioned in cl. 8 who were entitled to
receive the rents and profits and entitled to the property absolutely under
residuary cl 11, where they were referred to as "my male children living
at my death". The Court affirmed their right after referring to the
following authorities: Saunders v Vautier [100] , Gosling v Gosling [101] and Wharton v Masterman. [102] These
cases are clear upon the principle that:
where a testator has given the corpus to a
devisee, the Court will recognise such devisee's immediate right to the corpus
notwithstanding any directions by the testator that he is only to enjoy the
income of the property until after the expiration of a certain period or until
the happening of a certain event, unless the testator has not merely expressed
a clear intention that the devisee is only to have the income of the property
until the period has expired or the event has happened but has, during the
interval, given the property for the benefit of another.
Post
Independence
Where a true construction of a will disclosed a
general intention of charity or the paramount intention of the settlor to give
one-third of the residuary estate for a general charitable purpose, then
cy-pres may be applied to the testamentary charitable trusts so created.
Several courts have held in accordance with this principle.
The issue in Re Valibhoy Charitable Trust;
Mohammed Shariff Valibhoy v British & Malayan Trustees Ltd & Ors, [103] was
that the trusts declared by the settlor could not be established in India and
so the trustees asked the Court to declare whether:
i.
the trust
had failed, and if so, could the capital and income be applied cy-pres;
ii.
the Court
could direct a scheme; or
iii.
such
capital and income could be distributed as on an intestacy among those persons
entitled according to Muslim Law.
In this case, a certain testator, Mr. AA
Valibhoy, set up the ‘Valibhoy Charitable Trust’ for the purpose of maintenance
of schools for religious instruction (known as Madrasahs) and the education of
persons in the English language and general matters. Indigent
beneficiaries who belonged to the Gatchee class and professed the Mohamedan
Sunni Hanafee religion were given preference. There followed provisions
for scholarships, salaries, accommodation and food of teachers, managers and
other staff. Power 'to close and discontinue any school or schools so
established as aforesaid if they shall so think fit and to establish another or
others' was also given to his trustees. Clause 6 of the will provided
that should any government adopt, acquire or undertake the management or
support of any school, then the trustees were required to use their discretion
as they thought fit to apply the whole or such parts of the income arising from
the Valibhoy Charitable Trust and from time to time determine the purposes of
the trusts.
The actual appropriation of one-third share of the
estate only took place in 1964. After 1964, the trustees were unable to
establish a school or schools for religious instruction or for the education of
persons in the English language. In May 1971, one of the trustees wrote
to the Ministry of Education, Ahmedabad, India of their intention
i.
to
establish a Muslim Religious School (Madrasha) in or around the town of Jepur,
Rajkot District in which first preference would be given to children of the
Ghanchi Community who believed the Sunni Hanafi Sect of Islam and then to all
Muslim Children who believed in the same school of Islam as the Ghanchi
Community; or
ii.
in the
alternative, of their intention to establish an English Language School along
with the Islamic Religious teaching subjects for such persons.
The Director of Education, India, replied in
November 1971 that the permission requested could not be granted.
The High Court held that in the circumstances it
was impracticable to give effect to the expressed objects set out in the
testamentary trust. However, a general charitable intention in favour of
the advancement of education, both religious as well as in English, could be
inferred and the trusts had not failed but should be carried into effect
cy-pres by a scheme which conformed to the testator's directions as closely as
possible. The case went in appeal as the beneficiary entitled upon
intestacy, a son of the testator, appealed against this decision. The
trustees also sought to vary the judgment.
The contention of the appellant was that the
testator’s testamentary trusts were for the specific purpose of establishing
one or more schools in a particular province in a particular state in India or
in its neighbourhood and that as the primary or main object of the testator's
gift was the establishment of a particular type of school in a particular
locality of his choice, a general charitable intention for the advancement of
education could not be inferred. The appellant based his argument on
Jarman on Wills [104] which
reads:
Foreign charities are an exception to the
general rule, for as the court has no jurisdiction to administer a foreign
charity, it cannot execute the trust cy-pres, but it may give liberty to a
trustee to carry into effect a scheme for the administration of the charity to
be settled by a foreign court. Consequently, if the persons who are appointed
by the testator to administer the charity abroad, disclaim or refuse to accept
the trusts, the gift fails.
The Court of Appeal unanimously dismissed the
appeal based on the English locus classicus of Re Wilson, [105] where
Parker J ruled:
First of all, we have a class of cases where, in
form, the gift is given for a particular charitable purpose, but it is
possible, taking the will as a whole, to say that, notwithstanding the form of
the gift, the paramount intention, according to the true construction of the
will, is to give the property in the first instance for a general charitable
purpose rather than a particular charitable purpose, and to graft on to the
general gift a direction as to the desires or intentions of the testator as to
the manner in which the general gift is to be carried into effect. In
that case, though it is impossible to carry out the precise directions, on
ordinary principles the gift for the general charitable purpose will remain and
be perfectly good, and the court, by virtue of its administrative jurisdiction,
can direct a scheme as to how it is to be carried out. In fact, the will
will be read as though the particular direction had not been in the will at
all, but there had been simply a general direction as to the application of the
fund for the general charitable purpose in question.
The Court of Appeal held that where no such
paramount general intention could be inferred, and where the gift was in the
form of a particular gift, or a gift for a particular purpose, and it was
impossible to carry out that particular purpose, the whole gift failed. The
question whether a particular case fell within one of those classes of cases or
within the other was simply a question of construction of a particular
instrument. The leading Australian decision on this point is A-G for New
South Wales v Perpetual Trustee Co. [106]
The Court of Appeal agreed with the conclusion
arrived at by the learned judge of the High Court that on the true construction
of the will, it disclosed a general intention of charity or, to put it in
another way, the paramount intention was to give one-third (less 50,000 Rupees)
of the net residuary estate for a general charitable purpose. On the
cy-pres scheme, since the trust property was found in Singapore, Malaysia, and
India, the Court of Appeal ruled that the applicable law was correctly set out
in Halsbury, [107] in
directing that a scheme should be prepared and submitted to the High Court for
approval, such scheme to conform as closely as possible to the testator's
directions. A cy-pres scheme is settled where trusts, which have been
established within the jurisdiction for the endowment of a charitable object
out of the jurisdiction, become impracticable but the fund and the trustees are
within the jurisdiction.
6.
Exemption from Income Tax under the Income Tax Act 1961
The rationale behind granting tax exemption to
charities is that there is tremendous benefit to the public or a section of it
if the charity were to continue its activities.
All registered charities whether set up under
federal or state legislation or under any of the Acts: the Societies Act, or
the Companies Act, or Trust Companies Act, can apply for income tax exemption
under Part IX entitled “Exemptions, Remission and Other Relief” of the
Income-tax Act. [108] .
Section 127 refers to Schedule 6 of the Act which lists the categories of
income, which may vary from year to year, that may be exempt from income
tax. The Income Tax Department stipulates certain conditions that
registered institutions, trust bodies and charities must comply with in order
to qualify for tax exemption. According to the experience of the office
of the Registrar of Societies, this practice of the income tax authorities in
turn has had the effect of amendments being made to the constitution of many an
organisation before registration as a charitable society. In other words,
these societies come back for amendments to be made to their objectives and
constitution in order to qualify for tax exemption. Section 13 (1) (a) of
Schedule 6 of the Income Tax Act 1961 provides that the tax exemption applies
to the income of a charitable institution, trust body of any trust or body of
persons, if the institution, trust body or body of persons in question is
established in Malaysia for charitable purposes only and is approved by the
Director General of Income Tax for these purposes. Section 13 1 (b)
provides that the income of a building fund approved under section 44(6) or a
religious institution or organisation which is not operated or conducted primarily
for profit and is established in Malaysia exclusively for the purposes of
religious worship or the advancement of religion is also exempt from income
tax. Section 13 (2) (a) provides that where an institution, a trust body
or body of persons carries out the primary purpose of such institution they can
apply for approval from the Director-General. Further section 13 (2) (b)
adds that they shall apply its income, whether exempt or otherwise, solely for
its charitable purposes or charitable objects within Malaysia and the amount so
applied in a year of assessment shall not be less than seventy per cent (or
such percentage as may be permitted by the Director-General) of such income for
the basis period for that year of assessment.
Section 13 (3) states that where a business is
carried on by an institution, a trust body, body of persons or an organisation
referred to in subparagraph (1) the income from the business shall be exempt
from tax if
a. the business is carried on in the course of the actual carrying
out of a primary purpose of the institution, trust body of persons or
organisation; or
b. the work in connection with the business is mainly carried on by
persons for whose benefit the institution, trust body of persons or
organisation was established.
Section 13 only exempts the income and not the
dividend income of such institutions.
7.
Unidentified Donors and the Issue of Accountability
In 1973, the House to House and Street
Collections Act 1947, [109] was
revised to regulate house to house and street collections. In Malaysia,
there is no legislation governing the law of charities and in so far as
unidentified street donors are concerned such as persons who have contributed
to the building of a new hospital and insufficient funds were given for the
purpose (facts similar to Re Ulverston and District New Hospital Building
Trusts [110] ),
the trend here would be to follow the decision in Re Ulverston. There are
provisions under the Disposal of Public Funds (State of Penang) Act 1961 in
respect of the initial failure of certain funds raised for specific public
purposes. Under this Act, the Governor in Council can after taking into
consideration any views or objections by any person who had contributed to any
of the funds, by order, provide for the disposal of the funds for the purpose
of building a community hall by the name of Dewan Sri Pinang or for other
specified purposes similar to those for which the funds were originally
established. [111] Under
the powers vested in Section 67 of the Societies Act, the ROS has, for
administrative purposes, drawn up a 10 point Guideline on Street Collections,
which has been translated from Bahasa Malaysia (Malay), as follows:
1. An application to collect donations has to made to the parties
concerned for acquiring the approval and the release of a license, if
necessary;
2. The donation cannot make use of certain people or certain types of
companies referred to as ‘syarikat perantaraan’ for which there is no official
legal translation; [112]
3. The organizer has to show his identity card and letter of
authorization from the association organizing the collection and permitting him
to collect donations;
4. The organizer of the collections cannot be less than 16 years of
age;
5. Force, duress or violence cannot be used to compel the donee to
donate;
6. All donations received must be acknowledged by a receipt or
published in newspapers;
7. All expenses involved in the collection of funds should as far as
possible not exceed 1/12 of the collections made;
8. For all donations exceeding RM 1,000/- and more, a receipt should
be issued within a period of three days;
9. An audited statement of accounts should be sent to the ROS,
Malaysia within a period of three days after the last day of collection of
donations;
10. The collection of donations is limited to a period of one month
only from the date on which the first donation has been collected.
Public accountability of charitable trusts has
proven to be a difficult question. The ROS requires filing of returns and
conduct of normal visits upon notice and surprise visits.
8.The
Role of the Attorney General, Amanah Raya Berhad and Ordinary Trustees in
Charities
The official role of the Attorney General, is to
initiate a suit on behalf of a charity. The Amanah Raya Berhad, discussed
earlier, amongst its other functions, also commences an action in a
testamentary charitable trust. Ordinary trustees appointed by the settlor
carry out the day to day administration of the charitable trust and are
governed by the trust deed and the Trustee Act 1949, discussed earlier.
In Haji Abdullah & Ors v Ibrahim & Ors [113] the question was whether a suit
relating to a charitable trust was maintainable against the defendants on the
ground that it could only be brought by or in the name of the Attorney General
or with his consent. The Court held as the reliefs claimed in this action
were brought on behalf of a charitable trust and were not among the claims
specified in s 9(1) of the Government Proceedings Act, 1956 [114] the
suit should have been brought and had in the name of the Attorney General.
In Lee Chick Yet v Chen Swee Kee, [115] an action was brought by a
supporter of a school against trustees and others for a declaration that the
transfer of the school land to the defendants by the trustees was null and
void. The defendants objected arguing that the plaintiffs could not take
action without joining the Attorney General as the trust was a charitable trust
in law. Relying on Halsbury’s Laws of England, the Court held that from
the facts, it was satisfied that the land in question was held on an express
trust for the “sole use and exclusive benefit of a school”. His Lordship
Hashim Yeop A Sani held that it prima facie was a public or charitable trust, the
word ‘public’ meant ‘for the benefit either of the public at large or some
considerable portion of it addressing a particular description’.
Section 9(1) of the Government Proceedings Act
states that in the case of any alleged breach of any express or constructive
trust for public, religious, social or charitable purposes or where the
direction of the court is deemed necessary for the administration of any such
trust, the Attorney General or two or more persons having interest in the trust
and having obtained the consent in writing of the Attorney General may
institute a suit or be joined as a party in any existing suit on behalf of the
government or the public. It was held in Letchumanan Nagappan v R
Nadarajah & 2 Ors, [116] that
section 9(1) is a mandatory provision.
9.
Conclusion
Many of the trusts cases considered in this
paper relate to older trusts. Wakafs continue to be popular both in
Malaysia and in India. In the Malaysian context, only the law relating to
wakafs in the state of Terengganu was highlighted. There is a need to
undertake a scholarly treatise on the law of wakafs as found in the various
states of Malaysia. Wakaf jurisprudence in India was enriched during the
period of the British Raj. However, compared to the developments in
charitable trust law in England[117] , it is true to say that though
the trust concept is not popular in Malaysia, charitable trusts have had some
measure of acceptability.
The cases discussed show that the judges, both
before and after Independence, were influenced by English common law. The
judges have to keep abreast of English common law. Section 3 of the 1956
Civil Law Act provides different cut-off dates for the reception of English
common law into the different states of Malaysia. At present, the law of
charities in Malaysia is modeled on local statutes and the English common law
subject to the cut-off dates mentioned above. This section of the law
ought to be revised for it is clear that as the law stands, it means that
developments in the law of charities in England can only be taken cognizance of
by the local Courts provided the Courts are pro-active. If however, the
courts make no departure from the dates mentioned, it could lead to a
stagnation of the law, for there has been progressive development and evolution
of the law on the subject in England. While the current state of the law
seems somehow able to cater to the needs of the Malaysian public, as a legal
system, there is a need for progressive development of the law to take
place. It could be argued that as a legal system, this aspect of the law
needs to be revised to keep abreast of developments not only in England but
also other parts of the Commonwealth and the United States. However,
where necessary, this can be fulfilled to a small extent by the local courts
absorbing compatible legal provisions of the Commonwealth states and modifying
them to suit local conditions where there is no precedent in Malaysia. It
is further submitted that where the situation requires new law, then only the
relevant principles should be adopted. In this way, English common law
may be used on the basis of the theory of brooding omnipresence. [118]
The jurisprudential basis of charities,
particularly charitable trusts, involves a donor and several voluntary recipients
who have paid no consideration for the bounty that they receive. The
beneficiaries cannot compel the settlor to exercise the bounty in their
favour. The critical legal element is that like all other trust concepts
the recipients are called beneficiaries and they are voluntarily in that
status. In some of the non-charitable purpose trusts discussed above, the
beneficiaries are non-human, and therefore, greater reliance is placed on the
trustee and next-of-kin of the settlor to see to the proper administration of
the trust. However, in the context of proper charitable trusts, since
there is no loss of human dignity in having a bountiful donor and a grateful
beneficiary, the practice of establishing charities, particularly charitable
trusts, should be encouraged. When a charity is wound up, it is the Court
that will determine whether the proceeds will be applied cy-pres or not.
The terms, “charity”, “public benefit”, “altruism”, “benevolence”,
“philanthropy”, and “not-for-profit” have been used at various times to define
or express an act of giving. All benevolent acts are not charitable,
while all charities are benevolent. The acquisition of rights by the
needy under a charity, as originally understood, for the maxim is that “charity
begins at home”, comes from a higher moral order, something that religion
encourages and which is godly in nature to observe without boast. In such
cases, there may be beneficence in the act of giving and at other times there
may be considerations of salvation. In this sense, the receiver has a
moral right only.
There is a need to define charity for there is
no uniform definition or classification of charity or charitable purpose.
For example, on a more general note, as far as the list of the charitable
objects is concerned, the practice of classification of the ROS does not seem
to be in harmony with the classification of the law of charities as laid down
by Lord McNaughten in the Pemsel case. Very little information is
available concerning the practice of the ROC on charitable companies. The
rationale for the fiscal advantages enjoyed by charities under the Income Tax
Act must be in conformity with the rationale of other legislation on
charities. It is expressly recognized that trusts for politics are regarded
as non-charitable. Given the fact that any issue may be classified as a
political issue, because it could fall under the Fundamental Liberties or the
Directive Principles of state policy of the constitution of a nation, the
blanket coverage on politics may not be the right approach to take for a
distinction has to be drawn between attainment of political objects and mere
issue advocacy. [119]
In this area of the law there needs to be caution, standardization, and
uniformity.
The law in Pemsel offers a much wider scope when
compared to the guidelines mentioned above. Charities are established in
various ways and hence their constitutional basis also varies. The common
denominator is that they should all be for public benefit, and only if they can
so qualify, should they be tax exempt. In the ascertainment of whether a
charity meets the criterion of being for public benefit, considerations of
governmental support or lack of it and of a welfare or non-welfare state should
be borne in mind.
There is a great deal of ethnic plurality in the
various forms of religious charities making it a colorful area of the law as
seen for example, in the law of Chinese ancestral worship. The cases
highlight that many of the older religious charities were made by the early
settlers. This does not mean that religious charities were not
established by others. Charity has never been race specific.
As far as the competence to establish charities
is concerned, both offices of the ROS and the ROC are suitably empowered.
However, the Guidelines of both the ROS and the ROC are challengeable in a
court of law. [120]
On the part of counsel and the judges, charity litigation and adjudication
requires deep knowledge of the religious practices and customs of the plural
communities in Malaysia, before trust law can be gathered and applied.
The question then arises whether there is a need for standardization or is the
plurality acceptable? The trust basis of charities is far wider than the
directives given in the Guidelines mentioned above. Indeed, the law would
be clearer and definite if the various approaches would be made to conform with
each other and legislated upon.
It could be argued that in Malaysia, the English
concept of ownership of land and property rights therein and its extension and
application to the trust concept, does not apply. The double system of ownership
of land and property rights similar to England is absent in Malaysia. At
present, trust law is taught on the basis that trust property in Malaysia is
similarly subject to the twin perspectives of legal ownership and equitable
ownership. In this context, the better approach may be to view trusts
over any property and trusts over land as stemming from a fiduciary duty which
the trustee comes under an obligation to discharge. This approach was
adopted by the Court in India. Addressing the issue of trusts in the
Hindu law context, CJ Peacock in GM Tagore v UM Tagore [121] observed:
There is, consequently, no such thing here as a
bare legal estate in one man descendible to heirs side by side, with a
beneficial estate of inheritance, or a succession of beneficial estates in the
same property passing down another series of persons. But I think that
whether a man accepts property on the terms of giving another person specified
benefits out of it, or whether he undertakes to manage property on behalf of
another, or courts will, in both cases alike, know how to make him discharge
the obligation under which he comes, and I do not hesitate to believe that it
is in entire accordance with the genius of Hindu law that they should do
so. (emphasis added).
As mentioned above, since we do not have a
double system of ownership in property in Malaysia, the basis of all trusts
including charitable trusts should be trust as understood in the broad sense of
a fiduciary duty where the trustee holds the property on the basis of a
fiduciary obligation. It could be argued that this is a more sensible
approach to trust law in Malaysia according to the rationale of the Indian
model on this point.
Since there is no register of charities in
Malaysia, there is no requirement to register trust deeds and this situation
leads to vulnerability on the part of the beneficiaries. However,
stamping the trust deed according to its monetary value could give them some
legal protection. We neither have a Charity Commissioner nor any action
plan on the law of charities, that should form the underlying basis of and
provide a definitive framework for the law in Malaysia. The Malaysian law
on charities should be revised and consolidated based on the above
recommendations, with a national register of charities in place and a Charity
Commission set up. There is a need to encourage settlors to set up
charities, as the concept can be useful for more modern to several uses.
For instance, the charity concept can be utilized as a public trust doctrine in
the control of environmental pollution in maritime and aero-space industries.
This paper has appraised the law of charities in
Malaysia, a multi-racial and multi-religious society, with a federal system,
taking into account the various federal and state laws and case law. Most
of the federal laws dealt with public trust funds and charitable
institutions. Several of the state enactments are focused on Islamic
matters and a few others were concerned with state charitable trusts.
What the paper suggests as a matter for consideration is that charity law in
Malaysia needs to be better rationalized, to make it more consistent with
modern developments elsewhere and to ensure that charities will be encouraged
more broadly than they have been to date.
* Copyright © , 2001, by Mary
George, all rights reserved. ICNL has been given the right to publish
this by the author.
* Mary George is a lecturer in law
at the Faculty of Law, University of Malaya, 50603 Kuala Lumpur, West Malaysia,
Tel: 60-3-22847179 (Res); 60-3-79676558 (Off), E-mail: maryg@um.edu.my.
This paper is an expanded version of the paper
originally presented at the International Seminar on Charity Law, jointly
organized by the Centre for Civil Society, London School of Economics in
association with the Charity Law Unit, University of Liverpool, and the Charity
Law Association held at the London School of Economics, June 18-19 2001.
In writing this paper, I would like to express my gratitude to the Assistant
Registrar of Societies, Lau Chi Swee, of the Wilayah Branch of the Registrar of
Societies. However, the author remains responsible for any error or
omission in this article. The revised title of this paper was inspired by
the following source: ORICK, Critical issues in Employment Litigation,
Continuing Legal Education, United States of America.
Notes
[1] (Revised
1973), Act 125.
[2] (Revised
1987), Act 335.
[3] In
Re Chionh Ke Hu, Deceased, 1964-1 MLJ 270, the argument of a non-charitable
purpose trust was raised based on the proposition contained at page 482, para
804 of Williams on Executors and Administrators, 14th Edn, vol 2, which reads:
--
"A gift may be valid even where it is expressed to be for a
specific purpose and there is no person or persons named as legatee, or where
the person named must, by the terms of the will, hold the gift for some
specific purpose; and this is so, even if the purpose stated in the will is not
charitable, provided the purpose is sufficiently defined. But where the
testator expresses his intention vaguely and in effect leaves it to another to
make a will for him, the gift is void for uncertainty. Thus, a gift of a large
income to trustees on trust to apply it to maintain the horses and hounds of
the testator, together with their stables, kennels and buildings, for a period
of 50 years, was held to be valid. A gift of £1,000 to a trustee, to be
applied in such manner as he should in his absolute discretion think fit
towards the promotion and furthering of fox-hunting was also held to be
valid. Similarly, gifts have regularly been held valid, for the erection
of tombs and monuments, where there is no question of uncertainty or
perpetuity; likewise a gift for the erection of a Masonic temple. Such
gifts are valid although there is no person named as beneficiary or cestui que
trust, but in so far as gifts by way of trust are concerned, they are regarded
as exceptional, and the class of objects to be benefited will not be
extended."
The scope of these anomalous cases relating to horses, dogs,
graves, monuments and fox-hunting and others was reviewed in Re Astor's
Settlement Trusts [1952] Ch 534 and in Re Endacott, decd [1960] Ch 232 which,
however, clearly laid the principle down that the scope of such cases should
not be extended. In these anomalous cases the courts discovered indirect
means of enforcing the execution of non- charitable purposes but held out a
caution that such concessions to human weakness or sentiment should be
exercised with restraint. Roxburgh J observed in Astor's Settlement
Trusts, at page 547 that:
“the principle underlying these exceptional cases is that, not
only must there be non-charitable purposes which a court can control or enforce
but the relevant purposes must be stated in phrases which embody definite
concepts and the means by which trustees are to try to attain them must also be
prescribed with a sufficient degree of certainty. So much for the
anomalous and exceptional cases or trusts of imperfect obligation, as they have
sometimes been called. …As Lord Evershed MR said in Endacott's case,
supra, at page 246 –
"No principle perhaps has greater sanction or authority
behind it than the general proposition that a trust by English law, not being a
charitable trust, in order to be effective, must have ascertained or
ascertainable beneficiaries. These (anomalous) cases constitute an exception to
that general rule. I add also that, in my judgment, the proposition
stated, in Mr Morris and Professor Barton Leach's book 'The Rule Against
Perpetuities (1956)' (p 308) that if these trusts should fail as trusts they
may survive as powers, is not one which I think can be treated as accepted in
English law."
[4] (Revised
1972), Act 67.
[5] (Revised
1978) Act 208.
[6] [1996]
3 CLJ 713.
[7] [1965]
1 MLJ 44.
[8] 1988
MLJ LEXIS 523; 1988-1 MLJ 485. In this case, the Court had to consider
whether clause 11 (cl 11) of the will of the testatrix, which created certain
purpose trusts failed upon the Government of Singapore acquisition of the
subject-matter of the trust. (This case is discussed in greater detail
below). That the Accumulations Act 1800, was and still is part of the law
of
Singapore was decided in Tan Jiak Kim v Tan Jiak
Whye.[8] Accordingly, the Court held that nothing in cl 11 had
infringed the Accumulations Act 1800.
One of the issues in this case was the interpretation of the term
‘cash’ and the phrase ‘accumulation of income’. In the opinion of the
Court, the defraying of income for the upkeep of the plantation, the buildings,
the temple and the graves thereon did not amount to an accumulation of income
of the said property: see Re Gardiner [1901] 1 Ch 697 and Vine v Raleigh [1891]
2 Ch 13. However, it was contended by counsel for the first defendant and
the sixth defendant that cl 11 contained an implied direction to accumulate
income during the trust period as nothing was said about the disposal of the
surplus income. The Court understood this argument to mean that the
implied direction to accumulate could be inferred from the expression 'cash' in
cl 11(c), which expression, it was contended, meant 'income'. No
authority was produced to show why the said expression meant income and not,
for example, capital held in the form of cash. It was suggested that
since the word 'cash' was used in juxtaposition with the words 'investments'
and 'plantation', which latter expressions both refer to the capital of the trust
fund, the word 'cash' had to refer to 'income'. It was also suggested
that at the end of the trust period, the trustees could hold unused income in
the form of cash. Counsel did not agree with this contention for the
following reasons. Firstly, cl 11 used the expression 'cash' in the opening
words and paras (a) and (b) referred to the sum of $ 10,000 cash which the
trustees had to invest to provide the income to carry out the purpose trusts.
At the end of the trust period, the cash and investments were to be held
in trust for the male descendants under para (c). In the view of the Court, the
expression 'cash' in para (c) was used in the same sense as it was used in
paras (a) and (b) as no income was intended to be included in the gift over.
Secondly, the testatrix had in cl 11 used the expression 'income' when she
meant income. Thirdly, since cl 11 expressly directed the trustees to apply the
income to carrying out the purposes trusts, without any qualification, it meant
that they were required to apply all the income. Accordingly, it would be
a contradiction in terms to speak of cl 11 as containing an implied direction
to accumulate. To amount to such a direction, the property had to be
given in such a manner that the accumulation became necessary: see Theobald on
Wills (14th Ed) pp 616-617. An example of this would be that the amounts
directed to be expended could never exhaust the income. A direction to
accumulate should not be implied where an accumulation had occurred temporarily
or fortuitously or through the neglect or breach of duty on the part of the
trustees in carrying out the trust. Finally, the contention appeared to be
academic as there was no evidence that there was any surplus income at all at
any time during the period prior to the failure of the trust.
[9] (Revised
1973), Act 100.
[10] (Revised 1977), Act 196.The Trusts (State
Legislatures Competency)(Amendment of Schedule Order 1990 (PU) (A) (404/90) was
made under s.3(2) of the Trusts (State Legislatures Competency) Act 1949 (Act
196). It amends the schedule in the Act by adding the item ‘State
Heritage Trust’. It came into force on 20 November 1990.
[11] (Revised 1970), Act 18.
[12] (Revised 1981), Act 258.
[13] Act 339.
[14] Act 442.
[15] Act 452.
[16] Act 454.
[17] (Revised 1981), Act 247, now repealed.
[18] Act 532.
[19] (Revised 1972), Act 97.
[20] Act 534.
[21] Act 535.
[22] Act 8.
[23] (Act 200) (Revised 1978).
[24] (Act 517)(Revised 1994).
[25] (Act456)(Revised 1991).
[26] 1954 (FM Ordinance No.30 of 1954).
[27] FM Ordinance No.7 of 1955.
[28] Act 457 Revised 1991.
[29] FM Ordinance No.35 of 1956.
[30] FM Ordinance No.15 of 1957.
[31] FM Ordinance No.21 of 1957.
[32] No.8/92.
[33] No 8/92.
[34] [1917] AC 406.
[35] Woon W., Company Law, (2nd Ed.), (FT Law and Tax
Asia Pacific: Singapore: 1997) at 7.
[36] This communication was made by an officer of the
Department of Registrar of Societies, Puan Zahara to Researcher, Ms Jamie Lee,
a recent ex-student of the Faculty of Law, University of Malaya in an interview
held on approximately 14-15 June 2001.
[37] The reasons for this stringency is unknown at the
moment.
[38] Act 576.
[39] See Martin Jill E., Hanbury and Martin, Modern
Equity (15th Edn), (London: Sweet and Maxwell: 1997) at pages 8 to 24.
[40] Ibid at page 443.
[41] [1843], 8 Ves 570.
[42] [1953] Ch 672.
[43] [1955] Ch 495.
[44] [1957] Ch pp 423, 425.
[45] [1931] 2 KB 465 P 477.
[46] 14th Edn. Vol 2.
[47] [1952] Ch 534.
[48] [1960] Ch 232.
[49] See Roxburgh J's observation in Astor's Settlement
Trusts, supra, at page 547.
[50] Supra, at page 246.
[51] [1891] AC 531.
[52] Straits Settlement Cap 175.
[53] 1808-1884 1 KY 377.
[54] 1986 MLJ LEXIS 180; 1986-2 MLJ 188.
[55] Straits Settlement Cap 175.
[56] These provisions state:
Article 162(1): "Subject to the following provisions of this
Article and Article 163, the existing laws shall, until repealed by the
authority having power to do so under this Constitution, continue in force on
and after Merdeka Day, with such modifications as may be made therein under
this Article and subject to any amendments made by Federal or State law".
Article 160: "Existing law means any law in operation in the
Federation or any part thereof immediately before Merdeka Day".
[57] These are set out in the following terms:
Article 4(3): "The validity of any law made by Parliament or
the Legislature of any State shall not be questioned on the ground that it
makes provision with respect to any matter with respect to which Parliament or,
as the case may be, the Legislature of the State has no power to make laws,
except in proceedings for a declaration that the law is invalid on that ground
or
(a) if the law was made by Parliament, in
proceedings;
(b) if the law was made by the Legislature
of a State, between the Federation and one or more States; in proceedings
between the Federation and that State. Article 4(4): "Proceedings for a
declaration that a law is invalid on the ground mentioned in cl (3) (not being
proceedings falling within para (a) or (b) of the Clause) shall not be
commenced without the leave of a judge of the Supreme Court; and the Federation
shall be entitled to be a party to any such proceedings, and so shall any State
that would or might be a party to proceedings brought for the same purpose
under para (a) or (b) of the Clause".
Article 128(1)(a):
"The Supreme Court shall, to the exclusion of any other
court, have jurisdiction to determine in accordance with any rules of court
regulating the exercise of such jurisdiction, any question whether a law made
by Parliament or by the Legislature of a State is invalid on the ground that it
makes provision with respect to a matter with respect to which Parliament or,
as the case may be, the Legislature of the State has no power to make
laws". (emphasis supplied).
[58] (1984) 2 MLJ 52.
[59] (1969) 2 MLJ 30.
[60] Ibid at page 35.
[61] [1938] MLJ 119.
[62] [1940] MLJ 44.
[63] 1 KY 216.
[64] 1946-1 MLJ 159.
[65] Yeap Cheah Neo v Ong Cheng Neo, LR 6 PC 382 and Choa
Choon Neoh v Spottiswoode, 1 KY 216.
[66] [1919] AC 415.
[67] [1911] 12 SSLR 74.
[68] Suit No 239 of 1915. (unreported).
[69] [1922] 1 AC 256.
[70] 7th Edn Vol I at page 197.
[71] [1809] 16 Ves 206.
[72] [1833] 2 Myl and K 59.
[73] [1824] 1 Moll 616.
[74] 5th Edn at page 183 and 184.
[75] [1940] SSLR 78 (1940) 9 MLJ 181.
[76] 16 Eq 461.
[77] See Re Khoo Cheng Teow [1932] SSLR 226; (1933) 2 MLJ
119).
[78] See Attorney General v Thirpooree Soonderee 1 Kyshe
377 and Re Low Kim Pong's Trust Settlements [1938] SSLR 144 (1938) 7 MLJ 119.
[79] [1911] 12 SSLR 74. In Hadjee Ismail's case, a
testator by his will had directed that one third share of his property be held
upon trust for a named period (which did not infringe the Rule Against
Perpetuities) as a "Wakaf or property set apart for charitable
purposes" and he further directed that the income should from time to time
be applied to five specified purposes, some of which were held to be charitable
and some non-charitable. The plaintiffs contended that the charitable purposes
thereupon failed for uncertainty, the quantum being indefinite. The Attorney
General having argued that a charitable bequest never failed for uncertainty,
the learned Judge admitted this principle as applicable to uncertainty in the
object but said that the law laid down in the Encyclopaedia of the Laws of
England 2nd Edn, vol 2 at page 685. provided that: "If the amount is
uncertain or if there is not a clear charitable intention expressed, the gift
will fail". He noted that the cases cited in the Encyclopaedia for
that proposition were cases in which there was or was not a clear charitable
intention expressed, the amount in each case being definite, and quoted a
passage in the chapter on Incomplete Gifts in Tyssen on "The Law of
Charitable Bequests", in support of die proposition that if the amount was
uncertain the gift failed. He also referred to Ewen v Bannerman[79][79]
[1830] 2 Bow & Cl 74. and held that four of the gifts failed, two because
they were neither charitable nor certain, and two because, although charitable,
the amount in each case was left uncertain. The fifth gift was declared valid
because the testator had directed that the amount should be at the discretion
of the trustee.
The complete proposition in the Encyclopaedia reads as follows:
"If a testator has not completely expressed his intention,
but has defined the property or amount intended to be given, and it is clear
that he intended it for some charitable purpose or purposes, effect will be
given to the gift; but if the amount is uncertain or there is not a clear
charitable intention expressed, the gift will fail."
[80] This was a decision of Sir William Hyndman-Jones CJ
sitting in original jurisdiction and therefore a decision of a court of co-ordinate
jurisdiction which has stood for nearly forty years and which, though not
absolutely binding on the Court, ought to be followed in the absence of strong
reasons to the contrary.
The Court also found that the headnote on this point in Re Choo
Eng Choon [1908] 12 SSLR 120 was misleading: see XII SSLR 120 per Law A-G CJ at
p 161.
[81] [1899] AC 309.
[82] Rewritten in the 2nd Edn (1921) as Chapter X
"Indefinite and Incomplete Charitable Gifts" at page 124. This
passage that most nearly resembled the quotation by Sir William Hyndman-Jones
was the paragraph on "Blanks in wills" on page 129 where Ewen v
Bannerman was cited. These passages clearly referred only to cases where
the property was left uncertain.
[83] 2nd Edn vol 4, paras 223 and 224.
[84] Further, affirmation was also found in para 228 of
the same volume and to Tudor on Charities 5th Edn on "Certainty of the
Subject-matter" at page 59 et seq and on "Charitable and other
objects in unascertained proportions" at page 101. Other authorities
include the observations of Romer J in Re Clarke [1923] 2 Ch 407.
[85] [1923] 2 MC 38.
[86] Vol II, 4th Ed., p 194.
[87] (1980) 1 MLJ 286.
[88] (1969) 1 MLJ 110, (1970) 1 MLJ 222.
[89] (1894) 22 IA 76; ILR 22 Cal 619.
[90] [1952] AC 1.
[91] (1889) 17 IA 28; ILR Cal 498.
[92] (p 14).
[93] 2nd Ed, at page 252. Another author, Ameer Ali
in vol I, 5th Ed (1976) says that a wakaf may be created for the benefit of any
person or class of persons or for any object of piety or charity (page 273),
and among the objects of a valid wakaf is a gift to strangers (pages 276-277).
Similarly, Tyabji, 2nd Ed (1919), after observing that the Mussalman Waqf
Validating Act 1913 contains no reference to the question whether the
provisions in favour of others than members of the family, children and
descendants of the "waqif" (settlor) are valid, goes on to say that
provisions in the wakaf may be made in favour of strangers (page 571). In
Hashim Aliv Iffat Ara Hamidi Begum, (1942) 46 Cal WN 561 the Calcutta High
Court has taken the view that the provision for a small pension for three of
the faithful servants would not render the wakaf invalid, as the main purpose
of the wakaf in question was not to make settlement on those servants. In
Mt Akhtar Banu Begumv Kanhaiya Lal, AIR 1941 Oudh 492 it was held by the Oudh
High Court that payments of sums of money directed to be made in the wakaf to
two servants of the settlor were valid, though they were not members of the
family of the settlor. In the opinion of the court, the provisions contained in
the Mussalman Waqf Validating Act 1913 are not exhaustive as the words used are
"among other purposes". In Abdul Wahabv Sughra Begum, AIR 1932 All
248 Allahabad High Court held that a disposition in a wakaf for the payment of
salary and pensions to servants was valid. The court in this case acting
upon the opinion of Ameer Aliand Tyabji rejected the contention that for a
wakaf in favour of a stranger to be valid, the stranger concerned must be
poor. Thus a review of Indian cases on a wakaf in favour of stranger
shows that three High Courts, i.e. Calcutta, Allahabad and Oudh benches
upheld the validity of such wakaf. Only Bombay High Court in Ismail Haji
Aratv Umar Abdullaheld otherwise. The Indian Act contains no provision
relating to validity of a wakaf made in favour of persons other than the family
of the settlor.
Test of ‘what constitutes family’:
In Abdul Mabud Khan & Ors v Nawazish Ali Khan, AIR 1925 Oudh
301, it was held that whilst distant collaterals such as cousins in the fourth
and fifth degree cannot be viewed as members of the family, the word
"family" in the Mussalman Waqf Validating Act 1913 includes those
persons residing in the house of the settlor for whose maintenance the settlor
is mainly responsible. In Mt Musharraf Begum & Ors v Mt Sikandar
Jehan Begum AIR 1928 All 516 it was held that a wakaf in favour of a widow's
son, i.e. daughter-in-law, was valid because she was held to be a member of the
settlor's family. Similarly, in Ismail Haji Arat'scase, a nephew living in the
house of the settlor who treated and maintained him as his son was held to be a
member of the family.
[94] 1988 MLJ LEXIS 700; 1988-3 MLJ 311.
[95] Cap 121.
[96] [1993] 3 SLR 649.
[97] 1947-1 MLJ 157.
[98] Re White's Trusts 33 Ch D 449 which is referred to
in Cheang Tew Muey & Ors v Cheang Cheow Lian Neo & Ors [1930] SSLR
58.
[99] [1891] AC 583.
[100] 41 ER 482.
[101] 70 ER 423.
[102] [1895] AC 186.
[103] 1976 MLJ LEXIS 247; 1976-1 MLJ 207, Court of Appeal.
[104] (8th Ed) at p 260 of vol I.
[105] [1913] 1 Ch 314 at p 320 and 321.
[106] (1940) 63 CLR 209 where Dixon J and Evatt J at p
225. In this case the Court held that:
If there are insuperable objections, either of fact or of law, to
a literal execution of a charitable trust, it at once becomes a question
whether the desires or directions of the author of the trust, with which it is
found impracticable to comply, are essential to his purpose. If a wider purpose
forms his substantial object and the directions or desires which cannot be
fulfilled are but a means chosen by him for the attainment of that object, the
court will execute the trust by decreeing some other application of the trust
property to the furtherance of the substantial purpose, some application which
departs from the original plan in particular held not essential and, otherwise,
keeps as near thereto as may be. The question is often stated to be whether the
trust instrument discloses a general intention of charity or a particular
intention only. But, in its application to cases where some particular
direction or directions have proved impracticable, the doctrine requires no
more than a purpose wider than the execution of a specific plan involving the
particular direction that has failed. In other words 'generaI intention of the
charity' means only an intention which, while not going beyond the bounds of
the legal conception of charity, is more general than a bare intention that the
impracticable direction be carried into execution as an indispensable part of
the trust declared. Later at p 227 Dixon J and Evatt J said:
In determining whether a wider charitable intention is the
substantial purpose of the express directions by which the trust is
constituted, the court is guided by the trust instrument and the conclusion is
commonly said to depend on a question of construction. No doubt the terms of
the document, together with any extrinsic circumstances admissible in aid of
construction, form the materials for ascertaining whether the specific
directions were animated by a wider charitable purpose which amounted to the
true or substantial object of the trust. The process of extracting from such
materials an intention implicit in the transaction which they evidence is
properly called interpretation. But the construction of the language in which
the trust is expressed seldom contributes much towards a solution. More is to
be gained by an examination of the nature of the charitable trust itself and
what is involved in the author's plan or project. In distinguishing between
means and ends, between the dominant and the subsidiary, between the substance
and the form, an understanding of the relative importance in fact of the
component parts of the plan or purpose expressed in the trust is a first step
towards forming an opinion of the respective values they possessed in the view
of the testator or settlor. His forms of expression are by no means to be
neglected. In the arrangement of his ideas and his use of terms the importance
which he attached to the particular and to the general respectively may appear.
The decided cases show that slight indications have at times been treated as
enough to warrant a conclusion in favour of a wider charitable intention.
[107] On this point Halsbury's Laws of England (4th Ed)
vol 5 para 669 reads as follows:
Property situated or payable abroad.
The court will not direct a scheme to be settled where the
charity's property is out of the jurisdiction, or is a fund payable to trustees
out of the jurisdiction. In such a case, the court may direct an inquiry
whether the trust can be carried into effect according to the law of the
particular country, and may pay the money to the persons selected by the
testator as the instruments of his benevolence, if they are proper persons to act
as trustees, but not otherwise, or may appoint new trustees for the purpose, or
may retain the fund in court and direct payment of the dividends to the persons
entrusted by the testator with the application of them, or may retain the fund
in court to await the result of an application to the foreign court, or may
give liberty to carry into effect a scheme to be settled by the foreign court.
[108] (Revised 1971), Act 53.
[109] Act 192.
[110] [1956] Ch 622.
[111] See also KL Ter, Charities in Singapore and Malaysia
at p 131.
[112] An unofficial direct translation would read as ‘in-between
company’. However, there is no such concept in Malaysian Company Law.
This information was furnished by Professor P Balan, Faculty of Law,
University of Malaya in an interview held on Wednesday, 29 August 2001.
[113] (1965) 2 MLJ 189.
[114] (Revised 1988), Act 359.
[115] [1977] 2 MLJ 218.
[116] (1993) 4 CLJ 253.
[117] See Edwards R and Stockwell N, Trusts and Equity
(3rd Ed) (London: Pitman Publishing: 1997) at 206 to 228.
[118] Pillai PN, Soucrebook of Singapore and Malaysian Company
Law (Butterworths: Singapore: 1986) at 1to 3.
[119] For a discussion of this issue under current UK law,
see Graham Moffat, Charity, Politics and the Human Rights Act 1998: Chasing a
Red Herring?, also in this issue of IJNL.
[120] Personal communication with Professor P Balan,
Faculty of Law, University of Malaya, Saturday, 28 July 2001.
[121] 4 BLR 134.
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