Equity Notes PDF

Lim Chun Yuan LEB140053
Siti Nurlaila Abdul Ghani LEB140108

Tasha Lim Yi Chien LEB140116
Chapter 1: Birth and Development of Equity
 Equity is a body of rules and principles that form an appendage to the general principles of law.
 In a wide sense, equity means that which is fair, just and reasonable.
 Principles of justice and conscience are the basis of equity jurisdiction.
 The unique relevance of equity to contemporary issues is stated by Sir Anthony Mason as follows:
[T]he ecclesiastical natural foundations of equity, its concerns with standards of conscience,
fairness, equality and its protection of relationships of trust and confidence, as well as its
discretionary approach to the grant of relief, stand in marked contrast to the more rigid
formulae applied by the common law and equip it better to meet the needs of the type of
liberal democratic society which has evolved in the twentieth century.
 Another observation of Spry in The Principle of Equitable Remedies:

Equitable principles have above all a distinctive ethical quality, reflecting as they do the
prevention of unconscionable conduct. Further, they are of their nature of great width and
elasticity and are capable of direct application, as opposed to application merely by
analogy, in new circumstances as they arise from time to time.
1.1 History and Origins

 Developed from the informal process application made by petitioners seeking relief directly from
the King, or in circumstances where they were dissatisfied with the decision of common law courts
 Claims were later heard by the Lord Chancellor as the keeper of the King’s Conscience
 This grew and a court named ‘Chancery Court’ was set up to hear and to decide on those claims
1.2 Factors of the existence of the Chancery Courts:

 Weakness of common law – rigid procedure using a system of writ;
 Inadequacy of common law remedies;
 Common law did not have jurisdiction in certain situations – eg. Foreign merchants; and
 Rigid system of judicial biding precedents which could restrict the judges’ discretion
1.3 Equity Jurisdiction

Equity acts in personam
Remedies are discretionary
Equity operates on the conscience
Doctrine of unconscionability
1.4 Influence of Equity

 Intervention in the administration of common law
 Penetrates aspects of legal practice
 Influences modern commercial law
 Environmental law
 Administrative law: declaration and injunction
 Emerging roles of equitable principles: in human rights > restitution, fiduciary role of governments in
relation to indigenous people
Saad Marwi v Chan Hwan Hua (2001) 3 CLJ 98

Equity comes in to intervene.
GSR: We may not have the Unfair Contract Terms Act, but we should recognize wider doctrine of
unequal bargaining power, based on English doctrine of unconscionability, and since s3 CLA allows
us to apply, then we can apply unconscionability in total.
The Earl of Oxford’s Case (1615) 1 Ch Rep 1 Coke CJ

In a case of conflict between the rules of equity and common law, the rules of equity prevail.
 This concept was later given statutory recognition in s.25(11) Judicature Acts 1873-75
1.5 The Court of Judicature Acts 1873-1875

The Act
a) Establishing a new Supreme Court, Supreme Court of Judicature;
b) fused the administration of common law and the principles of equity in each court so that a
complete remedy may be given by a the judge hearing the case;
c) provided that whenever there is a conflict between common law and equity, under s 25, equity
prevails; and
d) Common law procedure applied in the Supreme Court
Case: Newbiggin Gas Company v Armstrong (1879) 13 Ch D 310
1.5.1 Relationship between common law and equity

The most often-quoted description of the distinctive relationship between common law courts and
the Courts of Chancery is the statement by Professor Maitland that:
We ought not to think of common law and equity as two rival systems. Equity was not a self-
sufficient system, at every point it presupposed the existence of common law. Common law was a
self-sufficient system. I mean this: that if the legislature had passed a short Act saying ‘Equity is
hereby abolished’, we might have got on fairly well; in some respects our law would have been
barbarous, unjust, absurd, but still the great elementary rights, the right to immunity from violence,
the right to one’s good name, the rights of ownership and possession would have been decently
protected and contract would have been enforced. On the other hand, had the legislature said,
‘Common law is hereby abolished’, this decree if obeyed would have meant anarchy. At every point
equity presupposed the existence of common law.
> If you don’t have equity and only common law, you would still have your reputation protected and
etc but the element of whether there is any injustice may not be there.
1.6 Fusion of Common law and Equity?

Ashburner in Principles of Equity (1902) 23 said:
The two streams of jurisdiction, though they run in the same channel, run side by side and do
not mingle their waters.
However look at Lord Diplock’s statement in United Scientific Holding Ltd v Burnley Borough Council
[1978] AC 904:
The innate conservatism of English lawyers may have made them slow to recognise that by the
Supreme Court of Judicature Act 1873, the two systems of subjective and adjectival law formerly
administered by Courts of Admiralty, Probate and Matrimonial Causes were fused.
“Two systems of substantive and adjectival law have been fused”
George Jessel in Walsh v Lonsdale

“There is only one court and equity rules prevail in it”
Seager v Copydex[1967] 2 All ER 415

PF (inventor) was negotiating with DF the marketing of a carpet grip which has not been patented.
DF later invented and patented an alternative carpet grip which was very similar to the PF’s/
Held:
- The law on this matter does not need to depend on an implied contract but the broad principle
of equity that he has received information in confidence shall not take unfair advantage of it
without consent.
- Where there is a breach in equitable right (breach of confidence), the PF is entitled to equitable
damages.
1.4.1.2 Consider this statement by Dal Pont and Chalmers (1996) 9:
If the two systems are truly fused, no difference should be detectable between common law of
damages and damages in equity. However, the fact that equitable damages are unavailable, and
can be awarded in circumstances where common law damages are unavailable, and can differ
from what would have been the quantum at law, suggests that the fusion has yet to be achieved.
http://lawyerwizdom.blogspot.my/2012/07/equity.html
Berry v Berry [1929] 2 KB 316

SWIFT, J.:
"...courts of equity have always held themselves at liberty, to allow the rescission or variation by a
simple contract of a contract under seal by preventing the party who has agreed to the rescission or
variation from suing under the deed."
Husband agreed to pay allowance to wife by a deed of separation. There was a reduction in husband’s
salary and wife agree to receive a lesser sum of allowance. However, the wife later sued for arrears.
Common law: Deed can only be varied under seal
Equity: Agmt can be varied by a simple ctt of preventing the party who has agreed to the rescission or
variation suing under the deed.
Held:
- Equity must come in to correct some of the worst and odious technicalities of CL
Job v Job (1877) 6 Ch D 562

The assets of a testator came into the hands of his executor, but were afterwards lost to the estate
through no willful default on the part of the executor. Under common law, the executor was strictly
liable whereas in equity, he was only liable on proof of willful default. Jessel MR treated the case as one
of conflict and applied the equitable rule.
[DF, the executor of an estate and one of the legatee of the estate, entrusted part of the testator’s
stock-in-trade to his son. Job became bankrupt and his trustee sold the stock, causing a loss to the
testator’s estate. Can the DF be held liable?
Held:
Common law: Executor is liable as soon as the loss happens when the assets came into his hands.
Equity: Not liable if accidental tloss
Equity prevails as there was no wilful default on part of the DF.
Lowe & Sons v Dixon & Sons (1885) 16 Q.B.D. 455

Three firms purchased a shipment of wheat as joint partners. One of the firms went into liquidation and
the question was whether and to what extent the other two firms had to contribute to make good the
default of the third. Lopes J found that:
At law, if several persons have to contribute a certain sum, the share which each has to pay is, the
total amount divided by the number of contributors; and no allowance is made in respect of the
inability of some of them to pay their shares. But, in equity, those who can pay must not only
contribute their own shares, but they must also make good the shares of those who are unable to
furnish their own contribution. Inasmuch, therefore, as the rules of equity prevail, the defendants
must make good each one-half of that which Lund, Beveridge, & Co. are unable to pay.
>> Equity comes in to protect a bona fide creditor.

Newbiggins Has Co v Armstrong (1879) 13 Ch. D 310
Seager v Copydex Ltd [1967] 2 All ER 415
Tinsley v Milligan [1994] 1 AC 340
One of the most important contributions in equity is the law of trust
Chapter 2: Reception of English Common Law and Principles of Equity
2.0 
2.1 Timeline
1807 1st Charter of Justice in Penang, Straits Settlement
1826 Set up Courts of Judicature in SS; 2nd COJ
Brought English principles in (English common law + principles of equity)
1937 Reception of English Common Law at FMS (Perak, Selangor, N9, Pahang)
Supposed to only “advise”
Statutory introduction of English Law
Civil law enactment
1951 Civil law extension
Intro to UFMS
1956 Civil law ordinance
S3: Provides for reception of English principles and equity
1963 Formation of Malaysia, Civil Law Act
1972 Sabah and Sarawak
Civil Law Act

S3 Cut off dates
Peninsular 7/4/1956
Sabah 1/12/1951
Sarawak 12/12/1949
Subject to local circumstances

Look at s3,s4,s6 of CLA
S5: No cut-off date for commercial law – not allowed
Only if there is a lacuna in our local law
S6: Application of English land law principles in Malaysia is not allowed
But see s206(3) of NLC: Provisions of land code does not affect operations of contractual
obligations relating to alienated land or any interest there in (form of equity)
2.1 Reception of Equity

Re The Will of Yap Kim Seng (1924) 2 FMSLR 313
“We have as a matter of fact adopted freely in these states a great mass of English Rule of Law and
Equity, either directly or derivatively…”
2.2 Application of English Principles of Equity

Motor Emporium v Arumugam [1933] MLJ 276
Judge:
“They will apply principles of English law because every court must have inherent jurisdiction
between the parties ... for attaining... with requirement... where the law is administered.”
- This is because in the end, these principles are very similar to principles of justice.
- Hence, felt that statutory introduction was not necessary
>> S49(1) of Court Enactment, Supreme Court has wide powers in all civil issues and has the
jurisdiction to apply principles of justice, subject to the social condition of the community where the
law is administered.
Chuah Choon Neoh v Spottieswood
- Adapted to the inhabitants where the law is subject
- Applied in various situations to alien population to such modification as are necessary to prevent it
from operating unjustly
>> The application of English law must be modified to prevent oppressiveness and English perpetuity
rule is not applicable
Warren v Tay Seng Geok [1965] 1 MLJ 44 PC

- Applied subject to local circumstnaes
- Reestablish that application of law is Subject to local circumstances
2.3 Cases
S3 allows us to apply English principles and equity
S6 says no application of English land law principles
Haji Abdul Rahman v Mohd Hassan (1915) 1 FMSLR 290 PC

- “We will not apply English principles of Equity because we have our own system of registration of
title and because we have a system of regulations (?), no need to apply Eng principles of equity.”
- TITLE IS GOOD AGAINST THE WHOLE WORLD
>> No such thing as a mortgage in the Land Code. Doctrine of equity was dealing with an entire
different land law.
The State of Johor v Salleh bin Hassan (1939) 2 SLR 73
UMBC Bhd v Pemugut Hasil Tanah, Kota Tinggi [1984] 2 MLJ 87

- NLC is a complete and comprehensive code, governing the tenure of land in Malaysia and
incidents of it as well as other important matters affecting land.
- No room for importing English law in that field, except in so far as the code may expressly
provide for this.
Bhagwan Singh & Co S/B v Hock Hin Bros [1987] 1 MLJ 324
- One of P died after the execution of the transfer by the V. Original transfer incapable of
registration. Sub-purchaser was entitled to an order directing the Registrar of Titles to register
what he had bought.
- Held: Antecedent ctt is a binding contract.
- English equitable principles in determining a question of priorities of caveats applicable
- Torrens system does not prevent the court form doing equity where the rights of 3 rd parties have
been intervened
Oh Hiam v Tham Kong [1980] 2 MLJ 159

 Statement by PC, Lord Russell
Torrens system (reg) is designed to provide simplicity and certitude in transfer of land which is
amply achieved w/o depriving eq of its ability to exercise jd in personam on grounds of
conscience
Summary:
 Parties entered in a contract of sale of certain pieces of land. The transfer was included with
a land on which stood the house on the ground of common mistake.
 Privy Council, issue: whether the equitable remedy of rectification was available to the
appellant notwithstanding the purchaser being the new registered owner of the fact his title
was indefeasible under NLC.
 Held: yes, when the claim was based on right in personam.
In personam on grounds of conscience.
Lian Keow S/B v Overseas Credit Finance

“The Malaysian Torrens System does not prevent or restrict the creation of beneficial interests in
land. It does not abrogate the principles of equity but alters the application of particular rules of
equity in so far as necessary to achieve its special objects.”
 Where there is in existence a right in personam or an equitable right prior to the registration
of title to land, the equitable principles of remedies may be applied. However, upon
registration of the transfer of the said land to the purchaser who thereby obtains a right in
rem or a real right in the property, the express provisions of the NLC will apply to the
exclusion of equitable principles. The equitable doctrine of equitable fraud has no application
under the provisions of the Code.
 Where there is a valid binding contract for the sale of land > right in personam (Equity)
 Where there is registration > right in rem (NLC applies, equity excluded)
Alfred Templeton & Ors v Low Yat Holdings S/B [1989] 2 MLJ 202, 222-223
S206(3) provides statutory authority for the liberal application of Equity whenever there is a basis for
that
Cheng Hay Guan

The case of Khoo Kongsi and these farmers in Penang. Khoo Kongsi people told them that “you can
live as long asyo ulike” but one day, Khoo Kongsi sold the land to Farlim who then wanted to evict the
farmers. The farmers had no title to the land but since was given assurance to stay as long as they
liked, built sprinkling systems and thus have a right in equity. However, the court also knew that they
had stayed there for so long, so the damages wasn’t a lot.
Borneo Mortgage Finance v Time Engineering (1996)

Chapter 3: Maxims of Equity
- The maxims of equity embody the general principles which evolved in the Court of Chancery.
- They are not rules which must be rigorously applied in every case, but are more in the nature of
general guidelines illustrating the way in which equitable jurisdiction is exercised.
- There is no logical division of these maxims – they do not cover comprehensively the whole field of
equity, plus they are overlap inter-related; one maxim containing by implication what belongs to
another
- They are generally:
 Indicative of the nature of equitable jurisdiction
 Guideposts to the development of equity and exercise of equitable jurisdiction
 Invoked to justify or fortify the decisions
 Not positive laws of equity
 Overlap: one maxim containing implication what belongs to another
 Each embodies some peculiar function of equity
- If you had to group them, it would probably be:
o Maxims concerning the nature of equity and its jurisdiction
o Maxims concerning the conduct expected of claimants
o Maxims concerning the circumstances in which equity will operate
3.1 Equity will not suffer a wrong to be without remedy

 Basis for development of the jurisdiction of the courts of equity.
 No wrong should be allowed to go unredressed if it is capable of being remedied by a court of justice
 A Plaintiff (Pf) can pray for the court’s good conscience by showing how unconscionable it would be
if the Pf is not give then appropriate remedy.
 The wrong here does not mean moral wrong, but a wrong capable of judicial enforcement, but was
not enforced by a court of law.
 The principle behind this maxim is that equity will intervene to protect a right which, perhaps
because of some technical defect, is not enforceable at law. It is not sufficient that the Defendant
(Df) may be guilty of some moral wrong: the Claimant’s right must be suitable for enforcement by
the court.
o The classic example is the enforcement of trusts.
o The beneficiary had no remedy at common law if the trustee claimed the property for
himself, as the trustee was the legal owner, but he could enforce his rights in equity.
 The maxim is also reflected in the area of equitable remedies, which may be granted where the Df’s
wrong is one not recognized by the common law.
 In the field of injunctions, for example, the claimant may obtain a quia timet injunction to restrain a
threatened wrong although he has no cause of action at law until the wrong is committed.
 Doctrine of unconscionability
 Also shows how this can be expanded – new remedies for new situations (mareva)
Walsh v Lonsdale
Lonsdale agreed in writing to grant a 7 years’ lease of mill to Walsh at a rent payable quarterly in
arrear, but with a years’ rent payable in advance if demanded. No formal deed was executed. Walsh
entered into possession and paid his rent quarterly without arrear. Subsequently, Lonsdale sought
to enforce a year’s rent in advance and Walsh refused to pay. Walsh claimed for an injunction and
damages for illegal distress on the ground that at law, he was tenant from year to year at a rent not
payable in advance.
Held:
The action failed. In equity, an agmt for a lease is considered to be as good as an equitable lease.
The tenant therefore was liable to pay a year’s rent in advance and the distress was lawful.
3.2 Equity follows the law (but not slavishly)

 Clearly equity may not depart from statute law, nor does it refuse to follow common law rules save
in accordance exceptional circumstances
 Equity follows the law unless there are circumstances disregarded by the common law that warrants
equity’s intervention.
 The court of equity will not override the statute
 Hence the GR: Equity will adhere to the common unless there is some exceptional justification for
not doing so (eg. Where it would be unconscionable)
 Equity does not destroy but fulfils the law – it supplements and explains it. Equity comes in only
where law is too technical to redress a legal wrong.
 In the event of conflict between common law and equity, the latter was to prevail but it was
stressed that even where injunctions were issued after judgment at common law, they did not
assume to reverse and undo the judgment. The common law judgment stood but the party was
prevented from enforcing it.
 ‘Where a rule of either of the common or statute law, is direct, and governs the case with all its
circumstances on the particular point, a court of equity is as much bound by it as a court of law, and
can as little justify a departure from it.’ – Story, Equity, (3rd Eng Edn) 34
 Graf v Hope Building
Equity follows the law, but not slavishly nor always
Abdulrahim v Drahman (1867) 1 Ky. 171

X gave title deeds of Y estate to A for valuable consideration when X was not yet appointed
administrator of Y’s estate.
Held:
- A person who is the administrator of a deceased person’s estate is entitled to recover
possession of title deeds belonging to such deeds, from another with whom the title may have
been deposited although such deposit might have been for valuable consideration, and made y
such person who is the administrator, as a next-of-kin.
- However, before he has obtained the LOA to the estate of such deceased, such a deposit affords
no defence, either at law or inequity, to a claim by such person depositing, when he has clothed
himself with the title of administrator by obtaining LOA (letters of administration)
3.3 He who seeks equity must do equity

 A claimant who seeks equitable relief must be prepared to act fairly towards the Df
 A person seeking an injunction will not succeed if he is unable or unwilling to carry out his own
future obligations.
 The maxim is the foundation of the doctrine of election.
 Hence, to obtain equitable relief, the claimant must be prepared to do what is right and fair to the
DF
 Cases:
Lodge v National Union Investment Co. [1907] 1 Ch 300
B borrowed money from M, an unregistered moneylender, and mortgaged certain securities to him.
The contract was illegal and void under the Money Lender’s Act 1900. B sued M for delivery
up/return of the securities.
Held:
The order can only be made upon the terms that B should repay the money which had been
advanced to him. B must do what was right and fair. However, if the PF were asking for merely for a
declaration or suing in detinue or trover, he could have recovered the securities without repayment.
Chillingworth v Chambers (1896) 1 Ch 685

- In breach of trust by joint trustees, a beneficiary who is also a trustee is required to pay
indemnity to a Df, to the extent of his share in the trust property as he colluded with them
despite his status as a trustee-beneficiary
- He, as a beneficiary who seeks equity must do equity by indemnifying the other DFs to the
extent of his portion of the trust property
Chappel v Times Newspapers Ltd (1975)

Newspaper employees who had been threatened that they would be sacked unless they stopped
their strike action applied for an injunction to prevent their employers from carrying the threat.
Held:
In order to be awarded the remedy, the strikers should undertake that they would withdraw their
strike action if an injunction be granted. Since they refused to do this, the injunction was refused as
well.
Hardoon v Belilios [1901] AC 118

A was the registered proprietor of shares in a company. He held the shares on a bare trust for R as
they were not wholly paid up. The company went into liquidation. R wanted A to pay for the debts.
Held:
R was bound to indemnify A personally. The plainest principles of justice require that the cestui que
trust (beneficiary of trust) who gets all the benefits of the property should bear all its burden unless
he can show some good reason why the trustee should bear them himself.
Wong Chun Wah v Kok Kam Chee[2008] 3 CLJ 176
3.4 He who seeks equity must come with clean hands

 This maxim looks to the past conduct of the Pf (similar to the previous but the previous looks at the
future while this looks at the past)
 Not only must the claimant be prepared to do what is right and fair, but he must also show that his
past record in the transaction is clean.
 Access to the court will be denied if the Pf’s actions are fraudulent or unconscionable.
 Thus, equity will not grant relief against forfeiture for breach of covenant where the breach in
question was flagrant.
 Cases:
Argyll (Duchess) v Argyll (Duke) [1967] Ch. 302 (Extra case)
The fact that the wife’s adultery had led to the divorce proceedings was no ground for refusing her
an injunction to restrain her husband from publishing confidential material.
Tinsley v Milligan [1994] 1 AC 340
Stella Tinsley and Kathleen Milligan jointly purchased a property. However, the property was solely
registered in Tinsley’s name so that Milligan could fraudulently claim social security benefits. This
was done with the full knowledge of Tinsley. When the couple’s relationship ended, Milligan sought
a declaration that Tinsley held the house for them both equally on resulting trust. Tinsley argued
that, as Milligan defrauded the Department of Social Security, she did not come to equity with
“clean hands” and that no equitable relief should be granted.
Held:
- In favour of Milligan as the resulting trust was created by her contributions to the purchase
price, she did not have to rely on the fraud to establish her claim.
- In fact, ironically, it was Tinsley who had to rely on the fraud (of which she was a part of) to
found her argument that Milligan was entitled to nothing
- Nor will unclean hands debar a claim which does not involve reliance on one’s own misconduct.
Sang Lee Investment Co Ltd v Wing Kwai Investment Co Ltd, The Times April 14, 1983
If both parties have “unclean hands”, the court should consider only those of the applicant, and
need not balance the misconduct of one against that of the other.
 Contrast these 2 cases:

Nail v Punter (1832) 5 Sim 555
Husband of a life tenant under a trust encouraged the trustees to pay him money from the trust
fund in breach of trust. The life tenant commenced proceedings against the trustees but died
shortly afterwards. The husband became the beneficiary and continued the action against the
trustees in breach of trust.
Held:
The action could not succeed because the husband was a party to the breach
Palaniappa Chettiar v Arunaselam Chettiar (No.2) [1962] MLJ 143

In order to avoid the Rubber Regulations (which required them to pay tax if you had more land
or something), a father transferred the land to his son. The son wanted to sell the land but was
stopped by the father.
Held:
- Since it was a transfer from a father to a son, there was a presumption that it was a gift. To
prove otherwise, one must clearly and distinctly show that the son took upon it as a trust.
- The father made the transfer for a fraudulent purpose, he cannot then use the process of the
courts to get the best of both the worlds.
Privy Council:
- Equity will not aid a person who has practised deceit on the public administration of the country
for personal gain. The fact that the Resp had arranged the transfer of the rubber land for an
illegal or fraudulent purpose and such purpose had in fact had been carried out, the Resp was
precluded from obtaining the aid of the court – too seek equity
Note:
Cases suggest that there must be some connection or reciprocal wrong committed by one
person to another when the clean hands doctrine is invoked. That means, just because someone
did something wrong does not per se bar him legal redress. Remember, equity will not suffer a
wrong to be without remedy.
*The clean hands” requirement must have a direct relationship with the transaction at hand.
Dering v Earl of Winchelsea (1787) 1 Cox Eq 318, per Eyre LCB:

Dering and the Earl and Rouse were all sureties for a bond belonging to X, Dering’s brother. When X
defaulted, Dering had to pay all. He sought to recover form the other two. (The doctrine of
contribution of sureties is not founded in ctt, but is the result of general equity on the ground of
equality of burden and benefit) The other two sureties said that Dering had led X astray,
encouraging him to gamble, etc.
Held:
- X was the author of his own loss, not Dering, and Dering could recover from the other two
sureties.
- “A man must come into a court of equity with clean hands; but when this is said, it does not
mean a general depravity, it must have an immediate and necessary relation to the equity sued
for, it must be a depravity in a legal as well as a moral sense.”
Arunaselam Chetty v Mohamed Nina Marican & Anor (1864) Leic 251
Suntoso Jacob v Kong Miao Ming [1986] 2 MLJ 170
Neo Tai Kim v Foo Stie Wah [1985] 1 MLJ 397
Overton v Bannister (1844) 3 Hare 503

“Infants have no privilege to cheat men” so if an infant misrepresent himself to be of age and
obtains from a trustee a sum which he is entitled only on coming of age, neither he nor his assigns
can compel the trustee to pay the sum again when he is of age.
Aik Ming (M) S/B & Ors v Chang Ching Chuen & Anor [1995] 2 MLJ 770
Fusing Construction S/B v EON Finance Bhd [2000] 2 AMR 2216
Bowmaker v Barnet Instruments [1944] 2 All ER 579
Eastern Properties S/B v Hampstead Corporation S/B [2007] 6 CLJ 538
Leo Leslie Armstrong v Jawatankuasa Kerja Tanah Wilayah Persekutuan KL [2014] 1 LNS 748
Timber Master Complex (Sabah) S/B v Top Orgin S/B[2002] 1 MLJ 33
Multitech Intelligent Homes v Home S/B [2010] MLJU 1845
Adrik bin Mohd Ramli v Woo Swee Mee & Ors [2010] 9 MLJ 717
Gascoigne v Gascoigne [1918] 1 KB 223, DC

A husband took a lease of a land in his wife’s name and built a house with his own money. He used
his wife’s name in the transaction with her knowledge and connivance because he was in debt and
was trying to protect the property from creditors.
Held:
The property belonged to the wife as there was a presumption that it was a gift. The husband also
had a fraudulent intention as to defraud his creditors.
Syarikat Panon S/B v Zecon Engineering Work S/B

DF was one of the sub-contractors engaged to undertake a portion of sub-contract works and PF
was engaged by DF as a sub-sub contractor. DF retained possession and control of the entire sub-
contract site. In the course of completing certain works, some ‘contractual problems arises’, leading
to negotiation between DF and PF. PF understood that in agreeing to the DF taking over the
disputed works, PF would be paid certain sums of money for works already executed by the PF. DF
then physically took over the disputed works with PF received none of the payment. PF was fully
aware of what DF was doing but took 5 months before coming to court.
Held:
- Having allowed the DF to take over and get on with the disputed works for five months, the PF
tried to disrupt the DF’s works by blocking only the entrance to the site.
- PF’s claim that the action was merely to reassert control and possession of the site was not
acceptable
- The fact that he went to such an extent shows that it was putting pressure on the DF through
the disruption of its works.
- PF had not come to court with clean hands.
3.5 Where the equities are equal, the law prevails

 Where the rights of both parties are the same, the party with the right in law has priority.
 S.206(1) and (3) of the NLC 1965
o (1) No instrument shall effect to transfer any title unless registered
o (3) Nothing in (1) shall affect the contractual operation of any transaction relating to
alienated or any interest therein.
 In a claim for land where equities are equal, the court will give priority to the party holding the
registered title.
 Case:
Langan & Others v Lee Cheng Keat (1886) 4 Ky 154
There was a land situated in Penang held on trust as marriage settlement. The trust was never
registered and the title deeds remained in the name of the owner. On the death of the owner, his
administrator sold and conveyed the land to DF. DF got the title deeds
Held:
- DF was in possession of the land and the title deeds as a BFP without notice of trust
- His equity prevails over the beneficiary
3.6 Where the equities are equal, the first in time prevails (Qui prior est tempore, potoirest jure)
 Where equities are equal, in the absence of any other factors that determines the rights between
the parties, the first in time has priority.
 These above two maxims are related and deal with the priorities of competing interests.
 They provide for the doctrine of notice.
 Thus, a prior equitable interest in land can only be defeated by a bona fide purchaser of a legal
estate without notice.
 But if the purchaser is bona fide and without notice, then the equities are equal and his legal estate
prevails; If he does not acquire a legal estate then the first in time
 Cases:
Quah Hong Lian Neo v Seow Teong Teck & Ors [1936] MLJ 203
United Malayan Banking Corporation Bhd v Goh Tuan Laye & Ors [1976] 1 MLJ 169
Rice v Rice
The plaintiff is the vendor of a parcel of land, which he sold to a purchaser, X. X only paid part of the
purchase price, and thus the plaintiff had an equitable interest of a vendor’s lien over the balance.
Plaintiff handed over certificate of title and the deeds to X. X prematurely created an equitable
mortgage in favour of E, the defendant. E is now the equitable mortgagee over the land. Vendor
seeks payment of the unpaid balance.
Issue:
Whether the prior equitable interest of the vendor (unpaid lien) defeats the subsequent equitable
interest of E.
Held:
In deciding whether the equities are equal, the court looks at the nature and condition of the
interests, the circumstances and manner of their acquisition, and the whole conduct of each party
with respect to their interests.Priority in time is the ground of preference last resorted to when the
merits between the equities are equal: priority in time is immaterial if as between the claimants one
has on other grounds a better equity.
Abigail v Lapin (1934) 51 CLR 58

- When all things are equal, 1st in time will have the equity
- However, it may be lost due to act or inaction.
- That Abigail’s interest should prevail. The Lapins had armed Mrs H, not only by giving her the
transfer of title but also because they had failed to lodge a caveat, which would have alerted
Abigail of their equitable interest in the land.
Vallipuram Silvaguru v Palaniappa Chetty [1937] MLJ 59

P deposited IDT as security for loan with B. Later, he entered into a sale agreement and fraudulently
told the purchaser that he had lost the IDT.
Held:
B had acquired the first right by virtue of the IDT with him and was not guilty of any priority-
postponing conduct. On B’s failure to enter a caveat – no evidence that C had searched the register.
Even if he had done so, he would still have had to be on his guard owing to the absence of the IDT.
• The loss fallen on C was not due to negligence on the part of B, but entirely owing to the fact
that C had ignored the most elementary precaution when he bought the land.
• B did not part with the IDT, as was in Abigail. He retained possession of the IDT throughout and
had the right to enter caveat at any time. B had done nothing to forfeit his priority.
*But these maxims are only applicable where equities are equal. It cannot be used against a bona
fide purchaser for value without notice of a prior interest.
Zeno Ltd v Prefabricated Construction Company [1967] 2 MLJ 104

Goh Keng How v Raja Zainal Abidin [1995] 3 MLJ 6
Haroon bin Guriaman v Nik Mah bte Nik Mat & Anor [1951] MLJ 209
First purchase (Haroon) paid faull purchase price but did not register. 2nd purchaser, Nik Mah paid a
substantial part of purchase price and took possession of the land, not knowing of Haroon’s
contract. Nik Mah applied for a court order of specific performance to enforce the sale. Haroon
upon learning Nik Mah’s action, did likewise and entered a caveat.
Held:
- In the absence of a caveat or IDT, the only indicium of title which can be considered is that of de
facto possession of the land
- NM has been in possession of the land the whole time and Haroon was aware of it.
- Thus, since he did not impose a caveat to protect his interest, no physical possession and no IDT,
he is guilty of gross negligence and his equity will be postponed though he is first in time.
Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265
Kitto J: The maxim que est prior tempore does not apply (b) it only applied where equities are equal.
A bona fide purchaser for value without notice is a good defence.
3.7 Delay defeats equity

 Equity aids the vigilant and not the indolent.
 This is the foundation of the doctrine of laches, whereby a party who has delayed cannot obtain
equitable relief.
 Doctrine is superseded when Limitation Act 1953 comes into play.
 Normally the court retains discretion, governed by the Doctrine of Laches, to effuse to grant an
equitable remedy in aid of a legal right even though the right is subject to an express statutory
period which has not expired.
Smith v Clay (1767) 3 Bro CC 639

The case concerned a petition to review a decree between thirty and fourty years old regarding
execution of a will. The petition was dismissed on grounds of the long delay between making of the
decree and this petition; as after twenty years most appeals would be dismissed.
Lord Canden:
“That a court of equity, which never is active in relief against conscience or public convenience, has
always refused its aid to stale demands where the party has slept upon his rights for a great length
of time. Nothing can call forth this court into activity but conscience, good faith and reasonable
diligence.”
Erlanger v New Sombrero Phosphat Co (1878) 3 App. Cas 1218

Erlanger (Resp-DF) bought the lease of the Anguilla island of Sombrero for phosphate mining for
55k. He then set up the New Sombrero Phosphate Co, and eight days after incorporation, he sold
the island to the company for 110k. Through promotion and advertising, Erlanger got many
members of the public to invest in the company. After 8 months, the public investors discovered
that Erlanger ha bought the island at half the price the company had paid for it. The New Sombrero
Phosphate Co sued for rescission based on non-disclosure.
Held:
- Promotes of a company stand in a fiduciary relationship to investors, meaning they have a
duty of disclosure.
- Futhre held that that the ctt could be rescinded and that rescission was not barred by
lachees
- The court considered that in a company, a delay caused by a change inthe governing body
might be excused.
- On the question of laches, Lord Blackburn cited the case of Lindsay Petroleum Company with
approval and stated:
“I think, from the nature of the inquiry, it must always be a question of more or less,
depending on the degree of diligence which might reasonably be required, and the degree of
change, which has occurred, whether the balance of justice or injustice is in favour of
granting the remedy or withholding it. The determination of such a question must largely
depend on the turn of mind of those who have to decide, and must therefore be subject to
uncertainty; but that, I think, is inherent in the nature of the inquiry.”
However, delay in itself does not restrict the right to claim where it is not related or relevant to the
claim.
Lindsay Petroleum Company v Hurd (1874) LR 5 PC 221 PC

- The doctrine of laches in the Courts of Equity is not arbitrary or technical doctrine.
- Where it would be practically unjust to give a remedy, either because the party has, by his
conduct, done that which might fairly be regarded as waiver of it, or where by his conduct
and neglect he has, though perhaps not waived that remedy, yet put the other party in a
situation in which it would not be reasonable to place him if the remedy were afterwards to
be asserted, in either of these cases, lapse of time and delay are most material.
- But in every case, if an argument against relief, which otherwise would be just, is founded
upon mere delay, the validity of the defense must be tried upon principle substantially
equitable.
- Two circumstances, always important in such cases, are the length of the delay and the
nature of the acts done during the interval, which affect either party, and cause the balance
of justice or injustice in taking the one course or the other, so far as it related to the remedy.
>> Delay in itself does not restrict the right to claim where it is not related or relevant to the claim.
The significant matters to be considered are:
a. Length of delay
b. Nature of the acts done during the interval (while waiting)
Allcard v Skinner (1887) 36 Ch D 145

Appellant-plaintiff was a member of a sisterhood, and claimed that she had been unduly influenced
to bequeath considerable property to the sisterhood. It was held that undue influence had been
exerted, and she was entitled to claim restitution. However, under the circumstances, her claim was
barred by her laches and acquiescence since she left the sisterhood. She left in 1879, but
commenced action to demand for the return of her property in 1885 (6 year gap).
Held:
The Court ultimately found that this was a case of actual undue influence. However the fact that the
plaintiff brought the case within 6 years and the fact that within these 6 years she was fully aware of
her rights means she had acquiesced to her loss. Claim was denied based on laches.
Re Len Chee Omnibus v Lee Chee Omnibus

Respondent had applied for letters of administration 3 years after the mother died. Applicant
claimed that he was entitled to administer the estate but he brought the claim 2 years after
Respondents administered it. Additionally, Applicant was aware for 5 years of the mother’s death
but did nothing to secure his right.
Held:
The applicant was guilty of unreasonable delay and hence the claim was denied.
Gov of Selangor v The Receiver of the Estate of Yap Ah Loy (1903) 9 SSLR 26
If resulted in a loss of evidence, the delay is material
Goh Keng How v Raja Zainal Abidin bin Raja Hussin [1995] 3 MLJ 6
Goh, a beneficiary under a trust entered private caveat instead of a trust caveat and fails to state his
interest as beneficiary of the trust. The beneficiaries had done nothing for a period of 30 years to
get the registered proprietor to register the land in their name.
Held:
Substantial delay and the Court found them to be estopped by laches to bring any claim tainted by
that undue delay.
Yong Nyee Fan & Sons v Kim Guan & Co S/B [1979] 1 MLJ 182
Bourne v Swan & Edgar Ltd (1903) 1 Ch 219
Limitation Act- Tengku Ismail Tengku Sulaiman v Sin Cheng Soon (2006) 3 CLJ 556
Material delay – M Ratnavalu v S Lourdenardin [1988] 2 MLJ 371
3.8 Equality is Equity

 Where two or more persons are entitled to an interest in the same property, then the principle of
equity is equal division, if there is no good reason for any other basis for division.
 Cases:
Tai Kwong Goldsmiths & Jewellers (under recievership) v Yap Kooi Hee&Ors[1995] 1 MLJ 1
A partnership was dissolved and a receiver was appointed by the court. He applied for directions for
the priority to be given in respect of the payment of the monies.
Held:
No provision in the Partnership Act that provide for the order of priority of payment of debts and
liability of a partnership. As such, it should be divided equally. Section 46 (b) (i) and s 47 (1)
Partnership Act 1960 refers.
Jones v Maynard [1951] Ch 572

Husband withdrew money from his account to create a joint account before flying off for military
service. Wife used a sum of the money for investment. They later got divorced.
Held:
Wife was entitled to half of the final balance and half of the investment existing at the closing of the
account.
Mac Donald v Mac Donald ( 1957) 2 All ER 690

Equal division between the husband, wife and the mother-in-law who had each contributed to the
purchase of home furnishings.
Lau ChoongChoo v Chau We Chuan [1980] 1 MLJ 6

Re Dickens (1935) Ch 267
Malayan Credit Ltd v Jack Chia-MPH Ltd [1986] AC 549 @560
(Land): Chung Kiaw Bank Bhd v Govt of Sabah [1993] MLJU 136
Chee Kok Choon v Sern Kuang Eng [2005] 4 MLJ 461
Shudesh Kumar v Kamlesh [2005] 5 MLJ 82
Wong Kim Foong v Teau Ah Kau [1998] 1 MLJ 359
Cf. Liew Choy Hung v Fok Kian Seng [2000] 1 MLJ 635
3.9 Equity looks to the intent rather than the form

 Generally, equity does not look to the form but the substance.
 In certain circumstances, equity will not allow a transaction to be set aside on grounds of
technicality.
 This principle does not mean that formalities may be ignored in equity, but rather that, equity looks
at the substance rather than the form.
 Thus, equity will regard a transaction as a mortgage even though it is not so described, if in
substance it appears that the property was transferred by way of security.
 Similarly, a trust may be created although the word “trust” has not been used.
 A covenant will be regarded as a restrictive covenant if negative in substance even if it is worded in a
positive form.
 Although a party to a covenant can enforce the contract at law even though no consideration has
been given, equity regards such a party as a volunteer and will not order specific performance in his
favour.
 This maxim is also the basis of the equitable doctrine that in construction of wills or trusts, what is of
utmost importance is the intention of the settler or the testator as expressed in the will.
Parkin v Thorold (1852) 16 Beav. 59: Romlly MR

Courts of Equity make a distinction in all cases between that which is matter of substance and that
which is a matter of form: and if it finds that by insisting on such form, the substance will be
defeated, it holds it inequitable to allow a person to insist on such form, and thereby defeat the
substance.
‘... if the court finds that by insisting on the form, the substance will be defeated, it holds inequitable
to allow a person to insist on such form, and thereby defeat the substance.’
Wan Naimah v Wan Mohd Nawawi [1974] 1 MLJ 41

The land had been sold to the parties’ father but the land was transferred to appellant, the
daughter. The Resp was the son of the purchaser, still an infant. There was evidence showing that
the father had intended to create a trust of an undivided half share in the land in favour of his son,
the Resp but there was no creation of a trust in writing.
Held:
There was a declaration showing that he wanted to give the half share to his son. The intention of
the deceased was paramount and need not be in writing as long as it was clear and unequivocal that
there was conclusive evidence vis-a-vis the deceased’s intention.
Yong Nyee Fan v Kim Guan & Co [1979] MLJ 182, 190
Re Adam’s and the Kensington VESTRY (1884) 27 Ch. D 394
Quah Eng Hock v Ang Hooi Kiam [2000] 5 CLJ 126
Teoh Heng Seng v [2001] 1 CLJ 598
Yeoh Poh Hong v Ng Cheung On [2010] MLJU 1077
3.10 Equity will not permit the provisions of a statute intended to prevent fraud to be used as an
instrument of fraud
 Although equity will not go against the statutory provisions, it will not allow a party to insist on his
legal rights under a statute to cause detriment or to avoid the performance of his obligation to the
other party.
 Cases:
Banister v Banister
An elderly woman conveyed a house (transfer title) on the understanding that she would be able to
continue to reside there, rent free. There was no documentation concerning the transaction.
Held:
There was a constructive trust which gave her a life interest in the property. To construe the bargain
as unenforceable would inflict injustice.
Sia Siew Hong &Ors v Lim Gim Chian &Anor [1995] 3 MLJ 141
Apps being shareholders of a company had obtained a loan, creating a charge over the Res’ land.
Apps executed a document described as a guarantee as security to the Resp, which can be enforced
‘anytime’. Company defaulted and Res had to pay for the default. App then argued that Res’ claim
was time-barred.
Held:
It would be unjust to permit the Apps to raise the defence of limitation as the Apps had agreed that
the guarantee may be enforced anytime.
Aik Ming (M) Sdn Bhd v Chang Ching Chuen & Ors [1995] 2 MLJ 770
2nd PF was given shares in trust for the 3rd and 4th DF because the company needed 2 Malaysian
directors so to deceive the Registrar of Companies into believing that the 2nd PF was the true
beneficial owner of the shares.
Held:
 The deeds of trust and powers of attorney were tainted with illegality and thus, worthless.
 Such statutory provisions cannot be relied upon for a fraudulent purpose.
3.11 Equity looks on that as done which ought to be done

 Where there is a specifically enforceable obligation equity regards the parties as already in the
position which they would be in after performance of the obligation.
 Therefore in equity a specifically enforceable contract for a lease creates an equitable lease:
doctrine of Walsh v Lonsdale
 Similarly, a specifically enforceable ctt for the sale of land transfers the equitable interest to the
purchaser, the vendor holding the legal title on constructive trust until completion.
 The maxim is also the basis of the doctrine of conversion
 Has been invoked by Privy Council and House of Lords
Walsh v Lonsdale (1888) 21 Ch D9 (repeat from above but more specific haha)
A 7 year lease was granted by Lonsdale to Walsh over a mill. The lease agmt contained a clause
allowing rent to be paid up front for 1 year upon the demand of Lonsdale. The lease was not granted
by deed (written agmt), which was and still is a formal requirement of the creation of leases with
duration exceeding 3 years (now s52 of the Law of Property Act 1925). Lonsdale (the
landlord/lessor) demanded a year’s rent upfront. This was not paid and so under the now abolished
remedy of distress, Lonsdale seized the property belonging to Walsh to enable the recovery of rent
advance.
Issue:
Whether Walsh could stop Lonsdale from demanding the year’s rent and the seizing ofhis property
as the lease was not formally executed.
Held:
No.
 The doctrine of Walsh v Lonsdale (1882) was created, allowing equity to regard as done that which
ought to be done, or more simply, creating an equitable equivalent of a formally defective but
otherwise legal lease
 The doctrine will only operate where the contract underlying the defective lease complies with the
Law of Property (Miscellaneous Provisions) Act 1989, in that it is in writing, contains all express
terms, is signed by or on behalf of all parties, provides for consideration and is specifically
enforceable
Lysaght v Edwards (1876) 2 Ch D 499

After a contract for sale had been settled, the vendor becomes in equity, a trustee for the purchaser
of estate sold, and the beneficial ownership passes on to the purchaser.
 Vendor has a right to the purchase money, charge or lien on the estate for the security of
that purchase money, and a right to retain possession until the money is paid.
 “It appears to me that the effect of a contract for sale has been settled ... it is that the
moment you have a valid contract for sale the vendor becomes in equity a trustee for the
purchaser of the estate sold, and the beneficial ownership passes to the purchaser, the
vendor having a right to the purchase money, a charge or lien on the estate for the security
of that purchase money, and a right to retain possession of the estate until the purchase
money is paid, in the absence of express contract as to the time of delivering possession.”
Re Lind [1915] 2 Ch 354
Napier and Ettrick (Lord) v Hunter[1993] AC 713

It was considered that the duty of an insured person to hand over any damages from the wrongdoer
to the insurer was specifically enforceable, so that the insurer had immediate proprietary rights in
the form of a lien over the money.
AG of Hong Kong v Reid [1994] 1 AC 324

The issue was whether a fiduciary who took a bribe became constructive trustee of it or was merely
personally accountable. Because he was under a duty to hand over the bribe to his principal, it was
held that the property belonged to the principal in equity.
 The difficulty in this is that an obligation to pay money is not normally specifically enforceable.
Borneo Housing Mortgage Finance Bhd v Time Engineering Bhd [1996] 2 CLJ 561
Developer entered into agmt to sell an industrial building to a purchaser. The developer charged the
land to a finance company. The developer defaulted and the finance company applied for an OFS.
The purchaser argued that the developer was a bare trustee for him and the charge should not be
valid.
Held:
- Doctrine of bare trust applies only after full payment is made and MoT is executed.
- “The contractual events which result in the vendor becoming a bare trustee of the land for
the purchaser, is on completion of the sale and purchase agreement, that is to say, upon
receipt by the vendor of the full purchase price, timeously paid and when the vendor has
given the purchaser a duly executed, valid and registrable transfer of the land in due form
in favour of the purchaser, for it is then that the vendor divests himself of his interest in the
land.”
Margaret Chua v Ho Swee Kiew [1961] 1 MLJ 173

- A lease which is not registered is void as a lease but is good and valid as an agreement for a
lease and may be enforceable in equity by a decree if specific performance.
- Here, R was only allowed to claimed damages in regards to the breach of the lease
agreement as the third party to whom the land was sold to have gone into possession.
3.12 Equity will not perfect an imperfect gift / Equity will not assist a volunteer
 An undertaking to convey or to transfer something without consideration cannot be enforced
because it is gratuitous.
 Unless there has been an outright transfer, the donee cannot enforce the promise.
 If there is an agreement to create a trust, the trust property must be vested in the trustee for equity
will not perfect an imperfect gift.
 But, this is subject to a number of exceptions – look at Incompletely Constituted Trusts: Milroy v
Lord (1862) 4 De GF & J 264, Inwards v Baker [1965] 2 QB 29, Cheng Hang Guan v Perumahan Farlim
[1993] 3 MLJ 352.
 Cases:
Milroy v Lord
Milroy (settlor) executed a voluntary deed purporting to transfer some shares in the Bank of ouisana
to Lord to hold on trust for him. However, under the bank’s constitution, the shares could only be
transferred by registration in the register of the bank.
(An attempt was made to establish a trust of 50 shares in a bank. The settler did not take any steps
to transfer the share before his death.)
Held:
- The settlor has used the incorrect form in attempting to transfer the shares, rendering the
gift imperfect.
- Therefore, there was no trust in favour of Milroy although Lord had the power of attorney
on behalf of the settlor
- Equity will only assist a beneficiary when there is a perfectly constituted trust (ie: once legal
title to the trust property has vested in the trustee)
- To render a voluntary settlement valid and effectual, the settlor must have done everything
which according to the nature of the property, and render the settlement binding upon
himself.
Jones v Lock
A father produced a cheque, payable to himself, and said that it for his nine month old son. He gave
the cheque to the baby, then later took the cheque back and put it into the safe. Jones later saw his
solicitor and told him that he was going to add $100 to the cheque and invest the total for his son.
Some days later, he saw his solicitor again to make an appointment to change his will to provide for
his son. He died the same day. The solicitor who was one of Jones’ executors, found the cheque and
cashed it in favour of the estates.
(A father had intended to make a gift of a cheque to his child but failed to endorse the cheque)
Held:
- The legal title did not pass. Equity refuses to cure the defect and the gift henceforth, failed.
- There had been no gift to the baby and declaration of trust in his favour.The Court of equity
will not aid volunteers. Thought the father had the intention of settling something on the
child but this does not mean that the child could bring an action for the cheque.
- “If I give any chattel that, of course, passes by delivery, and if I say, expressly or impliedly,
that I constitute myself a trustee of personality, that is a trust executed, and capable of
being enforced without consideration. I do not think it necessary to go into any of the
authorities cited before me; they all turn upon the question, whether what has been said was
a declaration of trust or an imperfect gift. In the latter case the parties would receive no aid
from a Court of equity if they claimed as volunteers.”
-
Strong v Bird
In this case, the intention to release the debt or to make a gift was completed by appointment of
the done as the donor’s executor. 2 criterias must be satisfied:
(i) Donor must be shown to have had the intention to make an immediate inter vivos gift
(ii) There must be a continuing intention right up to the date of death that the gift was made.
Re Rose
Held:
- The trust was completely constituted, with the deceased having done everything in his
power to transfer his legal and beneficial interest in the shares to the transferees (plaintiffs).
- The settlor executed documents to transfer shares in a private company to the trustees. The
company’s articles of association gave the directors discretion to refuse such a transfer if
they so choose.
- The transfer was in fact registered two months after the relevant documents were
executed.
- The date the trust was executed was at the point the settlor had done everything within his
power to execute the transfer.
- “Having regard to the form and operation of the transfers, the nature of the property
transferred and the necessity for registration in order to perfect the legal title, coupled with
the discretionary power in the directors to withhold registration, pending registration the
deceased was in the position of a trustee of the legal title in the shares for the transferees.”
Re Fry
Held:
- The settlor had not done everything within his power to transfer the gift of shares to his son,
and as such the trust was incompletely constituted i.e. an imperfect gift, therefore
rendering the said gift inoperative.
- “*…+ In view of the provisions of the restrictions on the transfer of securities then in force the
company were unable and therefore refused without the consent of the Treasury to the
transfers, to register them. To obtain this consent various forms and declarations had to be
signed both by the transferor and the transferees and in addition a questionnaire was
submitted to the transferor which he had to answer personally, and although the various
forms, declarations and other documents were in the end completed, the transferor died
before the requisite consent of the Treasury to either of the transfers had been obtained.”
3.13 Equity acts in Personam

 Equity has jurisdiction over the Df personally.
 Shows the difference between the procedure at equity and common law.
 The enforcement at common law is through the writ of execution whereas the Chancery court has
jurisdiction over the Df personally.
 The personal nature of the jurisdiction is illustrated by the fact that failure to comply with an order,
such as specific performance or an injunction, is a contempt of court punishable by imprisonment.
 **Provided that the DF is within the jurisdiction, it is no objection that the property which is the
subject matter of the dispute is outside of the area.
 Case:
Penn v Lord Baltimore (1750) 1 Ves Sen 444; ER 1132
Mr P owned the area of Pennsylvania and Lord B was the owner of the State of Maryland. Both
entered into an agmt to fix boundaries between their respective lands. The agmt was not
implemented. Mr P filed a suit for specific performance against Lord B in the Court of Chancery in
England. Lord B questioned the jurisdiction of the court as the properties were situation in North
America.
Held:
- The court overruled the objection.
- Specific performance was ordered of an agreement relating to land boundaries in Pennsylvania
and Maryland, the Df being in this country (England).
- Lord Harwicke:
“The conscience of the party was bound by this agmt and being under the jurisdiction of the
court, which acts in personam, the court may propely decree it as an agmt”
Ewing v Ewing & Ors (1883) 9 App. Cas 34, 40

Some of the executors and trustees were in England, but a great deal of the property were situated
in Scotland
Held:
- The English courts have jurisdiction to administer the real and personal assets of the testator, as
courts of equity operate on conscience.
- Lord Selbourne:
“The courts of equity in England are, and always has been , courts of conscience, operating in
personam, and not in rem; and in the exercise of this personal jurisdiction they have always been
accustomed to compel the performance of contracts and trusts to subjects which were not either
locally or ratione domicili within their jurisdiction. They have done so as to land, in Scotland, in
Ireland in the Colonies, in foreign countries.”
“personalty” – personal, moveable property
Re Valibhoy (1961) MLJ 187

Testator died possessed of a large estate in Singapore, the Federation of Malaya and India. 1/3 of
the income of this estate was set aside for certain charitable purposes to be performed in Jeptur,
India. Seven years after the testator’s death, the trustees had not realised the assets of the estate
nor 1/3 of the income of the nett estate set aside for such charitable purposes. So the trustees were
in Singapore, under the jurisdiction of the court but the property was not.
Held:
- Court had jurisdiction
- Where the property or part of it comprising a charitable trust and the trustees are within the
jurisdiction, the Court has jurisdiction in the matter.
- It does not matter if the charity’s property is partly outside jurisdiction as long as the person
concerned, which is the trustee, is within jurisdiction.
- Failure to comply with an order, ie specific performance or injunction is a contempt of court
punishable by imprisonment – provided that the DF is within jurisdiction, it is no objection that
the property (subject matter of the dispute) is outside of it
- The court however, may refuse to intervene in cases where some litigation may be in progress in
a foreign court or court’s order may come in conflict with the foreign law properly governing the
property in dispute.
3.14 Equity imputes an intention to fulfill an obligation

 Where a person is obliged to do some act, and does some other act which could be regarded as a
performance for it, then it will be so regarded in equity.
 Basis of the doctrine of performance and satisfaction.
4.0 EQUITABLE REMEDIES – INJUNCTIONS
 “Equity has not come to destroy the law, but to fulfil it”
 Where common law has provided an adequate remedy, equity would not intervene.
 The nature of equitable intervention founded in conscience and natural justice was, in the broadest
sense, discretionary
 GR: The availability of equitable relief depends on inadequacy of damages
 The principal remedy at common law is the award of damages to which a plaintiff is entitled to as of
right upon proof of breach, whereas in equity, a remedy is not only given for a breach but also to
prevent the breach of another person’s right
 Nature of equitable remedies:
o Acts in personam (personal remedies)
o Discretionary but, according to established principles
o Given where remedies at law are inadequate
o (Parties with rights – except for bona fide purchasers)
 Remedies:
- Injunction - Declaration
- Specific Performance - Tracing
- Accounts
4.1 Injunctions
4.1.1 Definition
- An order given by the court upon the courts’ discretion to direct a person to perform a specified act
or to restrain him for performing a specified act or breaching his obligation.
Ninno v Kow Lup Kai [1992] 2 MLJ 463

An injunction is a judgment or order to do or refrain from doing something
Sari Artists Film Production S/B v Malaysia Film Industries S/B [1974] 1 MLJ 123
The Plf must show “some connection between the Df and the particular act or acts in respect of which
the injunction was sought”
*Equity remedies are only granted when common law remedies are insufficient
4.1.2 Extent of Equity

- The remedy of injunction is based on equitable principles and is provided under s50-55 of the
Specific Relief Act
- Given only where legal remedies are inadequate
Day v Brownrigg (1878) 10 Ch. D 294

P had a house and named his house, Ashford Lords. Has been living in the house for 60 years and the Df
lived in smaller house and called it Ashford Villa. The Df then started to call his own house Ashford
Lodge. Pf sought injunction to prevent Df from using the name of his own house. Went up to COA.
Did he have the right to his name? Was there a violation of his right? Was there a violation of a legal
right or an equitable right? Can he get an injunction to stop that person from using that name
Courts:
No, that is not a legal right. You don’t have a legal right to this name and so he could not get an
injunction for that. There must be some kind of a legal or equitable right that has been breached before
you can ask for an injunction.
Principle:
Discretion is not according to the judge, but according to sufficient legal reasons or settled legal
principles.
Aspatra S/B & 21 Ors v Bank Bumiputera Malaysia Bhd & Anor [1988] 1 MLJ 97
Although the discretion [under s50 and 51(1) of the SRA] appears unfettered, it is however, established
that the exercise of this equitable jurisdiction is to be governed by well-recognized judicial principles.
4.2 Classification of Equitable Remedies

According to which forbid or command some According to the point of the trial at which they
positive act are granted
Prohibitory injunction Mandatory Injunction Before Trial: During/After Trial:
Interlocutory / Interim / Perpetual / Final
Temporary Injunction Injunction
To not do To do S51(1) SRA S51(2) SRA
To Not Do To Not Do
Restrains the Mandatory would direct Interim is before the Granted after whole
commission or the person to stop end of the case. To case has been heard
continuation of a something – in a way it keep the status quo so (Perpetual)
wrongful act is a restorative order that by the time the Day v Brownrigg
that would undo a case is heard, the Must have some kind of
wrong that has been subject matter is not injury to the right of the
done destroyed. person. Not just some
allegation of damage
Redland Bricks v Morris (talks about various types of injunctions inside)

There must be a strong probability of injury and that injury cannot be remedied by damages
MBF Holdings v East Asia
Other Injunctions
- Quia timet injunction
o When you’re asking for an injunction even before a breach. Court must prove
probability of substantial damage. If Df allowed to continue the case, it would bring
irreparable damage to the Pf.
o AG v Nottingham Corporation (old case but il
 In a residential area, wanted to build a hospital to treat small pox. So the hospital
was 50m away from residential area so there was a lot of panic as to what that
would mean to the residents.
 Can there be an injunction to prevent the hospital from being established in that
area?
 Courts said there is no real proof that by putting the hospital there, it would affect
the residents there. There must be real proof that there would be irreparable
injury. And here, there was no proof
- Mareva Injunction
- Anton Piller Injunction
When we talk about in personam, what about public interest?
4.2.1 Prohibitory Injunction - Perpetual Injunction

S51(2) SRA
A perpetual injunction can only be granted by the decree made at the hearing and upon the merits of
the suit; the Df is thereby perpetually enjoined from the assertion of a right, or from the commission of
an act, which would be contrary to the rights of the Pf.
S52(3) SRA
(Further states the situations in which perpetual injunctions may be granted upon interference of
property)
Principles:
A. Pf must establish a right/cause of action, and not a mere inconvenience
Day v Brownrigg
Pf lived in a house that he called Ashford Lodge. Df lived in a smaller house called Ashford Villa,
which he later changed to Ashford Lodge. Pf sued for injunction to prohibit the Df from doing so.
Held:
There is no legal/equitable right to the exclusive use of the name of a private residence.
Gov of MY v Lim Kit Siang [1988] 2 MLJ 12 SC

Resp applied for a declaration that the letter of intent issued by the government to UEM in
respect of the North-South Highway contract to be invalid and applied for a permanent
injunction to restrain UEM from signing the ctt with the government. On the same day of filing
the suit, he applied for an interim injunction against UEM. Resp got it from SC. UEM and the
Govt appealed to the HC, and now the SC set aside the interim injunction.
Issue was whether LKS had locus standi
Held:
LKS has no cause of action as he has no legal relation with UEM.
(the thought that strikes is that isn’t LKS a representative of the people as a MP? Is he not
representing the people in general and thus have locus standi?)
B. Discretion of Court
The court has the discretion to grant or withhold the injunction. For example, if there is only
nominal damage though cause of of action has been established, the court can still refuse
Behrens v Richards [1905] 2 Ch 614

Pf had sought to restrin members of the public from using tracks on the claimant’s land situated
on an unfrequented part of the coast, whose use caused no damage.
Court refused to grant injunction.
C. Inadequacy of damages
Court may hold that the damages are not adequate and should grant the appropriate remedy of
a perpetual injunction.
Martin v Nutkin (1725)
Pfs were annoyed by the daily ringing of a church bell and later the Church entered into an agmt
with the Pf not to ring the bell during the lives of the Pfs, as long as the Pfs provided the church
with a new clock and bell. The Church rang that bell in breach of the agmt and the Pfs went to
court seeking a perpetual injnction.
Held:
Court granted a perpetual injunction because this was a continuing nuisance.
D. Pf’s conduct
If the Pf is guilty of delay, he will not get a perpetual injunction; or with unclean hands; or guilty
of acquiescence
Gibb v Malaysia Building Society
4.2.2 Prohibitory Injunction – Interlocutory Injunction

S51(1) SRA
Temporary injunctions are such as to continue until a specified time, or until the further orders of the
court. They may be granted at a ny period of a suit, and are regulated by the law relating to civil
procedure.
Purpose
To preserve the status quo of the parties pending the trial
Hoffman La Roche & Co AG v Secretary of Statefor Trade and Industry [1975] AC 295, per Lord
Wilberforce
“The object is to prevent a litigant, who must necessarily suffer the law’s delay, from losing by that delay
the fruit of his litigation.”
RCA Sdn Bhd v Pekerja-Pekerja RCA Sdn Bhd [1991] 1 CLJ 19

Employees (Pf) of a company (Df) had formed and registered an in-house union. They needed 50% of the
company’s employees to join the union which prompt them to distribute membership forms on the
premises of the company. The company prohibited them to do so, and Pf obtained an injunction to
restrain Df from interfering. Appealed to SC.
Held:
S7 of the IRA prohibits workmen from persuading others to join a trade union without the employer’s
consent during working hours. There was no status quo which required to be preserved, as without the
injunction, there will only be some inconvenience to the Pf in its membership drive.
Principles:
In granting interlocutory injunctions, Malaysian courts have consistently applied the principles decided
in this case:
American Cyanamid Co v Ethicon Ltd[1975] AC 396 HOL

The Pf (owner of a patent) sued Df for infringement of the patent of a suture (stitches). The difference
was in the substance of the suture – one made of homopolymer and the other, is another chemical
substance (cannot remember). The Pf applied for an interlocutory injunction which was granted in the
court of first instance, but later reversed by the COA on the ground that no prima facie case of
infringement had been made out. The Pf subsequently appealed to the HOL.
Held, in a unanimous decision delivered by Lord Diplock:

 No need for a “prima facie” case – there was never a rule as such.
 All that is needed is to prove that there is a serious question to be tried
 The governing principle of the application of the interlocutory injunction is that:-
o Whether the plaintiff be adequately compensated by an award of damages for the loss
he would have sustained as a result of the defendant’s continuing to do what was
sought to be enjoined between the time of the application and the time of the trial.
o Whether on the contrary hypotheses that the defendant were to be succeed at the trial
in establishing his right to do that which was sought to be enjoined, he would be
adequately compensated under the plaintiff’s undertaking as to damages for the loss he
would have sustained by being prevented from doing so between the time of the
application and the time of the trial.
 If there is, and there is a doubt on adequacy of damages, then the court will consider whether,
based on the balance of convenience, an interlocutory injunction should be granted or not.
 How to measure balance of convenience arises? Answer: the extent to which the disadvantages
to each party would be incapable of being compensated in damages in the event of his
succeeding at the trial is always a significant factor in assessing where the balance of
convenience lies.
A. Serious Question to Be Tried

Alor Janggus Soon Seng Trading S/B & Ors v Sey Hoe S/b & Ors [1995] 1 MLJ 241 sc
The court must be satisfied that there is a serious issue to be tried
Referred to
Mothercare Ltd v Robson Books Ltd [1979] FSR 466
“… if his prospects of success are so small they lack substance and reality, then the plaintiff
fails; for he can point to no question to be tried which can be called ‘serious’…”
B. Balance of Convenience
How to consider?
o Are damages adequate compensation to the plaintiff?
o Can plf undertake to compensate if he loses the case?
o Take into account conduct of both parties
o Is there a question of urgency?
SAP (M) Sdn Bhd & Anor v I World HRM Net Sdn Bhd & Anor [2006] 2 MLJ 678
o Damages adequate? - As a result of Pf succeeding at trial, the disruption of service to
3rd parties who are using the plaintiffs’ software without the plaintiffs’ consent would
surely damage the plaintiffs’ goodwill and reputation as it would make the customers
lose confidence in the plaintiffs’ software. The damage suffered by the Pf would be
irreparable and monetary compensation would not be an adequate remedy
o Urgency? - if the interim injunction is not granted, Pf who will not be able to control the
licensing of the software, and this would irreparably destroy the value of the copyright
in the software during the period.
o Conduct of parties? - As the defendants are not prejudiced by the delay in the
application for interim injunction and the delay was due to ‘ongoing negotiations’
between the parties, the delay was excused.
C. Guidelines in Keet Gerald Francis

Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 1 MLJ 193
 State gov. of Terengganu offered Kilang Perkayuan Hj Mohd Noor (‘the firm’) a license to
enter upon and harvest timber from two parcels of a concession – compartments 408
and 412. The offer was accepted.
 Before licence issued, firm entered into agmt with Plf where it sold to the Plf all the
timber located on the two parcels.
 Licence for 412 was issued – no dispute; For 408, parcel had been subjected to logging
by neighbouring loggers, left in a state which was not in accord with terms/description
of original grant in licence
 Arrangement was made and firm had to apply for a replacement parcel which was done
and a new licence for 549 was issued.
 D1 then went into bankrupt (main guy) and D2 and D3 were brought in as partners (wife
and son). D1 then withdrew from firm.
 Once licence for 549 was issued, firm acted as if earlier agmt did not exist
 Plf took out a writ against Dfs and obtained an ex parte injunction preventing them from
entering 549 or give effect to any agmt other than that to sell Plf the timber logs from
549.
Held:
Gopal Sri Ram reviewed and summarised the guidelines on interlocutory injunction as
follows:
o Whether the totality of facts presented before him disclose a bona fide serious
question to be tried...if he finds that no serious question to be disclosed, that is
the end of the matter and the relief is refused. (“serious question to be tried”
test)
o Must consider where the justice of the case lies…take into account all relevant
matters, including practical realities…weigh the harm that the injunction would
produce by its grant against the harm that would produce from its refusal…inter
alia, the relative financial standings of the litigants before him…the Pf’s ability to
meet his undertaking in damages should the suit fail... (“balance of
convenience” test)
o The judge must have in his mind that the remedy…is discretionary, intended to
produce a just result for the period between the date of the application and the
trial proper and intended to maintain the status quo…entitled to take into
account all discretionary considerations, such as, delay in the making of the
application or any adequate alternative remedy that would satisfy the Pf’s
equity…any question going to the public interest may…be taken into account.
(“discretionary” test)
Cf. Cambridge Nutrition Ltd v British Broadcasting Association [1990] 3 All ER 523
- Kerr LJ dissenting: interlocutory injunction sought to prevent transmission of a current affairs
television program – an award of interlocutory injunction would have been equivalent to a final
injunction
4.3 Mandatory Injunction
An order directing Df to do an act
S53 SRA
‘When, to prevent the breach of an obligation, it is necessary to compel the performance of certain acts
which the court is capable of enforcing, the court may in its discretion grant an injunction to prevent the
breach complained of, and also to compel the performance of the requisite act.’
4.3.1 Final Mandatory Injunctions

Don’t confuse with “perpetual injunction” in this note, this means a mandatory injunction which
is granted after/at a trial
Redland Bricks Ltd v Morris & Anor [1970] AC 652

The Ap carried out excavation on their land which is adjoining to the Rsp’s land. Due to the
excavation, a large pit was formed on the Ap's land. Nearing the end of 1964, part of the Rsp' land
began to slip and some slipped onto the Ap's land. The Ap did remedial work but it was ineffectual
and further slips occurred. Among other remedies, Rsp obtained a mandatory injunction to direct
Ap to take all necessary steps to restore support to the respondents' land within six months. Ap
appealed on the grounds that the injunction failed to inform them precisely what to do.
Held:
The principles in granting mandatory injunction are as follows:
o Pf must show strong probability of grave injury will happen in the future
o The injury cannot be adequately remedied by damages
o The court must consider the cost to the Df to do work to prevent or lessen the probability of
the injury, also depending whether Df had acted reasonably.
o The order must define precisely what the Df is required to do.
In this case, Lord Diplock held that 3rd and 4th principle are not fulfilled as the Df had acted
reasonably, and there is no indication to Df what they should do.
4.3.2 Interlocutory Mandatory Injunction

Although courts have discretion to grant mandatory injunctions before trial, courts have been careful to
grant them only in exceptional cases.
 Gibb & Co v Malaysian Building Society [1982] 1 MLJ 271, FC.

Facts:
Rsp had applied for an interlocutory mandatory injunction that the Ap do deliver to it the IDT and
the charge documents pertaining to several units of a housing project, and HC granted it. Ap
appealed against the order.
Held:
Although interim mandatory injunction is never granted before trial save in exceptional and
extremely rare cases, there is no reason why it cannot be granted in proper and appropriate cases.
o Per Abdoolcadeer J: “the case however must be ‘unusually sharp and clear’…high degree of
assurance that at the trial a similar injunction would probably be granted…how the interest of
the parties may best be protected (right of both parties)…questions of hardship and
inconvenience at the meantime (balance of inconvenience)…any other relevant discretionary
considerations…”
o The court granted the injunction and stated that on the facts, Rsp had expended a very large
sum of money to provide finance for the purchasers and thus must necessarily have security by
way of charges over the said units.
 MBF Holdings v East Asiatic Co (Malaysia) Bhd [1995] 3 MLJ 49

Facts:
MBF had purchased a land from EAC by issuing its shares, but later it was discovered that part of the
land was occupied by EAC’s workers. MBF applied for interlocutory prohibitory injunction (to
restrain EAC from dealing with its shares) and interlocutory mandatory injunction (for EAC to deliver
vacant possession).
Held:
Interlocutory prohibitory injunction granted, applied American Cyanamid. However, for
interlocutory mandatory injunction, principles in American Cyanamid were not applicable.
o For the injunction to be granted, the case must be very clear and must be decided urgently.
o The court must be very satisfied that an injunction would also be granted during the trial.
o No existence of special circumstances
4.4 Quia Timet Injunction

To prevent a threatened infringement of the Pf’s right which has yet to take place.
Principles:
i. The applicant must prove the high probability of substantial damages as a result of the Df’s
actions
ii. The harm and injury suffered is irreplaceable
Redland Bricks Ltd v Morris & Anor supra

Lord Upjohn observed that a quia timet injunction arises in the following two types of case:
(i) where, as yet, no harm to the defendant has occurred but it is threatened or intended
(ii) where harm has been done by the earlier actions of the defendant, and the plaintiff has been
compensated, but the plaintiff fears that future wrongs may be committed by the defendant
AG v Nottingham Corporation
It was an action seeking for injunction to prevent DF from using a building as a smallpox hospital,
on the grounds that the close proximity of the building with various residences and public road
would cause grave danger of the potential spread of the air-borne disease.
Held:
While holding that it was a quia timet action which required no actual harm, PF had to show a
strong case that the apprehended mischief will in fact arise. Here, the degree of proximity did
not pose real danger of the spread of disease and vaccination was invented.
4.5 Mareva Injunction

An ex-parte injunction that seeks to prevent Df from removing assets from the court’s jurisdiction or
from disposing of or dealing with them within the jurisdiction in such a way as to defeat the judgment
obtained against him.
- Mareva Companie Naviera SA v International Bulk Carriers SA

Df (charterers) had failed to pay rental to the Pf (shipowners) although they had received the
money from the sub-charters and had kept the said money in a bank in London.
Held:
o Appropriate to grant an injunction to prevent Df from disposing of moneys then in the
bank of London.
o Court had jurisdiction to grant an interlocutory injunction to prevent him from disposing
assets
o Elements to be established
(i) A strong prima facie case
(ii) A good and arguable case
(iii) That DF has assets within the court’s jurisdiction
(iv) There is a risk of DF removing the assets so as to stultify any judgment given
- Art Trend Ltd v Blue Dolphin Pte Ltd

Mareva injunction cannot be misused to compel one to pay debt
4.5.1 Pre-Conditions/Elements
 Ninemia Maritime Corp v Trave Schiffahrts [1984] 1 All ER 398
o Strength of the claim – good arguable case to be tried (“…more than barely capable of
serious argument, and yet not necessarily one which the judge believes to have a better
than 50% chance of success”)
o Dissipation of the assets – real risk that the Df’s assets will be moved out from the
jurisdiction before the judgment
 In Prof. Ramy’s note, she listed down “Pf has evidence that Df has assets within the
jurisdiction” as another element. Which makes sense, since you need to prove the
existence before the dissipation, but I think just make it into one element?
 The risk depends of facts of each case.
 Creative Furnishing v Wong Koi [1989] 2 MLJ 153 - Mere refusal to pay a disputed
debt and the issuing of a dishonoured personal cheque by the director of the 2nd
Df does not amount to a real risk of dissipation.
 Seema Development v Mah Kim Chye & Anor [1998] 1 CLJ 174 – risk of dissipation
must not be just mere belief of possibility, but almost a certainty. The fact that Df
resides in Australia is insufficient to show such risk
4.5.2 Guidelines in Application

Third Chandris Shipping Corpn v Unimarine SA [1979] 2 All ER 972: The Core Test – 3 requirements
- There must be a good arguable case
- There are assets that are within the jurisdiction
- The plaintiff has grounds to believe that the defendants are going to remove the assets out of
the jurisdiction before the judgment or award
The plaintiff should:

o Make full and frank disclosure of all matters which are material for the judge to know
o Give particulars of his claim stating the grounds, amount and the points made against the Df
o Give grounds for believing that the defendant has assets within the jurisdiction
o Give grounds for believing that there is a risk of the assets being removed before the judgment
or award is satisfied
o Give an undertaking in damages
- Zanal Abidin v Century Hotel

Fourie v Le Roux and Others [2007] UKHL 1

 In 2004 Park J, on a without notice application made by the appellant (Mr.Fourie) made a
freezing order (Mareva injunction) against two individuals and a number of companies of whom
only two are still actively involved in the proceedings and they are Le Roux and Fintrade – the
respondents to this case.
 Mr Fourie made the application in the capacity as a liquidator of two South African companies
(HEE and its parent company, HEI). Le Roux was the majority shareholder of HEI, and had been
control of HEE and HEI until the two companies went into liquidation. Fintrade is a company
owned and controlled by Le Roux.
 Mr Fourie applied for the freezing order as he believed that the respondents had by fraud and
deception stripped HEE of its assets and removed those assets/proceeds to England.
 However, the order was set aside for want of jurisdiction, because it had not been ancillary to
any proceedings which had even been formulated let alone commenced.
 Mr.Fourie appealed refusal by the Court of Appeal to reinstate it.
Held – Appeal dismissed

 Provided the court has in personam jurisdiction over the person against whom an injunction,
whether interlocutory or final, is sought, the court has jurisdiction, in the strict sense to grant it.
S 25 of the Civil Jurisdiction and Judgments Act 1982 allowed the courts to grant injunctions in
support of foreign proceedings. However when the order had been made, the circumstances
required to support it did not exist since any claim it was intended to support had not been
formulated.
 ‘An interlocutory injunction, like any other interim order, is intended to be of temporary
duration, dependent on the institution and progress of some proceedings for substantive relief’
– Lord Scott.
 Lord Scott also considered the ambiguous nature of the word “jurisdiction. It seemed to him
that Park J had the jurisdiction, in the strict sense, to grant an injunction against Le Roux and
Fintrade. Both were in the territorial jurisdiction and were served with originating summons in
which relief in the form of freezing order was sort. There is no challenge to the propriety or the
efficacy of the service on them. The power of ajudge sitting in High Court to grant an injunction
against a party to proceedings properly served is confirmed by, but does no derive from the
Supreme Court Act 1981 and its statutory predecessors but instead derives from the pre-
Judicature Act 1873 powers o the Chancery courts, and other courts, to grant injunctions.
 According to him, the issue was not of jurisdiction but whether it was proper, in the
circumstances as they stood at the time Park J made the order, for him to make it. Restrictions
and limitations placed by judicial precedents and rules of court need to be examined for an
injunction relief to be properly granted.
Jurisdiction to Grant in Malaysia

Rules of court 2012 – Order 29 Rule 2
 Aspatra Sdn Bhd & 21 Ors v Bank Bumiputera Malaysia supra
“ We are of the opinion that our para 6 of the Schedule to the Courts of Judicature Act, read
with Order 29 RHC and section 50 of the Specific Relief Act, is wide enough to confer the
necessary jurisdiction to issue the Mareva injunction…”
Zainal Abidin bin Haji Abdul Rahman v Century Hotel S/B

Court is empowered by para 6, schedule to the Courts of Judicature Act 1964 to grant Mareva
injunction.
 Para 6, Schedule to CJA – power to provide for interim preservation of property

 Order 29, RHC – procedures in applying for injunctions
 S 50 of SRA – preventive relief for injunction to be granted at court’s discretion
* Worldwide freezing injunctions
- May be granted – in circumstances where it woud be expedient
- Credit Suisse Fides Trust v Cuoghi [1997] 3 All ER 724
4.6 Anton Piller Order

An ex parte injunction designed to prevent destruction of articles/documents in one party’s possession
which are prejudicial to his case.
Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55

Df in his capacity as an agent receives some confidential information. Pf suspects D had sold information
to P’s competitor, but is unable to prove it without access to documents which are in Df’s possession.
Held:
 An ex parte mandatory injunction was granted to require DF to allow PF to enter the premises to
inspect relevant documents and articles
 AP order is not a search warrant, but an order on the Df in personam to permit the Pf’s entry.
 Order in this nature can be made by a judge ex parte if it satisfied the following requirements:
 to do justice;
 there is a grave danger that vital evidence will be destroyed; and
 the inspection would do no real harm to the defendant.
4.6.1 Pre-Conditions
o An extremely strong prima facie case against the Df
o The damage, potential or actual, must be very serious for the applicant
o Clear evidence that Df has incriminating articles in his possession
o Real possibility that Df may destroy such material before an application inter partes can be
made.
4.6.2 In Malaysia
Lian Keow Sdn Bhd v C Paramjothy & Anor [1982] 1 MLJ 217
Pf claimed they are the beneficial owners of a piece of land, and that Df held the said land in
trust for the benefit of the plaintiffs. Pf applied for "Anton Piller" order to take into custody the
documents in Df’s premise.
Held:
- The court has jurisdiction to enter DF’s premises to inspect and remove vital material which DF
might destroy so as to defeat the ends of justice before inter parties application for injunction
could be made
- There was a serious danger of the Df destroying the trust deed and files relating to the said land,
and he is in possession of such trust deed and files.
5.0 EQUITABLE INTERESTS IN PROPERTY
(I personally find this part a bit confusing so there is loads of extra information to help you understand)
5.1Recognition of equitable interests in property
Extra Information found: (the label of how it goes is according to what I think)
5.1 Nature and Creation of Equitable Interests

- In order for an equitable interest in property to subsist, its holder must be able to protect the rights
pertaining to that interest against the person who holds the legal estate and must be able to enforce
those rights as against 3rd parties. (Wily v St George Partnership Banking Ltd (1999) 30 ACSR 204)
- A person’s standing to sue in equity need not be classified as an equitable interest as in many cases,
it is little more than what may be termed as “mere equity”
- It is the proprietary nature and of the interest in question, rather, that confers the entitlement to
standing, as well as impacts on the nature of the relief ordinarily available.
5.2 Creation of Equitable Interests in Property

- May arise in three ways:
1. Pursuant to the intention of the creator of the interest
2. By being presumed by law to arise where the equitable interest reflects the nature of a
transaction in issue (implication of law)
3. In circumstances that justify the court imposing an equitable interest in property independent of
actual or presumed intention (operation of law
- Distinguishing between the different modes of creation is important for 3 reasons
- (1) It goes to the relevant inquiry as to the existence of the interest
o [1.] Relies on evidence of that intention
o [2. & 3.] Evidence of a transaction that attracts such a presumption must be adduced
o [3.] Require proof of circumstances that justify the court imposing such an interest
- (2) May be important from the perspective of the timing of the equitable interest
o [1.] It is the expressed or inferred intention of its creator that ordinarily determines
when the interest takes effect
o [2.] Takes effect the moment it is imposed
o [3.] Arises when the circumstances that attract the implication arise, but must in any
case yield to contrary express or inferred intention
- (3) Statute requires certain equitable interests created by way of express/inferred intention to be
evidence in writing as a condition of enforceability, but does not impose this requirement on
equitable interests arising by implication or operation of law
5.2.1 Equitable interests created pursuant to intention

Property Given Subject to Certain Obligations
- EI may arise under a trust, whether expressly created by a transfer coupled with intention that
transferee hold elgal title for the benefit of others, or, by a declaration of trust whereby the
settler declares himself to hold the property on trust for others
- Critical to this form is the requisite certainty of intention
- Not every transfer attached which is an obligation constitutes a trust – may create an EI in the
nature of an equitable charge, or subject to equitable personal obligation not amounting to
trust – in which no EI is necessarily created
- If it is simply a moral obligation, attracts no legal consequence
Equitable Assignments
- An EI in property may be created by way of assignment in two main ways
- (1) An intended assignment under statute that does not fulfill the statutory requirements may
take effect as an EA, conferring on the assignee certain equitable proprietary rights
- (2) the purported assignment of property not yet in existence in equity constitutes the assignor
a trustee for the assignee as soon as the property comes into existence if the assignee has given
consideration
Contributions to Property
- Equity may recognize an equitable interest in property pursuant to the doctrine of proprietary
estoppel where there is evidence that its owner promised to confer on another person an
interest in the property in return for that person doing some substantial act in relation to it
- This equitable interest may be secured by way of an equitable charge or lien or court may
declare claimant received interest
- Some cases, claimant’s “equity” can be satisfied vi a compensation
- Oral promises may alternatively give rise to an equitable interest
Completely and incompletely constituted gifts

- For gift of property to take effect, donor must have done everything that, according to the
nature of the property, was necessary for the donor to have done to transfer to the done
- Gift is effective when if something remains to be done to complete transfer provided that it is
not something necessary to be done by the donor
- Donee acquires equitable interest “once transaction is complete so far as the donor is
concerned”
Equitable interests arising from instruments of security

- EG. A ctt to create a charge can take effect in equity, subject to applicable statutory writing
requirements, as an equitable because equity looks on that as done which ought to be done.
- Equitable charge is created “by an appropriation of specific property to the discharge of some
debt or other obligation without there being any change in ownership either at law or in equity”
- It is sufficient if the court can objectively ascertain from the instrument an intention that the
property is to constitute a security.
- Where however, the evidence discloses no intention that there should be a present right, but
only a right in the future, there can be no equitable charge.
5.2.2 Equitable interests arising by implication of law

Where the law recognizes an equitable interest to give effect to what could be construed as the
implied intention of the parties
Resulting trusts
- Arises where one person (settlor) confers legal title to property to another person but is
presumed to retain equitable ownership of the property – whole or part
- Hence, resulting trust is created pursuant not to settlor’s actual intention but to the intention
the law presumes in light of the form of transaction the settler has effected.
- Two categories of resulting trusts:
(1) Where settler failed to dispose of the entire equitable interest in the property, the equitable
interest remaining undisposed is said to “result” to the settler to fill the gap in equitable
ownership
(2) A resulting trust may arise where legal title to property is transferred but the transferor is
presumed by law not to have intended to dispose her equitable interest in the property
Contractual dealings in property giving rise to equitable lien

- May arise by implication to secure the discharge of actual or potential indebtedness
- Lien arises once the contract is signed, but cannot be actively enforced before the agreed
completion date
- As with other interests (of this kind), their operation can be ousted by express contractual
provision
- But it becomes exercisable only if the ctt goes off for reasons other than the purchaser’s own
default
- Lien places purchaser in position of a secured creditor – but this is entinguished once ctt is
completed, but before then, lien constitutes a sufficient interest to support a caveat over the
land
Equitable lien in fund arising from role in its management or creation

- Equity may raise liens based either upon general considerations of justice or upon the principle
that a person who seeks the aid of equity in enforcing some claim must admit the equitable
rights of others directly connected with or arising out of the same subject matter.
- The general law gives trustees an indemnity over the trust property for expenses properly
incurred in the management of the trust, also secured by an equitable lien
- The logic is that those taking the benefit of the administration must bear the burden of its
proper cost
Equitable interest protecting agreements that do not meet statutory formalities

- Equity recognizes that a statutory form of documentation may give rise to an equitable interest
in that land until the registration supervenes
- Hence, an unregistered instrument can vest in its holder an equitable interest in land beyond
the contractual rights
- That interest will be defeated by a registered security but entitles the mortgagee to lodge a
caveat to protect it and to rank as a secured creditor
Interests of a partner in partnership property

- n/a
5.2.3 Equitable interest arising by operation of law

To make a person accountable for property in which he or she should be denied equitable
ownership
Breaches of fiduciary duty
Where a fiduciary secures property through a breach of duty, equity can declare the defaulting
fiduciary a constructive trustee of title to that property for the person(s) to whom the fiduciary duty
is owed
Contributions to property
- Where a person has made a direct or indirect contribution to property that is not reflected in
the legal title, the court may declare the legal owner hold the property as constructive trustee
to the extent of that person’s contribution.
- A successful action in proprietary estoppels may also function to vest in a claimant to an
equitable interest in property, but this is by no means automatic
Mutual wills
Where two persons (usually husband and wife) execute mutual wills to the effect that following the
death of the survivor of them the testament property is to be disposed of according to agreed
terms, equity allows the beneficiaries of the wills to enforce this agreement by conferring on them
an equitable interest via a constructive trust to take effect in accordance with that agreement.
Contracts for the disposition of the land

A vendor who is contractually bound to dispose of land to a person who has given value is said to
hold her or his legal interest in the land as constructive trustee for the purchaser until the moment
when the full purchase price is paid
5.3 Types of Equitable Interests in Property

5.3.1 Trust
- Nature depends on the terms of the trust
- EG. Beneficiary of a fixed trust enjoys equitable interest in the trust property; beneficiary of
a discretionary trust has only a hope that discretion will be exercised in his favour
5.3.2 Equitable charge or mortgage

- Chargee (who takes benefit) may resort to the charged property only for the purpose of
satisfying a liability due to her or him
- Chargee is not entitled to possession of property but to enforce charge by order for sale
5.3.3 Equitable lien

- A right against property implied by equity to secure the discharge of an actual or potential
indebtedness
- It does not depend upon possession
- Proof of a ctt between parties is not essential
5.3.4 Equitable lease

- Non-fulfilment of the legal formalities for a lease generally renders the lease unenforceable
at law
- However, lease may be enforceable in equity under doctrine of Walsh v Lonsdale, which
treats an agmt to least as giving rise to a lease in equity for the term agreed upon
- Court’s willingness rests on its amenability to specific performance
5.1.1 Equitable interests may arise in a number of situations
5.1.1.1 Beneficial interest under an express trust

A) Transfer of Property
B) Self-declaration of Trust
o An owner can create a trust in favour of the intended beneficiary
o The declaration of a trust can be done informally so long as the words are clear and
equivocal
Wan Naimah v Wan Mohd Nawawi [1974] MLJ 41

A land had been sold to a deceased father who intended to create trust in favour of his
daughter and son. The land was transferred to the deceased’s brother-in-law who later
transferred it to the daughter alone as the son was still an infant at that point of time.
Held:
A declaration of trust may be made quite informally so long as the words used are clear
and unequivocal.
 Technical words are not necessary (eg. ‘I hold the property in trust for you’) so
long as it clearly conveys the intention to divest himself of all beneficial interest
in the property
 PROVEN that deceased’s father had clearly intended to create trust in favour of
the daughter and son. Thus the daughter held the half-share in the land in trust
for the son/brother.
C) Direction to a 3rd party to hold the property for a benefit of another

o An owner can benefit another by transferring legal title in the property to trustee to
hold on trust for the intended beneficiary
o To create a valid trust, the transfer of the property must first comply with the rules
applicable to the property concerned
o Otherwise, equity will not perfect an imperfect gift (eg. Land not registered yet you
purport to transfer]
Milroy v Lord 4 De GF & J 264

The settler assigned some shares to L upon trust for M’s benefit. However, the
assignment did not comply with the formalities required.
Held:
The trust was not valid due to failure of compliance.
 To create a valid voluntary settlement binding on the trustee, the settler must
have done everything necessary according to the nature of the property to be
settled.
(Look at previous pages for full case again)
5.1.1.2 Beneficiary’s interest under a deceased’s estate

The beneficiary’s right is not a specified right to the assets until the assets are distributed.
However, that right is capable of assignment.
Khaw Poh Chuan v Ng Gaik Peng [1996] 1 MLJ 761

A man died interstate leaving an estate behind and was survived by 2 widows, with all having
beneficial interest in the estate. The assignor who was entitled to shares in the estate assigned
all her beneficial interest to the assignee. A family settlement agreement was subsequently
reached to which the assignee’s interest was disregarded.
H:
Issue #1: Whether the assignee can institute a cause of action?
Yes. Valid assignment > Completion of administration > CoA?
Issue #2: Completion of administration/estate was fully administered: after the administrator
had satisfied all testamentary expenses and debts
- Before this, RB cannot lay specific claim to any asset in the estate, thus no legal or
equitable interest in the estate
- Only upon completion, the net residue is divisible among the RBs – they can
immediately claim his share of such divisible residue
Issue #3: The assignee only has what the assignor had
- Even though the administration of the estate was not complete and the assignor was
only a RB who did not have specified interest in the estate yet, the beneficiary right to
an unspecified interest is assignable.
- Assignee – step into the assignor’s shoes – regarded as a RB
- Assignee can bring a cause of action upon the completion of administration (as
legal/equitable interest has been ascertained)
Khaw Poh Chuan v Ng Gaik Peng

Facts:
The assignor in this case was to receive the land as part of the father’s estate after
his death and also as administratrix. However, before everything was finalized and
the property properly distributed, the assignor assigned all her shares in the
property to the assignee. Later, the assignor reneged on her promise to the assignee
by claiming there was no assignment and instead entering into a family agreement
to distribute the property.
Held:
Assignment of future property is allowed. As the person entitled to the residue
from the deceased’s estate, the assignor had equitable interest in the land and
under the law, had a right to assign that equitable interest in favor of the assignee.
Important to note however that beneficial interest cannot aid the beneficiary in
everything. In certain instances, the beneficiary still needs legal interest.
Chong Fook Sin v Amanah Raya

Facts:
There beneficiaries of the deceased’s estate sought to intervene in action brought
against the administrator of the estate against a third party.
Held:
A beneficiary only has equitable interest in the land. They can only intervene if they
have a legal interest once the administration of the estate is completed and
distributed.
5.1.1.3 Contract for sale of land

Vendor under a valid contract holds the land under a bare trust for the benefit of the purchaser.
See s 206(3) National Land Code 1965.
Lysaght v Edwards (1876) 2 Ch D 499

The vendor died and the transfer was not complete. Issue was: whether or not the purchaser
who had paid a part of the purchase price of a land was entitled to specific performance against
the vendor’s heirs.
Held:
- Constructive trust arises from a specifically enforceable contract
- Upon conclusion of the contract, the vendor becomes a trustee for the purchaser and
the beenficial ownership passes to the purchaser
- The vendor has the right of possession until the purchase price is fully paid up, or create
a lien on the property as security for the purchase price
Borneo Housing Mortgage Finance Bhd v Time Engineering Bhd [1996] 2 CLJ 561
When does doctrine of bare trust apply?
Held:
- Applies only after full payment is made and memorandum of transfer is executed
- Before that, parties are only to the contract of S&P
- The charge was valid as it was created after the S&P agmt but before the full payment of
purchase price
Borneo Housing Mortgage Finance Bhd v Time Engineering Bhd (FC)

Fact:
The contest was between a chargee (the appellant) under a charge registered and a
purchaser (the respondent) under a sale and purchase agreement (S&P agreement)
in respect of one unit of proposed industrial building (the building) to be built on
one of the four pieces of land (the land) the subject matter of the charge.
On 1.3.1982, the chargor, a developer, applied for a bridging loan (the loan) from
the appellant, a finance company, to finance its proposed industrial development
project on the land.On 2.11.1982, the chargor entered into a S&P agreement with
the respondent for the sale of the building to the latter.On 28.5.1983, the chargor
created a charge (duly registered under s. 104 of the Ordinance on 21 June 1983)
over the land in favour of the appellant as security for the repayment of the loan.By
23.5.1986, the respondent had effected due payment of the entire purchase price of
the building in favour of the chargor.
However, the chargor defaulted in its repayment of the loan, and, upon the
application of the appellant, an order for sale in respect of the land was made by
the Collector on 17.8.1991.The land was subsequently sold to a third party on
30.11.1991. On 7.12.1991, the respondent commenced proceedings against the
chargor, the appellant, the Collector, and the third party purchaser.
Held:
Relying on the dicta of H.S. Ong FJ in Temenggong Securities Ltd. & Anor. V.
Registrar Of Titles, Johore & Ors [1974] 1 LNS 175. and, certain passages in
Sinnadurai's Sale and Purchase of Real Property in Malaysia, the trial Judge held that
the chargor had, upon receipt of the full purchase price from the respondent,
become a bare trustee for the respondent, and that this trusteeship operated
retrospectively by conversion to the date when the S&P agreement was made.
Jessel MR’s dicta in Lysaght v. Edwards applied (“It appears to me that the effect of
a contract for sale has been settled for more than two centuries;... it is that the
moment you have a valid contract for sale the vendor becomes in equity a trustee
for the purchaser of the estate sold, and the beneficial ownership passes to the
purchaser, the vendor having a right to the purchase money, a charge or lien on the
estate for the security of that purchase money, and a right to retain possession of
the estate until the purchase money is paid, in the absence of express contract as to
the time of delivering possession.”)
The contractual events, which result in a vendor becoming a trustee of the land for
the purchaser, only came to completion upon receipt by the vendor of the full
purchase price, paid timely, and when the vendor has given the purchaser a duly
executed, valid, and registrable transfer of the land in due form
5.1.1.4 Beneficial interests that arise by implication of law

In circumstances where the law recognizes an equitable interest to give effect to what
could be construed as the implied intention of the parties in respect of the relevant
transaction. The main circumstances where this occurs are discussed below:
A) Resulting trusts
o Arises where one person (settlor) confers legal title to property to anor person but
retains equitable ownership of the property, in whole or in part
o Several circumstances give rise to ART (known as trust failure): -
 Nature of RT:
Born and dies with the settler without any writing at all; arises wherever
there is a gap in the beneficial ownership; ceases when the gap is failed.
o Hence, the resulting trust is not created pursuant to the actual intention of the
settlor but pursuant to the intention that the law presumes in view of the
particular form of transaction that the settlor has affected
o Sometimes it is described as implied trusts
o Divided into:
 Automatic resulting trusts (and)
 Presumed resulting trusts (Resulting trusts, Part III, Ch 7)
Re Vandervell’s Trusts (No.2) [1974] Ch
Transferor intended the transferee to hold the shares transferred on trust for his
kids. However, it was not made clear to the transferee that to whom it is to be held.
Held:
Law: A trust must be made for ascertainable beneficiaries
Since the trust was uncertain and did not clearly define who the beneficiaries were,
there was a RT for Vandervell and as such, the trust fell back to him.
Law Tanggie v Untong Ak Gantang

Facts:
Pf bought a native land from one (Atok) but could not register the land in his name
as he was underage and could not obtain a native certificate. Pf then by an
agreement appointed Df to hold the property in trust until Pf could obtain a native
cert. However, upon receiving his native cert, Df refused to transfer the said land to
Pf despite repeated requests. It turns out that the land had been transferred to the
Df’s daughter (bona fide purchaser, equity’s darling).
Held:
The Df was thus holding the said land on trust for the Pf, all the more so as there
was credible and acceptable evidence adduced that the Pf had paid for the purchase
price. This case fitted in with the classical case of a purchase being taken in the
name of a stranger, which would constitute the nominal purchaser as a resulting
trustee for the one who provided the purchase price.
B) Equitable lien
o It is a form of equitable charge that can arise in diverse circumstances – an
equitable adjustment of mutual obligations – operating on unfairness or
unconscientious acts
o Does not depend on the ctt, promise or possession; arises instead from the
parties’ relationship differs from an equitable estate or interest, where there is
an anticipated promise to make the assignment
o Purpose: it creates a right to obtain an order for the repayment of debt
o In common law, defined as the right to hold property belonging to anor person as
security for the performance of an obligation or the payment of a debt
o An EL is a right against property which arises by implication of equity to secure the
discharge of an actual or potential indebtedness. It does not depend upon
possession
Hewett v Court (1983) 149 CLR 639, and Deane J’s decision
A company engaged in constructing transportable houses entered into a contract
with certain purchasers to construct a house at the company premises according to
specifications provided by the purchasers. After the purchasers had paid the deposit
and the first instalment and when the house was nearing completion, it appeared
that the company was insolvent.
The company and the purchasers then varied the original agreement and the
purchasers removed the house and paid the balance of the contract price subject to
an adjustment to allow for the uncompleted work. Shortly thereafter, liquidators
were appointed and they sought to set aside the variation to the agreement on the
basis that it as a preference. The purchasers contended they were entitled to an
equitable lien upon the home. The appellant appealed from a judgment of the Full
Court of the Supreme Court of Western Australia reversing a decision of Wickham J
that there was no preference. Appeal allowed.
Held:
o An equitable lien is a right against property which arises automatically by
implication of equity to secure the discharge of an actual or potential
indebtedness. Thus the lien-holder gets an interest in the property as a security
for his loan.
o Under a valid contract of sale, while awaiting full payment of the purchase price,
the vendor is a trustee of the property at equity for the purchaser.
5.1.1.5 Equitable interests imposed by the courts

Constructive trusts
- The legal owner of the property must hold it on trust for another
- No formalities are needed; applies ‘whenever justice and good conscience require it’
- Court will by reason of unscionable conduct of the wrongdoer, impose a liability on
wrongdoer by creating a constructive trust – created articially
- AG of Hong Kong v Reid
Reid, who is the of Acting Director of Public Prosecutions breached the fiduciary duty
entailed by this position by accepting bribes in return for the obstruction of prosecution
in certain cases. It was discovered that Reid used the bribery to purchase certain New
Zealand properties which had an increase in value. The Hong Kong government argued
that owing to the breach of fiduciary duty, these properties were held on constructive
trust for them.
Held:
The fiduciary (Reid) who receives an unauthorised profit in breach of his duty of loyalty
will hold the profit on constructive trust for his principal because he is subject to an
equitable duty to account for the profit he received. As soon as the bribe was received,
whether in cash or in kind, the false fiduciary held the bribe on a constructive trust for
the person injured.
(See the materials under Fiduciary relationships (Part I, C6) and Constructive trusts (Part II, C8)
5.1.1.6 Assignment of future property in equity

Common Law Equity
- An assignment of property to be acquired - “Equity looks on that as done which ought
in future is void [in that common law to be done”
considers what a person does not have, - Such an assignment is treated as a ctt to
cannot be assigned] assign where it is made for valuable
- A person cannot assign what he does not consideration,
have - Binding the conscience of the assignor,
from the moment the ctt becomes capable
of performance
Re Lind [1915] 2 Ch 345

L mortgaged his expectancy of a share in his mother's personal estate on intestacy to the N Co in
1905, and to A in 1908. Later in 1908 L was adjudicated bankrupt. Neither the N Co nor A proved
in the bankruptcy. After his discharge L made a further assignment of his expectancy to the
plaintiffs. L's mother died intestate in 1918. The plaintiffs contended that the mortgages to the
N Co and A were of no value as their rights amounted only to contracts to assure in the future,
and because of the bankruptcy L had been released from the mortgage debts.
Issue:
Whether or not a future property can be charged for a loan
Held:
(i) an assignment for value of future property bound the property directly it was acquired,
automatically on the happening of the event, and without any further act on the part of
the assignor, and did not merely rest in and amount to a right in contract.
(ii) the mortgagees N Co and A had elected to rely upon their security and not to prove,
and, therefore, as mortgagees they stood outside the bankruptcy; moreover any
contract contained in the mortgage deeds for vesting the future property in the
mortgagees was ancillary, not to the debt, but to the mortgage by which the debt was
secured
(iii) The assignment does, however, operate as a contract to assign if and when the property
comes into existence, and to use the words of the same great judge,
"when it has come into existence, equity, treating as done that which ought to be done,
fastens upon that property, and the contract to assign thus becomes a complete
assignment."
An assignment of a future property for value operates in equity by way of agmt. The moment
the ctt becomes capable of being performed, the assignor became the trustee on the principle
that equity considers as done that which ought to be done.
Because the assignor’s conscience is bound in respect of the future property, equity
fastens upon the property itself, thereby making the assignor a trustee of the legal
rights or ownership of the assignee.
5.2 Competing Equitable Interests

Extra Information:
5.4 Competing Equitable Interests
- The general principle for prioritizing competing equitable interests is as per Rice v Rice: in a contest
between persons having only equitable interests, priority of time is the ground of preference last
resorted to
- But courts effectively treat the order of creation of equitable interests as prima facis determinative
of priority
- Reflected in the fact that the later equity holder bears the onus in reversing the order of temporal
priority
- Conduct of the holder of the prior interest is usually closely scrutinized to determine if he or she is
guilty of some act or default that prejudices her or his claim
- Also because later equity holder may be scrutinized for he may cause holder of earlier interest to act
contrary to its interest
- Four matters must be noted at the outset:
(1) The strength of an equity does not depend on the strength of the legal interest in reflects,
but on matters of equity and conscience
(2) Where a later equitable interest prevails over an earlier interest, the court will be careful to
ensure that the holder of the earlier equity is postponed only to the extent that her or his
conduct has prejudiced the holder of the later equity
(3) Courts “do not treat the competition of priorities of equities as turning on precise
categorizations”
(4) The issue of competing equitable interests remain relevant to Torrens land
5.2.1 General Principle: “First in prevail, all others being equal”

= Where the competing equities are equal, priority of time gives the better equity
Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265.
Kitto J (maksim “qui prior est tempore” applies as between two competing equitable interests
that are equal and not a bona fide purchaser for value without notice of a prior mere equity ).
United Malayan Banking Corp. Bhd v Goh Tuan Laye & Ors [1976] 1 MLJ 169
- The caveat would have acted as a notice of an interest
- However, since the As [prior uncaveated lien-holders’ were prohibited by a ocal
enactment from lodging a caveat, there were not guilty of any act or omission which
had or might have had the effect of inducing the respondent to act to their prejudice
- The As got the priority as they had done all they could to protect their interest by taking
possession of IDT
Quah Hong Lian Neo v Seow Teong Teek & Ors[1936] MLJ 203
Vallipuram Silvaguru v Palaniappa Chetty [1937] MLJ 59

- The failure to caveat was an omission but it was not grave enough to postpone the prior
interest
- True, the register is conclusive but the subsequent purchaser should be alert as the IDT
was absent
- Gist: whether the subsequent purchaser has exercised prudence on his part
Goh Keng How v Raja Zainal Abidin bin Raja bin Raja Hussein [1995] 3 MLJ 6
Space Investments Ltd v Canadian Imperial Bank of Commerce Trust Co. (Bahamas) Ltd 1986] 1
WLR 1072
5.2.2 Circumstances where a prior equity may be displaced or postponed by a later equitable
interest:
A) Estoppel
- It is difficult to accommodate all the cases of which the postponement of an earlier
equity is done on the doctrine of estoppels
- The conduct of the holder of the prior interest indicated that the earlier interest did not
exist (or clothed a third party with apparent ownership)
Heid v Reliance Finance Corp Pty Ltd &Anor (1984) 49 ALR 229, read the decision of
Mason& Deanne JJ
B) waiver by the holder of the prior interest;

C) the holder of the earlier equity is a volunteer and the holder of the later equity gives
consideration without notice of the earlier equity; [bona fide purchaser for value without
notice of prior interest] and
D) in competing interests between assignees, priority belongs to the party who gives notice to
the trustees.
Extra Information:
5.4.1 Relevant factors in ascertaining the better equity
Estoppel
- An owner of property who clothes a 3rd party with apparent ownership and the associated right of
disposition may be stopped from asserting that title as against a person to whom the 3 rd party has
disposed or charged the property and who took it in good faith and for value.
- Courts inquire into whether the holder of the prior equitable interest armed a 3rd party “to go into
the world under false colours”
- Rice v Rice
- Abigail v Lapin: commonly no actual, direct representation is made. Only in an artificial sense does a
representation exist.
- Most often, the effect of transferring title operates and is interpreted as the representation
- Where a 3rd party relies on the representation that no adverse equitable interest exists, and
subsequent acts to her detriment, the holder of the prior equitable interest is stopped from
asserting her equitable interest
- In the alternative, decisions can be explained on the basis that a person who hands over title deeds
to an agent with authority to deal with the property in a restricted manner cannot rely on the
restrictions as against a 3rd party who lacked notice of them
- Possessor of prior equity has acted negligently and should be deprived of priority.
- Point is, an inquiry into the relative behavior of parties, including omissions, impacts on the relevant
equities.
Failure to caveat
- Holder of an equitable interest cannot improve her priority by lodging a caveat
- Because a caveat does not enlarge existing rights but protects them
- Butler v Fairclough: the failure of an equitable mortgagee to lodge a caveat one clear day brought
about the loss of priority
- Abigail v Lapin: PC: Respondents armed H with the means of dealing with an estate as the absolute
and equitable owner and their failure to caveat was a factor in the postponement of their interest
- Yet, failure to lodge a caveat may not of itself postpone that interest.
- Where a caveat has been lodged and then removed, a person searching the title of the property is
entitled to assume that the former caveator no longer seeks to sustain the interest the caveat had
sought to protect
- The interplay of detriment and unconscionability may also be relevant.
- Mimi v Millenium Developments Ltd: To postpone a prior equitable interest holder, the subsequent
equity holder must show both an act capable of being regarded as unconscionable, and detriment
that renders that act unconscionable.
Accepted conveyancing practice

- Conduct of possessor of 1st equitable interest may not operate to postpone that interest to a later
interest if it accords with established practice and is necessary to enable a conveyancing transaction
to be completed
Notice
- Ordinarily, if later equity holder has notice, actual or constructive, of the earlier equity, her claim to
priority is defeated at the threshold.
- Does not refer to equitable doctrine of notice in context of a bona fide purchaser for value
- Exceptions to it include where there is an agmt to postpone, a waiver of priority, or other conduct
by the holder of the prior equity capable of stopping her from asserting priority.
Doing Equity
- Where a later equity holder is given priority over an earlier equitable interest, the court can, as a
condition of giving effect to its decision, require the later equity holder do equity.
5.3 Management /administration of property at law and equity
5.3.1 Declaration of trusts (refer to Part II: (Trusts) Ch 3)
5.3.2 Powers and duties of trustees (refer to Part II, (Trusts) Chs 11 and 12)
5.4 Assignment of Property

Common Law Equity
Consent of debtor is required for assignment Consent of debtor not necessary
Written notice not necessary
- Under s4(3) of the Civil LawAct 1956, a statutory assignment must be

o Absolute and unconditional
o In writing
o Signed by the assignor
o Notice in writing to the debtor, trustee or other persons from whom the assignor would
have been entitled to receive or claim the debt or chose in action
o Consideration not necessary if all requirements of the statute are fulfilled
- The full statute reads as such:

Any absolute assignment, by writing, under the hand of the assignor, not purporting to be by
way of charge only, of any debt or other legal chose in action, of which express notice in writing
has been given to the debtor, trustee or other person from whom the assignor would have been
entitled to receive or claim the debt or chose in action, shall be, and be deemed to have been,
effectual in law, subject to all equities which would have been entitled to priority over the right
of the assignee under the law as it existed in the State before the date of the coming into force of
this Act, to pass and transfer the legal right to the debt or chose in action, from the date of the
notice, and all legal and other remedies for the same, and the power to give a good discharge
for the same, without the concurrence of the assignor.
- The notice need not be an 'official‘ notice – it is sufficient if information relating to the
assignment is given to the debtor
- Rationale of s4(3)
o Did not change the law of assignment in equity, does not create a right of action
o Merely a machinery; enable the existing right to be purused in a less roundabout fashion
- makes it eaier for the assignee to sue in his own name – no need to borrow assignor’s
name
o To avoid the awkwardness – if the assignor is not cooperative, assigned can be listed as
co-D
o Facilitate the right to sue, be it equitable chose in action or a legal chose in action
Note: since the assignor was also acting in another capacity as the debtor (ie the
administrator of the estate of the deceased father, the notice of assignment was
presumed to have been given to him)
Khaw Poh Chuan v Ng Gaik Peng & Ors [1996] 1 MLJ 761
Compliance with s4(3) is not a pre-requisite to the validity of an assignment
(Makes it easier for the assignee to sue in his own name)
Harris Adacom Corporation v Perkom Sdn Bhd [1994] 3 MLJ 504
Df had entered into a distribution agreement with the Pf, an American company which it owed
the sum RM 538, 000. The Pf then sold its interest and assigned all its rights to the Df. When the
Df failed to pay the debt, Pf commenced arbitration proceedings in the United States. The Df did
not appear despite due notice and an award was made in favour of the Pf. The Pf applied to
register the award under the convention on the Recognition and Enforcement of Foreign
Arbitral Awards Act 1985. The Df opposed on the ground the assignment was void since due
notice had not be given to the him.
Issue:
Whether or not the notice given by the assignee to the trustee must be formal
Held:
o To create a statutory assignment, express notice in writing must be given to the debtor.
o However, this does not rquire formal notice.
o It is sufficient if information relative to the assignment is conveyed to the debtor
o In this case, the assignee’s letter of demand and the DF’s replying letters showed that
the DF had knowledge of the assignment
UMW Industries Sdn Bhd v Ah Fook

A finance company let one Mr. Yew an excavator on hire-purchase. The finance company then
conveyed all its rights, interest and labilities to UMW. Subsequently, R guaranteed the mining
company on the excavator. However, notice of the assignment was not given to R until 2
years later.
Issue:
Whether failure to give notice of assignment within reasonable time fatal.
Held:
The deed of assignment was absolute, and came within s 4(3) of the Act as the conditions
were all fulfilled. Further, there was evidence that the deed of assignment was signed by a
proper officer on behalf of the assignor.
R’s complaint that the notice was given more than two years after the execution of the deed
of assignment was not valid, as neither s 4(3) of the Act nor any law has prescribed any limit
of time within which notice must be given to the debtor, trustee or other person from
whom the assignor would have been entitled to claim the debt. However, notice must be
given before the assignee takes out its writ. In this case, notice was given before the action
was commenced.
5.4.1 Assignments in Equity

 If one or more of the requirements for a statutory assignment is not complied with, the
failed attempt at statutory legal assignment may take effect as an equitable assignment.
 Equitable assignments apply to property assignable in equity but not at law. eg choses in
action (intangible rights enforceable through [court] action) eg. a debt, rights of action
on a contract, shares, bonds etc.
Real Property/ Personal Property
Immovable Property
Land, Real Estate i. Corporeal [merchandise and jewellery]
ii. Incorporeal [copyrights, rights to bond or debt]
- All choses in action are a personal property
What is ‘Chose in Action’?
 Torkington v Magee [1902] 2 KB 427, 430
The D contracted to sell his reversionary interests in property to the D who by deed
assigned his interests under the contract to the P and notice in writing of the
assignment was duly given. The D, after the assignment to the P, refused to perform the
contract. It was held by the court that the assignment was an assignment of a legal
chose in action, and the P was entitled to sue the D for damages for breach of contract.
 A known legal expression used to describe all personal rights of property which can only
be claimed or enforced by action and not by taking physical possession
 “A legal chose in action is something which is not in possession, but which must be sued
for in order to recover possession of it.”
 Public Finance Berhad v Scotch Leasing Sdn Bhd (Penerima dilantik); Perwira Habib
Bank Malaysia intervener [1996] 2 MLJ 369. Peh Swee Chin J:
The true nature of an assignment of a debt or book debt is such that such a debt … can
only be transferred by way of assignment, and not, eg by delivery in the case of sale of
goods, or in the case of land by executing a valid and registrable transfer according to
the provisions of the National Land Code 1956.
 Characteristics:
i. An intangible personal property right recognized and protected by law
ii. Has no existence apart from the recognition given by the law
 The legal rules for the transfer of personal property are not as stringent as those
for the transfer of land. Thus, in considering these rules, a distinction must be
drawn between choses in possession (chattels) [CIP] and choses in action [CIA]
 Distinction between the two:

CIP CIA
Capable of physical possession An abstract form of property
Bank book The debt represented by the bank book
(owed by the bank to a customer)
A share certificate A shareholder’s certificate
Assignment of Debt/Book Debt

- An assignment of debt or book debt is different from transfer of the land through NLC or
sale of goods through SGA
- No statute modifies the applicability of the nemodat rule on its assignment
- Effect:
i. Debt is subject to NDR; a bona fide purchaser for value is not protected;
ii. The prior in time could invoke NDR and argues that the assignor cannot assign what
he does not have
- Assignment is the sufficient instrument for the transfer/sale of debt
 In Scotch Leasing, the assignment of the debt in the form of “master agreement”
was sufficient and valid; no further documents were needed
 The provision in the master agreement: that the assignor was required to execute
the assignment in the form required by the assignee was superfluous and redundant
Public Finance Bhd v Scotch Leasing Sdn Bhd (Penerima dilantik); Perwira Habib Bank
Malaysia intervener [1996] 2 MLJ 369.
R (Scotch Leasing) assigned 21 book debts under 21 leasing agreements to A (Public Finance)
in consideration for financial assistance given to it. The leasing agreements or the book
debts therein were assigned in pursuance of the terms of a master agreement.
The leasing company executed a debenture in favour of Perwira Habib Bank Malaysia ('the
debenture holder') under which a floating charge was created over all the undertakings and
assets of the leasing company as security for some loan facilities granted by the debenture
holder. The leasing company later defaulted. The floating charge was then cystallized, and
the debenture holder appointed a receiver and manager for the leasing company.
A, as assignee, then applied for a declaration, inter alia, that the leasing company held the
rights and property in respect of the lease agreements as trustees for it pursuant to the
master agreement.
Counsel for the debenture holder argued that the debenture holder took the 21 leasing
agreements bona fide for value without notice of the right of the finance company, as the
finance company had failed to register the master agreement with the Registrar of
Companies under s 108 of the Companies Act 1965. The High Court allowed the the
debenture holder's claim on the ground that there was no trust in favour of the the finance
company as the debenture holder was entitled to priority. Hence, the appeal by the the
finance company.
Held:
 On the facts, there was no evidence as to whether the finance company or the
debenture holder had given notice to such hirers and hire-purchasers. Thus, on the basis
of notice of assignment to the debtors, the real competing claims of the debenture
holder and the finance company respectively for so-called priority had not even begun
to arise in this particular appeal.
 By being a statutory assignment itself, the 'statutoriness' of such an assignment, ipso
facto, does not prevail over an earlier equitable assignment, and this is so even with the
added factor that the assignee involved in a statutory assignment took the assignment
for value without notice of an earlier equitable assignment
 If notice is not given, the assignee must give credit for any payment made to the
assignor by the debtor.
 This rule means that, by extension, even if the assignor assigns once more the debt to
another person in fraud or otherwise on the earlier assignee, and that other person
gives notice to the debtor; and if the debtor pays that other person or the second
assignee, then the earlier assignee must still give credit to the debtor for his payment
thus, for the debtor cannot be blamed for doing lawfully in ignorance of the title of the
earlier assignee who has failed to give notice of the assignment to the debtor.
Per PehSwee Chin FCJ at 380-381
(a) At common law … contractual rights, eg as to debts, were not assignable, ie transferable
to another person without the consent of both parties to the contract conferring such
contractual rights. Equity stepped in and has long allowed such assignment of such
debts to another person who is not privy to the contract in respect of such debts,
without at all the consent of the debtor: see eg Brice v Bannister (1878) 3 QB 569; and
even without notice to the debtor. … Such assignments as so allowed by equity are
called equitable assignment.
(b) The validity of such equitable assignments is not affected by any failure to comply with
requirements as laid down in s 4(3) of the Civil Law Act 1956, for an assignment that so
complies has been described as a statutory assignment; being so statutory for such an
assignment has the sole intended effect of facilitating an assignee to sue in his own
name directly, irrespective of whether the chose in action is an equitable chose in action
or a legal chose in action (not, be it noted, whether an assignment is equitable or
statutory).
(c) By being a statutory assignment itself, the 'statutoriness' of such an assignment, ipso
facto, does not prevail over an earlier equitable assignment, and this is so even with
the added factor that the assignee involved in a statutory assignment took the
assignment for value without notice of an earlier equitable assignment: eg see E Pfeiffer
Weikellerei-Weinenkauf GmbH &Co v Arbuthnot Factors Ltd [1988] WLR 150
5.4.1.1 Form / Requirement of Equitable Assignment

 Clear intention to assign
 The act of assignment
 Consideration not necessary
Malaysian International Merchant Bankers v Malaysia Airlines System Bhd [1982] 2 MLJ 59
B assigned the debts owed by MAS to MIMB. Due to absence of notice, there was no valid
legal assignment. The issue was whether there was an equitable assignment.
Held:
(a) Since the statutory notice was not given to the defendant, as the stakeholder under
s 4(3) of CLA 1956, there is no legal assignment.
(b) However, there is an equitable assignment. Syarikat Bahagia has clearly intended
that MIMB be given an interest under the contract with MAS and, MAS (as dfd) had
knowledge of that intention. Thus the DF had become trustees of the money subject
to the debt.
(c) The defendant as a debtor and ‘stakeholder’ is responsible to pay the money to the
plaintiff even if he had paid Syarikat Bahagia earlier.
In Simple Terms:
- Once there is a clear intention to assign, an equitable assignment is created.
- When the debtor became aware of it [notice given to him], he became a trustee for
the assignee.
- The debtor msut then withhold further payments to the assignor without the
assignee’s consent. Otherwise, he will have to pay over again to the assignee.
- In his case, MAS was liable to pay the sums to MIMB, even though it had already
been paid to B (in breach of trust) as MAS was aware of the assignment
- The delay in completing the formalities is immaterial as it merely confirms the
presence of the intention to assign and the debtor’s awareness of such
William Brandts Sons & Co v The Dunlop Rubber Company [1905] AC 4.
Per Lord Macnaghten, “The statute does not forbid or destroy equitable assignments or
impair their efficacy in the slightest degree.”
Recap
- At common law, debtor’s consent is needed
At equity, the assignment of debt to a person who is not privy to the ctt is allowed –
even without the debtor’s consent and notice to the debtor *Perwira Habib Bank
Malaysia intervener]
*However, notice is important in determining competing priorities
- Failure to comply with s4(3) of CLA does not affect the validity of such equitable
assignments.
*Look at rationale of s4(3)
- The statutory assignment does not override a prior equitable assignment even though
the later in time case as a bona fide purchaser for value [Perwira Habib]
Note
Though not essential for a valid equitable assignment, notice may still be desirable and necessary. Until
notice is received, a third party is not bound by the assignment and may continue to pay the assignor.
Any informal notice is sufficient, provided the fact of the assignment is brought to the mind of the
debtor or fund holder. In such cases the debtor cannot be compelled to pay the equitable assignee.
[The ordinary principle is that a debtor who has received notice of an equitable assignment must
withhold all payments to the assignor unless made with the consent of the assignee, For if he pays the
assignor without such consent, he will have to pay over again to the assignee.]
Notice is also useful to prevent the operation of the rule in Dearle v Hall (1828) 3 Russ1: 38 ER 475
which states that in cases of successive dealings with a chose in action, priority will depend on the order
in which notice of the interest created is given to the person affected by it and not by the order in
which the assignment is created.
unction of Notice
 Establish trust in the mind of debtor
A debtor who has received notice of an equitable assignment must withhold all payments to the
assignor unless made with the consent of the assignee. If he pays the assignor without such consent
[breach of trust], he will have to pay over again to the assignee
 For the protection of the assignee himself

 Prevent the operation of rule in Dearle v Hall
 Which states that successive dealings with a chose in action, priority will depend on the order of
the notice, not the order of the creation of assignment
 Effect: 1st assignee which did not give notice must give credit for payment made by debtor to
the 2nd assignee who gave notice
*this rule dilutes the role of nemo dat rule in resolving the disputed claim to a same debt
*1st assignee can of course recover the money from the 2nd assignee on nemo dat principle. Just that
he cannot claim it from the debtor
Chapter 6: Estoppel
6.1 Introduction and the basis for the doctrine estoppels
- The basic idea of estoppel at common law is that where a man asserts the existence of a state
of affairs, he cannot afterwards deny that which he has asserted.
- This has come to be adopted both in common law and equity.
- It is a flexible doctrine used by the courts to prevent injustice between the parties which
results from a person repudiating the foundation of a belief or assumption which he or she has
induced when the repudiation will cause harm to the person holding that belief.
- Grounded in `unconscionability’ and the prevention of injustice, the doctrine of estoppel is
used in various circumstances and branches of law, including company law, civil procedure,
contracts, assignments and others.
- The flexibility of the relief allows the courts to tailor the remedy to take into account tne
circumstance surrounding the relationship.
6.2 Distinctions between common law and equitable estoppels by conduct

There are three main distinctions:
Common Law Estoppel Equitable Estoppels
Operates upon a representation of existing Can operate upon representations or promises as to
facts. future conduct, including promises about legal relations.
Establishes a state of affairs by reference to Creates rights known as “equities” against the party
which the legal relation between the parties stopped, which prevail over that party’s common law
is to be decided. rights to the extent that the detriment stemming from
the unfulfilled representation is remedied. –
Incorporated rule of law
Aims to make good the assumption, even if Equity grants relief proportional to the loss suffered by
this results in the party misled recovering the party misled; it does “not compel the party bound to
more than the actual loss he or she has fulfill the assumption or expectation; it is to avoid the
suffered. detriment which, if the assumption or expectation goes
unfulfilled, will be suffered by the party who has been
induced to act or abstain from acting thereon”
– equity did not create it but only supplemented it
Thus, it has been said that it operates by Said to operate by reference to an assumption of rights.
reference to an assumption of fact
6.1.2.1 Equitable estoppel (or estoppel by conduct in equity) may be considered in two main forms
(a) Promissory estoppel

(b) Proprietary estoppel
6.2 Promissory Estoppel

- The doctrine of estoppel by representation is expanded in equity so as to include not only
representation of fact but also representation of intention, or promise.
- The basic princple is that, a person who makes an unambiguous representation by words or
conduct or by silence of an existing fact, and causes another party to act to his detriment in
reliance on the representation will not be permitted subsequently to act inconsistently with
that representation.
- The effect is temporary and it provides a defence
- Equity binds the holder of a legal right who induces another to expect that the right will not be
exercised against him.
Jorden v Money 23 LJ Ch 865
Central London Property Trusts Ltd v High Trees House Ltd [1956] 1 All ER 256
PF company leased to the DF a block of flats for 99 years at a rent of 2.5k/year. Due to WWII, D
was unable to find sub-tenants for his flats, and thus, was unable to pay rent. PF agreed to
reduce the rent to 1250 from the beginning of the term. After WWII, all the flats were let and
the PF claimed the full rent as from the middle of that year.
Held:
PF succeeded however, they would be estopped from claming the full rent for the period from
1940-1945 on the gorund that though not technically bound due to lack of consideratio, PF had
intended the DF to rely on the promise and DF had acted on the faith of it. Intention to create
legal relation is sufficient to allow a party to raise estoppel.
Hence, elements of it are as such:

1. A promise/representation of a fact was made
2. An act of reliance by the promisee upon that promise/representation made
3. That act is made to the detriment of the promisee in which the detriment is not necessarily
quantifiable in terms of money
Muthiah v Lee Kor Fan [1966] 1 MLJ 105
Bank Negara Indonesia v Philip Hoalim [1972] 1 MLJ 233

Issue: Whether if the said building was held to be a new building, the PF were estopped from
giving the DF a notice to quit the premises
Held:
The building had not changed its identity in such a manner as to render it to be a new building.
The PF were estopped from giving the DFs notice to quit as long as he continued to carry on his
profession on the premises.
Combe v Combe (1951) 2 KB 215, Per Denning J

There was an agmt (not written) between husband and wife that before the decree of divorce
became absolute, the husband would pay maintenance to the wife but he never did so for 6
years.
Held:
Promissory estoppel does not create new cause of action. It only prevents a party from
insisting upon his strict legal rights. There was no evidence to prove that having relied on the
husband’s representation; she would be induced to do something. Promissory estoppe ldid not
apply.
William Teo’s House and Estate Agencies v Chan EngSwee[1965] 2 MLJ 89

Aw Yong Wai Choo and Ors v Arief Trading Sdn Bhd & Anor [1992] 1 MLJ 166
The real test is whether in the circumstances of the case the situation has arisen where it is
unjust and unfair for the plaintiff or the party with the rights to insist on his rights.
The application of promissory estoppels is limited to a defence but it does not create a cause of
action (Combe v Combe)
1. There must exist a relationship between the parties, be it contractual or otherwise
2. Promissory estoppels must be reied on as a shield and not a sword
3. He who comes to equity must come with clean hands
4. The use of the doctrine of promissory estoppels is limited and cannot be used by the PF to
establish a right
5. The effect of promissory estoppels is that it may enable a person to assert his rights based
on an agmt between the two parties and without estoppels that agmt will not be
recognized.
Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd
Amlagamated had mortgaged a property in Bahamas in order to obtain loans, they executed a
guarantee for repayment of loan. These loans were also made available to their subsidiaries. In
reliance upon the parties’ belief that under the guarantee, As were bound to discharge any
indebtedness of the subsidiary in respect of the loan.
Held:
- The As’ claim was dismissed. Amalgamated knew that the guarantee did not include loans
given to ANPP but they allowed the bank to harbour under this mistake and kept quiet
- It was unconscionable to allow Amalgamated to take advantage of it nor is it fair to insist on
the strict interpretation of the original terms of the ctt when it would be inequitable to do so.
- Plea of estoppels applies It was unconscionable to go back on the representation
Conclusion:
The application of promissory estoppels is limited to defence as it can only be used as a
defence and not a cause of action.
It cannot be allowed to go back on assumption, court will give remedy
Promissory Estoppel = a shield and not a sword, even though its effects allow a person
to enforce his rights based on the assumption of the existence of those rights.
Another more simplified version maybe?

Amalgamated
T (a bank) agreed to lend money to ANPP ( a subsidiary of A). In the end, the loan was provided
through P (T’s subsidiary). This was part of a much broader set of arrangements under which T
provided finance to A secured by mortgages over properties owned by A. A gave a guarantee to
secure all monies it owed to T. The parties both believed that the guarantee extended to cover
the loan by P to ANPP (ie from the bank’s subsidiary to the guarantor’s subsidiary) though on a
strict interpretation of the guarantee it arguably did not cover the indebtedness to P. T and A
conducted their negotiations for the overall financing of A from time to time on the basis that
the guarantee covered the loan by P to ANPP.
A went into liquidation and the question was whether the cash realised from the sale of A’s
assets had to be applied partly to pay off the indebtedness to P.
Held:
The English Court of Appeal found in favour of T on the basis of estoppel by convention.
Principle from Lord Denning :
Although both parties to a contract are both under a common mistake as to the meaning or
effect of the contract and thereafter embark on a course of dealing based on that mistake
thereby replaced the original terms of the contract by a conventional basis on which they both
conduct their affairs, hence the original contract is replaced by the conventional basis. Either
party can sue or be sued upon it just as if it has been expressly agreed between them.
Principle from Brandon LJ :

This form of estoppel is founded, not on a representation of fact made by a representor and
believed by a representee, but on an agreed statement of facts the truth of which has been
assumed, by the convention of the parties, as the basis of a transaction into which they are
about to enter. When the parties have acted in the transaction on the agreed assumption that a
given statement of facts is to be assumed between them as true, then as regards that
transaction each will be estopped as against the other from questioning the truth of the
statement of facts so assumed.
In the case of (amalgamated) it talks about estoppel by convention Estoppel by convention in

English law (also known as estoppel by agreement) occurs where two parties negotiate or
operate a contract but make a mistake. If they share an assumption, belief, or understanding of
the contract's interpretation or legal effect, then they are bound by it
- They both knew the other had the same belief, and
- They both based their subsequent dealings on those beliefs.
Estoppel by convention is most commonly invoked if one party wishes to rely on pre-contract
negotiation as an aid to construction of the contract.
6.2.1 Effect of promissory estoppel

(a) The application of promissory estoppel is limited to a defence. It does not create a cause of
action where none existed before.
Cases
 Liew Ah Hock v Malayan Railway [1967] 1 MLJ 53
 Combe v Combe [1951] 2 KB 215
(b) Nevertheless, promissory estoppel may have the effect of enabling a person to insist on his
right based on the assumption by both parties, where without estoppel, that right would not
have existed.
Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1982]
QB 84 at 105
Amlagamated had mortgaged a property in Bahamas in order to obtain loans, they executed a
guarantee for repayment of loan. These loans were also made available to their subsidiaries. In
reliance upon the parties’ belief that under the guarantee, As were bound to discharge any
indebtedness of the subsidiary in respect of the loan.
Held:
- The As’ claim was dimissed. Amalgamated knew that the guarantee did not include loans given
to ANPP but they allowed the bank to harbour under this mistake and kept quiet
- It was unconscionable to allow Amalgamated to take advantage of it nor is it fair to insist on
the strict interpretation of the original terms of the ctt when it would be inequitable to do so.
- Plea of estoppels applies It was unconscionable to go back on the representation
Conclusion:
The application of promissory estoppels is limited to defence as it can only be used as a
defence and not a cause of action.
It cannot be allowed to go back on assumption, court will give remedy
Promissory Estoppel = a shield and not a sword, even though its effects allow a person
to enforce his rights based on the assumption of the existence of those rights.
 Cheng Hang Guan (Penang) SdnBhd&Ors v PerumahanFarlim[1993] 3 MLJ 352;

[1994] 1 AMR 201
6.3 Proprietory estoppel

- Can prevent an owner of an interest in property from asserting her or his rights against another
party whom he or she has allowed or encouraged to deal with that interest, or act in relation to
that property, as if the latter had rights to the property.
6.3.1 Categories of Proprietory Estoppel

- Traditionally, it was divided into two categories:
(i) Estoppel by Encouragement
 Where representor encouraged expenditure on the property by some
representation of benefit
(ii) Estoppel by Acquiescence
 Where the representor passively acquiescenced to the expenditure
Estoppel by Encouragement
- Where a person (X) placed reliance and was encouraged to act in a certain way which gave rise
to certain detriment as a result of that representation or encouragement by another (Z), it is
unjust for Z to deny that right, especially where X has expended money because of his reliance
on Z’s encouragement.
- Cheng Hang Guan v Perumahan Farlim (Penang) Sdn Bhd & Ors [1993] 3 MLJ 352
DF bought land from Khoo Kongsi – PF’s granddad had been allowed to farm land by Khoo
Kongsi and was told that they can could use the land for as long as they needed. It was held in
this case that there are 2 important elements for “encouragement“ to be established in
proprietary estoppels
(1) The reliance was created due to express/implied encouragement of another party.
(2) A form of detriment – not necessarily loss in money (had arisen)
Estoppel by Acquiescence
Dilwyn v Llewelyn (1862) 4 De GF & J 517
A father encouraged his son to build a house on his father’s land. A memorandum to transfer
the land to the son was signed but not sealed. In the father’s will, the land was left to another
but since the son had expended 14k on building the house with the father’s knowledge and
encouragement, the son could raise proprietary estoppel.
6.3.2 Elements of proprietary estoppel
Willmott v Barber
There are 5 elements before a proprietary estoppel can operate:
(1) PF must have made a mistake as to his legal rights
(2) PF must have done some act of reliance
(3) DF, the possessor of a legal right must know the existence of his own right which is
inconsistent with the right claimed by the PF
(4) DF must know of the PF’s mistaken belief
(5) DF must have encouraged the PF in his act of reliance
So in short: Representation, Reliance, Detriment, Unconscionability
 Teng Huan v Ang Swee Chuan [1992] 1 MLJ 393; Ramsden v Dyson (1865) LR 1 HL 129
 Inwards v Baker [1965] 2 QB 69
6.3.1.1 The elements of encouragement

(i) The reliance of the plaintiff is based on the encouragement of the other party.
 Cheng Hang Guan (supra)

 Boustead Trading SdnBhd v Arab Malaysian Merchant Bank (1995) 3 MLJ 331
(ii) The reliance gave rise to detriment

Detriment may take the form of expenditure, or even working as a house helper
without pay based on the representation and encouragement of another, or an
opportunity forgone in reliance of a promise.
 Cheng Hang Guan (supra)

 Pascoe v Turner [1979] 1 WLR 431
 Greaseley v Cooke [1980] 1 WLR 1306
 Jones v Jones [1977] 2 All ER 231
6.4 New interpretation of the doctrine of estoppel

 A broad doctrine of estoppels wherein promissory estoppel and proprietary estoppels is
fused
 Based on the doctrine of unconscionability
 There is no need to prove detriment, only need to prove justice has been achieved.
Boustead Trading S/B v Arab Malaysian Merchant Bank (1995) 3 MLJ 331
A bought goods from a company, Chemitrade on credit. Chemitrade then entered into a
factoring agreement with the R where the debts owed by A to Chemitrade would be assigned
to R. Chemitrade then passed the invoices of every transaction to R and R then stamped the
invoices with the indorsement that any objection was to be reported within 14 days of its
receipt. A did not object and paid for the invoices for 7 months. A later refused to pay for
certain invoices as they were stamped with certain remarks. R argued that they were stopped
from doing so as they did not oppose within 14 days.
Held:
A reasonable man in R’s position would be entitled to assume that A had agreed to the
imposition of 14 days limit, and the agreement was not due to the silence by not objecting, but
based on the fact that A had made payments on some invoices. Therefore, A should not be
allowed to question the validity of the indorsement after 7 months as it would be
unconscionable to do so.
Conclusion:
o The doctrine of estoppels is a flexible doctrine which can be used to ensure that justice
is done in various circumstances
o Although the doctrine may only be used as a shield and not a sword, the doctrine may
be used by both PF and DF
o There must be encouragement or representation and also, an act or reliance on such
encouragement
Note:
Boustead Trading seemed to be a representation by silence. Though silence ordinarily cannot amount
to a representation per se, the exception to this is when there is a duty to speak. If you fail to say
anything when you have an obligation to do so, your silence amounts to speech and a form of
acquiescence. Thus, you cannot thereafter deny a representation when you already acquiesced to a
certain outcome
.
 Legione v Hateley (1983) 152 CLR 406 ( clear and unequivocal representation)
 Waltons Stores (Intestate) Ltd v Maher (1988) 164 CLR 394

Waltons negotiated with Maher for the lease of property owned by Maher. The parties understood
Maher would demolish an existing building and erect a new one which Waltons would occupy.
Agreement was reached on terms and rent. Waltons' solicitors sent a draft lease to Maher's
solicitors in October and some changes were discussed. A revised lease was then sent to Waltons
by Maher. In November Maher informed Waltons that demolition had commenced and it was
therefore important to conclude the lease quickly. Later that month Waltons started to have
reservations about the lease and instructed its solicitors to 'go slow'. In January Maher commenced
building. Later that month, when approximately 40% of building work was completed, Waltons
informed Maher it did not wish to proceed. Maher brought action to enforce the agreement.
Held:
The majority held that, although formal contracts had not been exchanged, Maher was entitled to
assume the exchange was a mere formality. Maher could rely on promissory estoppel which
extends to representations or promises as to future conduct. In Australia promissory estoppel can
be used both as a 'sword and a shield'. It will apply to provide a promisee with a cause of action
where:
 Promisor makes a promise
 Promisor creates or encourages an assumption that a contract will come into existence or a
promise will be performed
 Promisee relies on this to his/her detriment; and
 It is unconscionable, having regard to the promisor's conduct, for the promisor to ignore the
promise.
In those circumstances Waltons was under obligation to communicate with Maher within
reasonable time and certainty when it heard of demolition. It did not and its inaction in the
circumstances constituted clear encouragement or inducement for Maher to continue. As a result,
Waltons was estopped from retreating from its implied promise to complete.
The High Court in Australia modified the doctrine of estoppel in three important respects:
(a) abandoned the requirement that the parties be in a pre-existing legal relationship
(b) permitted promissory estoppels to be used as a cuase of action (a sword) rather than merely a
defence (a shield)
(c) the criteria upon which the court exercised its jurisdiction was unconscionability
 Boustead Trading SdnBhd v Arab Malaysian Merchant Bank (1995) 3 MLJ 331
(flexibility of the doctrine) – see decision of Gopal Sri Ram JCA.
The doctrine of estoppel is a flexible doctrine which can be used to ensure that justice is done in
various circumstances. Although the doctrine may only be used as a shield and not a sword,
the doctrine may be used by both the plaintiff as well as the defendant.
 Chor Phaik Har & 2 Ors v Choong Lye Hock Estates Sdn Bhd & Ors [1996] 2 MLJ 206: ( Boustead
Trading (1985) Sdn Bhd v AMMB Bank and Habib Bank Ltd v Habib Bank AG Zurich [1981] 2 ALL
ER 650 followed)
Held inter alia:

(1) It is settled beyond argument that estoppel is a flexible doctrine by which justice is
done according to the facts of a particular case. It was, therefore, erroneous to apply
the doctrine to the facts of a case as though it were some form of legal straitjacket.
(2) Although decided cases speak of some of the features of the doctrine, such as a
declaration or a representation and an inducement, these were but statements made
in the context of the facts and circumstances of the particular case in which they
appear. At the end of the day, the court has to answer the question: is it just that this
particular litigant should, in the light of his conduct, succeed in the action given the
peculiar facts of the case? If the answer to that question is in the affirmative, then the
doctrine does not apply; if it is in the negative, then it does (see p 216H); Boustead
Trading (1985) SdnBhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 and
Habib Bank Ltd v Habib Bank AG Zurich [1981] 2 All ER 650 followed
(3) All that a representee need do is to place sufficient material before a court from which
an inference may fairly be drawn that he was influenced by his opponent's actings …. It
is sufficient that 'his conduct was so influenced by the encouragement or
representation ... that it would be unconscionable for the representor thereafter to
enforce his strict legal rights' (per Robert Goff J in Amalgamated Investment [1982] 1
QB 84 at p 105).
(4) It is essentially the application of a rule by which justice is done where the
circumstances of the conduct and behaviour of the party to an action are such that it
would be wholly inequitable that he should be entitled to succeed in the proceeding.'
6.5 Fiduciary Duties in Relationships Between Governments and Its Citizens-
Sagong Tasi v Kerajaan Negeri Selangor [2002] 2 MLJ 591
Kerajaan Negeri Selangor v Sagong Tasi [2005] 6 MLJ 289
Haida Nations v British Columbia (Minister of Forests [2004] 3 SCR 50
Taku River Tlingit First nation v British Columbia (Project Assessment Director)2004 3 SCR 550
Read
Bulan, R, “The Detriment Element and The Reinterpretation of the Equitable Estoppel Doctrine
in Malaysia” (1999) 26 JMCL 49.
6.6 Australian Position

- A claim for estoppel will fail if detriment cannot be demonstrated. Estoppel is said to have 3
competing purposes:
1. To provide protection against detrimental reliance
2. To prevent unconscionable conduct
3. To make good expectations
The Commonwealth of Australia v Vervayen

The central element of the doctrine of estoppels is there must be proportionality between the
remedy and the detriment which is its purpose to avoid.
*Emphasis on detriment and unconscionability
Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

In this case, the court allowed for claims on a particular transaction without written contract. P
which was a chain of supermarkets entere into negotiation, to lease a building from D. D tore
down the building for P to develop. Ctt was rushed through. After 6 months, P doesn’t want to
lease the building. New building has been built under D’s specifications. D said no written
contract so no specific performance.
Held:
The High Court had modified the doctrine of estoppels in 3 main aspects:
(1) Abandoned the requirement that parties be in a pre-existing legal relationship
(2) It permitted promissory estoppels to be used as a cause of action (a sword) rather than
merely as a defence (a shield); and
(3) It substituted “unconscionability” for “inequity” as the criterion upon which the court
exercises its jurisdiction.
Conclusion:
- Unified both promissory and proprietary estoppels
- Flexibility – the doctrine is applied by the court to achieve justice rather than proving
traditional elements of representation, reliance and detriment
- Both parties to use it as a shield or sword
Chapter 7: Fiduciary Relationship
7.0 Introduction
- Primary basis for equity to expand its reach to prevent unconscionable conduct
- A duty which opens the spectrum for equitable remedies which may otherwise be unavailable at
common law
- Its existence is determined according to the nature and scope of relationship
English v Dedham Vale Properties Ltd [1978] 1 All ER 382
Tengku Abdullah ibni Sultan Abu Bakarv MohdLatiff bin Shah Mohd [1996] 2 MLJ 265
H: Equity is not a set of strict rules for determining whether what amounts to FR.
- “The category of fiduciary relationships are not closed”

To be dealt with on a case-to-case basis
- Securities Exchange Commission v Chenery Corp

i. To whom is he a fiduciary? [element/category]
ii. What obligations does he owe? [fiduciary duties]
iii. In what respect has he failed to discharge these obligations? [breach/defence]
iv. What are the consequences of the deviation from his duty? ]relief/remedy]
- The law on fiduciaries has been a primary basis of by which equity has expanded the reach of
equity’s concern with unconscionable conduct.
- A person may raise breach of fiduciary obligation, and a breach of a fiduciary duty opens the
spectrum for equitable remedies which may otherwise be unavailable at common law.
- There is no accepted legal definition of a fiduciary relationship, nor are there factors giving
rise to fiduciary duty anywhere exhaustively or rigidly defined.
- The existence of a fiduciary relationship is determined according to the nature and scope of
the relationship between the parties, thus expanding equity’s jurisprudence according to the
facts of each case.
7.1.1 Elements of the fiduciary relationship

7.1.1 A relationship based on trust and confidence in another.
Reading v The King [1949] 2 KB 232 at 236, Asquith LJ
“a ‘fiduciary relation’ exists (a) whenever the plaintiff entrusts to the
defendant property, including intangible property as, for instance,
confidential information, and relies on the defendant to deal with such
property for the benefit of the plaintiff or for purposes authorised by him,
and not otherwise ... and (b) whenever the plaintiff entrusts to the
defendant a job to be performed, for instance, the negotiation of a contract
on his behalf or for his benefit, and relies on the defendant to procure for the
plaintiff the best terms available ...”
Court held: That there are 2 conditions

(1) PF entrusts DF property and relies on DF to deal with it for the benefit of PF
or for purposes authorized by him
(2) PF entrusts to DF a job to be performed on his behalf or for his benefit, and
relies on DF to procure for PF the best terms available
7.1.2 Relationship exhibiting disadvantage, vulnerability and unequal bargaining power.
Hospital Products Ltd v United States Surgical Corporation &Ors (1984) 156 CLR 41 at
142, Dawson J
“the notion underlying all the cases of fiduciary obligation is that inherent
in the nature of the relationship itself is the position of disadvantage or
vulnerability on the part of one of the parties which causes him to place
reliance upon the other and requires the protection of equity in acting upon
the conscience of that other.”
7.1.3 Relationship where one person undertakes to act in the interests of another
Hospital Products Ltd v United States Surgical Corporation &Ors (1984) 156 CLR 41
per Mason J at 96-97
Frame v Smith (1987) 42 DLR (4th) 81.

Held:
3 general characteristics of a fiduciary relationship:
i. Fiduciary has scope for exercise of some discretion or power
ii. Fiduciary can unilaterally exercise that power so as to affect beneficiary’s interest
iii. Beneficiary is peculiarly vulnerable to/at the mercy of the fiduciary
See the definition given by Wilson Jat 99.
Note
Where one party stands in a position of trust and confidence, the court would intervene in
circumstances where the person occupying the position of trust and confidence took
improper advantage of the position for the benefit of herself or himself or a third party.
7.2 Fiduciary Duties

(a) No person in a fiduciary position may use that position for private advantage or for his
own benefit.
Keech v Sandford [1558-1774] All ER Rep 230
DF was entrusted for a lease inherited by a minor. The lease expired. DF was informed by
landlord that he did not want the minor to have the renewed lease, but was happy to give
the lease to DF himself. DF obtained the lease.
Held:
A strict duty is imposed upon trustee not to put oneself in a position of any possibility of
conflict of interest.
“...though I do not say there is a fraud in this case, yet [the trustee] should rather have let it
run out, than to have had the lease to himself.”
Bray v Ford (1896) AC 44, 51-52
(b) No person in a fiduciary position may enter into any engagement in which his personal
interests conflicts or may possibly conflict with his duty.
Boardman v Phipps [1967] 2 AC 46 at 123
In this case, the appellants consisted of a trustee of a will trust and his solicitor. The
respondents were the beneficiaries of the will trust. The will itself was created in favour of
a certain company. The appellants discovered that the company was in losses so they
decided a takeover to the point of using confidential information for said purpose. This
confidential information obtained was during an AGM of which the beneficiaries were not
informed. Ultimately, the company was turned around to quite a profitable venture using
that information. However, the beneficiaries sued the appellants for a breach of fiduciary
relationship and account for profits.
Held:
- There was indeed a fiduciary relationship in part of the solicitor to the beneficiaries as
he was the solicitor to the trust. The underlying problem here is that though the
company ultimately became profitable, the appellants cannot be in a position of
conflict i.e. between in his interest (making profits) and his duty to the principal (the
beneficiaries). Thus the solicitor was held to be in breach of that duty.
- A fiduciary is liable to his or her principal for profits derived by reason of either or both
the opportunity and knowledge acquired through the fiduciary position
Keech v Sandford [1558-1774] All ER Rep 230
(c) Malaysian position: adopts both rules

Soon Seng Palm Oil Mill (Gemas) S/B v Jang Kim Luang @ Yeo Kim Luang
DF was director of a department in PF company. She was actively involved in the invention
of a shredder that can shred fiber. She misappropriated the invention and used it for her
own use.
Held:
An employee of a company was under the fiduciary obligation to:
(i) Act in good faith in the best interest of the company
(ii) Exercise her powers to achieve corporate purposes, not collateral purpose; and
(iii) Not place herself in a position of conflict of interest.
7.3Relationships giving rise to fiduciary obligations

Whether a fiduciary relationship exists in any given relationship is determined according to the
nature and scope of the relationship between the parties.
Cases
 Avel Consultants SdnBhd&Anor v MohdZainYusof& 2 Ors [1985] 2 MLJ 209
 Perdana Merchant Bankers Bhd v Abdul Rahim bin Abdul Hamid [2001] 2 MLJ 711, at
713
(a) Trustee and beneficiary (the archtypal fiduciary relationship)

Keech v Sandford [1558-1774] All ER Rep 230; compare with Re Biss [1903] 2 Ch 40
(above)
Chan v Zacharia (1984) 53 ALR 417

There was a medical partnership between two doctors. Premise was leased by DF. Renewal of
lease was refused by partner, so DF obtained the lease for himself and operated medical
practise on his behalf.
Held:
DF breached his fiduciary duty as he had acted in his own personal interest.
(b) Director and company
Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134;
DF director made profit by buying and selling the shares of the company
Held:
Director has a fiduciary duty not to make personal profit from the position, even in the absence
of fraud, and bad faith.
“The liability arises from the mere fact of a profit having in the stated circumstances been
made”
Industrial Development Consultants Ltd v Cooley [1972] 2 All ER 162;
Avel Consultants Sdn Bhd v Mohamed Zain Yusof & Ors[1985] 2 MLJ 209.
Salleh Abbas LP,
“The law is clear that a director of a company is in fiduciary relationship with his company and
as such is precluded from acting in a manner which will bring his personal interest into conflict
with that of his company”
BBMB v Lorraine Esme Osman [1990] 3 MLJ 481 compared with Peso Silvermines Ltd v Cropper
(1966) 58 DLR (2d) 1; Queensland Mines Ltd v Hudson (1978) 18 ALR 1.
Pharmmalaysia Bhd v Dinesh Kumar Jashbai Nagjibha Patel [2004] 7 CLJ 465.
The Board of Trustees of the Sabah Foundation &Ors v Datuk Syed Kechik bin Syed Mohamed
&Anor [1999] 6 MLJ 497, per Ian Chin J, at 533.
Canadian Aero ServiceLtd v O’Malley (1973) 40 DLR (3d) 371 at 384:

The rationale for the fiduciary obligation is stated by Laskin,
Strict application [of fiduciary obligations] against directors and senior

management officials is simply a recognition of the degree of control which
their positions give them in corporate operations, a control which rises
above their accountability to owning shareholders and which comes under
some scrutiny at annual general meetings or at special meetings. It is a
necessary supplement in the public interest, of statutory regulation and
accountability which themselves are, at one and the same time an
acknowledgement of the importance of the corporation in the life of the
community and the need to compel obedience by it and by its promoters,
directors and managers to norms of exemplary behaviour.
(c) Promoter of a company or club

A fiduciary relationship arises where a person relies on another to negotiate a contract on his
behalf and depends on the other to get the best terms for him.
Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 at 1236

[Promoters] ... “have their hands in the creation and moulding of the company; they have the
power of defining how, and when and in what shape, and under what supervision, it shall start
into existence and begin to act as a trading corporation.
Tengku Abdullah ibni Sultan Abu Bakar v Mohd Latiff bin Shah Mohd[1996] 2 MLJ 265
The appellants in this case were promoters of a then soon-to-be-incorporated recreational
club. Before the actual club was incorporated the promoters opened the club to some 200 over
members who were deemed as provisional-members. The promoters then convened an EGM
and authorized the purchase of shares of another company for a price of RM47 mil. The
provisional-members were not invited to nor informed of that EGM. Subsequently, the
provisional-members found out that the shares prices were higher than the given value due to
some extra costs. There was also an issue since the promoters were also the share-holders of
the company of whose shares were being bought (so of course they would have an interest in
getting the highest price and profit possible). The provisional-members sued the promoters for
a breach of fiduciary duty and won. Hence the promoters appealed arguing that they owed no
fiduciary duty to the provisional-members not fiduciary duty as they were not a class of
persons to whom such duty could be owed.
Held:
- The Court held that the provisional-members were in fact a class of persons to whom a
fiduciary relationship could be owed. In this case, the promoters were in such a position and
had the duty to disclose that pertinent piece of information to the p-ms.
- The fact that they did not do so meant that they were in breach of their fiduciary
relationship to the respondents aka the p-ms. Hence the appeal was dismissed as the Court
upheld the decision of the lower Court.
- Fiduciary relationship exists between promoter and the club, because the settled elements
of a fiduciary relationship were present.
(d) Solicitor and Clients

- The solicitor-client relationship carries with it obligations to act with absolute fairness and
openness towards the client.
- A solicitor must not, without the informed consent of the client, stand to make a profit or
receive any benefit from a transaction which he is retained to conduct, other than professional
remuneration, without the consent of his client
Boardman v Phipps [1967] 2 AC 46 (House of Lords)

Solicitor received the opportunity to profit while acting in their fiduciary capacity and could
only escape liability for their actions through informed consent of the beneficiaries. He must
account for the profits made. Nonetheless, since he was acting honestly, he was entitled to
payment on a liberal scale for work and skill displayed.
“The defendants must account for the profits made; but by reason of having
acted bona fide, they were entitled to payment on a liberal scale for the work
and skill they had displayed.”
- Although they had acted honestly, they were both fiduciaries: Boardman as solicitor and
Phipps as agent for the trust - both received the opportunity to profit while acting in their
fiduciary capacity and could only escape liability for their actions through informed consent of
the beneficiaries.”
Letchemy Arumugam v Annamalay [1982] 2 MLJ 198

If the other party is unrepresented, solicitor of opposite party has a duty to explain to the other
party, so neither party has any unfair advantage. If there is a conflict of interest, solicitor must
and should advise the party to be separately represented.
Yong & Co v Wee Hood Teck Development Corp [1984] 2 MLJ 39
Datuk Jaginder Singh &Ors v Tara Rajaratnam [1986] 1 MLJ 105
(e) Other fiduciary relationships

The jurisprudence applied as between trustee and beneficiary strict senso has been expanded
to include other similar relationships called fiduciary relationships. This includes:
 Partners in a partnership or joint ventures
Reading v AG
A British staff sergeant received bribes in return for allowing people to smugge
contraband goods past civilian check post.
Held:
Sergeant was in a fiduciary relationship with the Crown and was under the duty to
account for profit wrongfully made.
 Agent and principal  Parent/ guardian and child

 Stockbroker and client  Doctor and patient
Note
A fiduciary relationship gives rise to obligations even in the absence of a contract at law.
7.4 Defences that may be raised by a fiduciary

(a) Consent or authorisation given to the fiduciary
Queensland Mines v Hudson (1978) 18 ALR 1
DF director resigned from PF company after it renounced the mining project. DF obtained a
mining license using PF’s good name and did a mining business on his own.
Held:
While the opportunity arose from the use of his position, he was not liable:
- The board had renounced the project – took venture outside the scope of fiduciary duties
- The board has full knowledge that DF was taking over the venture – taken to have
consented to his activities
Shanghai Hall Ltd v Chong Mun Foo [1967] 1 MLJ 254

PF company conducts business of restaurant and bar. DF director promoted a rival company
conducting similar business on the floor immediately below PF premise.
Held:
The articles of association does not prevent a plaintiff from becoming a director of a rival
company
Avel Consultants SdnBhd&Anor v MohdZainYusof& 2 Ors [1985] 2 MLJ 209; [1996] 2 AMR 1996
(b) Estoppel
(see estoppel, Part I, Ch 5)
7.5 Relief or remedies that the courts may grant

(a) Damages
(b) Account for profit wrongfully obtained

In Hospital Products Ltd (supra) Mason J at 107 said:
The principle accepted by the courts below, is that the fiduciary cannot be
permitted to retain a profit or benefit which he has obtained by reason of his
breach of fiduciary duty. (Consul Development Pty Ltd v DPC Estate Pty Ltd
(1975) 132 CLR 373 at p 395, Queensland Mines Ltd v Hudson (1978) 52 ALJR
399 at p 401). A fiduciary is liable to account for a profit or benefit if it was
obtained (1) in circumstances where there was a conflict, or possible conflict of
interest and duty, or (2) by reason of the fiduciary position or by reason of the
fiduciary taking advantage of opportunity or knowledge which he denied in
consequence of his occupation of the fiduciary position.
Queensland Mines v Hudson (1978) 18 ALR 1

Held:
The fiduciary is bound to account to the company for profits made if the opportunity to make
such profit arises from the use of his position as the fiduciary without informed consent by the
company.
(c) Injunction
See Part I: Ch 7
(d) Tracing into the hands of the fiduciary

Tracing is used where the property is identifiable in the hands of a trustee or another fiduciary.
The property or money from the sale may be traced except for bona fide fie purchaser for
value without notice. (See Part I: Ch 9.)
Re Diplock [1948] 2 All ER 318

Chase Manhattan NA v Israel-British Bank (London) Ltd [1981] Ch 105
Agip (Africa) Ltd v Jackson [1990] Ch 265, [1992] 4 All ER 385, per Millet J at 289.
Chapter 8: Tracing
(1) DF retains original property or exchanges it with another
(2) Where DF misaaplies Claimant’s property and mixes it with DF’s own property
(3) Wrongdoer peripates part of the mixed fund
(4) Wrongdoer has transferred Claimant’s property to a 3rd party
8.0 Introduction
- Where a trustee breaches his or her fiduciary duty by dealing with trust property as if it were his
or her own, he or she will be personally liable to the trust for any gain of loss there from.
- But if the trustee is insolvent, the beneficiaries may opt to pursue a claim against the property
that has been misused rather than a personal action against a trustee.
- Comes in when beneficiaries opt to pursue a claim against the property that has been misused
by the trustees [against the world] instead of instituting a claim against the trustee personally
[in personam]
- **It is NOT a remedy. Just a means of how one can identify their property of which will be his
remedy
Foskett v McKeown
- Tracing allows a claimant to identify and follow property into the hands of a 3rd party where the
property has been mixed or the form of the property has changed.
- The traceable interest binds everyone who takes the property or its traceable proceeds except a
BFPV
- Just a preliminary process for the Claimant to identify the traceable proceeds of the original
assets and base his claim on it
- It does not establish his claim
[Tracing: The process of identifying a new asset as the substitute for the old;
Following: The process of following the same asset as it moves from hand to hand]
8.1 Tracing at Common Law

At common law, tracing of property is allowed in a number of situations:
(a) A pre-existing common law cause of action
(b) Clear succession to the property followed
(c) That property remained identifiable
Re Diplock [1948] Ch 465

Diplock left some money on trust in his will for charity. His executor was given absolute discretion to
decide on the distribution of the gift, which he distributed to a number of welfare homes. When the
will was found to be invalid, the heirs of Diplock’s estate brought an action for the return of the gifts by
the welfare institutions. (Trust fund mistakenly distributed for charitable purposes)
Issue: Can they follow the money into the hands of the recipients of the gift?
Held:
- Lord Greene MR held that common law takes a materialistic approach to mixed and looks at the
physical identity of the property.
- CL tracing can only appreciate the physical identity of the property, not the components within
- Can still identify the money which becomes another form [property], provided that the fund is
not mixed with others.
*CL tracing ceases when the thing/proceeds from its sale is intermixed with other things, thus losing its
identity.
Puma Australia Pty Ltd v Sportsman’s Australia [1994] 2 Qd R 159

Difficult to be applied nowadays as the subject to be traced is often mixed with other properties.
Per MacPherson ACJ at 162-163.
What is clear is that the right to trace at law ceases when the thing, or more often the
proceeds of its sale in the form of money, is intermixed with other things or money so as
to lose its identity … Once that point is reached, the common law, acknowledging that
‘money has no earmark’ , abandons the pursuit of equity.
Agip v Jackson
- CL tracing is not subject to the requirement of fiduciary relationship
- The liability depends upon receipt of P’s money by D – one of strict liability [dishonesty or lack of
inquiry by D recipient are irrelevant] – the fact that D did not retain it is irrelevant
- P must prove the money received by D was P’s money
*The money was paid by telegraphic transfer, through clearing banks, thus a common law
tracing claim failed. Why? Because it could not be established that the money received by D is
P’s money
(electronic transfer differs from cheques – through the former, steam of electros passes – true,
they’re particles and presumably physical objects but in no way it can be associated with P’s
money)
8.2 Tracing of Property in Equity requires

(a) That there be a Fiduciary Relationship (and a breach of that relationship)
- Relationship of a trustee and beneficiary
- In fraud cases, not difficult to prove relationship as it usually involves the company’s agent
- Cases:
Sinclair v Brougham (1914) AC 398 HC

A banking business set up by a building society went bust as it was found ultra vires – a sum
was left – its legal title belongs to the shareholders – issue between the shareholders and the
depositors over the sum
Held:
o Best solution available was parri passu whereby both sides were to stand equally for a
claim according to their respective payment
o Equitable tracing is only allowed if there exists a fiduciary relationship
o The court held that there was a fiduciary obligation by the director to the depositors.
Re Diplock [1948] 1 Ch 465

- There must be a breach of the trust or fiduciary obligation first before equitable tracing can be
done (recognized/affirmed above principle)
- The principle can operate against the fiduciary agent and also volunteers who receive the
interest as a result of the breach of trust by the fiduciary agent (continuing liability of breach of
trust)
**Re Diplock is freaking important (so here is another simplified version)
Diplock left some money on trust in his will for charity. His executor was given absolute
discretion to decide on the distribution of the gift, which he distributed to a number of welfare
homes. When the will was found to be invalid (on ground -not wholly and exclusively charitable-
a must for charities), the heirs of Diplock’s estate brought an action for the return of the gifts by
the welfare institutions. Some of the monies were used to pay loans and for improvements or
alteration of asset of charities. So, can the beneficiaries trace and claim back the money?
Held:
Where money not mixed with charities monies, charities hold in trust for true owner as the
application of the remedy should not result in injustice. In addition, claim by next of kin to trace
money into charities can succeed notwithstanding that the charities had mixed the money with
own monies. However, the charities are entitled to assert their own claim to mixed funds so that
charities and claimant would share pari passu in the mixed fund.
Note the Court also mentioned a few important details:

- In common law tracing: in order for you to trace the money, the property must be
physically identifiable.
- Lord Greene MR held that common law takes a materialistic approach to mixed funds
and looks at the physical identity of the property.
- The Court also referred to Sinclair v Brougham in affirming that to justify a claim in
equitable tracing, there must be a fiduciary relationship between the parties.
Agip (Africa) Ltd v Jackson[1990] Ch 265

P’s company chief accountant fraudulently altered payment order to B company specifically set
up for the purpose.
Held:
Who is a fiduciary? Someone who assumes the position that gives him control of the fund or
enables him to misapply them
o The chief accountant stood in a fiduciary relationship with Agip as he was entrusted
with the signed drafts/orders upon the bank.
Strangers (bank and D) in this can be made liable as a constructive trustee in equity:
1. Knowing receipt of or dealing with trust property
2. Knowing assistance, even though he does not himself receive the trust property
Chase Manhattan NA v Israel-British Bank (London) Ltd [1981] 1 Ch 105

P mistakenly paid a sum twice to D – upon D’s liquidation – P was able to trace the money
mistakenly paid into the liquidator’s hand.
Held:
- FR need not be there initially – it is sufficient that FR arose as a result of an occasion
- In this case, no FR initially between P & D, FR arose upon the mistaken payment
- A person who pays money to another under a factual mistake retains an equitable property in
it and the conscience of that other is subjected to a fiduciary duty to respect his proprietary
right.
- It is not necessary that it should have been the subject of fiduciary obligation before it got into
wrong hands.
El Ajou v Dollar Land Holding [1993] 3 All ER 717
F in breach of trust, transferred the money to a company to which he was a chairman. Issue
was whether the company is liable as a constructive trustee
Held:
To establish knowing receipt:
(i) The disposal of P’s asset is in breach of fiduciary duty
(ii) It is traceable the assets received by D are the assets of P
(iii) D knows that the assets he received is a result of a breach of FD
- F’s knowledge about the fraud could be attributed to the company, thus the claim to enforce a
constructive trust against the company on the basis of knowing receipt succeeded.
(b) There must be Continued Existence of the Property

Re Diplock (supra)
- There must be continued existence of the money, be it in the form of a separate fund, mixed
fund, property acquired by the fund/actual or notional – to enable equity to grant specific relief
- Otherwise, equity is as helpless as common law
- Equity can do nothing if the fund, mixed or unmixed, is spent upon a dinner because it deals
only with specific relief, not damages.
- The alternative would be CL
(c) Property must be identifiable (but this is given a liberal interpretation)

- Property that is mixed might still be followed into the hands of another
- Re Hallett’s Estate (1880) 13 Ch D 696
o If the property is bought exclusively with trust fund:
Beneficiary can choose whether to take the property if it is identifiable or to have a
charge on the property for the amount of the trust money
Ie: trustee lent the trust fund to A on a bond/promissory note – beneficiary can take the
bond/promissory note or impose a charge o them for the amount of trust money
o If Mixed fund (trust fund + other people’s fund (ie trustee’s own money)):
Beneficiary can only impose a charge on the property for the trust money
Ie. Trustee lends the mixed fund to A on a bond/promissory note – beneficiary have to
charge for the amount of the trust money on the bond/promissory note
o Where money is withdrawn from the mixed fund and dissipated, it is presumed that the
fiduciary’s money will be withdrawn first
Trustee is deemed to have spent his own money first
- Re Diplock (above) - Lord Green MR at 520

Equity adopted a more metaphysical approach. It found no difficulty in regarding a composite
fund as an amalgam constituted by the mixture of two or more funds each of which could be
regarded as having for certain purposes, a continued separate existence. Putting it in another
way, equity regarded the amalgam as capable, in proper circumstances, of being resolved into
its component parts … it was the metaphysical approach of equity coupled with and encouraged
by the far reaching remedy of a declaration of charge that enabled equity to identify money in a
mixed fund.
(d) Where DF mixes the monies belonging to two or more parties who are innocent and dissipates
the money or invests or buys property with the money
Re Oatway [1903] 2 Ch 356

A trustee purchased shares with money from a mixed fund and then dissipated the remaining
amount.
- GR: Re Hallet
- Exception: If the trustee purchases property from a bank account containing his own money and
trust funds and then dissipates the rest of the money in the account – the beneficiaries can
claim the property purchased as against the trustee
- In this case, the trust property should be traced into the share – overturn the presumption in Re
Hallet (that trustee uses his own money first)
- D cannot maintain the investment represents his own money alone
(e) Where the DF transfers property of monies to a 3rd party

UMBC v Aluminex (M) Sdn Bhd [1993] 3 MLJ 587
UMBC granted a loan facility to A to purchase glass for its business (being a sub-contractor).
The payment in advance was made to the glass supplier. As a security, A assigned all the
benefits accrued to A under the sub-contract to UMBC.
Held:
Although the legal ownership to the glass has been transferred to A, the glass is still subject to
an equitable charge for the benefit of UMBC.
8.3 Relief through Tracing

(a) An order to restore the monies that have not been mixed (where the DF holds the original
property)
(b) Order or declaration of a charge over the mixed funds or property
If there has been a wrong how do you find remedy through tracing?
(1) Court can make you open account
(2) Court can declare on property
El Ajou v DollarLand Holdings No 2 [1995] 2 All ER 221, 223
Re Hallett’s Estate (1880) 13 Ch D 696, Sir George Jessel MR:
The beneficial owner has a right to elect either to take the property
purchased, or to hold it as a security for the amount of the trust money laid
out in the purchase; or as we generally express it, he is entitled at his
election either to take the property, or have a charge on the property for
the amount of the trust money.
8.4 Mixing of Trust Moneys with Personal Money of a Trustee – The Tracing Steps
8.4.1 Equity presumes that the trustee uses his personal funds first, so that any amount
remaining is trust monies
Re Hallett’s Estate (1880) 13 Ch D 696
The trustee, a solicitor, mixed moneys held on trust for a client with his own money. The
trustee subsequently died insolvent. The client was allowed to trace her money into the bank
account and claim the balance remaining as trust moneys thereby removing those moneys
from the pool to be distributed among the trustees general body of creditors.
- It cannot be argued that the money spent is the beneficiary’s and that the remaining balance is
the trustee’s
- In this case the beneficiary is entitled to priority over the remaining balance as against the
trustee’s creditors
- Rule: Trustee is deemed to have spent his own money first
8.4.2 Equity limits the beneficiary’s claim to the lowest balance in the account between the date
of the wrongful deposit and the date the claim was made unless there is evidence of the
trustee’s intention to restore the funds in the depleted account
- GR:
o Assuming that the mixed fund (non-claimant + claimant) has been exhausted; if non-
claimant’s or fiduciary money is being added to the mixed fund, claimant cannot trace
into the mixed fund.
o Where after unlawful spending, a sum is still left in the mixed fund, non-claimant or
fiduciary’s money is being added into the mixed fund, C cannot trace to a higher
amount than the initial sum (lowest intermediate balance)
- Exception: Unless there is evidence of the trustee’s intention to restore the funds in the
depleted account.
- Practicality: If there have been many payments in and out of a mixed fund – many innocent
parties are involved, the court will abandon the strict LIB rule and apply proportionate sharing
rule of the surviving fund.
- Cases:
Roscoe (Bolton) v Winder [1915] 1 Ch 62

D, as a fiduciary, misappropriated $455 of the company’s money. After the misappropriation
and dissipation, only $25 was left. Before it was mixed with D’s own money, and the balance
became $358.
Held:
o C could only trace through to only $25
o C had no equitable right to subsequent deposit by the fiduciary unless there is
intention to restore the moneys that was wrongly used
Re Goldcorp Exchange Ltd [1995] 1 AC 74

Company W held some bullion in trust for claimants – Goldcorp, running a similar business
then took over the trust. G misappropriated C’s bullion by mixing it with its own, removing
bullion from the mixed stock, and adding more bullion to it without intending to replace the C’s
bullion. In this situation, Cs were entitled to the LIB of bullion. Can the claimants impose an
equitable lien on other bullions and assets of the company?
Held:
o No, C’s other bullion was dissipated and did not exist in any form – the company’s
assets were not bought with C’s bullion
o It would be unjust – G’s customers and creditors have a claim too – in any case, C
should have gone after where C’s other bullion was misappropriated.
Kensington v Liggett [1994] 2 NZLR 385

8.4.3 The principle is not restricted to money – may apply to other property
Re Hallet’s Estate at 338-339
Equities are not defeated if a trustee mixes trust moneys with his own moneys and
with the mixture purchases a grey horse and a black horse, or a grey horse alone. In
such a case equity imposes a charge on the two horses or the one horse. But where
it is possible to give effect to the rights of a cestuique trust by simply taking out so
much money or so many bonds or so many shares, the cestuique trust may elect
whether he will take property in specie out of the mass or have a charge on the
mass..[t]hat distinction is well illustrated by the contrast between the case,
instanced above, where a trustee has mixed trust moneys with his own and bought
a horse, and the case where he has mixed trust bonds with bonds of his own. Yet a
horse is an ‘indistinguishable mass’ in almost the opposite sense. The horse is an
‘indistinguishable mass’ in the sense that it is no practicable to attribute one part of
him to the trust fund and another part of him to the trustee’s own funds. The bonds
are an ‘undistinguishable mass’ in the sense that there is no practical reason for
differentiating one bond from another and it is quite possible to take out so many
bonds as will suffice to make a good trust fund. The real distinction which equity
draws is between the case where it is, and the case where it is not; practicable to
give effect to the rights of the cestuique trust by approaching to him a specific
severable part of the available properly.
- If the mixed fund is used to buy a property, the beneficiary can either take and sever a
proportionate amount from the property or impose a charge over the property for
trust money
- Depends on practicality – horse (indistinguishable), egg and a dozen bullion
(distinguishable)
8.4.4 Property must be in Existence

- Whether the property to be traced is money, shares, or other property, the property must
be in existence to permit tracing.
- The right to trace ends when the property is dissipated.
- For instance, equitable tracing cannot be pursued through an overdrawn (and therefore,
non-existent) bank account.
- Cases:
Re Diplock [1948] Ch 465
Is the money from mixed funds used by some of the charities to improve or erect new
buildings traceable?
Held:
The building work might not have improved the value of the property. Where a building
has not been objectively improved, there is not traceable product and the money should
instead be treated as dissipated.
Bishopsgate Investment Management Ltd v Homan [1994] 3 WLR 1270

A trust fund as pension was misappropriated and transferred by the boss into the
company’s overdrawn account. Can C impose a charge over the company’s asset for the
trust money appropriated and thus acquiring priority over the company’s unsecured
creditors?
Held:
o No
o Money paid into an overdrawn account ceases to be traceable and is deemed to be
exhausted
o An overdrawn bank account constitutes a debt owed by its customer to the bank.
The company’s overdrawn account was a debt owed by it to the bank.
o Impossible that C could trace the misappropriated money to the company’s
present assets
Re Goldcorp
Purchased money could not be traced because it had been paid into an overdrawn account
and thus ceased to exist.
8.4.5 Increase in Value of Property Traced

- Trustees must account to the beneficiaries for any profit made from the trust fund whether
by breach of trust or in the ordinary course of management of the trust.
- Cases:
Re Tilley’s Will Trust [1967] 1 Ch 1179
A mother mixed a trust fund belonging to her daughter and son with her private funds and
purchased a house. At the mom’s death, her estate was worth 94k pounds. Issue was
whether the daughter and son were entitled to a proportionate share of the value of the
property, or limited to the initial 2,237 pounds?
Held:
o GR: if property bought with the mixed fund has increased in value, a beneficiary can
claim a proportionate share
o Exception: unless the trustee intended to use only her own money or overdraft
facilities to make the purchase.
o In this case, the mother made an overdraft facility, the trust money was only applied
to reduce the overdraft.
o Hence, beneficiaries were only entitled to charge the property for the trust fund.

The trustee made an investment with a sum from a bank account containing mixed fund and
the investment remains in the trustee’s name with the rest of the money in the account
being dissipated:
o He cannot maintain that the investment is made with his money alone and what has
been spent is no longer traceable
o Beneficiary claims whatever may be left against the trustee
o In this case, there is no balance left, the only thing left was the investment which
represents parts of the mixed fund
o He is entitled to impose a charge on the investment for the trust fund and profits in
proportion to his contribution
Per Joyce J:
When any of the money drawn out has been invested and the investment
remains in the name or under the control of the trustee, the rest of the
balance having been afterwards dissipated by him, he cannot maintain that
the investment which remains represents his own money alone and that what
has been spent and can no longer be traced and recovered was the money
belonging to the trust.
Foskett v McKeown
- If the traceable proceeds have increased in value and are worth more than
the original asset, eh will assert his beneficial ownership and obtain the
profit for himself
- The trustee cannot be permitted to keep any profit resulting from his
misappropriation for himself, and his donees cannot obtain a better title
than their donor.
8.5 Mixing of Property from more than One Trust – The Allocation Step
(a) First issue is the identification of the property
(b) Second issue involves the distribution of the property among the trusts involved
8.5.1 General Rule of Distribution is pari passu
Sinclair v Brougham [1914] AC 398

The mixed funds comprised money of the depositors and money of the society’s shareholders, both
of which are innocent.
Held:
They are ranked equally in accordance to the proportion of their contribution
8.5.2 Mixing of Funds in One Bank Account

The general rule is FiFo: First In First Out (Clayton’s Rule)
Devaynes v Noble (Clayton’s Case) (1816) 1 Mer 572; 35 E 718

- Where there are various funds in an account, first funds placed into the account is the first to be
taken out
- Displaces the pari passu rule, states that all beneficial interests in a mixed account are subject to
a FIFO rule
- Unfair against the first victims of a breach of trust as it eliminate their attempts to trace
- This rule will not be applied if there is a preferable alternative
 When does it apply?

- If a trustee holds multiple trust funds, the beneficiaries may have been mixed. Equity allows
them to trace their fund according to their individual contributions provided they remain
identifiable
- When some f the funds have been spent, the balance is not equally divided among them
- Hence, Clayton’s rule comes in
Exceptions
(a) Where there is a specific contrary agmt between client and banker
Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567
L lent a sum to a trustee for the purpose of paying shareholders, the sum was held in trust by
the trustee for the shareholders, kept in the trustee’s account with the bank who knew the
purpose of the trust. Later, the trustee went bust and the trust failed. The bank sought to claim
the fund to satisfy the trustee’s debt with it.
Held:
- Two trusts are involved:
(i) Trustee – shareholders
(ii) Bank – shareholders
- When the trustee went bust, the purpose of the trust cannot be fulfilled – resulting trust
occurs and the money falls back to L
- Thus, the fund kept in the account for the specific purpose cannot be claimed by the bank
(b) Where specific withdrawals are indicated as belonging to a particular trust

Re Diplock [1948] Ch 465, 551-552
The rule will not apply if the fund is unmixed’ and a specific withdrawal is earmarked as trust
money. Accordingly, a charity that paid $1500 trust moneys into its current account and later
drew out the same sum, which is placed in a Post Office Saving Bank Account and treated as the
trust money was held bound by its own appropriation
(c) Does not apply to transactions entered on the same day but rather to the balance at the end
of the day
The Mecca [1897] AC 286, 291 per Lord Halsbury LC
When a debtor pays money on account to his creditor and makes no appropriation to particular
items, the creditor has the right of appropriation and may exercise the right up to the last
moment
(Where appropriation is made by the debtor, the creditor is bound to apply it in the manner
directed by the debtor. If the debtor does not make any appropriation at the time when he
makes the payment, the right of appropriation devolves on the creditor.)
(d) Will not apply where there are distinct and separate debts
The Mecca [1897] AC 286
Clayton’s rules concerns multiple funds in one account whereas the case concerns different
debts from different transactions and were never brought together into a common account.
 Think about:
The application of Clayton’s rule has been questioned in a number of cases including Barlow Clowes
International Ltd v Vangham [1992] 4 All ER 22; also in New Zealand in Re Registered Secutiries
[1991] 1 NZLR 545
So, should it be done with?
8.6 Limits to the Right to Trace

8.6.1 Bona fide purchaser for value without notice
Re Diplock
8.6.2 Impossibility of Identification of Property

Borden (UK) Ltd v Scottish Timber Products Ltd[1981] Ch 25 46
The manufacturer has mixed theresin with other materials to produce carpets. It will be impossible
to restore or to take back there in, the unaltered form.
However, the impossibility of precise identification, arising from the mixing by the wrongdoer, of
funds belonging to the wrongdoer, and the claimant will not preclude tracing.
Sumitomo Bank v Kartika Ratna Tahir [1993] 1 SLR 735

Re Diplock
The money used by the charities to pay off loans was found to have been dissipated. The funds used
to erect buildings on the land could not be disentangled from the asset or land as the money in that
aspect ceased to be identifiable
8.6.3 Where Tracing will cause Hardship and Result in Injustice

Re Diplock
What about an innocent volunteer? The right to race will not be available against monies that an
innocent volunteer has used to extinguish or to settle a debt.
8.6.4 Backward Tracing

Bishopsgate Investment Ltd v Homan
There can be no equitable remedy against an asset acquired before misappropriation of money takes
places, ex-hypothesis it cannot be followed into something which existed and so had been acquired
before the money was received and therefore without its aid.
8.6.5 Proprietary Estoppel

(See above)
Chapter 9: Creation of Wills
9.0 Introduction
These are some basic terms that you must know:
o Testator = Person who makes the will
o Codicil = Supplement/Addition to a will
o Inter vivos =/= wills
o Inter vivos – Property conveyed during the conveyor’s lifetime
o S2(1) Wills Act 1959 – Definition of will
o S2(2) – Non-applicable for Muslim
9.1 Types of Estates

Testate = Deceased died leaving a will, executor will apply to court a grant of probate
Intestate = Deceased died without leaving a will, administrator will apply to court for letter of
administration.
Partial Intestacy = wherein a will exists but only part of the property is to be disposed of under his will –
the others not in the will, will be via DA
9.2 Legal Authority of Executor vs Administrator

Executor Administrator
Meyappa Chetty v Subramaniam Chetty Comptroler of Income Tax v Yan Tai Min
o Derives his title and authority from o Derives power after grant of letters of administration
the will of his testator and not from o Letter of administration is the proof of his title to
grant of probate estate
o Not obtained in a decree before o Cannot take action before the letter is issued.
probate, not because his title
depends on probate but because the Exception:
production of probate is the only way Foster v Bates
in which, by rules of the court, he is Doctrine of relation back - between time of testator’s death
allowed to prove his title. and grant of letter of administration, the doctrine can be
invoked for the limited purpose of protecting the
deceased’s estate from wrongful injury and recovery of
property in action of trespass, trover and conversion.
9.3 Benefits of Making a Will

- It is irrevocable
- It is valid and can be changed before a person dies
- As soon as one dies, it takes effect
- Power of executor comes into play
- Intended to take effect upon death
- Not necessary just one document – may have more than one
- As such, courts are quite liberal in the way they look at the formalities of making a will
- Only thing is that it must be in writing
S35 Probate and Adminitration Act 1959

Cases:
R v Tan Ghee Kooi [1958] 1 MLJ 1
Foster v Bates (1843) 12 M&W226
Meyappa Chetty v Subramaniam Chetty[1916] 1 AC 603,
It is quite clear that an executor derives his title and authority from the will of his testator and
not from any grant of probate. The personal property of the testator, including all rights of
action, vests in him upon the testator’s death, and the consequence is that he can institute an
action in the character of executor before he proves the will. He cannot, it is true, obtain a decree
before probate, but this is not because his title depends on probate, but because the production
of probate is the only way in which, by rules of the court, he is allowed to prove his title
9.4 Formalities
9.4.1 Capacity
A) Age of Majority
S4: No will made by any person under the age of Majority (18 years and above)
B) Soundness of Mind
S3: Every person of sound mind can dispose all kinds of property either at law or in equity that he has
o Testator must know that he is making a will

o Directs his mind to the property
o Knows or understands how the property is disposed
 Unsoundness of mind after the execution is immaterial

 However, a will made during lucid intervals (when a person is sound mind during that moment), it is
valid.
 (If a testator is incapacitated, blind or illiterate – a will may be made and read to him)
Amaullah v Hajiah Jamilah

The will is invalid by reason of the deceased being a come when the will was made.
Udham Singh v Indar Kaur

Burden of proving testamentary capacity rests on the person alleging the validity of will
Bank v Goodfellow [1874-80] All ER 999

Testator suffered from delusions but not so bad as to affect his capacity or to influence his testamentary
disposition. He was in a mental hospital and later left. He believed and continued to believe that he was
being pursued by devil and evil spirits, and that a dead man was pursuing him. However, he was capable
of managing affairs, and gave sensible instructions about his will.
The judge had given the following direction:

‘the question is whether.. the testator was capable of having such a knowledge and
appreciation of facts, and was so far master of his intentions, free from delusions, as
would enable him to have a will of his own in the disposition of his property, and act
upon it.’
Held:
- The will was effective. English law gives testators ‘absolute freedom’ in the disposal of their
property.
- However the court pointed to ‘a moral responsibility of no ordinary importance…the instincts and
affections of mankind, in the vast majority of instances, will lead men to make provision for those
who are the nearest to them in kindred and who in life have been the objects of their affection.’
- To disappoint reasonable expectation of this kind is to ‘shock the common sentiments of mankind,
and to violate what all men concur in deeming an obligation of the moral law’.
- English law ‘leaves everything to the unfettered discretion of the testator’ on the assumption that
‘the instincts, affections and common sentiments of mankind may safely be trusted to secure, on
the whole, a better disposition of the property of the dead’ than stereotyped and inflexible rules.
The court considered the test for testamentary capacity.
In short:
Valid. One can have delusions so long as it was proven that person didn’t have a delusion while making
it.
Cockburn J,
As to the testator’s capacity, he must in the language of the law, have a sound and disposing ind and
memory. He ought to be capable in making his will with the understanding of:
o The nature of business in which he is engaged
o Recollection of the property [he means to dispose of]
o Objects of bounty [knows what belongs to him and what does not]
o And the manner in which it is to be distributed between them
 Understand the nature and effect of the will

 Realise the extent of the property of which he is disposing
 Aware of whom his beneficiaries are (understand their relationship and their claims
upon him)
State of Park [1953] 2 All ER 1411

Testator is a retired businessman whose physical and mental health was poor but had married at the
age of 78 and died two weeks later. He had married a waitress at the club and right after the wedding,
during the inception, he makes a new will which supersedes the previous will executed a year earlier.
The executors sought to prove that the 2nd will but the jury found as fact that on that day, D was not of
sound mind memory and understanding. The widow then brought an action to establish the vaidity of
the marriage and the consequent invalidity of the earlier will under which most of the testator’s estate
would have gone to other relatives.
Held:
The COA affirmed the trial court and said the marriage was valid and had revoked the earlier will so that
testator had died intestate.
The test is whether a party to marriage was capable of understanding the nature of the ctt into which
he or she was entering and that it involves the duties and responsibilities normally attached to
marriage. An illiterate man might be able to understand the ctt of marriage in its simplicity but coming
into a sudden accession of wealth might be quite incapable of making anything in the nature of a
complicated will.
Harwood v Baker (1840) 13 ER 117
The question which the Lordships propose is not whether Baker knew when he executed his will that he
was giving all his property to his wife, and excluding all other relations. But whether at that time,
capable of recollecting who those relations were, of understand the respecting claims … or
intentionally.. excluding them from the property.
(saying that the threshold is higher)
So the board had emphasised the importance that the Court should be satisfied that a testatrix had the
necessary capacity when she executed the will if the evidence showed that she had lost capacity shortly
afterwards. The infirmity of the testator may strengthen certain presumptions which arise against the
will in a case where the will is contrary to the previously expressed intentions of the testator as to his
testamentary dispositions.
Erskine J said:
‘Their Lordships are of opinion that, in order to constitute a sound disposing mind, a
testator must not only be able to understand that he is by his will giving the whole of his
property to one object of his regard, but he must also have capacity to comprehend the
extent of his property, and the nature of the claims of others, whom by his will he is
excluding from all participation in that property; and that the protection of the law is in
no cases more needed than it is in those where the mind has been too much enfeebled to
comprehend more objects than one; and more especially, when that one object may be
so forced upon the attention of the invalid as to shut out all others that might require
consideration. And, therefore, the question which their Lordships propose to decide in
this case is, not whether Mr Baker knew, when he executed this will, that he was giving
all his property to his wife, and excluding all his other relations from any share in it, but
whether he was at that time capable of recollecting who those relations were, of
understanding their respective claims upon his regard and bounty, and of deliberately
forming an intelligent purpose of excluding them from any share of his property. If he
had not the capacity required, the propriety of the disposition made by the will is a
matter of no importance. If he had it, the injustice of the exclusion would not affect the
validity of the disposition, though the justice or injustice of the disposition might cast
down some light upon the question as to his capacity.’ and ‘that in all cases the party
propounding the Will is bound to prove, to the satisfaction of the Court, that the paper in
question does contain the last will and testament of the deceased, and that this
obligation is more especially cast upon him when the evidence in the case shows that the
mind of the testator was generally, about the time of its execution, incompetent to the
exertion required for such a purpose.’
Thiang Kai Goh v Yee Been Eng [2005] 1 MLJ 431 HC

The testator gives his son, TKG four-tenths of his property in Klang. Testator is bedridden and living with
deceased’s son’s wife.
5 and a half months later, TKG goes to China. Testator writes a new will and he leaves none of the
property to TKG and all to the deceased son’s wife and children. Two months later, he dies.
TKG challenges the capacity of the testator. Dropped undue influence.
The two witnesses of the will did not bring up capacity as an issue.
Held:
Court said it was valid. Mere speculation.
The burden of proof always lies on the party propounding the will.
 Caprice and Delusions
- Eccentrice or poor judgment is okay, so long as test is satisfied
- Delusions can invalidate a will if they influence the making of the will and prevent Banks
competence
Smee v Smee
Re Nightingale [1974]
The adopted son is with the father who is lying down in bed. The adopted son comforts the
father who suddenly sits up and twice.
Held:
Court said it was invalid because he was under the delusion that the son was trying to murder
him.
Banks v Goodfellow
Testator was in a mental hospital and then left. He believed and continued to believe that he
was being pursued by devil and evil spirits. And that a dead man was pursuing him. However, he
was capable of managing affairs, and gave sensible instructions about his will.
Held:
Valid. One can have delusions so long as it was proven that person didn’t have a delusion while
making it.
Exception:
Parker v Falgate [1883] 8 P & D 171
In this case, a will was challenged on the basis of alleged lack of capacity. The testatric had
capacity when instructing her solicitor but suffered from Bright’s disease which affected hr
kidney, and she fell into a coma before it was prepared. She was roused later on to execute the
will. The doctor came in, waived the will and asked if the person beside her could help her sign
by which she said yes. ‘This is your will. Do you wish this lady to sign it?’
Held:
What is required at the date of execution is that the testator understands that he is executing a
will for which he has previously given instructions.
9.4.2 Intention
Will must be made out of free will and with intention.
Effect of undue influence or duress

Hall v Hall (1868) LRIP & D 481, Sir J P Wilde said
In a word, a testator may be led but not driven; and his will must be the off spring of his own volition and not
the record of some one else’s.
- In succession, unlike in other areas of the law, undue influence means coercion/duress
- Test is whether testator was lead or driven
Parfitt v Lawless (1872) 2 P & D 462

Testatrix made a will. Primary beneficiary is her priest. Shown that priest lived with the testatrix. He was
her
In this case, the will was valid because there was no undue influence based on this relationship.
‘The natural influence over the parent or guardian over the child, or the husband over the
wife, or attorney over client, may be lawfully obtained for a will. So long as the testator
understands what he is doing and is a free agent. ... provided that the persuasion stops
before coercion.. not overborne and subjected to the domination of another.
- There must be evidence of actual coercion, not just power to coerce.

- Was the testator’s power to decide overborne?
- The weaker the testator, the easier to prove
- A person under undue influence lacks animus testandi – the intention that his will takes effect after
death
- Animus is lacking where will is made by testator is coerced. Persuasion however is legitimate. In
practice, the problem is whether it is persuasion or coercion
- When a court considers the preparation and execution of a will, there can be no presumption of
undue influence
Tyrell v Painton [1894] P 151.

It was not necessary to show that the will was the result of a fraudulent scheme on the part of the
beneficiary or the attesting witnesses. It was enough that suspicions attached to the execution of the
second will which was not removed. Davey LJ said that: ‘wherever a will is prepared under
circumstances which raise a well-grounded suspicion that it does not express the mind of the testator,
the court ought not to pronounce in favour of it unless that suspicion is removed.’
9.4.3 Section 5
S5(1) Must be written (although it need not be the testator’s handwriting)
S5(2) Signed by testator with animo testandi1
- With the intention to give effect to the will
o Signed at the foot of the document
o Signed by the testator or another person in his presence or at his direction
o Signature must be made in the presence of two or more witness
o Witnesses to attest to the signature in the presence of testator
*Can be written anywhere so long as it is permanent. Also, it can be coded if the way of
deciphering the code is clear.
*The space does not invalidate the will
*Not signing on the line but at the side or below the line, it is valid. So long as below the
provisions
*Not valid if you write things in when it was already signed. Because it was not done
together.
Khaw Cheng Bok & Ors v Khaw Cheng Poon & Ors [1988] 3 MLJ 457 HC; [2006] 6 MLJ 540 COA
The children and grandchildren of testator are fighting over the wills. Datuk Khor Bian Cheng. Testator
had created three wills in 1990 – these three are complemantary to each other. And another three in
1992. Some argued that the testator had no capacity in 1992 and was unduly influenced.
HC:
1
An intention to make a testament or will
PFs had proved the 1990 wills but DF failed for the 1992 – had satisfied the formalities but the 1992
wills failed because one of the witnesses signed when the testator was not there. As such, it was
unnecessary to talk about undue influence when it was spoilt due to technicalities.
[But the court did decide that under influence probably did exist because the 1992 will was different
from the 1990 will and had given a lot of property to the nuclear family of the person who prepared the
1992 will]
Re Jenkins [1931] 2 Ch 218

A signature using “rubber stamp” is accepted
Re Finn 1935] All ER 419

Signature using “thumbprint” is accepted
In this case, the testator is illiterate.
A testator who put his thumb in the ink bottle and places a ‘blot’ in the will, is valid.
[Even if he is not, it is still allowed]
Facts:-
An illiterate testator T dictated his will to a clergyman, who read it back to him. T then "signed" his will
by making a thumbprint in ink (which was smudged because his hand slipped), and it was duly attested.
The will was admitted to probate: the judge said this was no less a "signature" than a cross, though it
was not something he would consider a good idea generally.
Held:-
The testator's signature must be such as to make it plain that he intends thereby to give effect to the
will. Before 1983 it had to appear at the end of the will, anything appearing below the signature being
disregarded, but the courts were fairly generous in their application of this rule. The formal rule has now
gone, but where the signature appears anywhere other than the bottom there may still be some
uncertainty as to the testator's intention.
In the Good of Chalcraft [1948] 1 All ER 700

The initial of the testator accepted as a valid signature although it was only partial in result.
 The testatrix started to sign her name and wrote “E.Chal” before she became too weak to
continue. This was held to be a valid signature on the basis that she had decided to end the
signature at that point and so the signature was complete.
‘At the end of’

Re Hornby [1946] 2 All ER 150
Signature at the side of the will – valid signature.
Re Roberts (1881) 19 Ch D 520

In the intention of the testator, the signature was at the end of the will.
Re Long [1936] All ER 193

The court considered the nature of title which could be imposed on a reluctant purchaser. Luxmoore J
said: ‘The purchaser having bought under an open contract was entitled to have a good marketable title
which, as I understand it, is a title which will enable him to sell the property without the necessity of
imposing special conditions of sale restrictive of the purchaser’s rights.’
The courts gave very liberal interpretation to the above situations.
9.3.4 Witnesses
Just a ministerial act so minors can sign on testator’s behalf
9.3.4.1 Signing “in the presence of”
Casson v Dade [1781] 1 Bro CC 99
A testatrix signed her will in her solicitor’s office but could not wait until the witnesses subscribed the
will since the office was very hot. She went outside to sit in her carriage where she could not see the
witnesses through the window of the office but at the very moment when the witnesses were signing,
the horses backed just so that there was a line of sight through the window of the carriage and the
window of the office in such a way that had she so wished, the testatrix could have seen the witnesses
signing. The will was therefore declared as valid
Held:
Testatrix would have been able to see the will being signed through a window – said to be “in her
presence”.
o Must be able to say “I know that this testator signed the will”
o Don’t need to actually see, “could have” seen
o Both witnesses need to be there
9.3.4.2 Attestation
Dr K Shanmuganathan (suing by his Attorney Dr A Puraviappan v Periasamy s/o Sithambaram Pillai
[1994] 2 CLJ 225
Betts v Gannel [1930] 19 TLR 304

Testator to sign the will or attest the signature on the will in the presence of two witnesses
Moon v King [1842] 3 Curt 243

Both witnesses who attest the will must sign in front of the testator
* Both must be there when YOU sign but not necessary both must be there for each other to sign
Brown v Skirrow [1902] P 3; 85 L.T 645

Not necessary for the witness to sign in the presence of each other
9.3.4.3 Incompetency of attesting witness

S8: Does not affect the validity of the wil
9.3.4.4 Gift to Witness

S9: Gift to an attesting witness, or his or her wife or husband is null and void.
However, this will not affect the validity of the will but only the gift
= Husband/wife cannot lah jadi witness
Exceptions:
Re Young [1951] Ch 344

One of the intended beneficiaries under a secret trust had witnessed the will and the question was
whether he forfeited his legacy under section 15 of the Wills Act which provides that a witness to a
will cannot take a benefit under it. The judge held that there was no forfeiture because the whole
theory of the formation of a secret trust was that the act had nothing to with the matter. He went on
to say that the forms required by the Wills Act were to be entirely disregarded because the
beneficiary did not take by virtue of a gift in the will but by virtue of a secret trust imposed on an
apparent beneficiary who did not take under the will and who was bounded by the trust.
Held:
On the face of the will, I leave all my property to X but there is another document that tells X that X is
to hold it in beneficiary of B. Then there is another part that gives B a secret trust. Let’s say the
beneficiary of the secret trust is a witness to the wil, and that happens to be one of the spouses, this
will not be caught by the same rule because the secret beneficiary does not received it by will but
outside of the will.
Thorpe v Bestwick (1881) 6 QBD 311

P was not married when T made his will and she became T’s witness. Later, T married P. The issue was
whether the attestation by P is null and void.
Held:
- P is still a valid witness
- If there is a gift to a beneficiary, the spouse husband or wife cannot be the witness
- But that only applies if that person is married to the witness at that particular time during the
execution of the will
- That is why, if the witness was just a fiancée, he or she is not caught by the section.
- Also, if it was found that the marriage was void, that section does not apply.
Public Trustee v Barry [1936] Ch 520

The testatrix, a nun, left her property to whoever was abbess of the convent at the date of her death.
The nun who witnessed the will was later that abbess. The gift was challenged under the Act.
Held:
The act took effect where the gift was taken beneficially. The gift remained effective here because the
gift was taken as trustee for the convent, and also that at the time the will was made the person who
would eventually take, could not be ascertained.
Re Royce Will Trust

If the witness only became entitled by some later event, his entitlement is not affected.
*S11: Executor cannot be a witness
9.4 Islamic Wills

9.4.1 Formalities
a) Capacity
a. Age – A-kil-ba-ligh
In MY, age of majority act 1971 is a statute of general application – 18 years is age of
majority
But for Muslims, it is the age of puberty
b. Soundness of Mind
Amanullah bin Haji Ali Hassan v Hajjah Jamilah bt Sheikh Madar [1975] 1 MLJ 30
Testator was in a coma
Held:
Such a capacity is not had by a person who is insane or who faints
b) Clear intention to make a will
o No need to be in writing or attested
o What is important is evidence of intention
Mohd Altaf v Ahmad Baksh
Intention is the most important element even though will is not in writing
9.4.2 Two important Conditions

a) Disposal by will is valid if the intention is to dispose off more than 1/3 of the estate
Amanullah v Haji Jamilah
Even if the 1968 was validly made, it would be void because it would offend these two principles
of Muslim law. A testamentary position is invalid if it purports to dispose more than 1.3 of the
estate. – Referred to Prof. Ibrahim of Islamic Law MY) then he goes to the other case
b) Disposal by will which is intended to increase the shares as Quranic or under faraid is not valid
Shaik Abdul Latif v Shaik Elias Bux
In Malay states, in which man has power ... not more than 1/3 of his property...
o There cannot be disposition by will of property which is intended to increase the shares
of Quranic heirs or shares under faraid
o Faraid – distribution of property in MY is via sya’fi law. There are different portions to
different people. In this law, the men get more than girls. Men get double the woman.
Exception to this rule:

i) Consent of all the beneficiaries
 Siti bte Yatim v Mohd Norbin Buyai(19280 6 FMSLR 135
ii) Consent must be given after the testator has died

Zalani Bongsu bin Dato Haji Othman v Bahrom b Dato Othman & 2 Ors (interveners)
[1993] 4 CJ 37
o Provisions
o A case where there was an attempt by the deceased to distribute his properties by will
which was found to be contrary to his personal law. The parties in this case were
brothers and sisters. And in dispute of method of distribution
o A piece of land was given to DF in 1969 via will. DF and 1 st intervener signed agmt in
1979 to ensure that the rights of the beneficiaries would be protected. The land in
question was charged to a bank but it was subsequently sold. The balance of the
purchase price was held by the lawyers with the consent of all the parties in the case.
The deceased by a letter written to one of the children, that it was his desire that the
property be distributed via Hukum Syarak. In a subsequent will, he said his property
should be divided equally.
o If the wife was to live past him, then she would get equal shares with the beneficiaries (I
think, didn’t hear all, need to read)
o Question was: whether or not the property should be divided equally according to the
last will. (Whether he was giving more than 1/3 of his property)
- Court considered other cases and held that he could not dispose of more than 1/3 of his
property by way of will
- Court said he did not actually create a will because he didn’t make one but more like an
intention to do it
- And again, it was not valid because against his personal religion
- PF and interverners agreed that it was void for want of consent of beneficiaries
9.5 Privileged Wills
Made and remains valid even though it does not meet the requirements in S5 (not in writing or minor)
S26(1) – Member of armed forces, a mariner or seaman are entitled to make privileged will.
- Particular for people who cannot make a will due to work or certain situations
9.5.1 Members of the armed forces who are “in actual military service”
Re Wingham
T joined the Royal Air Force during WWII and made an unattested will there. He died while on
aircraft training.
Held:
- T was entitled to make a privileged will.
- Buckmill LJ: Tests
o Was the testator on ‘actual military service’?
o Was such service ‘active’? (Confines military service to such service as is directly concerned
with operations in a war or has been in progress or is imminent)
- Lord Denning: Should include the peacetime when a soldier is in, or about to be sent to, a
disturbed area or an isolated post, where he may involve in military operations.
- Even though he was only preparing to be part of the military service
- Not only when he is in danger but that he was in active service as long as there was imminent
danger.
In the estate of Rippon

Actual military service can commence before the commencement of military operations
In the will of Anderson

Young Australian soldier who was coming to Malaya to fight the Communist insurgency and he
expressed his wish that his mother should have his property if anything were to happen to him. It
was considered a privileged will even though he was not in combat zone yet. A civil disorder can
amount to military service
In the Estate of Yates

An officer of the Royal Navy was entitled to the privilege when under orders to join his ship, he told
his on bidding farewell at the railway station that if anything happened to him, he wanted
everything to go to his wife.
Oral will was valid for military servant
9.5.2 A ‘mariner’ or seaman

In the Goods of Hale (Sarah Hale)
A will of a clerk who worked in a German vessel which was sunk by a submarine was valid as a
privileged will
9.5.3 When does it Lapse

When the danger is over or something LOL
9.6 Overseas Wills

S27 – Must be a written will
Fulfills at least one of the following conditions:
- Valid under the Act
- Valid according to the local law in the jurisdiction where the will was made
- Valid according to the domicile of the testator at the time of death
9.7 Doctrine of Incorporation

- Documents that have not been executed in accordance with S5 can still form part of the will if
they have been incorporated by the will
- A testator may incorporate or direct that certain documents be incorporated into the will,
making them part of the will.
- Re Louis (1916) 32 TLR 313
- The onus of proof lies on the person seeking to rely on the document.
The conditions are:

9.7.1 Existence of Document when the will is made
Singleton v Tomlinson
Testator wrote will on 3 sides of paper and the schedule was on the fourth side. The witnesses who
attested the will had not seen the schedule when they made their attestation.
Held:
The schedule could not have been incorporated with the will as this schedule was not proved to
have been written at the time of the execution of the will.
9.7.2 The documents is referred to in the will as an existing document

- “a memorandum already written by me” (fulfils the condition) but “to be named in a letter
addressed to X” (does not)
In the Goods of Sutherland (1866) LR 1P&D 198
In the Goods of Reid (1866) 38 LJP & M1
In the Goods of Smart [1902] 238

In order that the informal document should be incorporated in the validly executed document, the
informal documents must be referred as a written instrument than existing: that is, at the time of
execution, in such terms that it may be ascertained. (no future document)
“to such of my friends as I may designate in a book or memorandum that will be found in this letter”
- A codicil made 3 years later – the incorporation was said to be not valid because the terms of
the document was not met.
Once you have a codicil to be part of the will, the will executed the start of the
Conclusion: No future document may be relied upon
Re Edwards Will Trust [1948] Ch 440

If a will refers to an already existing document, that refers to within any substitution thereof, or any
modification thereof, then the requirement is also not satisfied.
9.7.3 The document must be referred to in the will – Identified

In the Goods of Garnet[1894] P 90
Testator referred to papers no. 1- 6 as containing his testamentary wishes. These documents were
to be in the drawer but when found, there were other papers as well.
Held:
It is impossible to identify which paper without the possibility of mistake and thus cannot be
incorporated.
*Document must be sufficiently described in the will
9.8 Effect of Incorporation

- Becomes part of will and may be admitted or probate
- Also a public document
- Because it is part of the will, it is also subject to the rules governing the will
- A will which is not valid may be incorporated into a codicil that is validly executed
- In the Goods of Heath Code (1881) 6 Pd 30
- Made an invalid will
- Later executed the codicil describing itself as a ‘codicil to the last will and testament of
me’.
Chapter 10: Revocation, Alteration, Revival and Republication of a Will
10.1 Introduction
A will is valid until revoked. The will may be revoked any time before the death of the testator.
10.2 Methods of Revocation

10.2.1 Through a Valid Marriage
S12 of Wills Act 1959 – Conditions that must be fulfilled
(i) The will makes reference to the marriage that will be solemnised
(ii) The name of the husband/wife expressly stated
(iii) The marriage takes place
Exceptions:
(a) A will made under a power of appointment
(b) A will made in contemplation of marriage
Sallis v Jones [1936] P 43

Where the testator ‘this will is made in contemplation of marriage’ Court said this is too
general a provision, does not say anything more, this will not save the will = will not come into
the exception.
Re Knight [1944] unreported

He refers to his future wife and names her. When they got married, the marriage did not
revoke the will.
10.2.2 Revocation through Destruction of a Will

S14 (type in) – same procedures required as making of a will
All or part of the will is revoked when it is burnt or torn by the testator or by another party in
his presence, and at the direction of the testator, with the intention to revoke the will.
Hence, two main elements must be present

Act of Destroying the Will
- Can be testator
- Or someone else that does it in his presence
- Actual destruction and not just a symbol
Cheese v Lovejoy
Testator drew a pen through some lines of the will and wrote at the back, ‘all these are
revoked’ and took it, crushed it, and threw it into the wastepaper basket.
This paper was retrieved by the housemaid. She kept it in the kitchen. 7 years later, she
produced it. Question was whether it was a valid will (COA).
Held:
Will was not revoked. Even though he had written at the back of it, it was not allowed because
it was not actually destroyed.
Hobbes v Knights (1838) 1 Curt 768

The signature is burnt or cut off so that the witness’ signature no longer visible. And this
obliterated the will.
Held:
An actual act of destruction does not require the whole will to be destroyed. It is sufficient if
the essence of the instrument is destroyed (signature)
(The whole will need not be destroyed but it must be so impaired that it....)
(Since the signature is the most important part of the will, cutting the signature was held to be
a significant act of destruction)
In the Goods of Morton (1887) 12 PD 141

The signature of the testator as well as the witness was scratched away with a penknife. So
the will was considered revoked.
Re Adams [1990] 1 Ch 601

The signature was scrawled out with a ballpoint. So it was taken to have destroyed or revoked
the will.
- The act of scribbling on material parts of the will had sufficiently destroyed the will
Doe d Perkes v Perkes (1820) 3 B & Ad 489

The testator must complete the act of destruction (which he did not because he tore it
already and then he piece it back together)
In the Goods of Dadds (1857)

 Act of destruction must be carried out by the testator himself or by another person in his
presence
 A testator on her deathbed expressed a wish to revoke a codicil
 Executor and neighbour went out of her presence into the kitchen and burnt the codicil
 It was held that there was no actual destruction
 The codicil was not revoked because it was not burnt in the presence of testator.
Wills v Wills [1909] P 157 (at the direction of the testator) Compare with
In the Estate of de Kremer (1965) 110 SJ 18
Solicitor was requested by the testator to burn the will but it was conducted in his office
(because he had instructed via a phone call)
Held:
The will was not destroyed because it was not witnessed by the testator was not physically
there. *must be in the presence of testator
Intention to Revoke
 Must possess mental capacity
Brunt v Brunt
Will was torn to pieces by the testator as he was very drunk at that time and suffered from
an attack of delirium tremens. Hence, will was not revoked.
In the Goods of Brassington

He was drunk when he tried to tear it.
 Not by mistake
Re Jones
J Barkley
‘The testator may have merely torn it up, thinking it was no longer worth the paper it was
written upon. ... The right inference to draw was that he had no intention to revoke. Merely
disposing what he thought was rubbish.’
State of mind is important
In the Estate of Southerden

The testator burnt his will in the mistaken belief that if he died intestate, his wife will be
entitled to the whole estate.
Held:
His intention to revoke the will as conditional on this assumption being true; since it was
not, the will remained valid.
 Must be intention to destroy the whole will

Hobbs v Knight
In the Estate of Nunn

The testator cut out a piece of the middle of a page of her will and then sewed the
remaining pieces together.
Held:
T had intended to revoke the part cut out. The other parts remained intact.
Leonard v Leonard
The testator had made a 5 page will and later destroyed the first 2 pages, replacing them
with new ones that were not properly executed.
Held:
The rest of the will was entirely unintelligible without the destroyed pages and cannot stand
without it. Thus, the entire will stood revoked.
10.2.3 Revocation though a New Will or Codicil

S14
A revocation clause that states “all wills, codicils, and disposition by will made by me” have
the effect of revoking an earlier will, but ‘this is my last will and testament’ is not an express
revocation clause.
Lemage v Goodban(1865) LR 1 P & D 57

- The will of a man is an aggregate of his testamentary intentions
- If a few papers are involved, revocation depends on the language of all papers,
indicating what the testator intended to retain or revoke
- Revocation does not depend on which paper supersedes another
Kitcat v King [1930] p 266

“This is my last will” was interpreted as a testamentary paper read with the will and not
revoking the will.
In the Estate of Wayland [1951] 2 All ER 1041

(Two wills – one in England and one in Belgium – the revocation clause was said to have
covered the property in England only.)
Principle: There must be an intention of the new will to revoke the old will and the
intention must be expressly made
Re Howard [1944] P 39, 60 TLR 248
(Extra Notes? Revocation by Writing)

- The writing should declare the intention to revoke the will
- Re Spracklan’s Estate
The testator is very ill and dictated a letter which she signed. The letter was duly
attested. The letter was addressed to her bank manager requesting him to destroy her
will which she had deposited at the bank.
Held:
Requirements of revocation were satisfied.
10.2.4 Revocation of Wills under Islamic Law

3 methods:
(a) Express declaration and revocation
(b) Implied revocation – eg. Gift of the same property to another party
Sardar Bibi v Abd Latif (1952) Lahore 468
(c) New will – with different provisions
10.3 Alteration of a Will

S15 WA1959
(a) Was the alteration done before the execution of the will?
(b) Is the alteration complete?
(c) Does the alteration render the provisions of the will unclear?
 Re White
A testator dictated he wants to alter certain terms of the will. He altered but did not sign and
thus it did not have an effect.
Any alteration after the execution of the will must be signed by the testator and two witnesses
Principle:
You need to follow the same steps that you took when you were creating the will.
Nature of alteration:
(i) Obliteration – to wipe out, to away with so as to leave no trace
(ii) Interlineations – writing between the lines of the will
10.4 Codicil
A document that is executed in the same manner as the will becomes a supplement to the existing will,
and is subject to the same conditions as the creation of a will
The codicil may (i) add to (ii) alter, or (iii) revoke a previous will.
10.5 Revival and Republication of a Will

S16 (1) and (2)
(a) A revoked will may be revived through the republication of the will or by way of a codicil to the
will – showing an intention to that effect. The revival may be done through the ordinary
formalities or through the codicil
(b) The execution of a codicil to a will republishes the will so that it takes effect from the date of
republication and with the insertion of the changes introduced by the codicil
Chapter 11: Construction of Wills
11.1 General Rules of Construction
11.1.1 The Aim of the Court is to determine the Actual Intention of the Testator
Perrin v Morgan [1943] AC 399 at 406
The fundamental rule in construing the language of a will is to put on the words
used the meaning which having regard to the terms of the will, the testator
intended. The question is not … what the testator meant to do when he made
his will, but what the written words he uses mean in the particular case – what
are the “expressed intentions” of the testator.
(a) Court will not rewrite the testator’s will

Re Bailey [1951] Ch 407, 421
- The court of construction does not improve upon or perfect testamentary
dispositions
- The function is to give effect to the dispositions actually made as appearing
expressly or by necessary implication from the language of the will applied to
the surrounding circumstances of the case.
(b) Court will not guess the meaning of the words used by the testator
Abbot v Middleton (1858) 7 HLC 68
The court will not speculate upon what the testator may be supposed to have
intended to do, and instead will only try to determine what the testator has
written means
Re Rowland [1963] Ch 1 11-12
11.1.2 Words Used Must be given the Ordinary Meaning

 Scale v Rawling [1892] AC 342
Where the ordinary meaning is clear – and the court will give it that ordinary meaning.
 Re James’s Will Trusts [1962] Ch 226

T’s children took life interests in his residuary estate, each child taking a life interest in
equal shares. As such child died, the share in which he had, had a life interest passed to
his issue. If a child dies without issue, his share passes to “my surviving children”
“my surviving children” – upon the death of one of the children, his share may be
distributed among the surviving siblings.
Held:
- The words “my surviving children” indicates taht upon the death of one of the children,
his share is distributed among the surviving siblings, not the issue of other siblings
- The ordinary meaning of the words was clear and that was the meaning the court gave
 Perrin v Morgan (supra)

“money” can mean “syilling” or “real property”. Meaning of words may change or they
may have multiple meanings. The reason being that she had “money” in terms of
stocks and shares so the court had to decide and thus the court gave a broad meaning
to it.
11.1.3 The will must be Construed as a Whole
 Re MacAndrew’s WT [1964] Ch 704; per Ungoed Thomas J at 719
“The fundamental and overriding duty binding the court is to ascertain the intention of the
testator as expressed in his will read as a whole”
 Re Haygarth [1913] 2 Ch 9 15
- The intention of testator... must have effect given to it, beyond, and even against the
literal sense of particular words and expressions
- Not only to fix the sense of ambiguous words, but to control the sense even of clear
words, and to supply the place of expressed words
a) In situations of uncertainty
The court determines the meaning intended by the testator by considering all the provisions of
the will, construed with the aid of any admissible extrinsic evidence
b) Dictionary Principle: The dictionary meaning may be used to rebut the presumption of ordinary
meaning.
- The situation where the testator provides his own meaning to the words used. This is
allowed provided that he makes the sense in which he is using them clear in his will
- The court must give effect to the meaning
c) Where a testator explains the use of certain words, the courts must give it that particular
interpretation.
- Re Davidson [1949] Ch 670
T’s residuary gift to “my grandchildren” was held to include the children of testator’s
stepson, because the testator’s will described the stepson as “my son” and also
described stepson’s daughter as “my granddaughter”
(She married her deceased sister’s husband so she kinda became their stepmum)
- If the presumption in favour of any ordinary meaning is not rebutted, the ordinary
meaning of a word or phrase prevails even though it may produce results
which appear capricious
- Testatrix had not made any mistake in her use of language but had plainly,
deliberately and well knowing the facts to be otherwise described John Foster
Davidson as her son and Nora Margaret Davidson as her granddaughter and
had used the word “grandchildren” in a sense peculiar to herself but plainly
indicted in the will
- Re Lynch [1943] 1 All ER 168

Courts will adopt the ordinary meaning in the will. But if there is an indication in the
will that the person meant it to mean something else, then you must look at the
external evidence.
Also left residuary estate ‘to my wife during the widowhood’, and the remainder to his
sons, after the death or remarriage of wife.
FOC: Testator was not married with Annie because not registered but co-habited =
lived together as husband and wife. If you use dictionary meaning, Annie would lose.
But here he has provided to whom the wife he meant, so court allowed Annie.
(They could never be married btw cause Annie is his brother’s daughter! O_o)
(d) The courts may insert, delete and change the words that are used but the scope for
this is limited and must be used with caution. This may be done in the circumstances
where:
(i) certain words or provisions are omitted; and
(ii) there are mistakes in the words used
- Re Whitrick [1957] 1 WLR 884

The testator by her will leaves her entire estate to her husband and provides that “in
the event of my husband... and myself both dying at the same time”, her estate would
be held upon trust for X, Y, Z equally. However, her husband predeceased her. The
literal meaning of the words used indicates that the gift to X, Y, Z failed and testator’s
entire estate passed as her intestacy.
Held:
It was clear from the will as a whole that the testator intended for the contingency of
her husband not surviving her. The will read as husband predeceased her as well as
both died simultaneously. Hence, X,Y, Z entitled to the gift
(e) In situations where two provisions in the will cannot be reconciled:

Re Isaac [1905] 1 Ch 427
The question to be determined was what is the destination of the legacies which have
lapsed by the deaths of the two legatees in the lifetime of the testator, whether to the
first residue or the second?
Held, that the lapsed legacies fell into the first residue and did not go to H.
Because if the prior gift of one or more of the shares of "the remainder" were to fail,
owing to a lapse by the death of the legatee in the lifetime of the testator, the
subsequent disposition appointing a residuary legatee would take effect.
If some person entitled to a share of the remainder died in the lifetime of the testator,
there would be a lapse of a part of the first disposed of residue, and under the second
disposition the residuary legatee would take something.
The second residuary legatee would only be entitled to something if there is lapse in
part of the first residue.
Re Gare [1952] Ch 80
Leaves to three different beneficiaries: St Peter’s Church, …
In the last clause of his will, he put there ‘all my estate hereby not otherwise … at their
discretion’ Having made this provision to three then makes the ending as such,
property not disposed to be dealt with as executor’s discretion.
You have two contradictory provisions. Which one is it suppose to carry.
You look at the earlier gift, and if nothing is left after distributing first part, then don’t
worry about the second half.
Re Alexander’s Will Trust [1948] 2 All ER 111

Where it has been given to two or more persons in the same will. Diamond bracelets
from a lady to another. Both didn’t match. But court divided it to two! :o
Re Alexander’s WT [1948] 2 All ER 111
By a clause of her will the testatrix bequeathed "my five row diamond bracelet" to a
beneficiary and by a subsequent clause she bequeathed "my diamond chain bracelet"
to another beneficiary. The testatrix possessed only one diamond bracelet containing
eight rows of diamonds, which, according to extrinsic evidence, she generally referred
to as "my five row bracelet," sometimes as "my chain bracelet" and sometimes as "my
diamond bracelet."
The court held:

(i) The existence of only one article available to answer two bequests framed in
different language was a latent ambiguity, so that extrinsic evidence was admissible.
(ii) as there was good ground for concluding that the testatrix had directed her mind to
the earlier gift at the date of execution of the will, the rule that a later disposition
prevails over an earlier had no application, and, the article being divisible, each
beneficiary was entitled to a moiety (each of two parts of which a thing can be divided)
(f) Where there are two conflicting provisions – the later provision is given preeminence
because it was deemed to be the testator’s last thought. This a merely a “ rule of
despair.”
Re Potter’s WT [1944] Ch 70
He says he gives 1000 to son but in writing, wrote 100. ‘This is the last thing on his
mind so this must be it’
Principle:
The rule that the later gift prevails is only used as a last resort when all attempts to
reconcile the various provisions of the will have failed, ie the court can find nothing
else to assist in determining the question.
11.1.4 Technical Words are given Technical Meaning

 Re Harcourt [1921] 2 Ch 491, 503
 Falkiner v Commissioner of Stamp Duties [1973] AC 565; 577-578
 Re Cook [1948] Ch 212

A lay person used a technical term which was widely known by lawyers.
‘I give my personal estate’ But personal does not include land. So the question was
what did he meant.
Held:
The court held that the term is defined in its ordinary meaning.
Since he did not make clear, court said to mean personal effects.
Note:
The presumption that technical legal words and expressions are to be given their technical meaning
may be rebutted by the dictionary principle
11.1.5 The Intention to Revoke must be Clear
Re Freeman
- The testator by his will appointed A to be one of his executors and also gave him a share of his
residue
- By a codicil, the appointment of A is revoked and B is appointed to be an executor in place of A
Held:
- This declaration did not impliedly revoke the gift of the share of residue
- Gift can only be revoked if testator’s intention to revoke is clear
Note:
A clear gift in a will is not to be cut down by anything subsequent which does not, with reasonable
certainty indicate the intention of testator to cut it down. If there be a plain gift in a will, the court will
not say that it is defeated by something ambiguous in a codicil which does not plainly cut down the
previous gift.
11.2 Admissibility of Evidence

11.2.1 A Gift Admitted to Probate is Absolute –
According to the terms of the will, No extrinsic evidence is allowed in the construction of a will
Baylis v Att Gen (1741) 2 Atk. 239
- A gift admitted to probate is absolute, according to the terms of the will
- No extrinsic evidence is allowed in the construction of a will to fill up the blanks of a will
However, extrinsic evidence may be allowed in a number of situations:

(a) to prove the existence of a condition
(b) to prove the existence of the object or subject matter of a gift.
11.2.2 Use of Extrinsic Evidence after Death of Testator
(a) Armchair principle

- Evidence as to the surrounding of the testator when he made his will has always been
admissible as an aid in construction in cases of uncertainty or ambiguity
Per James LJ in Boyes v Cook (1880) 14 Ch D 53, 56
You may place yourself so to speak in *the testator’s’+ armchair, and consider
the circumstances by which he was surrounded when he made his will to
assist you in arriving at his intention.
a. Extrinsic evidence is admissible to show which beneficiary the testator

designated by a particular description up to the time of his death
Charter v Charter [1874] LR 7 HL 364

(ascertain the identity of the beneficiary)
Testator, a farmer by his will appoitned ‘Foster Charter’ as his executor and
gave him his residuary estate. He had three sons, Forster Charter (had died
before the will was amde), William Forster Charter and Charles Charter (both
of whom survived the testator). William became a butcher and settled 100
miles away, seeing his father only occasionally. Charles however, lived with the
testator and worked in his farm.
Probate was granted to William and Charles applied for revocation.
Held:
From the facts, such evidence was admissible to show which son was intended
to take the farm (Charles) since the court had a right to ascertain all the facts
known to the testator to determine whether there existed any person or thing
to which the description in the will could be applied with sufficient certainty.
Thus evidence of his relationship with any claimants was certainly relevant.
"It is only where in a written instrument the description of the person or thing
intended is applicable, with legal certainty, to each of several subjects that
extrinsic evidence, including proof of declarations of intention, is admissible to
establish which of such subjects was intended by the testator.”
b. Where there is uncertainty as to the identity of the subject matter of the gift
Ricketts v Turquand
- The testator devised ‘all my estate in Shropshire, called Ashford Hall’.
- Testator owned a mansion-house called Ashford Hall, adjacent lands and other
realty in Shropshire.
- Evidence was admitted which showed that the testator regarded all his realty in
Shropshire as the Ashford Hall estate
Kelly v Charmer [1856] 23 Beau 295

IXX and OXX represented 100 pounds and 200 pounds respectively among jewellers
(Court was trying to figure out what it meant)
(b) Where the words used do stand to reason or are nonsensical when given the
ordinary meaning
- The situation occurs when the ordinary meaning of a word or phrase in the will
does not make sense when read in the light of these circumstances
- However, when the word or phrase has a secondary meaning which does make
sense when read in this light, the word or phrase may be given this secondary
meaning.
Re Smalley [1929] 2 Ch 112

Here was a testator. Left his wife (Mary Ann Smalley) and children and lived with
another lady. Lady living with was Elizabeth Ann Mercer. When he died, he wrote
Elizabeth Ann Smalley. So was it for the first wife or second wife?
Held:
- Testator’s wife was not called Elizabeth and Elizabeth was not his wife
- Elizabeth was entitled as the surrounding circumstances showed that the testator
had used the words “my wife” in his will in their secondary meaning of his
reputed wife and this makes more sense
Re Bailey [1945] Ch 191

- The words “residuary legatee” was used in the will
- The court held that there was sufficient context in the will, read in the light of the
surrounding circumstances to show that the technical words had been used in
the wider sense of “residuary beneficiary”.
(c) Equivocations
Where gift is given to a named person but there is more than one person or object that
fits that description
Doe d Gord v Needs (1836) 2 M & W 129

- The will contained a legacy to a “George Gord, the son of John Gord” and another
to “George Gord, the son of George Gord” and also a devise to “George Gord,
the son of Cord”
- It was held that it was permissible to show testator’s declaration as to which
George was the intended beneficiary of the devise
(Too many people with the name George Gordan so they had to find out who
they meant)
Re Jackson [1933] Ch 237

- 3 nephews with the name Arthur Murphy – one was illegitimate.
- Evidence was adduced to show that she was close to the illegitimate one.
- She always referred to him as ‘nephew’ and had been in charge of taking care of
her affairs prior to her death
Held:
Court had looked at surrounding circumstances and accepted the evidence
showing that it was for him.
Asten v Asten [1894] 3 Ch 261; Re Ray [1916] 1 Ch 4

The testator had 4 houses to be given to his 4 sons but houses were not numbered in
the will
Held:
‘It appears to me clear from the will that what the testator intended was to give a
particular house to each son, and not to give any right of selection or election to any son.
Owing unfortunately to the houses not being numbered at the date of the will, and their
descriptions as given in the will being undistinguishable, I cannot tell from the will which
house the testator intended to give to any of the sons.
And it is admitted that no extrinsic evidence will supply the deficiency of description, or
enable the Court, on inquiry, to ascertain which house was intended by the description
of it in the will.’
Note:
If, the will construed as a whole, with the aid of any evidence as of surrounding circumstances
admissible under the armchair principles shows to which of the 2 or more persons or things the
testator was referring, there is no equivocation.
Chapter 12: Specific Rules
12.1 Failure of A Gift under the Will
12.1.1 ‘Disclaimer’ by a Beneficiary
Case: Townson v Tickell (1819) 3 B &Ald 31
Abbot CJ “The law is not so absurd as to force a man to take an estate against his will”
(what if the beneficiary does not want the gift)
However:
(i) when a person has accepted the gift – he cannot afterwards disclaim it;
(ii) he cannot accept part of the gift and disclaim the other.
12.1.2 Lapse
Where a beneficiary predeceases a testator, or a corporation is dissolved, the gift lapses and becomes
part of the residue.
Case: Re Gardner (supra)
 Exception
(a) Gifts that are given to fulfill a moral obligation
 Williamson v Naylor (1838) 3 Y & C 208 (to settle own debt)
A father gave a gift to settle his debt so even though the beneficiary will
predecease the testator, the gift will not lapse.
 Re Leach’s WT *1904+ 2 Ch 232 (to settle the son’s debt)

Death in such a case does not affect – gave gift to settle son’s debt
 Steven v King [1904] 2 Ch 30, 33 Per Farwell J:

(Applies in the case of Re Leach)
I think that the cases… have established the rule that, if the Court finds, upon the
construction of the will, that the testator clearly intended not to give a mere bounty
to the legatee, but to discharge what he regarded as a moral obligation, whether it
were legally binding or not, and if that obligation still exists at the testator’s death,
there is no necessary failure of the testator’s object merely because the legatee dies
in his lifetime; and therefore death in such a case does not cause a lapse.
(b) Gifts to issue under s 25 Wills Act 1959

GP:
If the beneficiary dies before testator, the gift will lapse. But if it is to one of the children, S25
says that the gift will be saved for the ordinary beneficiary’s kids. However, it is not
automatic, they only save it.
For them to receive it, there must be a provision for it.
 Re Meredith [1924] 2 Ch 552
- If there are issues, the issues will save the gift from lapse. But if there is a
contrary intention in the will, then it may exclude the application of S25
- (based on s33 of WA of England.)
- Testator had left 100 pounds to his son. Rest of his estate to his 5 children.
Then the son died before testator, leaving two children. By right, this principle
should apply.
- Gift to the son was therefore saved from lapse but the testator did not realize
that he had made a codicil which referred to the supposed lapse, and had
given the son’s sons 100 each.
- So he personally settled it but didn’t know. So the saving of the gift had lapsed
(good way)
 Elliot v Joicey [1935] AC 209 – at 229-233

(do not include issues en ventresa merei.e born after the death of the testator)
 Re Basioli[1953] Ch 367
 Re Hensler (1881) 19 Ch D 612

(The gifts will be divided according to intestacy rules where s 25 gives rise to a
‘circle’ of who should receive
(c) Charity – general charitable intention – gift may be used cy- pre´s.
(See Part II – Chapter 9)
(What this means essentially is that they look at the intention. Two scenarios:
(1) “To be donated to Red Salvation”
(2) “To be donated to Red Salvation so as to aid homeless boys”
Scene 1, to specifically to Red Salvation so it will only be for them. If the charity
disappears then so does the will/benefit
Scene 2, again it is specific for Red Salvation but if RS disappears, the benefits will
go to another charity which is also for ‘homeless boys’. The court will look at the
intention.
(d) Substitutionary gift

 Re Greenwood [1912] 1 Ch 393, 396
To A “but if he shall die in my lifetime to his legal personal representatives”.
(e) Gift to joint owners (except where both predecease the testator)
12.1.3 Commorientes
The presumption applied in situations where it cannot be ascertained as to who died first:
(a) It is presumed that the older predeceased the younger.
(b) The presumption applies in all situations except in the case of husband and wife where
husband and wife are presumed to survive each other.
See: Presumption of Survivorship Act 1950 (came from Law of Property Act England]
In all cases where, after the commencement of this Act, two or more persons
have died in the circumstances rendering it uncertain which if them survived
the other or others, such deaths shall (subject to any order of the court), for
all purposes affecting the title to property, be presumed to have occurred in
order of seniority, and accordingly the younger shall be deemed to have
survived the elder.
Hickman v Peacey [1945] AC 304

(bomb explosion – it is not known who died first)
Per Lord Macmillan:
Can you say for certain which of these two dead persons died first? If you
cannot say for certain, then you must presume the older to have died first. It is
immaterial that the reason for your inability to say for certain which dies first is
either because you think they both died simultaneously or because you think
they consecutively but you do not know in what sequence.
Exception:
Look at S6(3) of DA
When the intestate and the intestate’s husband or wife have died in circumstances rendering it uncertain
which of them survived the other, this section shall, notwithstanding any rule of law to the contrary,
have effect as regards the intestate as if the husband or wife had not survived the intestate
12.2 The Will Takes Effect at Death

Section 18 Wills Act 1959
(a) Specific gift
 Trinder v Trinder (1866) LR 1 Eq 695
A provision for “all my shares in Marks & Spencer Ltd“ refers to T’s property at the
time of death subject to any contrary intention.
 Re Evans [1909] 1 Ch 784

‘all my lands in the country of Kent’
Where there is a peculiarity … as to show some object .. date of will.. intended to

pass… sufficient evidence … exclude application of S24 (which is similar to S18)
(b) The will refers to date of the will

 Re Whitby [1944] Ch 210 (at the date of this my will)
Testator left some personal chattels to his niece, then he had a codicil. By a later
codicil, he excluded all articles of jewelry and other chattels, effects belonging to me,
which are now deposited to safe custody
 What does that mean?
 Re Willis [1911] 2 Ch 563

“all that my freehold house and premises situate at Oakleigh Park, Whetstone ... in
which I now reside.”
Per Eve J - the statement “in which I now reside” – refers to the time of his death.
Merely an additional description
(c) Doctrine of ademption

The gift must exist at the time the will was executed
 Re Slatter (1907) 1 Ch 665; and
The testator made a specific bequest of shares in the Lambeth Waterworks Company.
The undertaking of this company was transferred to the Metropolitan Water Board
and stock was issued by the Board to replace the original shares. The CA held this was a
change of substance and the gift failed .
 Harrison v Jackson (1878) 7 Ch D 339
(d) Interests acquired after the execution of the will

 Re Russell [1882] 18 Ch D 432
T by his will made a gift of his share of the partnership which at the time amounted to
1/3. Later, he acquired all the shares and became a sole proprietor – the gift included
the whole of his interests.
12.2.1 Exception to the Rule that the Will Operates from Death
Where it is clearly expressed
 Re Edwards *1918+ 1 Ch 142 ( “ the house I now reside”)’

 Re Whorwood (1887) 34 Ch D 446
 Section 18 applies to persons who are alive at the date of the will.
12.3 Public Policy

A beneficiary will not be allowed to receive an interest under a will of a deceased against
whom that beneficiary had committed a wrong – eg, where he murdered the testator.
 Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147

Here a beneficiary who had murdered the spouse was denied the right to claim the payout
under a life insurance policy, on the basis that the wrongdoer should not be allowed to
profit from the crime.
 Re Hall [1914] PI
 Re Callaway [1956]
 Re Peacock [1957] Ch 310
Chapter 13: Administration of States
- Distribution Act 1958
- Small Estates (Distribution) Act 1995 and Regulations
- Probate and Administration Act 1959 (Act97) and Regulations (PAA)
- Probate and Administration (Amendment) Act 1995
- Public Trust Corporation Act 1995
13.0 Types of Estates

(a) Testacy – Valid will exists
(b) Intestacy
(c) Partial Intestacy
Testate Estate Intestate Estate Partial Intestacy

- Valid will exists - No valid will - There’s an
- Executor will apply to court a - Administrator will apply to court for letter incomplete will
grant of probate (S3 PAA 1959) of administration - Left out certain
- Executor’s power: property or
(i) To deal with estate (eg Comptroller of Income Tax v Yan Tai Min forgot to put a
to sell it to pay debts or It is only on extracting the grant of a LOA that residuary
to distribute amongst a person can be said to be duly clothed with a clause (a catch-
beneficiaries) representative character and to have all clause)
(ii) Represent the deceased acquired a title to the estate so as to make
in legal actions and to him an administrator
settle legal actions
against the deceased’s ** Admin cannot take action before LOA is
estate issued
- S16 PAA
a) No executor is appointed by a Exception:
will; Doctrine of relation back can be invoked for
b) Executor/all appointed by will the limited purpose of protecting the
are legally incapable of acting as deceased’s estate from wrongful injury in the
such, or have renounced; interval between his death and the grant of
c) No executor survives the LOA to his estate
testator
d) All executors die before Foster v Bates
obtaining probate or before (1843)12 M & W 226
having administered all the "It is clear that the title of an administrator,
estate of the deceased; or though it does not exist until the grant of
e) Executors appointed by any will administration, relates back to the time of the
do not appear and extract death of the intestate; and that he may
probate recover against a wrong doer who has seized
or converted the goods of the intestate after
Letters of administration with the his death, in an action of trespass or trover.
will annexed may be granted to such The relation being established for the benefit
person as the Court deems fit to of the intestate's estate, against a wrong
administer the estate. doer, we do not see why it should not be
equally available to enable the administrator
Meyappa Chetty v Subramanian to obtain the benefit of a contract
Chetty intermediately made by suing the contracting
- It is quite clear that an executor party;"
derives his title and authority
from the will of his testator and Kechik & Ors V Habeeb Mohamed & Anor
not from any grant of probate [1963] 1 MLJ 127
- The personal property of the The first Df (widow of a deceased Mr.Ghany)
testator, including all rights of was granted LOA for her husband’s estate on
action, vests in him upon the December 1958, but she only extracted the
testator’s death, and the LOA on May 1960. Prior to the grant of LOA,
consequences is that he can she granted sub-tenancies of portions of a
institute an action in the premise (of which Mr.Ghany was a tenant) to
character of executor before he the 2nd and 3rd Df.
proves the will
- ‘He cannot, it is true, obtain a Pf (owner of the premise) found the 2nd& 3rd
decree before probate, but this Df in occupation of the premises and sent a
is not because his title depends notice to quit to them. Subsequently, the Pf
on probate, but because the sued all 3 Df to claim possession of the
production of probate is the only premise. The issue raised was whether the 1st
way in which, by rules of the Df can grant sub-tenancies as LOA has yet to
court, he is allowed to prove his be granted, and how doctrine of relation back
title’ may be applicable.
Held:
The court held that when the 1st Df
subsequently became administratrix, her
previous actions is protected by the doctrine
of relation back.
Referring to Foster v Bates, the judge stated

that the contracts of tenancy made between
the 1st Df and the 2nd & 3rd Df was for the
benefit of the estate. Upon extraction of the
LOA, the 1st Df would have been able to sue
for the rents if they had not been paid. Thus,
the court held that her appointment can
relate back to give the 2nd and 3rd Df a good
title as they would have had if LOA had been
obtained prior to the tenancy contract.
Yap Boon Eng & Anor [2001] 6 MLJ 442
ADMINISTRATOR EXECUTOR
o A person who obtains his authority solely from o The person appointed by the testator to
the grant of letters of administration. execute the will.
o Required to give administration bond – s35 of o Not required to give a bond or to provide
PAA sureties for the due performance of his
o As he derives his authority and powers from duties.
the court, s 60(4) of the PAA, provides that he o As he takes his powers from the testator
cannot without previous permission of the himself, s 60(3) of the PAA provides that he
court: may, without the leave of the court, charge,
a) mortgage, charge or transfer by sale, mortgage or otherwise dispose of all or any
gift, exchange or otherwise any property of the deceased as he may think
immovable property situated in any proper, subject to any restriction in the will
State and for the time being vested in of the deceased…
him;
b) lease any such property for a term
exceeding five years.
13.1 Testacy
Administration of Estates
a) Meaning and the importance of administration
b) S64 PAA 1959:
13.2 Important Administrative Steps

1. The executor or administrator to compile a list of deceased’s assets
2. Pay the debts and liabilities of the estate
3. Distribute the remainder of the estate according to
(i) The terms of the will; or
(ii) The Distribution Act 1958
After all the debts and liabilities have been settled, the remained of the estate can then be distributed
to the rightful beneficiaries as laid down in the will. Once this is completed, the administration of the
estate will cease.
13.3 Types of Grants (PAA 1959)

a) Probate
S2: “Probate” = A grant under the seal of the Court authorizing the executor named to
administer the testator’s estate.
S3: Probate may be granted to the executor appointed by a will
b) Letters of Administration – s30 PAA 1959

- LOA is granted when a person died without a will or in situations of failure of executors as
provided under s16 of PAA
- Who can apply: Normally, the petition for a LOA is filed by a beneficiary who has priority
over other beneficiaries.
- Every other beneficiary must agree to the appointment and renounce their rights to
petition.
- Regardless of the priority, the court has the direction on to whom LOA will be granted.
- The court grants power to trustee to administer estate of intestate, same rights as if he was
the executor
- S30:
In granting administration the Court shall have regard to the rights of all persons
interested in the estate of the deceased person or in the proceeds of sale thereof, and,
in particular, administration with the will annexed may be granted to a devisee or
legatee; and in regard to land settled previously to the death of the deceased, and not
by his will, administration may be granted to the trustees of the settlement; and any
such administration may be limited in any way the Court thinks fit:
Provided that, where the deceased died wholly intestate as to his estate, administration
shall, if application is made for the purpose, be granted to some one or more of the
persons interested in the residuary estate of the deceased, unless by reason of the
insolvency of the estate or other special circumstances the Court thinks it expedient to
grant administration to some other person.
Yap Kee Par v Molly Yap [1996] 2 MLJ 219

The deceased died intestate, leaving behind his second wife and four children. One of the four
children was the petitioner. The petitioner applied for LOA of the estate of the deceased cited
the other beneficiaries (L and the other children) who resisted his application. The reason for
the opposition was that L has priority over the petitioner to file for LOA.
Held:
- A female spouse does not enjoy priority over the children.
- Nevertheless, s 30 of PAA gives the court a wide discretion as to persons to whom
administration is to be granted, enabling the court to pass over a person otherwise entitled
to a grant, and any such administration may be limited in any way the court thinks fit.
- In granting general or limited administration of estates, the court must have regard to the
rights of all persons interested in the estate or to the proceeds of its sale.
HSBC Trustees Bhd v Kim Ho [1999] 3 MLJ 3

Re Estate of Teow Cheow Choon [1994] 3 AMR 2436
Yap Boon Eng & Anor [2001] 6 MLJ 442
c) Letters of Administration with Will Annexed

- A will exists but the executor is dead or has no capacity or refuses to act.
- S16 and S17 of PAA
Re Ramanathan Naciappan [1998] 2 MLJ 90

The testator named his adopted son ('Ramasamy') as the sole executor. The probate was
granted in 1956 but Ramasamy died before completing the administration. However, by his will,
he appointed his wife as the executrix of the estate of the testator.
The wife subsequently appointed two lawyers in year 1978 and 1995 respectively to apply LOA
de bonis non for the testator’s estate. Yet, though LOA was obtained by both lawyers, they died
before completing the administration (seems like the will is cursed, haha). In 1996, the wife
appointed another lawyer Ramanathan to obtain the LOA for the testator’s estate. During the
trial, the court examined the validity of the grant of LOA.
Held:
Must first be established that there is no chain of executorship and all executors named in the
will of the deceased must have been cleared off by reciting their death or renunciation. (Must
prove no executors already) The manner in which the chain or representation is broken must be
shown in the oath.
d) Letters of Administration de bonis non

- De bonis non refers to the goods of a deceased person which has not been administered
- This happens when probate has been extracted or letters of administration granted
previously, but administration incomplete at the time of the death of the executor or
administration.
13.4 Why Letters of Administration are Important

- Authority is granted to the executor or administration through the grant of probate or letters of
administration
- An executor’s power is derived firstly from the will and then reinforced with the grant of probate.
He can begin an action n his representative capacity before the grant of probate
- An administrator derives his title solely under his LOA and cannot institute an action as admin
before he gets the grant
S31
Meyappa Chetty v Subramaniam [1916] AC 603

An executor’s power is granted through probate. An administrator cannot give a valid discharge or
receipt until he gets the letters of administration. Prior to that, the estate would be vested in the Public
Trustee – under the PnAA 1995.
 S 39(1) of PAA - provides that prior to the grant of administration, the property of an intestate shall
vest in the Corporation (s2 of PAA defines this as Amanah Raya Berhad, pursuant to Public Trustee
Public Trust Corporation Act 1995).
 S 39(2) of PAA On the making of an order for a grant of administration by the Court all such
property shall vest in the administrator. (Means only upon granting LOA, the estate of the
deceased will vest in the administrator. Before that, it’s under ARB)
See Amendments made to:

S23
S39
S45
S48
S49
Whereby the Public Trustee replaces the Official Administrator.

Power is now granted to the Public Trustee
13.5 Powers of the Public Trustees in a Summary Administration

- Situations where you do not have to go to court – a simpler administration.
- Public Trust Corporation Act 1995 confers the powers of the Official Administrator on the Public
Trustee (Amanah Raya Berhad)
- See
- S13: Grant of Probate and LOA to corporation
- S15: Corporation may aply for grant on failure of grantee to extract LOA
- S16: Corporation may take possession of property
- S17: Summary administration of movable property
- S19: Payment of minor’s maintenance
- S35: Exemption from giving notice of distribution of property
Note: S17
a) Summary administration covers administration of property with a value of less than RM600k (S17
PTC compare with S83 PAA 1959)
b) No need for administration bond
c) Property whose value is not more than RM50k – paid directly to an applicant subject to proof of a
right
For a discussion of the above, see: Ramy Bulan “Wills and Succession” in Annual Survery of Malaysian
Law 1995
13.6 Administration of Estates / Small Estates (Distribution) Act 1955 and Regulations
a) Small Estate
 An estate of a deceased consisting wholly or partly of immovable property
situated in any State and not exceeding ... in total value
 Small Estates (Distribution) Act 1955 and Regulations
 Section 3(2) includes both immovable and movable property above
RM2,000,000.00.
b) The value of the estate – s.3(4)

 Does not include property held by the deceased as a trustee, but
 Includes property that is held as a beneficiary
c) Small estates – exclusive jurisdiction of Land Administrator
Look at S2 to see who can be appointed as a collector, as well as 4, 5, 7

Fatimah bt Mat Akir v Sharifah bt Haji Ahmad [1977] 1 MLJ 106
 This was administered by the collector and when it was contested at the HC. Went up to FC
and said that HC has no jurisdiction to hear this case as the Collector has the exclusive
jurisdiction to hear the matter.
 Contest that the mother was of unsound mind when this was done and that was the basis on
which they contested it.
 Under s4 of the Small Estates (Distributions) Ordinance, it is not the HC but the Collector who
exclusively has original jurisdiction in the distribution of small estates. The proper course for
the appellants was to ahve appealed against the Settlement Officer’s order, which they did not
do, and thereore the application was rightly dismissed.
- S5: The HC has exclusive jurisdiction to grant probate of any will/testamentary disposition/letters
of administration if the deceased has left a valid will. If the probate/LOA with a will is not granted,
the court may
i) Grant LOA to any person to whom letters would have been granted on an intestacy if the
estate had not been a small estate;
ii) Direct that a petition for distribution of the estate be lodged under s8
iii) Order any LA named in the order to proceed with the distribution of the estate as if a petition
therefore had been duly lodged (S3)
- S8(1): Where any person has died intestate leaving a small estate, any person claiming to have
interest on the land may lodge to LA for the distribution of the estate in the prescribe form (Form
A)
- S8 – 19: Procedure for the distribution of the small estate
- S31: No advocate shall be entitled to appear on behalf of any part in any proceedings before the LA
except with the permission of the LA
13.7 Intestacy
References
 Distribution Act 1958 (“DA”)
 Sabah – Intestate Succession Ordinance
 Sarawak – no statute – customary laws apply in certain situations)
 Parsee Intestate Succession Ordinance
13.7.1 Distribution Act 1958

- S1 & 2: Applicable to Malaysians in PM (excluding Muslims) and foreigners with a MY
domicile who die intestate in MY
- S3 – ‘child’ means a legitimate child and where the deceased is permitted by his personal
law a plurality of wives includes by any such wives, but does not include an adopted child
other than adopted under the provisions of the AA 1952 or the Adoption Ordinance of
Sarawak
- S3 – ‘parents’ means the natural mother or father of a child or the lawful mother or father
of a child under the AA 1952
- S4 – Law regulating the distribution of movable and immovable property when deceased
domiciled at the time of his death
- S6(1) – How the estate is to be distributed
*Applies only to non- Muslims
(a) issues – section 3 – includes children adopted under the Adoption Ordinance 1952.
(b) mother and father – s 3 DA 1958
(c) domicile – s 4 DA 1958
Shamugam v Pappah 1994 1 MLJ 144

A stark reminder that persons in a de facto type of relationship may have difficulty in
claiming under the DA
There was a conflict between the claimants – one claimed to be the son of the
deceased, the other claimed to be his wife. The facts that there was a previous
marriage between the deceased married the new wife – through Hindu ceremony. The
former marriage dissolved only after the new one and had three children with him. The
other claimant, Shamugam, he alleged that he was the only son of the deceased and
the heir of the deceased. But he was not able to prove that he was not illegitimate
One said I am the son but not able to prove not illegitimate, one was the wife and had
three children but could not prove to be legitimate wife as well.
In that regrettable situation, none of them were able to claim under the DA.
Had he not been married before 1982 (customary accepted then) or that he had no
previous marriage, it would not have been a problem.
Hence it is important that the status of those claiming are lawful.
**It seems that level of entitlement depends on the closeness to deceased

Spouse, issues, parents, brothers or sisters, issues of brothers or sisters, uncles and
aunts
13.7.2 How the estate is to be distributed

Section 6(1) was amended by the Distribution (Amendment) Act 1997 so that section 6 now
provides as follows:
(a) if an intestate dies leaving a spouse and no issue and no parent or parents, the surviving
spouse shall be entitled to the whole of the estate;
(b) if an intestate dies leaving no issue but a spouse and a parent or parents, the surviving
spouse shall be entitled to one-half of the estate and the parent or parents shall be entitled
to the remaining one-half;
(c) if an intestate dies leaving issue but no spouse and no parent or parents, the surviving issue
shall be entitled to the whole of the estate;
(d) if an intestate dies leaving no spouse and no issue but a parent or parents, the surviving
parent or parents shall be entitled to the whole of the estate;
(e) if an intestate dies leaving a spouse and issue but no parent or parents, the surviving spouse
shall be entitled to one-third of the estate and the issue the remaining two thirds;
(f) if an intestate dies leaving no spouse but issue and a parent or parents, the surviving issue
shall be entitled to two-thirds of the estate and the parent or parents the remaining one-
third;
(g) if an intestate dies leaving a spouse, issue and parent or parents, the surviving spouse shall
be entitled to one quarter of the estate, the issue shall be entitled to one half of the estate
and the parent or parents the remaining one-quarter;
SS Issue Spouse Parents

(a) - 100% -
(b) - 50% 50%
(c) 100% - -
(d) - - 100%
(e) 2/3 1/3 -
(f) 2/3 - 1/3
(g) 1/2 1/4 1/4
(h) subject to the rights of a surviving spouse or a parent or parents, as the case may be, the
estate of an intestate who leaves issue shall be held on the trusts set out in section 7 for the
issue;
(i) if an intestate dies leaving no spouse, issue, parent or parents, the whole of the estate of
the intestate shall be held on trusts for the following persons living at the death of the
intestate and in the following order and manner, namely:
Firstly, on the trusts set out in section 7 for the brothers and sisters of the intestate in equal
shares; but if no person takes an absolutely vested interest under such trusts, then
Secondly, for the grandparents of the intestate, and if more than one survive the intestate
in equal shares absolutely; but if there are no grandparents surviving, then
Thirdly, on the trusts set out in section 7 for the uncles and aunts of the intestate in equal
shares; but if no person takes an absolutely vested interest under such trusts, then
Fourthly, for the great grandparents of the intestate and if more than one survive the
intestate in equal shares absolutely; but if there are no such great grandparents surviving,
then
Fifthly, on the trusts set out in section 7 for the great grand uncles and great grand aunts of
the intestate in equal shares.
(j) Where no one is entitled to claim, then the estate will go to Consolidated Fund for Gov
(3) If intestate and his or her spouse died in circumstances rending it uncertain who survived the
other, then it presumes that the spouse had not survive the intestate
13.7.3 Statutory Trusts under 7

- An administrator will hold the property under the statutory trust until the parties are entitled to
receive:
(a) S7(1) –
(i) For issues until attain age of majority
(ii) Interest of a child who, though predeceased the intestate, has left issue is preserved
(iii) No issue shall take whose parent is still living at the death of the intestate and so
capable of taking
(b) S7(2) –
Where the estate of an intestate is directed to be held on the trusts set out in this section
for any class of relatives of the deceased other than the issue of the intestate, the same
shall be held on trusts corresponding to the trusts set out in s7(1) for the issue of the
intestate
(c) S7(3) –
Monies/property held for the benefit of the issues – if any issue dies before reaching
majority or marries, his share will be held for the benefit of other beneficiaries.
Extra:
Partially Intestate Estate
- If the deceased has disposed off some of his property under his will but had left out the remainder
of his property undisposed, then a partial intestacy arises.
- S.8 of Distribution Act 1958 - Where any person dies leaving a will beneficially disposing of part of
his property, this Act shall have effect as respects the part of his property not so disposed of.
- S.17 of Public Trust Corporation Act 1995
The Inheritance (Family Provision) Act 1971

- It enable the court to make a lumpsum or periodical payment out of the deceased’s estate to the
husband or wife or a dependent son or daughter of a deceased person if the court is of the opinion
that no reasonable provision has been made by his will or the law combining to testacy on
combination of will and the law.
- Application must be made within a period of 6 months after probate or after letters of
administration is issued. (S.4)
- S.3(1) – leaving spouse or issues (dependant) where the court may order that such reasonable
provision as the court thinks fit shall, subject to such conditions or restrictions, if any, as the court
may impose, be made out of the deceased’s net estate for the maintenance of that dependant (Give
remedy to dependant of the deceased who will not obtain reasonable provision for maintenance in
law OR the court can make adjustments of property is not distributed properly by the will)
Re Tan Hui Guan, deceased (Phang Siew Fa v Am Kim Siok) –

engagement does not fall within the meaning of spouse
• S.3(2) – Termination of maintenance (Situations)
Tan Kok Chuan & Anor v Liew Nan Fong –

remarriage causes lose of right
• S.3(4) – Where the amount does not exceed RM40,000 the court may order a lump sum payment

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Lim Chun Yuan LEB140053

Siti Nurlaila Abdul Ghani LEB140108

 Another observation of Spry in The Principle of Equitable Remedies:

1.1 History and Origins

1.2 Factors of the existence of the Chancery Courts:

1.3 Equity Jurisdiction

1.4 Influence of Equity

Saad Marwi v Chan Hwan Hua (2001) 3 CLJ 98

The Earl of Oxford’s Case (1615) 1 Ch Rep 1 Coke CJ

1.5 The Court of Judicature Acts 1873-1875

1.5.1 Relationship between common law and equity

1.6 Fusion of Common law and Equity?

George Jessel in Walsh v Lonsdale

Seager v Copydex[1967] 2 All ER 415

1.4.1.2 Consider this statement by Dal Pont and Chalmers (1996) 9:

Berry v Berry [1929] 2 KB 316

Job v Job (1877) 6 Ch D 562

Lowe & Sons v Dixon & Sons (1885) 16 Q.B.D. 455

>> Equity comes in to protect a bona fide creditor.

Civil Law Act

Subject to local circumstances

2.1 Reception of Equity

2.2 Application of English Principles of Equity

Warren v Tay Seng Geok [1965] 1 MLJ 44 PC

Haji Abdul Rahman v Mohd Hassan (1915) 1 FMSLR 290 PC

The State of Johor v Salleh bin Hassan (1939) 2 SLR 73

UMBC Bhd v Pemugut Hasil Tanah, Kota Tinggi [1984] 2 MLJ 87

Oh Hiam v Tham Kong [1980] 2 MLJ 159

In personam on grounds of conscience.

Lian Keow S/B v Overseas Credit Finance

Cheng Hay Guan

Borneo Mortgage Finance v Time Engineering (1996)

3.1 Equity will not suffer a wrong to be without remedy

3.2 Equity follows the law (but not slavishly)

Abdulrahim v Drahman (1867) 1 Ky. 171

3.3 He who seeks equity must do equity

Chillingworth v Chambers (1896) 1 Ch 685

Chappel v Times Newspapers Ltd (1975)

Hardoon v Belilios [1901] AC 118

Wong Chun Wah v Kok Kam Chee[2008] 3 CLJ 176

3.4 He who seeks equity must come with clean hands

 Contrast these 2 cases:

Palaniappa Chettiar v Arunaselam Chettiar (No.2) [1962] MLJ 143

Dering v Earl of Winchelsea (1787) 1 Cox Eq 318, per Eyre LCB:

Overton v Bannister (1844) 3 Hare 503

Gascoigne v Gascoigne [1918] 1 KB 223, DC

Syarikat Panon S/B v Zecon Engineering Work S/B

3.5 Where the equities are equal, the law prevails

Abigail v Lapin (1934) 51 CLR 58

Vallipuram Silvaguru v Palaniappa Chetty [1937] MLJ 59

Zeno Ltd v Prefabricated Construction Company [1967] 2 MLJ 104

3.7 Delay defeats equity

Smith v Clay (1767) 3 Bro CC 639

Erlanger v New Sombrero Phosphat Co (1878) 3 App. Cas 1218

Lindsay Petroleum Company v Hurd (1874) LR 5 PC 221 PC

Allcard v Skinner (1887) 36 Ch D 145

Re Len Chee Omnibus v Lee Chee Omnibus

3.8 Equality is Equity

Jones v Maynard [1951] Ch 572

Mac Donald v Mac Donald ( 1957) 2 All ER 690

Lau ChoongChoo v Chau We Chuan [1980] 1 MLJ 6

3.9 Equity looks to the intent rather than the form

Parkin v Thorold (1852) 16 Beav. 59: Romlly MR