Re Baden’s Deed Trust(No.2) (Individual ascertainability test – discretionary trust)•Individual ascertainability test was satisfied if “as regards a substantial numberofobjects it can be said with certaintythat they fall within the trust” even though it cannot beproved that whether others fall within it or not. Power – mere gift not trust2.Rules of Formalities a.Rule against perpetuities Settlor appointing beneficiaries, the contingent benefit of beneficiaries going on, the settlorparty cannot be alienated. Time period is X + 21Re Lee Moey Chee, Decd.
Facts: The clause in the testator’s will read: “The remaining fifteen shares and the money incash under my name shall be reserved as the ancestral property in China”.Held: Since the trust was to be carried out in a foreign country objection that the trust in thiscase was invalid according to the law in Singapore as infringing the rules againstperpetuities was immaterial and it must therefore fail. A trust failed because impractical to perform the trust in China from Singapore. b.Rules against public policy – declared voidA trust which infringe public policyis void. Void objectives are those where property isdirected to be kept unused, or where the purposes of the trust either encourage a breach oflaw or weaken the family unit, or introduce unlawful conditions that interfere with parentalduties, between married couples or which deter a separated married couple from livingtogether.Choo Yee Wah v Choo Ah PatFacts: Deceased had prior to his death drawn a cheque to the joint account of him and his commonlaw wife. •Issue was whether the deceased had in full possession of his mental faculties when histhumbprints were affixed to the said cheque. Whether the trust was tainted with forgery,thus invalid. •Evidence disclosed an intention on the part of deceased, which was sufficiently clearand precise to impress the money with a trust for the benefit of his common law wife. Validtrust. Palaniappa Chettiar v Arunasalam Chettiar 1 MLJ 143•Trust illegal as it was a deceit to avoid taxation. •No court will lend its aid to a man who founds his cause of action upon an immoral oran illegal act. c.Principle of draftingPrinciples of DraftingConsider various factors such as objectives and intentions of settlor, capacity of settlor, natureof trust property, type of trust, tax position, class of beneficiaries, choice of trustees andexecutors.Correct procedurefor transfer of trust property must be followed, every clause of trustinstrument must be explained to settlor which clause may give rise to breach of trust.Every precedent must examined and trust instrument must be sufficiently flexible to caterfuture developments.d.Rules against inalienability Man is free or at least ought to be free to alienate his property where he so desires.
Mohamed Ghouse v Hajee Mohamed Saiboo •A clause restraining alienation of land was void because everyone should be given thefreedom to dispose of his land.