Gifts AND Failure OF Gifts PDF

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GIFTS AND FAILURE OF GIFTSIntroductionGift: A voluntary transfer of an interest(extent of a person’s right in property) in property by the owner (donor) to another (donee) without any consideration or compensationS of Wills Act:Except as hereinafter provided, every person of sound mind may devise, b...

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GIFTS AND FAILURE OF GIFTS Introduction Gift: A voluntary transfer of an interest(extent of a person’s right in property) in property by the owner (donor) to another (donee) without any consideration or compensation S.3 of Wills Act: Except as hereinafter provided, every person of sound mind may devise, bequeath or dispose of by his will, executed in manner hereinafter required, all property which he owns or to which he is entitled either at law or in equity at the time of his death notwithstanding that he may have become entitled to the same subsequently to the execution of the will. Property defined in S. 2 of Wills Act 1959: Includes lands, leases, rents and hereditaments corporeal, incorporeal…. Devise:

related

to

real

property.

The

legal definition

of

real

property is land, and anything growing on, affixed to, or built upon land. This

also

includes

man-made

buildings

as

well

as

crops. Real

property is best characterized as property that doesn't move, or that is attached to the land. House, factories, land, orchard,plantation. Bequest: Related to personal property other that real property. Monies, shares, jewelleries, cars, bitcoin, insurance policies, gold, silvers, Property not disposableby will:

1.Not belonging to the testator-Testator cannot transfer property that does not belong to him.-For example, if the Testator is a trusteeand has legal ownershipover a property, he cannot disposeit in his will as it doesn’t belong to him.

2.Choses in action-Testator cannot transfer property that does not belong to him.-For example, if the Testator is a trustee and has legal ownership over a property, he cannot dispose it in his will as it doesn’t belong to him.Eg.

Right

to

sue,

life

assurance(like

insurans),

EPF,

share

in

companyoInsurance Policy (kiv)-Section 164 (2) of Insurance Act 1996 A nomination shall not be revokedby a will or by any other act, event or means.-In Singapore case- Eng Li Cheng Dolly v Lim Yeo Hua: The court held thatthe

proce e ds

of an

disposed of in thedeceased's will,

insurance policy not specifically did not form part of the assets of

the deceased's estateand that the beneficiary named in such policy was solely entitle proceeds of the policy. As the policy was taken out during the marriage (between the deceased and the beneficiary) with the object of creating a fundfrom which the beneficiary might benefit, she obtained an immediate trustin her favour which was not defeated by their subsequent divorce.-Malaysian Assurance Alliance Bhd v Anthony Kulanthai Marie Joseph:This statutory trust has been recognised by the Insurance Act 1996 and also astatutory trust can now be made under s 166 of that Act. The fact that thepolicy is vested in the trustee for the benefit of the beneficiary does not meanthat upon the death of the insured the money is automatically held on trustby the appellant for the benefit of the beneficiary as bare trustee(hold propertfor someone).

Classification of gifts Specific “specific legacy” means a legacy of specified property.  A gift of a particular item/group of property owned by the testator, distinguished in the will from other property of the same kind.  Specific legacy indicates that it is a movable property while specific devisee denotes immovable property.

 The properties shall be free from encumbrances (charge, caveat).  Takes priority over general legacies and are liable to abatement only if the assets are insufficient to pay the debts  Eg: if the testator made a gift which leaves insufficient money to pay the debts, funeral expenses and cost of administration, then the money for those expenses will be taken from pecuniary legacies and not from specific legacies.  Main characteristic: subject to the doctrine of ademption (ie must be in existence at the time of death).

 Re Abdullah Saleh Shooker: A legacy comes within the Moratorium Proclamation.

definition of "debt"

in

the

Therefore, the executors should pay

interest on the legacy at the rate of six per centum per annum from the end of one year after the testator's death.

Lim Soo Siam v Leow Yong Moey & Ors [1933] MLJ 214 It was held that the legacy of $10,000 to the testator’s daughter for marriage expenses was partially adeemed by her marriage during the testator's lifetime and by the payment by the testator himself of her marriage expenses and that the balance should be paid to her for her sole use. General  Does not refer to any specific or particular object.  A gift of property to be provided out of the testator’s estate whether or not the property so described forms part of the testator’s estate upon his death.  Usually takes in form of money.

 Soo Bian Joo v Soo Boon Leong:

A gift arising from the general personal estate of the testator and has no application to the distribution of property to the persons entitled under intestacy.  Re Gage: A gift of ‘the sum of £1150 five per cent war loan 1929-1947 stock’ was held to be a general gift even though the testator held the stock when the will was made as there was no indication that the testator was referring to a property belonging to him.  Q: How to determine: from the construction of the will, as affirmed in Shanti Rupchand Binwani [1951] 1 MLJ 31  Subject to abetment if the testator’s estate is insufficient to pay debt.  Not subject to ademption, unlike specific legacies.

Demonstrative  General in nature but directed to be paid out of a specific fund (eg: education fund).  Ashburner v Macguire: A gift of ‘£1000 from my account at Barclays Bank’ is a demonstrative legacy.  Not subject to ademption. Pecuniary  A gift of money.  Usually general but may be demonstrative or specific. Residuary  A gift of the testator’s remaining property. If there is no other gift is given, the gift of the whole estate is a residuary gift.

 Residuary devises or bequests shall include estates comprised in lapsed and void devises or bequests.  S.19 of WA: Unless a contrary intention appears by the will, such property as is comprised or intended to be comprised in any devise or bequest in such will contained, which fails or is void by reason of the death of the devisee or legatee in the lifetime of the testator or by reason of such devise or bequest being contrary to law or otherwise incapable of taking effect, shall be included in the residuary devise or bequest respectively, if any, contained in the will.  If the property lapses under s.25, the property shall also become residue under s.19.  Distribution of residuary property is based on the will.

Failure of gifts 1.

The beneficiary or his/her spouse as attesting witness

Refer to: S 9 of Wills Act 1959: HARJINDER KAUR SHAM SINGH & ANOR v. BALVINDER SINGH SHAM

SINGH

&

ORS

[2017]

1

LNS

1490

[33] Mr. Ravin also took issue that the Will contravened section 9 of the Wills Act. That aside, he disputed the authenticity of the Will in that the signature of Mother Prakash in the Will is questionable as it appeared different from other documents bearing her signature as well as that Mother Prakash could neither read, write or understand the English language. Mr. Ravin referred to the following speech of Lord Slynn in Fulton v. Andrews [1875] LR 7 HL 448:

"These authorities, and many others to which it is not necessary to make reference since they are on similar lines, make it clear that where a person is in a fiduciary relationship with another who is intending to make a will, that person if he prepares or is closely involved in the preparation of the will or informing the testator's intentions must if the will is challenged satisfy the court that the testator knew and understood what he was doing and that the will has given effect to his intentions. The possibility of undue influence leading to the provision of such a benefit for the person, whether a solicitor or not, but particularly a solicitor, must be ruled out. The simplest way of avoiding the conclusion that there has been such influence is to ensure that an independent legal adviser is consulted by the testator or at any rate to give a clear and recorded opinion that such advice be obtained. But the statement in Rhodes v. Bate [1886] 1 Ch App 252, 257 upon which Permanand JA relies that the persons by whom the benefits have been conferred must be shown to have 'had competent and independent advice in conferring them' goes too far. It is simple and conclusive but other methods showing that the will contains the intention of the testator and that he knew and understood what he was doing may be sufficient to remove the suspicions which have arisen." which was approved by the Court of Appeal in Lee Ing Chin & Ors v. Gan Yook Chin & Anor [2003] 2 CLJ 19.

[46] By the Seventh Defendant having signed the Will as directed by Mother Prakash, it attracted the application of section 9 of the Wills Act by reason that the Seventh Defendant's husband, Mahinder Singh had been named as a beneficiary therein. [47] There is no case law proffered by the parties to me on the interpretation of section 9 of the Wills Act. The Defendants advanced a twofold argument in crux. Firstly it was contended that the Will could be saved if the witness testified on the due execution of the Will which the

Seventh Defendant did at the trial. Secondly, any contravention would not mandatorily avoid the Will. The Plaintiff instead referred to the Digest, Annotated British, Commonwealth and European case, Volume 50, Wills (Part 1-12(16)) (1983 Re-issue) ("Digest") that commented on the equivalent provision in the English Wills Act 1837 as follows: "1519 General Rule - Witnessing beneficiary unable to take (I) By a will made since Will Act 1837 certain land and houses, after the death of testator's niece A and her husband J, to whom life interest had been given, were directed "to be equally divided among the children" of A and J. The will purported to be attested by three witnesses, two of them were Thomas and Sarah, children of A and J: held the devise to the children, although it was a devise to them as tenants in common, was a devise to a class, so that the whole was to be taken by those who after testator's death came within the limit of such class and were capable of taking, and therefore the share of Sarah and Thomas, who was attesting witnesses were themselves incapable of taking, went to the other members of the class, and not the heir-at-law of the testator." [48] By the Federal Court case of Krishnadas Achutan Nair & Ors v. Maniyam Samykano [1997] 1 CLJ 636, it was held that the function of the Court is to interpret the statute by referring to the words appearing in the statute and adopting a construction which will give effect to all the words therein. Based on these principles, I have carefully read section 9 of the Wills Act several times. The concluding phrase "and such person so attesting shall be admitted as a witness to prove the execution or to prove the validity or invalidity thereof, notwithstanding such devise, legacy, interest, gift of appointment mentioned in such will." in my opinion meant that the witness is not disqualified from giving evidence on the due execution or validity of the Will and the Seventh Defendant was permitted and testified on the due execution of the Will in this Suit. However it certainly did not extend to nullifying any contravention of the principal prohibition set out in section 9 itself as suggested by the Defendants. In addition, my opinion is that contravention mandatorily results in

avoidance of the devise or gift because "be utterly null and void" is synonymous with "shall be null and void" to me. Put simply, the bequeath of Mother Prakash to Mahinder Singh could not be regularized or saved. [49] Based on the commentary set out in the Digest produced by the Plaintiffs, the resultant effect of the Seventh Defendant attesting the Will as witness would be the avoidance of Mother Prakash's gift to Mahinder Singh. The First Defendant would in consequence inadvertently inherit the entire estate of Mother Prakash solely by operation of law. [50] In the circumstances, the English Court of Appeal case of Fuller v. Strum [2001] 2 All ER 92 is instructive. Chadwick LJ stated as follows in respect of the test on the circumstances arousing suspicion of the Court: "The question is not whether the court approves of the circumstances in which the document was executed or of its contents. The question is whether the court is satisfied that the contents do truly represent the testator's testamentary intentions.' … and 'It is not, and cannot be, in dispute that, before admitting the document to probate, the judge needed to be satisfied that it did truly represent the testator's testamentary intentions; or, to use the traditional phrase, that the testator 'knew and approved' its contents…" In the later English Court of Appeal case of Gill v. RSPCA [2010] EWCA Civ 1430, it is seen that generally the correct approach is to ask whether those propounding the will had discharged the burden of proving knowledge and approval albeit it must remain the case that due execution of an apparently rational will would ordinarily satisfy that burden. [51] The critical consideration appears to me to be the knowledge and approval of the contents of the will by testator. This is factual and naturally suspicion may be aroused in varying degrees depending on the precise circumstances. I have found that Wazir Singh did mention to Mother Prakash that the Seventh Defendant as her daughter in law could not sign the Will as witness. There is however no further evidence

adduced as to whether he had explained the consequences of the Seventh Defendant so doing to Mother Prakash. I do not think so because he did not possess the necessary legal expertise to appreciate and explain to her the resultant effect notwithstanding he had years of working experience in law firms. This necessarily involved the interpretation of section 9 of the Wills Act. [52] Based on my aforesaid interpretation of that provision, the resultant effect would be that the entire estate would devolve to the First Defendant. I do not think that Mother Prakash knew of it and would have accordingly approved it had she known. As pointed out by the Third Defendant, this is an instance following Fulton v. Andrews (supra ) where an independent advocate and solicitor ought to have been brought in to advise Mother Prakash before the execution of the Will. Failure to do so is in my view fatal. The sanctity of the Will cannot be upheld. [53] Consequently, I find and hold that the Defendants have failed to satisfied me that there was absence of suspicious circumstances surrounding the making of the will. The Will is thus invalid. I have been reminded and am thus mindful that Gopal Sri Ram JCA (later FCJ) held as follows in the Court of Appeal case of Lee Ing Chin v. Gan Yook Chin & Anor [2003] 1 CLJ 19 with emphasis added by me: "In the leading case of Tyrell v. Painton [1894] P 151 , 157, Lindley LJ after referring to the two rules laid down in Barry v. Butlin (supra) and to the cases of Fulton v. Andrew LR [1875] LR 7 HL 448 and Brown v. Fisher 63 LT 465 said: The rule in Barry v. Butlin, Fulton v. Andrew, and Brown v. Fisher is not, in my opinion, confined to the single case in which a will is prepared by or on the instructions of the person taking large benefits under it, but extends to all cases in which circumstances exist which excite the suspicion of the Court; and wherever such circumstances exist, and whatever their nature may be, it is for those who propound the will to remove such suspicion, and to prove affirmatively that the testator

knew and approved of the contents of the document, and it is only where this is done that the onus is thrown on those who oppose the will to prove fraud or undue influence, or whatever else they rely on to displace the case made for proving the will. (emphasis added.)"

2. The beneficiary pre-deceased the testator/Lapse  S.19 of WA:  Unless a contrary intention appears by the will, such property as is comprised or intended to be comprised in any devise or bequest in such will contained, which fails or is void by reason of the death of the devisee or legatee in the lifetime of the testator or by reason of such devise or bequest being contrary to law or otherwise incapable of taking effect, shall be included in the residuary devise or bequest respectively, if any, contained in the will.  Failure of a testamentary gift due to a situation where the donee pre-deceases the testator. Reverting to the above agreed facts, in particular the lapsed gifts viz. gifts which fail or are otherwise incapable of taking effect, I shall now consider s. 19 of the Wills Act 1959 ("s. 19") on which the respective learned counsel have relied. The relevant portion ofs. 19 reads: 19. Residuary devises or bequests shall include estates comprised in lapsed and void devises or bequests. Unless a contrary intention appears by the will, such property as is comprised or intended to be comprised in any devise or bequest in such will contained, which fails or is... otherwise incapable of taking effect, shall be included in the residuary devise or bequest respectively, if any, contained in the will.

In my view, the legal effect ofs. 19 is that a lapsed gift must be included in and form part of the residuary devise or bequest, if any, contained in the will. An illuminating authority is to be found inRe Chin Sem Lin's Settlement, supra, where the relevant issue was whether the provision of 40% of the trust property in a deed of settlement fails by reason of impossibility of performance or failure of object. Clause 13 of the deceased's deed of settlement provided for the 40% to be paid to Ken Huin Kongsi in Moyang or Swatow in China for the ancestral graveyard, but no members of the settlor's family resided in China in order to maintain the graveyard. Chang Min Tat J (later FJ) held that the 40% had failed as no one had been able to advise that the graveyard was being maintained. Hence, this portion fell into the residuary estate of the settlor to be distributed in accordance with the terms of the will. Applyings. 19 and the judgment inRe Chin Sem Lin's Settlement, supra, I hold that the three lapsed gifts fall into the residuary estate of the testatrix for the benefit of all the grandsons living at the date of distribution to be distributed in accordance with the terms of the will.  General rule: donee to survive testator.  Exceptions to the general rule: - Gift to testator’s issue 

S.25 of WA: Where any person, being a child or other issue of the testator, to whom any property shall be devised or bequeathed for any estate or interest not determinable at or before the death of such person shall die in the lifetime of the testator leaving issue, and any such issue of such person shall be living at the time of the death of the testator, such devise or bequest shall not lapse, but shall take effect as if the death of such person had

happened immediately after the death of the testator, unless a contrary intention shall appear by the will. 

Requirements: - the property should be diverted to testator’s child or issue. - the issue must survive the testator - if the issue dies then the gift will lapse under s19



Purpose: preserve the gift given to the child stated in the parents will.

- Alternative gift 

There is a substitute beneficiary.

 Foo Yin Choo v Foo Siew Lan The testator gave his adopted son 1½ shares out of 10 shares...