Variation of terms of trust on behalf of minors, etc.
(1) Subject to subsection (2), the Court may, on the application of a settlor or his personal representative, the protector of a trust, a trustee or a beneficiary, on behalf of—
(a) any minor, or any person incapacitated at law, who has directly or indirectly an interest, whether vested or contingent, under the trust;
(b) any person, whether ascertained or not, who may become entitled, directly or indirectly, to an interest under the trust as being at a future date or on the happening of a future event;
(c) a person of any specified description or a member of any specified class of persons;
(d) any person unborn; or
(e) any person in respect of any interest of his that may accrue to him by reason of any discretionary power given to anyone on the failure or determination of any existing interest that has not failed or determined,
approve any arrangement which varies or revokes the terms of a trust or enlarges or modifies the powers of management or administration of any trustee, whether or not there is another person with a beneficial interest who is capable of assenting to the arrangement.
(2) The Court shall not approve an arrangement on behalf of any person mentioned in paragraph (1)(a), (b), or (c) unless it is satisfied that the carrying out of such arrangement appears to be for the benefit of that person.
Approval of particular transactions
Where in the management or administration of a trust, a transaction is in the opinion of the Court expedient, but cannot be effected because the necessary power is not vested in the trustee
by the terms of the trust or by law, the Court may, on the application of the trustee or beneficiary—
(a) confer on the trustee, either generally or in any particular circumstance, the necessary power, on such terms and subject to such conditions, if any, as it deems fit; and
(b) direct in what manner and from what property any money authorized to be expended, and the costs of any transaction, are to be paid or borne.
General powers of the Court
(1) A trustee may apply to the Court for directions concerning the manner in which he may or should act in connection with any matter concerning the trust and the Court may make such order, if any, as it deems fit.
(2) The Court may also, if it deems fit—
(a) make an order concerning—
(i) the execution or the administration of any trust;
(ii) the trustee of any trust, including an order relating to the exercise of any power, discretion or duty of the trustee, the appointment or removal of a trustee, the remuneration of a trustee, the submission of accounts, the conduct of the trustee and any payments into court;
(iii) any beneficiary or any person having any connection with the trust; or
(iv) any trust property, including an order as to the vesting, preservation, application, surrender or recovery thereof;
(b) make a declaration as to the validity or enforceability of a trust;
(c) rescind or vary any order or declaration made under this Act, or make any new or further order or declaration.
(3) An application to the Court for an order or declaration under subsection (2) may be made by the trustee or by any beneficiary.
(4) All proceedings other than criminal proceedings relating to any offshore trust commenced in any court shall, unless the court otherwise orders, be heard in camera and no details of the proceedings shall be published by any person without leave of the court.
(5) Where the Court makes an order for the appointment of a trustee, it may impose such conditions as it thinks fit, including conditions as to the vesting of trust property.
(6) Subject to any order of the Court, a trustee appointed by the Court under this section shall have the same powers, discretions and duties as if he had been originally appointed a trustee.
Payment of costs
The costs and expenses of and incidental to an application to the Court under this Act shall be paid out of the trust property or be borne and paid in such other manner or by such other person as the Court may order.
Protection of persons dealing with trustees
(1) A bona fide purchaser for value without actual notice of any breach of trust—
(a) may deal with a trustee in relation to trust property as if the trustee was the beneficial owner of the trust property; and
(b) shall not be affected by the trusts on which such property is held.
(2) No person paying or advancing money to a trustee shall be concerned to see that such money is required for the purposes of the trust, or that no more than is required is raised, or otherwise as to the propriety of the transaction or the application of the money.
Limitation of action
(1) No period of limitation or prescription under any law shall apply to an action brought against a trustee—
(a) in respect of any fraud or criminal breach of trust to which the trustee or, in the case of a trust company acting as trustee, any of its officers or employees was a party or privy; or
(b) for the recovery from the trustee or, in the case of a trust company acting as trustee, any of its officers or employees, of trust property or the proceeds thereof in his possession or control or previously received by him and converted to his use.
(2) Subject to subsection (1), no action may be brought against a trustee by a beneficiary for any breach of trust after the expiration of six years—
(a) commencing from the date of the delivery of the final accounts of the trust to the beneficiary; or
(b) commencing from the date on which the beneficiary first had knowledge of the occurrence of the breach of trust,
whichever is the earlier date.
(3) Where the beneficiary is a minor or is under any legal disability, the periods referred to in subsection (2) shall not begin to run until the day on which the beneficiary ceases to be a minor or his legal disability ceases.
(4) The periods mentioned in this section shall be interrupted if a claim or action is filed in the competent court and served on the trustee before the expiration of the periods.
Money or other property from illegal activities
(1) A trust company acting as a trustee of an offshore trust shall not accept—
(a) any money or other property originating from a transaction, operation or other activity which is a criminal offence under the laws of Malaysia or which, had it been carried out in Malaysia, would have been such an offence; or
(b) any money or other property the receipt, ownership or control of which is or would be an offence as mentioned in paragraph (a).
(2) Where any person, being a director, officer or agent of a trust company for the time being acting as a trustee of a trust—
(a) has reason to believe that the trust has property or has income accruing to it or derived by it and originating from a transaction, operation or other activity which is a criminal offence under the laws of Malaysia or which, had it been carried out in Malaysia, would have been such an offence; or
(b) has received or has in its possession or control money or other property the receipt, ownership or control of which is or would be an offence as mentioned in paragraph (a), it shall be the duty of such person to forthwith bring the matter to the notice of the Authority.
(3) Any person who without reasonable excuse fails to comply with the requirements of subsection (1) or (2) shall be guilty of an offence.
Penalty: Imprisonment for five years or thirty thousand ringgit or both.
(4) A person convicted of an offence for contravening subsection (2) shall be permanently disqualified from being a director or officer of a trust company.
(5) All moneys or property described in subsections (1) and (2) shall be forfeited to the Government and become its property absolutely.
General offence and penalty
(1) Any person who—
(a) does anything which is forbidden by or under this Act;
(b) does not do that which by or under this Act he is required to do; or
(c) otherwise contravenes or fails to comply with any provision of this Act, shall be guilty of an offence.
(2) A person who is guilty of an offence against this Act shall be liable on conviction to a penalty not exceeding the penalty expressly mentioned as the penalty for the offence, or if a penalty is not so mentioned, to a fine not exceeding ten thousand ringgit.
(3) The penalty, pecuniary or otherwise, set out in or at the foot of any section or part of a section of this Act shall indicate that the offence is punishable upon conviction by a penalty not exceeding that so set out and where the penalty is expressed to apply to part only of the section, it shall apply to that part only.
Power to prosecute
(1) No proceedings for any offence against this Act may be instituted by the Authority except with the written consent of the Public Prosecutor.
(2) Proceedings for any offence against this Act other than an offence punishable with imprisonment for a term exceeding three years may be prosecuted in a Magistrate’s Court and an offence punishable with imprisonment for a term exceeding three years shall be prosecuted in the Sessions Court or in the High Court.
Compounding of offences
(1) The Authority may, with the consent of the Public Prosecutor, compound any offence committed by any person against this Act, by making a written offer to such person to compound the offence upon payment to the Authority within such time as may be specified in the offer such sum of money as may be specified in the offer, which shall not exceed fifty per centum of the amount of the maximum fine to which that person would have been liable if he had been convicted of the offence.
(2) An offer under subsection (1) may be made at any time after the offence has been committed, but before any prosecution for it has been instituted, and where the amount specified in the offer is not paid within the time specified in the offer, or within such extended period as the Authority may grant, prosecution for the offence may be instituted at any time thereafter against the person to whom the offer was made.
(3) Where an offence has been compounded under subsection (1), no prosecution shall thereafter be instituted in respect of such offence against the person to whom the offer to compound was made.
Regulations
(1) The Minister may from time to time make such regulations as may be necessary or expedient for giving full effect to the provisions of this Act, for carrying out or achieving the objects and purposes of this Act, or for the further, better or more convenient implementation of the provisions of this Act.
(2) Without prejudice to the generality of subsection (1), regulations may be made for prescribing such forms, notices, fees, charges and anything which is required by this Act to be prescribed or as the Minister may deem necessary.
Exemption
(1) The Minister may, on his own motion or pursuant to an application in writing lodged with the Authority by the settlor or trustee of an offshore trust or a registered offshore trust or any person exempt that offshore trust or registered offshore trust or any person from all or any of the provisions of this Act and any regulations made thereunder and may impose such terms and conditions as he thinks fit.
(2) An exemption granted under subsection (1) may be revoked or varied by the Minister at any time.
Prohibition on registration or carrying on of business
(1) The Minister may, without assigning reasons therefor, issue a direction—
(a) prohibiting the registration or creation or recognition of any trust or enforcement of any trust under this Act; or
(b) directing any offshore trust to cease to carry on its business or part of its business either immediately or within such time as may be specified in the direction.
(2) A direction made under this section may be revoked or varied by the Minister.
Procedure where none laid down
In the event that any act or step is required or permitted to be done or taken under this Act and no form is prescribed or procedure laid down for the purpose either in this Act or any regulations made thereunder, application may be made to the Authority for directions as to the manner in which the act or step may be done or taken, and any act or step done or taken in accordance with its directions shall be a valid performance of such act or step.
Saving in respect of trusts existing before the commencement of this Act
(1) Nothing in this Act shall affect the legality or validity of any trust existing in Labuan arising from a document or disposition executed or taking effect, or of any act taken or done in relation to any such trust before the commencement of this Act.
(2) Where, prior to the coming into force of this Act, a trust has been established or created in Labuan, the settlor, if he is still alive or in existence, or in any other case, the beneficiaries and the trustees including any protector, may, within a period of twelve months from the coming into force of this Act, amend or vary the trust to bring it into conformity with the provisions of this Act and upon such amendment or variation the trust shall be deemed to have been validly created in accordance with or as provided by this Act.
Non-application of certain laws
The provisions of the Trustee Act 1949 [Act 208], the Trustees (Incorporation) Act 1952 [Act 258] and section 9 of the Government Proceedings Act 1956 [Act 359] shall not apply to an offshore trust validly created or enforced or registered under this Act.
LAWS OF MALAYSIA
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
