Is the concept of a secret trust in a will recognised and applicable in Malaysia?

CHIN JHIN THIEN & ANOR v. CHIN HUAT YEAN @ CHIN CHUN YEAN & ANOR [2020] 4 MLJ 581

• A man was diagnosed with terminal cancer and died in 2013 (“the Deceased”). He was an engineer by profession and had three wives.

• Only his marriage with the first wife was registered. The Deceased had two children with the first wife (“the Plaintiffs”).

• The Deceased had 4 children with the second wife, of whom two were still studying when the Deceased died, and the youngest was still a minor at that time.

• The second wife is the elder sister of the first wife. The second wife had a marital affair with the Deceased whilst the first marriage subsisted. Unable to accept the fact that her sister had an affair with her husband, the first wife filed for a divorce. Decree nisi was granted however, has not been made absolute.

• In the meantime, the Deceased married his third wife who was also his business partner. His third wife was not called as a witness during the trial. Nevertheless, there were wedding photographs to show that they went through a Chinese customary marriage ceremony and the Deceased did not have any children with the third wife.

• The family conflicts arose from the will made by the Deceased dated 18 December 2013. The will was prepared by a lawyer named Peter Huang who also witnessed the will together with his secretary (“the Defendants”)

• Under this will, the Deceased gave all his assets and properties to the Defendants. The Deceased died six days after the will was made.

• The Defendants later obtained the grant of probate on 12 February 2014 at the Kuala Lumpur High Court.

• Consequently, the Plaintiffs filed a civil suit at the Pulau Pinang High Court and seeking for an order that the grant of probate issued by the Kuala Lumpur High Court be declared null and void and is revoked and cancelled; and a declaration that the will dated 18 December 2013 alleged to be the last will and testament of the Deceased is void under the law. The Plaintiff’s claim was that the deceased did not have the capacity [testamentary capacity] to make the will.

• The Defendants contended that they are not the true beneficiaries of the will as they are only trustees for the benefits of the Deceased second wife and her children. In the upshot, the defendants claim that a secret trust was created under the will. It was not stated in the will that the Defendants were to hold the properties of the Deceased under the will on trust for the Deceased’s second wife and children

• The High Court found in favour of the Plaintiffs. The High Court held that the Deceased did not have the capacity to make the will. They further held that if the purpose of the will was to provide for the Second Wife and the children then it should have been mentioned in the will.

• The Defendants appealed to the Court of Appeal. The Court of Appeal found in favour of the Defendants.

• The Plaintiffs appealed to the Federal Court.

• The concept of secret trust is applicable in Malaysia subject to subject to 3(1) of the Civil Law Act 1956, the Wills Act 1959, and the fact is that the concept has never been explicitly abrogated by any of our statutes or Acts of Parliament. The doctrine does not offend public policy.

• In this case, the Defendants had adduced sufficient evidence to establish that the Deceased had the testamentary capacity to make the said will.

• The overriding purpose of a secret trust is to enable a property to be left in a will without explicitly naming who the property is being left to. As will are by nature public documents open to scrutiny, the concealment of the identity that a secret trust provides is vital for those desiring a degree of privacy.