Professor Ying Khai Liew presents a webinar on ‘Trusts Law in the Asia-Pacific Region: Some Reflections’

Professor Ying Khai Liew from the University of Melbourne presented a webinar on ‘Trusts Law in the Asia-Pacific Region: Some Reflections’ over Zoom on 14 February 2023. This webinar was moderated by Professor Hans Tjio.

The webinar began with the observation that while trust law scholarship was chiefly concentrated on the UK, the Commonwealth jurisdictions, and East Asia, little was known about trust law in the Asia Pacific region and a region wide conversation would add to the richness of the scholarship. To understand the state of trust law in the region, the various Asia Pacific countries could be grouped according to the state of the development of trust law. The first group comprised the Commonwealth countries of Australia, Hong Kong, Malaysia, New Zealand, and Singapore which adopted English trust concepts. The second group were the South Asian countries of India, Pakistan, Bangladesh, and Sri Lanka in which the trust gained validity through trust legislation to supplement some common law. In the third group, the East Asian nations of China, Japan, South Korean, and Taiwan were civil law countries which constrained the adoption of trust law. While the fourth group of countries comprising the Cook Islands, Niue, and Samoa had laws like the first group, they were categorised separately as they aggressively marketed trusts in the context of a financial centre. The fifth and final group of countries was the largest, and they referred to countries which did not recognise the trust in any form e.g., Indonesia and Vietnam.

In terms of the nature of the trust, Professor Liew said that the debate whether a beneficiary interest was a personal right or proprietary interest had practical consequences in Group 2 and Group 3 countries. In Group 2 countries, practical consequences arose as the choice made in defining the trust was intertwined with English law and a policy decision was made to avoid a distinction between legal and equitable ownership which was alien to these jurisdictions. For Group 3 countries, this was also an important question because of the civil law tradition in which nomenclature mattered greatly and that every right must be clearly defined. The trust acts therefore defined a trust as a personal interest as this understanding did least violence to the applicable civil law tradition.

As regards the dimensions of the trust, this concept was multidimensional in terms of facility, regulation, and analytical framework. In the offshore jurisdictions of Group 4 countries, the facilitative aspects of the trust were radically emphasised. For example, there was an express provision to allow the settlor to be the protector of the trust and an abolition of the rule against perpetuities. The issue was whether these laws were overly facilitative at the expense of conceptual clarity. By contrast, the mid-shore jurisdictions of Singapore, Hong Kong, and the Labuan IBFC were also facilitative but did not go as far as the offshore jurisdictions although pressures were growing on them. In terms of regulation, the introduction of trust acts in Group 3 countries served to regulate existing trust practices. Although it was not confined to trust businesses, there was little take up of the trust facility by individuals. In relation to the analytical framework of trusts, trust law was also useful to help understand existing customary practices.

In relation to constructive trusts, the Group 3 countries had not yet adopted this concept as there were constraints arising from the civil law system. The distinction between remedial constructive trusts and institutional constructive trusts was also discussed, as well as the choice of law rules for cross-border trust disputes. It was surprising to note that Group 2 and 3 countries did not have dedicated choice of law rules for trust disputes despite the domestic law recognising trusts. A lively question and answer session followed in which questions were asked about remedial and institutional constructive trusts and non-charitable purpose trusts in Singapore.