Order for Sale of Trust Property Obtained at the Kuala Lumpur High Court
Our firm recently acted for applicants in proceedings before the High Court of Malaya at Kuala Lumpur involving an application for an order for sale of a trust property pursuant to the Trustee Act 1949 and Rules of Court 2012.
The matter was commenced by way of Originating Summons, supported by an Affidavit setting out the material facts, the structure of the trust, and the justification for the sale.
Background of the Matter
The applicants were duly appointed trustees of a trust established for the benefit of a minor beneficiary. The trust arrangement was evidenced by a valid trust deed, under which the trustees held legal title to a residential property for the benefit of the beneficiary.
The subject property is a double-storey premises located in Johor Bahru, which had been acquired and fully paid for by the trustees on behalf of the minor.
As trustees, the applicants were under a fiduciary duty to manage the trust property in the best interests of the beneficiary. Subsequently, an opportunity arose to dispose of the property at a reasonable and favourable price, which would allow the trustees to better manage and preserve the beneficiary’s financial interests.
Legal Issues and Application
Given that the beneficial owner of the property was a minor, the trustees were not at liberty to unilaterally dispose of the property without the sanction of the Court.
Accordingly, we have filed on behalf of our clients/applicants an Originating Summons seeking, among others, the following orders:
- That the trustees be authorised to sell the property to a third-party purchaser pursuant to a duly executed Sale and Purchase Agreement;
- That a portion of the net sale proceeds, after deduction of legal fees and incidental costs, be preserved in an interest-bearing account for the benefit of the minor until he attains the age of majority; and
- Such further or other relief as the Court deems fit.
The application was supported by detailed affidavit evidence demonstrating the existence and validity of the trust, the trustees’ role, the minor’s beneficial interest, and the commercial justification for the proposed sale. The evidence further showed that the sale was undertaken in good faith and that adequate safeguards had been put in place to protect the minor’s entitlement to the proceeds.
Decision of the High Court
Upon hearing the application, the High Court Judge at Kuala Lumpur Court granted the orders sought by the applicants.
The Court was satisfied that the trustees had acted bona fide and in accordance with their fiduciary duties. The proposed sale was found to be reasonable and in the best interests of the minor beneficiary, particularly in light of the agreed purchase price and the structured mechanism for safeguarding the proceeds.
Importantly, the Court endorsed the arrangement whereby a portion of the net sale proceeds would be retained in an interest-bearing account and only released to the beneficiary upon attaining the age of majority. This ensured that the beneficiary’s financial interests remained protected notwithstanding the disposal of the trust asset.
Significance of the Case
This matter highlights the need of obtaining judicial approval when dealing with trust property involving minor beneficiaries. Trustees must always act within the confines of their legal authority and ensure that any transaction involving trust assets is demonstrably for the benefit of the beneficiary.
Our firm has extensive experience in handling trust-related applications, including applications for sale, administration, and preservation of trust assets, particularly where the interests of minors are involved.
Written on: 15th April 2026
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Disclaimer: The above proposition is subject to actual facts and circumstances and shall never be referred as the actual law without seeking legal advice. Consult us for more information!