Sarawak JVC land development is “facilitative commercial trust”
Taken from article by Assoc Prof Ramy Bulan
Dayakbaru:
Please take note that the Agong is to protects the natives of Sabah and Sarawak under the Federal constitution. (Should we send a memorandum to the Agong on Sarawak Government land grab policies?) Please read the article slowly to understand better our JVC Konsep Baru model.
The Trust and Native Customary Land Development
This ‘new model’ JVC is a type of development trust which is a ‘facilitative commercial trust’ (Bryan 2001). Creating a trust circumvents the requirements for a person or persons to be a party to the contract in order to enforce it. A third party cannot enforce the contract but he may enforce a trust even though he was not party to it. The beneficiaries include persons whose names appear in the appendix of the trust deed, their respective heirs, successors in titles, executors, administrators, personal representatives, trustees and any other person claiming title or interest in the name or on behalf of the native customary owners.
The trust does away from the need to equally contribute equally in order to share equally in the profit
The trust also does away with the need to get into a partnership that will require the parties to contribute equally in order to share equally in the profits (Ladbury 1987). Most native landowners do not have the financial means to develop the land, so vesting the land in trustees is arguably one of the most appropriate mechanisms that can be used. Be that as it may, the intrinsic nature of native customary rights could give rise to problems peculiar to this kind of trust.
The JVC and the Nature of the Beneficiaries’ Interests
The terms of the trust deed presume that the native customary owners have acquired the rights through one of the means prescribed under Sections 5(2), 7A, 7B or 7C, or had obtained a permit under Section 10, of the Land Code , or that there is evidence or records kept by the Land Office pertaining to the land, so that a registrable document of title may be issued in favour of the company.
With one master title, the owners cannot apply for subdivision for as long as the company is the registered proprietor.
This arrangement is different from some property development ventures which are financed through the marketing of shares in land trusts where the shares have clear proportions. In this case, while the beneficiaries may be entitled to the land as set out in the appendix of the trust deed, their respective interests, rights, and shares are undivided. With one master title, the owners cannot apply for subdivision for as long as the company is the registered proprietor.
What is the power of trustees in NCR land development?
Applying the traditional requirements of certainty, there is no exhaustive listing of all beneficiaries entitled under customary law. The question in this case is: could the trust be challenged as void for uncertainty of objects? If so, who is responsible to ensure that the land reverts to the owners? And finally, what are the powers of the trustees?
General Powers and Duties of Trustees
The trustee’s powers are provided for by the trust deed, although general statutory powers are also provided by the Trustee Act 1949. The powers of a trustee are facilitative, enabling a trustee to act in a certain way but leaving the discretion to him as to whether to so act. Duties, on the other hand, are imperative. They compel or prohibit a trustee from acting in a certain way, failing which he may be liable for breach of duty.
The general powers of trustees under the Trustee Act include the powers to compound liabilities, to settle claims and to give receipts, to fix the value of trust property, to concur with co-owners of land in disposing of trust property, and to insure trust property.
The Trustee cannot put himself in a position where there is a conflict of interest
The trustee cannot put himself in a position where there is a conflict of interest, nor can he profit from his position without authorisation by the trust deed or consent of the beneficiaries. It is his duty to administer the trust honestly and impartially for the benefit of the beneficiaries, to account to the beneficiaries and to distribute the income to those entitled to it.
A breach of duty may result in a claim by the beneficiaries.
Any loss caused by the trustee or trustees wrongfully disposing of the assets or any diminution in the value of the trust fund may have to be borne by the trustees. The same liability may be imposed on a trust corporation, although the standard of care and business prudence expected of a trust corporation is higher than that of an ordinary trustee, particularly where it holds itself out as capable of providing certain expertise which cannot be provided by an ordinary prudent man. The reasonable standard of care is one for the courts to decide based on the facts of the case.
Underlying these powers and duties is the fiduciary obligation of the trustee to the beneficiary.
The Fiduciary Relationship and its Ramifications
The word ‘fiduciary’ comes from the Latin fiducia meaning ‘trust’. Inherent in the nature of the fiduciary relationship is one party’s position of disadvantage or vulnerability which causes him to place reliance upon another and requires the protection of equity in acting upon the conscience of that other. It is important to determine whether a fiduciary relationship exists and, if so, whether any remedy is available in case of any breach of that fiduciary obligation.
Relationship between a trustee and the beneficiaries
The relationship between a trustee and the beneficiaries has been called the ‘archetypal’ fiduciary relationship.[17] It is an established principle that the trustee must not use his position to make a gain for himself. This has been extended to apply generally to all cases where one person stands in a position of influence over another, enabling the court to intervene in circumstances where the person occupying a position of trust or confidence took improper advantage of that position. The question is: would these principles of fiduciary duty apply to a government and its agencies?
Dal Pont and Chalmers (1996: 118) argue that the government, like a trustee, is concerned with the control and distribution of wealth. Having been sourced from the people, the exercise of a government’s power to affect the interests of its people is subject to an obligation to deal with this wealth for the benefit of its people. In this respect, the people can be characterised as ‘beneficiaries’ of the trust established by the conferral of their authority on the government to act on its behalf (Finn 1994: 45). The fiduciary duty that binds the Crown is similar to the duty that a constructive trustee owes to a beneficiary, which entails a duty not to compromise the beneficiary’s interest in transactions with third parties.
Fiduciary relationship between government and natives
The highest courts in the United States, Canada, New Zealand and, to some extent, Australia have recognised the existence of a fiduciary relationship between the government and aboriginal persons. The issue of fiduciary obligation towards aboriginal people has also arisen in Malaysia. In one recent case,[18] the federal and state governments were both said to have owed a fiduciary duty to the Orang Asli (aborigines) of Peninsula Malaysia to protect them from unscrupulous exploitation and to safeguard their tribal organisation and way of life. That duty emanates from Article 8(5) of the Federal Constitution. This was affirmed by the Court of Appeal in 2005.
The Agong is to protect the interest of the natives of Sabah and Sarawak
In the case of natives in Sarawak, Article 153 of the Federal Constitution also imposes a fiduciary obligation on the Yang di-Pertuan Agong (the King) to protect the interests of the natives of Sarawak and Sabah. Further preferential treatment as regards alienation of land by the state is contained in Article 161A(5), while protection of native law and custom is also enshrined under Article 150(6A), Clause 5.
Clearly, there is legal recognition that natives are especially vulnerable to the power of government, and this justifies their preferential treatment. For natives in Sarawak, this is a reflection of the Brooke government’s belief that Sarawak ‘is the heritage’ of its people and that land is their ‘lifeblood’. In the ‘Nine Cardinal Principles of the Rule of the English Rajahs’, the government held itself as ‘trustee’ of the people and policies for protection of native interests against outside exploitation were put in place.
Sarawak Government do not have the power to impair NCR by way of alienation
The state’s fiduciary duty also arises because of the inalienability of the property. The state’s power to impair native customary rights by way of alienation, and the fact that such rights are inalienable except to another native or by surrender to the state, gives rise to a fiduciary obligation on the state. The fiduciary obligation protects those rights so that they cannot be terminated without involving, informing, consulting and negotiating with the customary right holders in good faith, minimising the impact and detriment on the affected parties. It is imperative for the government to deal with the property surrendered to it with utmost good faith.
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Inspirational word from gkm2020
DAYAK LAMA & RABAN IYA
PADAH NGAGAI AKU PROJECT PERINTAH KE
BEBILLION DINI ALAI PROJECTNYA?
ANANG NYEBUT ALUMINIUM DIBINTULU
SEMADI NEGERI BUKAI DI MALAYSIA
KE ENGGAI ALAI KILANGNYA LABAN
SIDA NGIRA ALAM SEKITAR
Are our interests as natives really protected by the Constitution? Whether the government acts according the Constitution to protect our interests?
How about 20-points agreement in the formation of Malaysia, have they been honoured all this while?