1. 1
LAW 3112: MALAYSIAN BUSINESS LAW
SEMESTER 2 2017/2018
SECTION 2
1ST CASE: IN RE TAN SOH SIM, DECEASED: CHAN LAM KEONG & OTHERS VS
TAN SAW KEOW & 3 OTHERS.
2ND CASE:
Prepared by:
AMINAH SHAKIRAH BINTI IBRAHIM 1522918
NUR AINA MUAZ BINTI MUHAMMAD ROSHIDI 1525404
NUR AMALEENA BINTI MOHAMMED 1520380
CHE KARTINI BINTI CHE RAZAK 1522414
SITI AQILAH BINTI NOOR AZMI 1529370
Instructor’s Name:
Dr. Siti Salwani Binti Razali
Date of Submission:
26th April 2018
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TABLE OF CONTENT
NO CONTENT PAGE
1
1st Case: IN RE TAN SOH SIM, DECEASED: CHAN
LAM KEONG & OTHERS VS TAN SAW KEOW &
3 OTHERS.
3
2 - Facts of the Case 4
3 - Issues of the Case 5
4 - Principle of the Case 6-7
5 - Decision held by the Court 8
6 - Commentary 9
7 - Islamic Perspective 10
8
2nd Case: VENTAKA CHINNAYA RAU GARU VS
VENKATARAMAYA
11
9 - Facts of the Case
10 - Issues of the Case
11 - Principle of the Case
12 - Decision held by the Court
13 - Commentary
14 - Islamic Perspective
15 References
16 Appendix
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1ST
CASE:
IN RE TAN SOH SIM, DECEASED:
CHAN LAM KEONG & OTHERS VS
TAN SAW KEOW & 3 OTHERS.
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THE FACTS OF THE CASE
In the case of Re Tan Soh Sim [1951] MLJ 21 the deceased, Tan Soh Sim, had three
sisters. Their mother was firstly married to one Tan Ah Thai and had four children. When Tan
Ah Thai died, she married one Khoo Kim Huat and had seven children. The Tan and Khoo
children maintained social and friendly relations with one another. Tan Soh Sim married, but
having no issue, adopted four children. Her husband, one Chan, married a second wife, Tan
Boey Kee. When Tan Soh Sim was on her death-bed, too ill to make a will, all the Khoo and
Tan children signed a document drawn up by a solicitor renouncing all claims to Tan’s estate
in favour of the four adopted children and Tan Boey Kee. They were told by Tan Boey Kee
that this was the testamentary intentions of Tan Soh Sim. Tan Soh Sim died without having
recovered consciousness. The question arose in the distribution of Tan’s estate, whether the
instrument signed was valid. It was contended that he instrument was a contract under Section
26(a) of the Contracts (Malay States) Ordinance 1950.
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THE ISSUE OF THE CASE
1) Whether there is near relation between Tan Soh Sim and her four adopted children?
This raised the further question what exactly was meant by “near relations” under
section 26 (a) of the Ordinance. The Court of Appeal stated that the words ‘relationship’ and
‘near’ must applied and interpreted in each case according to the mores of the group to which
the parties belong and with regard to the circumstances of the family concerned. A person who
has been adopted according to Chinese custom therefore is a relation and the answer to the
question whether he is a “near” relation within the scope of section 26 of the Contracts
Ordinance depends on the position of the other person in regard to whom the question arises.
It can hardly be doubted that agreements between an adopted child and his adoptive parents or
brothers would be supported on the ground of affection existing between them. But here,
according to Chinese custom, the Khoo and Tans children are related to the four adopted
children of Tan Soh Sim only in a special and limited way which is not near. Tan Boey Kee’s
relationship to them is certainly more remote than that of the children, if indeed any relationship
existed. Accordingly, the court held that the instrument did not fulfil section 26(a) of the
Contracts Act.
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PRINCIPLE OF THE CASE
(CONSIDERATION-NATURAL LOVE AND AFFECTION)
In the case of Re. Tan Soh Sim, the deceased Tan Soh Sim in her last illness had
expressed a wish that her estate should be divided among her adapted children. The legal next-
of-kin of Tan Soh Sim, three sisters and seven half sisters and brothers, respecting his wish,
made a contract renouncing all their rights in favour of the four adapted children. The issues
were whether the legal next-of-kin of Tan Soh Sim are in near relation to their adapted nephews
and nieces. Chinese adapted children are related to the adoptive parents and brothers. However,
they are not nearly related to the family of their adaptive mother. Therefore, the legal next-of-
kin of Tan Soh Sim were not in near relation to the four adopted children of Tan Soh Sim. Thus,
there is no valid of natural love and affection between them the contract was invalid. The
consideration can be made valid if both parties sign a written agreement.
Even though, English law does not recognize natural love and affection as valid
consideration. However, the position under the Contracts Act 1950 is differing by virtue of
Section 26(a) of Contracts Acts which said as follows: -
“...An agreement made without consideration is void, unless it is expressed in writing and
registered under the law (if any) for the time being in force for the registration of such
documents, and is made on account of natural love and affection between parties standing in a
near relation to each other...”
As such Illustration (b) to section 26 of Contracts Act provides an example which as follows:
-
“...A, for natural love and affection, promises to give his son, B, $1,000. A puts his promise to
B in writing and registers it under a law for the time being in force for the registration of such
documents. This is a contract...”
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Therefore, an agreement made on the ground of natural love and affection would be
binding in Malaysia if the requirements of Section 26 (a) of the Contracts Act are present, if it
is full filled the condition as follows: -
i) It is expressed in writing;
ii) It is registered (if applicable); and
iii) The parties stand in a near relation to each other.
The requirement that the document be registered appears unnecessary as there is no law in force
in Malaysia requiring registration of agreements made on account of natural love and affection.
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DECISION OF THE CASE
First and foremost, English law does not recognize natural love and affection as a valid
consideration. It is only considered as a valid consideration if certain prerequisites are complied
with the Contracts Act1950 in Malaysia. An agreement made on account of natural love and
affection would be held to be binding in Malaysia if the requirements of section 26(a) are
present. The requirements of section 26(a) is that the agreement must be
1. expressed in writing,
2. registered if it’s applicable, and
3. the parties stand in a near relation to each other.
Since social norms and cultures differ from one group to another, the Courts will decide in
what situations “near relations” will apply.
In the case of Re Tan Soh Sim [1951] 1 MLJ 21 it was held by the court that Chinese adopted
children could not be regarded as being ‘in near relation’ to the uncles and aunts of the adoptive
mother. Plus, even the agreement were not effective as it was contrary to Section 26(a) - that it
was not in writing, and there was no natural love and affection between parties standing in near
relation to each other, since the four children were adopted and did not have natural relations
(blood ties) to the siblings of the adoptive mother.
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COMMENTARY
Based on our opinion, we all agreed that the conclusion of the appeal be dismissed. This is
because firstly regarding the issue of whether the document formed by the solicitor is a contract
or not. It is true that the instrument or document formed by the solicitor is based upon the
deceased wishes. However, an agreement requires a promise, and there must be acceptance in
order to produce a promise. In this case, since there is no written will that can be found at all
means it is not sufficient enough to convert the proposals into promises and the document into
an agreement. Since they failed to seek the validity of the document, it means they failed to
fulfil the requirement of paragraph (a) of section 26 which should be “expressed in writing.”
Next, what exactly is meant by "near relations"? Are adoptive relations included? How
"near" must they be? It is impossible to define relationship or "nearness" without either
extending or restricting the legislation which would be beyond the province of the Court. If the
word "near" were excluded, then the most distant cousin would be an eligible relation and the
subsection would be unmanageable. Therefore here the Court of Appeal stated that the word
'relationship' and ‘near’ must be interpreted based on the belief and culture as well as the
circumstances of each case involved. But here, according to Chinese custom, the Khoo and
Tans children are related to the four adopted children of Tan Soh Sim only in a special and
limited way which is not near. Therefore, I agree that the adopted children and Tan Boey Kee
should not have been deprived to make second appeal.
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ISLAMIC PERSPECTIVE
Adopted children is not listed as the heir who is entitled to inherit the wealth of his adoptive
parents in accordance with Faraid law. This is because the adopted child does not have a blood
ties with the father. However, it does not mean that the adopted child is left unattended until
been granted nothing by the adoptive parents. From Shariah perspective, inheritance law
permits the father and mother and any family member to write a will a recommendation for the
orphan. Any of them can put an amount of money provided that it must be no more than one-
third of inherited money.
With regard to the will, In Islam, writing a will may be obligatory with regard to the dues of
others where there is no proof, lest they be lost or neglected, because the Prophet (peace and
blessings of Allaah be upon him) said:
“It is not permissible for any Muslim who something to will to stay for two nights without
having his last will and testament written and kept ready with him.”
(Narrated by al-Bukhaari, al-Wasaayaa 2533).
To relate with this case where the written will was absence, supposedly the deceased must
prepare to write the will earlier even before she got badly ill. Writing a will earlier also could
help ensuring that your wishes are followed avoiding unnecessary family disputes after you
have passed away. This is because in the event of dying intestate, our family will have to apply
to the courts to administer your estate which means a far more lengthy and costly process than
if you had written a will. Lastly, always try to give to those who are religiously committed in
a way that will help them to obey Allah. It is also permitted to bequeath to them one-third or
less of your wealth as long as they are not your heirs. Allah knows best.
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REFERENCES
1. Mr Bharath (2008, April 9th). Under Malaysia law, “consideration need not be
adequate”. [Web log post]. Retrieved April 15th, 2018, from
http://alagendra.blogspot.my/2008/04/contract-lawconsideration.html
