Section 101
of International Trusts Order, 2000
Section 101
(1)
Subject to the provisions of this section, every disposition of property to or in favour of the trustees of an international trust as such trustees or to or in favour of any beneficiaries of an international trust as such beneficiaries shall, if made with an intent to defraud and at an undervalue, be voidable at the instance of a creditor thereby prejudiced.
(2)
In subsection (1) –
(a)
“an intent to defraud” means an intention on the part of the person making the disposition, or directly or indirectly causing it to be made, willfully to defeat an obligation or liability (including a contingent liability) which is owed to the creditor on the date of the disposition and of which the person making the disposition then has actual notice; and
(b)
“at an undervalue” means for no consideration or for a consideration that is of substantially less value in money or money’s worth than the property disposed of.
(3)
The burden of establishing an intent to defraud for the purposes of this section shall be upon the creditor seeking to set aside the disposition.
62
BLUV as at 16th December 2010
(4)
No action or proceedings pursuant to this section shall be entertained unless commenced within six years after the relevant disposition.
(5)
If a disposition is set aside under this section then –
(a)
unless the Court is satisfied that the trustees have acted in bad faith –
(i)
the trustees shall have a first and paramount charge over the property, the subject of the disposition, and any property representing that property, of an amount equal to the entire costs and expenses properly incurred by the trustees in the defence of the action or proceedings to set the disposition aside (and not merely such costs and expenses as might otherwise be allowed by the Court); and
(ii)
the disposition shall be set aside subject to the proper fees, costs, expenses, pre-existing rights, claims and interests of the trustees and of any predecessor trustees who have not acted in bad faith;
and
(b)
unless the Court is satisfied that a beneficiary of the trust has acted in bad faith the disposition shall only be set aside subject to the right of each beneficiary to retain any distribution made consequent upon the prior execution or exercise of a trust, or exercise of a power or discretion vested in the trustee of the trust or any other person, and otherwise properly executed or exercised.
(6)
The burden of proving that a trustee or beneficiary has acted in bad faith shall be upon the person making the allegation.
(7)
A disposition shall be set aside pursuant to this section only to the extent necessary to satisfy the debt or liability to the creditor at whose instance the disposition had been set aside together with such costs as the Court may allow.
63
BLUV as at 16th December 2010
(8)
Nothing in this section –
(a)
shall validate any disposition of property which is neither owned by the transferor nor the subject of a power in that behalf vested in the transferor;
(b)
shall affect the recognition of a foreign law in determining whether the transferor is the owner of such property or the holder of such power.
(9)
Nothing in this section shall create or enable to be enforced any right claim or interest avoided or defeated by section 108.
(10)
Neither section 172 of the Law of Property Act, 1925 (in so far as it applies in and is in force in Brunei Darussalam) nor any rule of law or equity other than this section concerning settlements or other dispositions for no or for inadequate consideration or concerning dispositions defeating or delaying creditors shall apply to any disposition of property to or in favour of the trustees of an international trust as such trustees or to or in favour of any beneficiaries of such a trust as such beneficiaries.
(11)
This section shall apply to a disposition wherever the property is situated at the time of the disposition and even though the disposition is not (apart from this section) governed by the law of Brunei Darussalam; and this section shall so apply to the exclusion of any foreign law.
Trust law.