SURENDRAN A/L THURAISINGAM v SELVAMANICKARAJA A/L MANOHAR

Case Significance

Illustrates the mandatory operation of Schedule 10 of the Financial Services Act 2013 over life-policy nominations to non-family members, the court holding that proceeds nominated to persons outside the statutory categories of spouse, child or parent form part of the deceased's estate for its debts, taking precedence over a trust deed and a will.

This High Court decision concerns the distribution of life-insurance proceeds and trust assets where a policy was nominated to persons who were not the deceased's family members, and it turns on the interpretation of Schedule 10 of the Financial Services Act 2013. The plaintiff, as executor of the deceased's estate, sued the defendant — sued personally and as litigation representative for his children — contending that assets designated to nominees who were not within the statutory categories of "spouse, child or parent" must form part of the deceased's estate and be applied to settle the estate's debts under paragraphs 5 and 6 of Schedule 10, and that those beneficiaries lacked the requisite relationship to the deceased. The defendant argued that a deed of trust and the deceased's will were separate instruments, that the will had not revoked the trust, that the assets had been validly designated to the named beneficiaries, and that the Financial Services Act 2013 applied only where there was no will or trust. The court held that the statutory provisions governed regardless of whether there was a will, a trust, or an application for administration: the decisive question was whether a person outside the categories in paragraph 5 of Schedule 10 had been designated as nominee of a life policy, and here that had occurred. It held that paragraph 13 of Schedule 10 gives the Schedule precedence over policy terms, other laws and customs relating to estate matters, that the role of a protector under the trust could not override a statutory provision, and that there was no evidence the deceased had assigned the relevant policies to the beneficiaries. The court accordingly allowed the plaintiff's claim, declaring that the beneficiaries outside the statutory categories were not entitled to retain the trust assets and that those assets formed part of the estate subject to its debts, with costs of RM5,000 to the estate. The judgment illustrates the mandatory operation of Schedule 10 of the Financial Services Act 2013 over non-family nominations.