12 August 2020

In the 21st century where opinions are often pitted against each other, there is one undeniable fact even a relentless individual would concede – digitalisation has taken the world by storm. In 2018, according to a survey conducted by the Malaysian Communications and Multimedia Commission, the number of internet users in Malaysia had reached 28.7 million users, which translates to an astonishing 87.4% of the population![1]

In our daily lives, we cannot escape the alluring screens of computers, smartphones and televisions alike. From banking transactions to storing documents in the ‘cloud’; from video calling with friends and family to streaming Netflix, all these are done at the convenience of a click. Due to the COVID-19 pandemic, the Singapore judiciary had even elected to sentence a man to his death via Zoom.[2]

So, have you ever stopped to ponder – can I leave behind a digital will for my loved ones or can I pass on my digital assets such as Bitcoins[3] to my children?

The Wills Act 1959

The subject matter of wills is governed by the Wills Act 1959[4] (“WA 1959”). Section 5(1) of the WA 1959 states:

“No will shall be valid unless it is in writing and executed in manner hereinafter mentioned.”

In order for a will to be valid, the will must satisfy two conditions, that is:

  1. it is in writing; and
  2. it is executed in a manner prescribed in section 5 of WA 1959.

“In Writing” – first limb

It seems like the concept of a digital Will may not be plausible from the beginning, as section 5(1) of WA 1959 stipulates that a Will shall be in writing. Fret not, as Section 3 of the Interpretation Acts 1948 and 1967[5] (“Interpretation Act”) defines ‘writing’ to include a digital form:

““writing” or “written” includes type writing, printing, lithography photography, electronic storage or transmission or any other method of recording information or fixing information in a form capable of being preserved”

“Executed in a manner prescribed in section 5” – second limb

Once the first limb is satisfied, one would need to examine the second limb. A will must be executed in a manner prescribed in section 5 of WA 1959, particularly section 5(2):

“Every will shall be signed at the foot or end thereof by the testator or by some other person in his presence and by his direction; such signature shall be made or acknowledged by the testator as the signature to his will in the presence of two or more witnesses present at the same time, and such witnesses shall subscribe the will in the presence of the testator, but no form of attestation shall be necessary…”

The law requires that a will must be signed by the testator in the presence of two or more witnesses present at the same time.

The question is must the witnesses be in the ‘physical’ presence of the testator? Can the witnesses witness the signing of the will via Skype or Zoom instead?

As the Interpretation Act offers no answer, we must look into case precedents.

In Sawinder Kaur Fauja Singh v Charnjit Singh Thakar Singh,[6] Zainun Ali JC (as Her Ladyship then was) held the following:

“As it stands, s. 5(2) Wills Act 1959 is equivocal in its terms. It states that:

Every will shall be signed at the foot or each thereof by the testator or some person in his presence, and by his direction, such signature shall be made or acknowledged by the testator as the signature to his will in the presence of two or more witnesses present at the same time…

(The underlined emphasis is added)

The operative words are clearly of a peremptory nature and so it is clear that the testator is to acknowledge his signature in the actual, visual presence of two or more witnesses…”

It is also to be noted that there is a wide perception that the Electronic Commerce Act 2006 (“ECA 2006”), which provides the law for e-signatures, had specifically excluded the application of the ECA 2006 on Wills[7]. This would suggest that Malaysian Parliament is not ready to recognise Wills to be signed virtually by either the testator or witnesses. Not to mention the Bar Council has taken the position that witnessing a signing via a screen is unlikely to fulfill the requirement of the witness being present during of the signing.[8]

For the time being, it appears we are bound by the conventional way in preparing a will. It must be in writing and signed by the testator in the presence of two or more witnesses physically present at the same time.

Does Malaysia cater for inheritance of digital assets?

Can one depose his digital assets in his will? To answer this, it is helpful to dive back to WA 1959. Section 2 of WA 1959 defined ‘property’ as:

““property” includes lands, leases, rents and hereditaments corporeal, incorporeal or personal and any individual shares thereof and any estate, right or interest therein or in relation thereto, moneys, shares of Government and other funds, securities for money, charges, debts, choses in action, rights, credits, goods and all other property whatsoever which devolves upon the executor or administrator and any share or interest therein and any contingent, executory or other future interest.”

Let’s focus on the word ‘incorporeal’. Merriam-Webster online dictionary defines ‘incorporeal’ as “of, relating to, or constituting a right that is based on property (such as bonds or patents) which has no intrinsic value”.[9] In essence, an incorporeal entity has no physical form, a perfect example would be a right to sue or cryptocurrencies such as Bitcoins.

In a decision by Re Hee Chun Meng,[10] Shankar J (as His Lordship then was) opined that:

“However, s 2 of the Act provides that ‘estate’ means all property which if a person died intestate would vest in the Official Administrator under s 39. Section 2 also provides that ‘property’ includes a thing in action and any interest in movable or immovable property. In other words, under the law it is obvious that a thing in action is property. Even though it is intangible it is a right which could move from one person to another depending upon capacity to sue and in that sense a thing in action could be said to be movable property.”

In another decision by Richard Malanjum J (as His Lordship then was) in Husli bin Moj & Ors v Probate Officer, Miri[11] in affirming another case King Hock Ching v Ung Siew Ping[12] held:

“Indeed, in the case of King Hock Ching v Ung Siew Ping [1974] 2 MLJ 16, a Sarawak case which also dealt with the Ordinance, his Lordship Tan Chiaw Thong J found that the word ‘asset’ was no-where defined in the Ordinance but nevertheless held that a right to sue being a chose in action was an asset in Sarawak. His Lordship went on to say thus at p 19C-E:

In this connection, the point for consideration is whether a right to bring this action is an ‘asset’ of the estate of the deceased person concerned. If so, then this right is an asset of the deceased in Sarawak. In this connection, in the case of Ong Ah Ngim v Lau Kiok Kia [1956] SCR 7, it was held by the then High Court at Kuching that the right of action is part of the assets of a deceased’s estate and that before a plaintiff can bring an action in pursuance of this right, it must have been vested in him. In that case, it was held, inter alia, that the right of action to sue for damages must be included in a grant of letters of administration before it could be enforced by an administrator. This part of the decision in that case turns upon the construction of the relevant provisions of the Ordinance which have not been amended up to now. With respect, I agree with the decision of the then High Court.”

To date, the courts have yet to test whether assets deposed in a will are wide enough to incorporate digital assets. Our view is that digital assets, be it cryptocurrencies or funds in a PayPal account, will qualify as an incorporeal property, and thus can be deposed in a will.

Summing up

Whilst digital assets have made inroads towards legal recognition, creation of wills digitally remain a legal challenge. To date, only three states in the USA have passed legislation to pave the road for the use of digital wills.[13] The rest of the world has adopted the wait-and-see approach.

As catastrophic as the COVID-19 pandemic seems, it brought about some welcoming changes. History was made on 23 April 2020 when the Court of Appeal live-streamed its proceedings conducted via Skype for the first time ever to the general public[14] on Youtube Live.[15] From then on, courts in Malaysia began transitioning into online hearings at a gradual, steady pace. But will Malaysia catch on to the concept of a digital will? To achieve this, a new parliamentary act has to be introduced to cater for the digital wills, or amend the existing WA 1959 to provide for it.

There are certainly some hoops to jump through before a digital will will be recognised in Malaysia. The risks of the contents of the digital will being altered against the testator’s wishes need to be addressed. But we remain optimistic that in the near future a digital will can co-exist side-by-side with a conventional will.

If you have any questions or require any additional information, please contact Jeyakuhan S K Jeyasingam, Victor Wong or the Zaid Ibrahim & Co partner you usually deal with.

This alert is for general information only and is not a substitute for legal advice.

[1] Malaysian Communications and Multimedia Commission, ‘Internet Users Survey 2018’ <https://www.mcmc.gov.my/skmmgovmy/media/General/pdf/Internet-Users-Survey-2018-(Infographic).pdf> accessed 18 June 2020.

[2] ‘Man sentenced to death in Singapore via Zoom’ (BBC, 20 May 2020) <https://www.bbc.com/news/technology-52739676> accessed 20 May 2020.

[3] ‘Guide: What is Bitcoin and how does Bitcoin work?’ (BBC, 31 October 2018) <https://www.bbc.co.uk/newsround/25622442> accessed 21 May 2020.

[4] Wills Act 1959 (Act 346).

[5] Interpretation Acts 1948 and 1967 (Act 388).

[6] [1998] 1 CLJ Supp 402.

[7] Schedule of Electronic Commerce Act 2006 (Act 658)

[8] Malaysian Bar Council Circular No 084/2020 dated 1 April 2020

[9] Merriam-Webster, <https://www.merriam-webster.com/dictionary/incorporeal> accessed 15 May 2020.

[10] [1989] 2 MLJ 310.

[11] [1996] 5 MLJ 420.

[12] [1974] 2 MLJ 16.

[13] David D. Little, 11 February 2020 https://www.law.com/therecorder/2020/02/11/the-future-is-almost-here-electronic-wills-in-california/?slreturn=20200606011409 Accessed 6 July 2020

[14] New Straits Times, 23 April 2020 https://www.nst.com.my/news/crime-courts/2020/04/586873/court-appeal-goes-virtual-first-time-nsttv Accessed 15 May 2020

[15] Tayangan Langsung Pendengaran Kes Mahkamah Rayuan Secara Dalam Talian (23 April 2020) https://www.youtube.com/watch?v=5zuKiIxj4_M Accessed 2 June 2020