Trustees and church governance
By Mable Leong
AT some stage of church growth, most churches will grapple with land and property issues. Under Malaysian law, most churches are either registered as companies limited by guarantee or as societies, both of which have the legal right to acquire and own property and to hold and administer it in accordance with the law.
With many small and independent churches emerging, what of churches that are neither registered as a company nor society? Such a church may appoint a trustee or trustees who have the power to purchase, own and administer land and property on behalf of beneficiaries, in other words, the church congregation. A trust would fall under "bodies expressly empowered to hold land under any other written law" in Section 43 of the National Land Code 1965 on the groups of persons who are eligible to hold and deal in land.
A trust can be created by appointing one or more trustees by resolution of a general meeting and with a trust deed prepared by a competent legal practitioner. Trusts set up by churches tend to be unincorporated. Some churches prefer the company structure although a trust is generally simpler to administer and cheaper to establish and operate.
There are, however, scenarios where the trust can run into problems. Some of these can involve the death of the trustee with no clarity as to whom the church property goes to. The heir of the trustee may spark off a legal tussle by attempting to lay claim to the property. Or a trustee might have left the church but refuses to relinquish his position and transfer the property to the church or a new trustee. An unscrupulous trustee may take advantage of the trust and abuse it for his own benefit. If the trustee does not act in good faith, we can expect a hard time for the church.
In an interview with Berita NECF, Transparency International Malaysia President Datuk Paul Low, who is also an elder of a local church, stresses that it is critical for churches to have safeguards because of the extensive powers that trustees hold. Legally, a trustee has no obligation to consult either the settlor or the beneficiaries and has wide powers under the Trustee Act 1949. While church members can sue for breach of trust, the process can be lengthy and will involve many complications besides marring the good name of the body of Christ.
Most important is a Trust Deed that clearly and precisely defines the duties and powers of the trustee, with restrictions and checks to minimise any abuse. Some of these safeguards can be, for example, obtaining the unanimous decision of all trustees. It is also wise for churches to appoint more than one trustee and to ensure that there is no conflict of interest especially if the trustees hold other positions in the church management. Another option is to utilise the services of a trust corporation.
The church has to ensure that its appointed trustees are trustworthy as well as God-fearing, and be capable of managing property on behalf of the congregation. They are responsible to see that the church is administered in line with its stated purposes and within legal requirements. Trustees are accountable to the church and to the public generally. The work of the trustee should thus be seen as spiritual work so that the church will be blameless before men. As the body of Christ, the church's stewardship must be on par, if not better than secular organisations.
Resources:
Ng Kam Weng. (2004). Doing the Right Thing: A Practical Guide on Legal Matters for Churches in Malaysia. Petaling Jaya: Kairos Research Centre Sdn Bhd. |
