Key point
Equity will perfect an imperfect gift where there is detrimental reliance by the donee
Facts
- An interim charging order was granted against shares D owned for court damages
- D claimed that he had in 2007 given 300 of his shares to his wife and 14 to his daughter and these shares could not be subject to the final charging order
- D did not complete the share transfer forms and did not pass them his share certificates but issued them new certificates unauthorised by the company
Held (High Court)
- D did not transfer away the shares successfully
- None of the three situations below are applicable
Briggs J at [43]-[48]
There are three situations in which equity will perfect an imperfect gift
- Where the donor has done everything in his power to give (principle in re Rose)
- Where there is detrimental reliance by the donee on the imperfect gift
- Benevolent construction to find an intention to give or declare a trust
Interpretation of Pennington v Waine
- On the facts, Pennington v Waine was an example of detrimental reliance by the donee who had agreed to become a director of the subject company upon an assumption that he had received an effective gift of qualifying shares in it
Commentary
The donor is deemed to have done everything in his power when (Pennington v Waine):
- The share transfer forms are executed and delivered
- The share transfer forms are delivered to the transferee