Constitution cases

T Choithram International SA v Pagarani

Pagarani, a wealthy businessman, made a public oral declaration that he was giving his wealth to a charitable foundation. He was himself one of the trustees of that foundation. He signed the foundation's trust deed but died before transferring the assets formally. The foundation sued his estate for the money.

The Privy Council held the trust was completely constituted. Although the assets had never been formally transferred, Pagarani was himself one of the trustees — so when he declared the gift to the foundation he was in substance declaring himself a trustee of those assets. Equity would not allow him to resile from that declaration. It would be unconscionable for his estate to deny the gift when he had made a solemn public declaration.

Estate argued that this was an incomplete transfer because the money had not been transferred to a trustee. However, Pagarani himself was a trustee meaning the money was with a trustee, completing the gift (gift requirements under Milroy are 1. declaration, and 2. vesting)

Principle: where a settlor declares a gift to a trust of which he is himself a trustee, equity treats this as an immediate declaration of trust over those assets — the gift cannot be taken back even without formal transfer of legal title.

Exam takeaway: use this where a settlor has made a clear declaration of gift but is also one of the trustees. The incomplete transfer argument fails because the declaration itself constitutes the trust — equity will not allow the settlor or their estate to resile from it.

Pennington v Waine

Mrs Pennington wanted to transfer shares to her nephew Harold. She signed a share transfer form and gave it to her agent, but the form was never delivered to Harold or registered at Companies House — the steps needed to legally complete the transfer. She later died and her estate argued the gift was incomplete and therefore failed.

CA held the transfer was effective. Harold had been told about the gift and had relied on it — he had agreed to become a director of the company on the basis that he would receive the shares. In those circumstances it would be unconscionable for the donor's estate to deny the transfer. Equity would therefore treat the gift as complete even though the legal formalities had not been finished.

Principle: where it would be unconscionable for a donor to recall a gift — because the donee has relied on it — equity will treat an incomplete transfer as complete even without full legal formalities.

Exam takeaway: cite where a transfer has been started but not completed and the donee has relied on it in some way. The unconscionability argument perfects the gift. But note this is controversial — it sits in tension with the strict rule in Milroy v Lord that equity will not perfect an imperfect gift, and Curtis v Pullbrook shows courts are reluctant to extend it too far.

Curtis v Pullbrook

Curtis tried to argue that shares had been effectively transferred to him on the basis of Pennington v Waine — there had been some steps taken towards transfer but nothing formally completed. Unlike Pennington, there was no clear evidence that the donor had unambiguously committed to the transfer or that Curtis had relied on it to his detriment in any meaningful way.

The court refused to apply Pennington and held the transfer was incomplete. The unconscionability principle from Pennington was not made out on the facts — you cannot invoke it just because some steps towards transfer have been taken. There must be something more, specifically a clear commitment by the donor and genuine detrimental reliance by the donee.

Principle: Pennington v Waine is not a general licence to perfect imperfect gifts. Unconscionability must be clearly established — mere steps towards transfer without more are not enough.

Exam takeaway: use Curtis as a counterargument whenever Pennington is raised. Ask whether there is genuine detrimental reliance and a clear unambiguous commitment. If those are absent, Curtis says the gift fails and the strict Milroy v Lord rule applies.

Re Rose

Rose executed share transfer forms in March 1943 and handed them to the transferee, but the transfers were not registered by the company until June 1943. The question was whether the transfer was complete in March or June — this mattered for estate duty purposes.

CA held the transfer was complete in March when Rose had done everything in his power to transfer the shares. The remaining step — registration by the company — was outside his control entirely. He could not have done anything more. Equity therefore treated the transfer as complete from the earlier date.

Principle: a transfer is completely constituted in equity as soon as the transferor has done everything within their own power to effect the transfer — even if some administrative step outside their control remains outstanding.

Exam takeaway: cite Re Rose where a settlor or donor has taken all the steps available to them but some third party action remains — company registration, Land Registry, trustee in bankruptcy consent. The transfer is complete in equity from the moment the transferor's role is finished. Contrast with Pennington where the donor had not even done everything in their power — Re Rose is the stronger and less controversial authority.