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Ariadne’s Share Certificates


The issue that arises in this situation concerns the rights of Neptune in the property of shares of Miles plc. The issue is whether the imperfect gift of the shares be considered to have passed to Neptune? In other words, whether Neptune is the rightful owner of the shares in Miles plc, as against Zeus?


The principle of equity that is applicable in this case is- “Equity regards as done that which ought to be done.” This means that where there is a contract or another obligation, which can be specifically enforced, then the law of equity treats the parties as being in position that they would have occupied on the completion of the performance of the obligation. In the case of PAGE 8 gift, the courts have used this principle to allow an imperfect gift to pass to the donee, where the donor has done all that was in their control to make the gift.

In the case of Re Rose ([1952] Ch. 499), the court had held that when the donor has done everything in his power to vest the legal interest in the property in the donee, the gift will succeed in passing on to the donee even if something had yet to be done by the donee or some third person (Moffat’s 2015: 154).


In Pennigton v Wayne [2002] EWCA CIV 227, similar facts were involved. The court used the equity principles to perfect the imperfect gift (Atkins 2015: 263). The aunt (donor), made a gift of shares in a company to her nephew, who was informed of the same by the agent of the donor. The donor died but the agent had not filled in the prescribed forms for registering the shares. In a case that involved the donee and the executors of the donor under her will, the Court of Appeal held in favour of the donee. The Court of Appeal applied the subjective test in Re Rose. The crux of the matter was that as the donee had been informed of the intentions of the donor, it would be unconscionable to withhold the gift from the donee, merely because the agent had failed to take appropriate steps for the registration process. If it was unconscionable then equity would perfect the gift, thus rendering done what ought to be done. (Atkins 2015: 261). The knowledge of the donee in that case was essential to the decision that was ultimately made by the court. In other words, the trust would be enforceable even where all the necessary formalities had not been done by the donor, if not enforcing the trust would be unconscionable (Bray 2012: 65).

Recently in Zeital v Kaye [2010] EWCA Civ 159, the Court of Appeal refused to validate a transfer of shares and in turn, completely constitute a gift, when all necessary formalities were not fulfilled by the donor (Moffat’s 2015: 163). However, the facts of that case can be distinguished from the present case. In Zeital v Kaye, the donor had not done everything that he could do to transfer the shares. In the present case, the donor has done everything that she could to transfer the property in the shares on to the donee. Therefore, Zeital principle ought not to apply in this case.


In this case, the donor, that is Ariadne, has instructed her solicitor, Juno to hold the shares in Miles plc in trust for her nephew Neptune. She has accordingly issued the share certificate in favour of Juno. Now the responsibility for carrying out the instructions for registering the shares in her name by Miles plc is on Juno. Ariadne has done all that she could have done for making the gift in favour of Neptune. The incomplete aspects of the gift (registering the share certificate in Juno’s name) were to be performed by Juno. As per the principle laid down in Re Rose, in this situation, the imperfect gift can be perfected as per the maxim, “Equity regards as done that which ought to be done.”

Secondly, Neptune had been informed of the intention of the donee to gift the shares. As per the principle laid down in Pennington v Wayne, such information will now make the withholding of the gift unconscionable. Therefore, Neptune is now entitled to receive the property in the share certificates of Miles plc, even if technical part of the gift making was left incomplete. In this case, the donor has entrusted her agent to register the shares and to hold them in trust for her nephew. To that end, the donor had made a share certificate in the name of the agent. The information has been given to Neptune and it would now be unconscionable if the property in the shares did not pass to Neptune.


Neptune is entitled to receive the gift of the shares in Miles plc even as against the interest of the inheritor of Ariadne’s property, her husband. The imperfection of the gift does not exclude the right of Neptune in the shares.


    1. Atkins S, Equity and Trusts, Oxford: Routledge, 2015.
    2. Bray J, A Student's Guide to Equity and Trusts, Cambridge: Cambridge University Press, 2012.
    3. Garton J, Moffat G, Bean G, Probert R, Moffats’ Trust Law, 6th ed., Cambridge: Cambridge
    4. University Press, 2015.
    5. Hudson A, Equity and Trusts, Oxford: Routledge, 2014.
    6. McKendrick E, Contract Law: Text, Cases, and Materials, Oxford: Oxford University Press, 2012.
    7. Stone, R, Devenney, J, The Modern Law of Contract, Oxford : Routledge, 2015.
    8. Watt G, Equity and Trusts Law Directions, Oxford: Oxford University Press, 2014.

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