LAW

Pennington v Waine

Pennington v Waine

Introduction

Pennington V Waine is a case where equity had aided the volunteer in order to not strive officiously to defeat a gift. in this case, it was held that it will be unconscionable for the settlor to have clearly recalled what was intended as a gift, as a settlor will not be permitted to change his mind if it is unconscionable to do so. It seems that in order to defeat a gift not officiously, courts will assist to volunteer, even though this would mean that equity is neither substance nor form looking at, since equity is not giving effect to the settlor's intention now-changed. It seems that equity's main concern is to defeat a gift not a gift defeating when will lead to unconscionability. In this paper, the Pennington and Waine will be analyzed in detail.

Discussion

The facts

In this case, 1500 out of the 2000 shares of a family company were hold by Ada Crampton. She wanted to give 400 shares to Harold, her nephew. She consulted the auditor of the company, Mr. Pennington who helped her executing the stock transfer form regarding those shares. On the other hand, Ada also informed Harold about the shears and that she wanted him to become the director of the company. He received a 288A form from Mr. Pennington which is consent to act as a director. Mr. Pennington also informed him about Ada's instruction to transfer 400 shares of the company. Further he added that this process did not require any further action from Harold's side. The form was signed at returned by Harold while Ada also signed the stock transfer form prepared by Mr. Pennington. He kept those forms in his file but did not take any further action. The share certificates remained to the registered office of the company. Ada died shortly after making the will. On the other hand, the share transfer was not registered by the time of her death, that is why legal title to those shares also remain entitled with her and passed on her to the executors. Harold argued that the entitlement to those shares was also passed to him in equity all the same.

His arguments were based on the doctrine of Re Rose. According to this doctrine when the donor has carried out every action in his power to vest the legal concern in a property in the donee, the transfer of the gift will not fail even when something has been left to carry put by the done or any other third person. Therefore, it is evident that in the case of transfer of shares, if the share transfer form is executed by the donor and also delivered along with the share certificate to the donee then he will be considered the owner of the shares in equity despite being unregistered as an owner in official documents. Difficulty with Harold was that he did not receive the transfer form or the ...