• In the case of Curtis v Pulbrook 2011 EWHC 167 ch, it was found that equity will perfect an imperfect gift where there is detrimental reliance by the donee.

Facts of the Case

  • The claimant (T), by his personal representatives, sought a declaration that two deeds of gift in respect of shares in a company (F) executed by the first defendant director (P) be set aside and a final charging order be made in respect of them.
  • As T’s financial adviser with authority over his finances, P had caused substantial sums of money to be paid from T’s bank account in payment of personal legal fees.
  • T commenced proceedings against P with the result that P was ordered to repay those sums.
  • T also obtained an interim charging order over 445 shares in F that were registered as belonging to P as one of F’s directors. Thereafter, a final charging order was made in respect of 131 of those shares, it being P’s case that he had, by way of gift to his daughter and wife, divested himself of the remainder. The purported gifts took place after P had misappropriated the money from T’s bank account.
  • Both gifts were effected by the execution, amongst other things, of new share certificates and an entry on F’s share register.
  • However, neither his daughter nor wife received a stock transfer form and the only board meeting of F at the material time disclosed no mention of the relevant transfers.
  • The issues for determination were whether P had successfully transferred legal title to the shares to his daughter and wife; if not, there was a transfer of P’s beneficial interest in those shares; in any event, T was entitled to an order setting aside the gifts pursuant to the Insolvency Act 1986

Issues in Curtis v Pulbrook 2011 EWHC 167 ch

  • Is it within Equity’s power to perfect an imperfect gift.

Held by High Court

  • Declaration granted in favour of claimant

Briggs

  • Held that there were three situations in which equity will perfect an imperfect gift:
  • Where the donor has done everything in his power to give (principle in 
  • Where there is detrimental reliance by the donee on the imperfect gift
  • Benevolent construction to find an intention to give or declare a trust
  • “It follows that there was not an effective gift of Mr Pulbrook’s beneficial interest either in the 14 or in the 300 shares which he attempted to give respectively to his daughter and to his wife so that, in the result, there is nothing to prevent the charging order being made final in relation to all of them. Since however I have thus far arrived at that conclusion on highly technical grounds in relation to an area of law that may warrant further examination, I shall also state my conclusions in relation to the claim to set aside the gifts under s.432” [48]

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