Curtis v Pulbrook [2011] EWHC 167 (Ch)

Mr Pulbrook had misapplied money belonging to a client and was ordered to repay it. The client sought a charging order over shares registered in Pulbrook’s name. Pulbrook argued that he had already given some shares to his wife and daughter. Documents and company records had been altered, but the necessary transfer documentation and corporate steps were disputed. The purported gifts followed the misapplication of the client’s money. The court had to determine whether legal or beneficial title had passed and whether the creditor could obtain relief against the disputed shares.

Whether the proposed share transfers were perfected by gift or trust, and whether the circumstances made it unconscionable for the donor to deny their effectiveness.

The High Court found that the purported gifts had not effectively transferred the disputed shares to Mr Pulbrook’s wife and daughter. The required steps for transferring legal title were incomplete, and the circumstances did not establish a completed equitable transfer or a basis on which it would be unconscionable to deny one. Briggs J reviewed recognised explanations for equity’s intervention, including a donor having done everything required of him, detrimental reliance and appropriate construction of the disposition. He did not find those routes satisfied here. The creditor could obtain a final charging order over the shares. The judgment’s further discussion of creditor-protection legislation should be kept separate from this primary conclusion about ownership.

Equity does not automatically perfect an incomplete gift. Curtis reviews limited routes by which an intended disposition may nevertheless become effective, including completion of the donor’s required steps and detrimental reliance, but held that the disputed share gifts failed on the facts.

Curtis reviews the limited circumstances in which equity recognises an intended disposition despite incomplete transfer formalities. It should not be cited as deciding that these gifts succeeded: the purported transfers failed. Briggs J’s treatment of detrimental reliance is an analysis of earlier authorities, especially Pennington, rather than a universal test replacing every constitution rule. A creditor context also requires care, because questions about effective title and setting aside transactions are legally distinct. The decision belongs in trusts and constitution, not public law.