Re Rose [1952] Ch 499

KEY POINTS

• Although, in general, "equity will not perfect an imperfect gift" such that the gift is not considered complete until registration, there is an exception when the donee has done everything within their power to complete the legal transfer. 

• Therefore, the court held that the gift was deemed to be held on a (constructive) trust by the donor for the donee, after the donor had taken all the necessary steps, and consequently, the dividends belonged to the donee.

FACTS

• Eric Hamilton Rose executed two transfers of shares in the Leweston Estates Company, an unlimited corporation.

  • The first transfer was in favour of his wife, Rosamond Mary Rose, as a gift of love and affection.

  • The second transfer was in favour of Mrs. Rose and another individual, subject to certain trusts.

  • Both transfers were duly stamped and registered with the company on June 30, 1943.

• However, Mr. Rose passed away after a few years. In between the donor completing the steps required on his end and the donee registering the transfer of shares, some dividends accrued to the shares and the question was who would get them.

COMMENTARY

• Re Rose serves as a cautionary tale for individuals wishing to make gifts, emphasising the importance of ensuring that all necessary steps are taken to complete the transfer of ownership. 

• It highlights the need for clear and unambiguous instructions to be given, and proper documentation to be prepared to avoid any ambiguity or disputes regarding the validity of the gift.

ORIGINAL ANALYSIS

• A donor had completed all the steps to give some shares to the donee, but the donee had not yet registered his title, which was necessary before the law would recognise the transfer.

• In between the donor completing his steps and the donee registering, some dividends accrued to the shares and the question was who would get them.

• Although generally “equity will not perfect an imperfect gift” so that the gift wouldn’t be viewed as complete until registration, there is an exception where the donee has done everything in his power to complete legal transfer.

• Therefore the court held that the gift was taken to be held on (constructive) trust by the donor for the donee, after the donor had taken all the steps required of him, and therefore the dividends went to the donee.

RELATED CASES

• Pennington v Waine