Re Rose

Ratio Decidendi

Ffeithiau

Mr Rose executed share transfer forms for shares in a private company, intending to transfer some to his wife and to place others in trust, and delivered the completed transfer forms and share certificates to the transferees. Under the company's articles the directors had a discretion whether to register the transfers, and registration (the step that vested legal title) did not occur until some time later. The date the transfers took effect mattered for estate-duty purposes, because Mr Rose died within the relevant period measured from one date but not the other.

Crynodeb o'r dyfarniad

The Court of Appeal held that, although legal title to the shares did not pass until the company registered the transfers, the transfers were complete in equity from the earlier moment when Mr Rose executed the transfer forms and delivered them, with the share certificates, to the transferees. By then he had done everything in his own power to divest himself of his interest and vest it in the transferees; the only outstanding step — registration by the company — lay in the hands of a third party and was outside his control. From that point he held the shares as trustee for the transferees, and equity would regard the gift as effective. The principle — the rule in Re Rose — is that an imperfect gift will be treated as complete in equity once the donor has done all that is required of them to transfer title, even if some further act by a third party remains outstanding. It qualifies the maxim that 'equity will not perfect an imperfect gift', and was applied in Mascall v Mascall and (controversially extended) in Pennington v Waine.

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