Equity and Trusts Essay Example | Topics and Well Written Essays - 750 words

Equity and Trusts - Essay Example This is because, it is expected that for a transfer to be effective, the share transfer form should be filled in, and then submitted to the company, for the completion of the share transfer process in the name of the new shareholder3. However, the ruling in the case Penningon v Waine EWCA CIV 227 [2002] ignored this maxim, and instead pitched the ruling on the intended actions of the transferor. This makes the principle of unconscionability vague in that; as the ruling provided in the case Tunkl v. Regents of the University of California, [1963], it is not possible to effectively establish the intentions of the transferor at the time of his/her death. The principle of unconscionability operates on the basis of three concepts, which are exploitation of weakness, duress and undue influence4. The holds that if any transfer is effected on the basis of any of the three concepts, where the transferor was forced to undertake the action out of severe pressure being exerted on him/her, then t he law, as was provided in the case Williams v. Walker-Thomas Furniture Co. [1965], considers such a transfer as unconscionable, since it was undertaken contrary to the good conscious of the transferor, thus making such a transfer ineffective5. In such a case, the ruling considers the exertion of pressure that arises from the beneficiary of the contract, and thus nullifies the agreement on the basis of the transferor having been forced to undertake an action that was against his or her conscious will. However, the law is silent regarding the exertion of pressure on a transferor by circumstances which are entirely outside the defendant’s control, and thus the pressure arising from a non-beneficiary is not provided a remedy6. Therefore, owing to the silent nature of the law regarding the action to be undertaken in case of the exertion of pressure by a third party, the law becomes vague and unspecific, which then renders the judgment made in application of the principle of uncon scionability not a good law. The principle of unconscionability was established in the Re Rose [1952], where the court observed that if everything had been done to transfer the title from the transferor to the transferee, but a delay has be caused by the operation of the law, then the gift of transfer still remains effective, as long as the transfer is not affected by the contrary conscious will of the transferor7. This provision pitches the validity of the delay on the routine operation of the law8. However, in the case Penningon v Waine EWCA CIV 227 [2002], the delay was caused by the failure of Mr. Pennington to submit the transfer form to the company, and thus the delay in this case does not fit into the routine operation of the law9. Therefore, the ruling under the case Penningon v Waine EWCA CIV 227 [2002], was not undertaken on the basis of the legal delay, but out of a mistake that emanated from the representative of the company’s auditors. However, the explanation gi ven by Lord Justice Arden in this case was that it would have been unconscionable for Ada, the transferor in this case, to change her