Prepare written instructions based on the following questions and scenario;

Mary operated her business through a company, with 100 ordinary shares. Mary had an investor Tania who had invested $10,000 with Mary. The $10,000 payment was not for the shares in the company. It was not secured against anything. But Mary promised to return the $10,000 plus $1,000 of interest at the end of the year, and that if she was unable to do so, Tania could have ‘half of the company’ (Mary originally anticipated that her company would be worth about $20,000 at the end of the first year).

Mary’s company has been developing well but she has limited cash – she has no money to pay Tania back the loan. Her company has attracted the attention of a large public company that would like to buy it. Mary has secured a deal to sell the shares in her company for $1,000,000 but she has not transferred her shares in her company to the public company yet. The public company will only accept a 100% interest in Mary’s company, nothing less. Upon transfer to the public company, Mary will receive $1,000,000. Tania, obtains an injunction preventing Mary from transferring her shares.
Tania argues in court that she has not been paid the $11,000 she is owed and that she has no confidence that she will be paid the $11,000 once Mary is paid for her shares. Therefore, Tania argues, she is entitled to have half of the shares transferred to her due to the fact that she has an equitable lien in those shares.

1.Will Tania be successful in pursuing half the shares in Mary’s company? 
2. Do you perceive a problem with her argument? 

A Memorandum to be written to a senior lawyer

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