Assignment

General

Assignment of a claim for restitution: Equuscorp Pty Ltd v Haxton; Equuscorp Pty Ltd v Bassat; Equuscorp Pty Ltd v Cunningham’s Warehouse Sales Pty Ltd [2012] HCA 7

Assignment of causes of action – See Mijac Investments Pty Ltd (ACN 084 820 280) v Graham (No 2) [2009] FCA 773 (Gordon J) at [30] –[34] and [184] – [186]. See also Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd (2004) 220 ALR 267

Assignment of intangibles – Whether an intangible interest is capable of assignment is determined by the law under which the interest was created: Trendtex Trading Corp v Credit Suisse [1982] AC 679; Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd(2006) 229 CLR 386

Actions for misleading and deceptive conduct are not assignable: Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 at [73]

Assignment of a personal right to sue for damages: Trendtex v Credit [1982] AC 679

Requirements necessary to establish contractual assignment of debt: Commmercial Factors v Maxwell Printing [1994] 1 NZLR 724

Assignment of right of action for conversion of cheque – whether effective in law or equity: Monk v ANZ(1994) 34 NSWLR 148

Whether assignees have genuine commercial interest in causes of action and their enforcement National Mutual Property Services v Citibank 132 ALR 514

Company’s right to bring proceedings – Assigned to administrator- purposes of carrying out terms of deed – Standing in administrator to seek order for examination Flanders v Beatty 16 ACSR 324

Company assigning rights to directors prior to commencement of action – validity of assignment Norglen v Reeds Rains[1996] 1 AER 945 and on appeal to House of Lords [1999] 2 AC 1

Assignment of debt – validity – whether assignment champertous Camdex Int v Bank of Zambia[1996] 3 AER 431

Assignment of cause of action – whether a liquidator should be directed to make an assignment – whether the assignment will lead to improper or vexatious litigation Bank of Melbourne v HPM Pty Ltd 26 ACSR 110

Assignment of bare right of action – company administration – whether contrary to public policy Re William Felton Co Pty Ltd; Ex Parte Sims 28 ACSR 228

Equitable Assignment of Legal Rights: a Resolution to a Conundrum – G J Tolhurst Law Quarterly Review – Vol. 118 – January 2002

Assignment of rights of action under Trade Practices Act and of causes of action in tort and equity: Salfinger v Niugini Mining (Australia) Pty Ltd (No 3) [2007] FCA 1532 at [110] ff

Assignment of cause of action – Whether liquidator permitted to sell company’s cause of action only to person with existing interest in outcome of litigation – Whether assignment to person with no such interest would amount to champerty or maintenance – Whether s 477 Corporations Law to be read as doing no more than identifying circumstances in which liquidator can exercise powers which would otherwise vest with company – Whether appellant, opposing assignment of chose in action, entitled to leave to raise points on appeal not argued in court below and not in written submissions – Where new points proceeded from view of facts not presented in lower proceedings Held: Proposed sale of right of action was within power of liquidator: UTSA Pty Ltd v Ultra Tune Australia Pty Ltd (1996) 21 ACSR 457 (VSCA)

Assignment of causes of action: the principles (from Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd (2004) 220 ALR 267; [2004] NSWSC 1041 at [42] ff)

[42] The following propositions appear to be uncontroversial:

• (1) A debt arising under a contract is regarded as property, and is assignable; and this is so even if the debt is overdue for payment: Comfort v Betts [1891] 1 QB 737; Fitzroy v Cave [1905] 2 KB 364; County Hotel and Wine Co Ltd v London and North Western Railway Co [1918] 2 KB 251; Re Daley; Ex parte National Australia Bank Ltd (1992) 37 FCR 390 ; 8 ACSR 395.
• (2) The benefit of a contract, whether a claim to which that benefit gives rise is liquidated or unliquidated, may be assigned before breach: Torkington v Magee [1902] 2 KB 427.
• (3) A cause of action (at least, in contract: Defries v Milne [1913] 1 Ch 98) that is annexed to a right of property may be assigned along with that property: Ellis v Torrington [1920] 1 KB 399; Re Kenneth Wright Distributors Pty Ltd (in liq); W J Vine Pty Ltd v Hall [1973] VR 161; Camdex International Ltd v Bank of Zambia [1998] QB 22 ; [1996] 3 All ER 431.

[43] In Poulton v Commonwealth (1953) 89 CLR 540, it was said that causes of action in tort are not assignable at law or in equity: see Fullagar J (at first instance) at 571, and Williams, Webb and Kitto JJ (on appeal) at 602. Since their Honours all considered that there had been no assignment (or purported assignment), what they said was obiter. I recognise that, as it is put in R P Meagher, J D Heydon and M L Leeming, Meagher, Gummow & Lehane’s Equity Doctrines and Remedies, 4th ed, LexisNexis Butterworths, Sydney, 2002, p 281 [6-480]), “It is not easy for courts below the High Court legitimately to depart from the considered dicta of three [sic] High Court justices”.

[44] In Trendtex Trading Corporation v Credit Suisse [1982] AC 679 ; [1981] 3 All ER 520, the House of Lords concluded that a cause of action in contract could be assigned where the assignee has a genuine and substantial, or genuine commercial, interest in the enforcement of that cause of action. The principle established in Trendtex was applied, in the related area of champerty in connection with a cause of action in tort, in Giles v Thompson [1994] 1 AC 142 ; [1993] 3 All ER 321.

[45] The application of the Trendtex principle in Australia has been considered in a number of first instance decisions but not, so far as my own researches or those of counsel show, by any intermediate appellate court. A number of those decisions suggest that it should be followed (and that the obiter remarks of the High Court in Poulton should be distinguished or regarded as no longer applicable); and a number suggest the contrary.

[46] Decisions that support the adoption of the Trendtex principle in Australia include:

• Re Timothy’s Pty Ltd and the Companies Act [1981] 2 NSWLR 706 (Needham J);
• Monk v Australia and New Zealand Banking Group Ltd (1994) 34 NSWLR 148 (Cohen J);
• South Australian Management Corporation v Sheahan (1995) 16 ACSR 45 (Debelle J);
• Beatty v Brashs Pty Ltd[1998] 2 VR 201 (Smith J);
• Singleton v Freehill Hollingdale & Page  [2000] SASC 278 (Olsson J);
• Vangale Pty Ltd (in liq) v Kumagai Gumi Co Ltd  [2002] QSC 137 (Mullins J).

[47] Support for the application of Trendtex is also found in New Zealand in the decision of Gault J in First City Corp Ltd v Downsview Nominees Ltd [1989] 3 NZLR 710.

[48] Decisions declining to apply the Trendtex principle in Australia include:

• Park v Allied Mortgage Corporation Ltd (1993) ATPR (Digest) 46-105 (Davies J);
• Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (FCA, Beaumont J, No G381 of 1994, 7 November 1994, unreported, BC9400129);
• National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 (Lindgren J);
• Chapman v Luminis (No 4)(2001) 123 FCR 62 ;  [2001] FCA 1106 (von Doussa J);
• Deloitte Touche Tohmatsu v Cridlands Pty Ltd (2003) 134 FCR 474 ; 204 ALR 281 ;  [2003] FCA 1413 (Selway J).

[49] Neither list may be comprehensive.

[50] The reasoning in the first category of cases may be summarised as follows:

• (1) The relevant remarks by the High Court in Poulton were obiter. In any event, they do not bear on the question of assignment of a bare cause of action (that is, one not annexed to or associated with a proprietary right) for breach of contract.
• (2) There is no public policy ground for distinguishing between assignment of a cause of action for unliquidated damages for breach of contract on the one hand and, on the other, a cause of action for damages in tort (at least where the tort is not of a personal nature).
• (3) The obiter remarks in Poulton may be distinguished because the assignee lacked the requisite interest to support the assignment; alternatively, because the High Court said nothing about assignment to persons possessing the requisite interest, what was said may be distinguished on that basis.
• (4) What was said in Poulton reflects the effect of considerably older English authority, and (self-evidently) does not take into account the review of that earlier line of authority by the House of Lords in Trendtex.
• (5) Further, Poulton was decided before modern developments in the law of negligence; the tort of negligence is frequently involved in commercial disputes and cannot be regarded as peculiar to personal claims.

[51] It will be noted that the cases against the introduction of the Trendtex principle in Australia are all decisions of the Federal Court of Australia. Those decisions are to some extent complicated because, to the extent that they involve a claim under s 82 of the Trade Practices Act 1974 (Cth) for damages for contravention of s 52, it has been held consistently that an assignee of the cause of action is not, for the purposes of s 82, a person who suffers damage “by” the contravention: see Davies J in Park at 53,469. However, that aside, the consistent approach is that it is not open to courts of first instance to depart from a considered statement of the High Court, and that bare rights of action in tort should be regarded as incapable of assignment (whether or not the tort is of a personal kind).

[52] What was said in Poulton was confined, in terms, to the assignment of bare rights of action in tort. In principle, therefore, it should not be taken to extend to the assignment of bare rights of action in contract; although, as Cohen J put it in Monk at 152, “there seems no logic in making a distinction between a cause of action in tort and one in contract if the basis of the claim is a commercial one”. (This view was shared by Gault J in First City Corp (at 757), Debelle J in South Australian Management Corp (at 57) and Smith J in Beatty (at 209).)

[53]If it were necessary for me to reach a concluded view, it would be that I am at liberty to depart, and should depart, from the dicta of the High Court in Poulton.

Principal and agent — Undisclosed principal — Assignment of rights: Westbourne Grammar School v Sanget Pty Ltd [2007] VSCA 39

Master lease agreement entered into between buyer and bank – buyer assigned all its contractual rights to bank “in relation to” plant, when supplied and installed by seller – whether right to sue seller for breach of contract between buyer and seller was right assigned to bank – whether assignment was of bare right to damages or of legal chose in action: North East Equity Pty Ltd v Proud Nominees Pty Ltd (No 2) [2008] FCA 1189

Trustee — Assignment of chose in action — Undischarged bankrupt — Application for declaratory relief — Second respondent’s company (company) purchased units in apartment complex developed by first applicant: Meriton Apartments Pty Ltd v Industrial Court of New South Wales [2008] FCAFC 172

Equitable Assignment

Assignment of income – effect of assignment of future property – nature of proprietary interests of accountancy practice: Hadlee v Comm of Inland Rev (1991) 3 NZLR 517

Mortgage by deposit of title deeds to secure debt – sub-mortgage by re-deposit – whether loss of title deeds affects equitable mortgagees rights – equitable assignment effective without notice to assignee: UTC Ltd v NZI Securities 4 WAR 349

Equitable assignment of whole debt – who may give valid demand – requirements of valid notice: Re Small & Shattell 7 ACSR 99

Arrangement to pay creditors from proceeds of sale of future produce – whether arrangement amounted to an equitable assignment – whether equitable assignment of future property is binding when made or when property comes into existence Re Puntoreiro 104 ALR 523

Equitable assigment of chose in action – assignment of legal debts – whether assignment operated in future McIntyre v Gye 122 ALR 289; and on appeal to the FC 51 FCR 472

Assignment of debt owing to taxpayers by judgment debtor – whether fact of equitable assignment sufficient to defeat right of DCT to receive payment: Zuks v Jackson McDonald 132 FLR 317

Whether action lies in law for breach of warranty to assign future property Government Employees Superannuation Board v Martin 19 WAR 224

Whether there was an equitable assignment over moneys due under a contract for personal services Rolfe v Transworld Marine Agency Company 83 FCR 323

Assignment of debt – assignment ineffective at law – whether effective equitable assignment – whether assignment supported by consideration – whether transaction sufficiently certain: Lonsdale Sand and Metal Pty Ltd v Federal Commissioner of Taxation 162 ALR 220

Transfer of equitable title – by agreement to assign property for valuable consideration – specific performance considered: Chief Comm of Stamp Duties v ISPT Pty Ltd [1999] 45 NSWLR 639

Equitable assignment — Assignment by promise — Reliance: Donis v Donis [2005] VSC 365

Assignments in equity – ownership of medical records relating to patient treatment – ownership of pathology reports obtained by a medical practitioner for patients – rights to possession of pathology reports obtained for patients – whether as a matter of construction a contractual obligation of confidentiality has been agreed to be assigned – whether a contractual obligation of confidentiality is inherently assignable – rights of an equitable assignee of a contractual obligation – for what damages an assignee of the benefit of a contractual obligation can sue ‒ Mid-City Skin Cancer & Laser Centre v Zahedi-Anarak [2006] NSWSC 844

Extent of assignment under contract – whether assignment included right to terminate the head contract: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty [2006] FCAFC 40