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Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and...

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Law of Law of Assignments Assignments Assoc Prof Cameron Assoc Prof Cameron Stewart Stewart
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Page 1: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Law of Law of AssignmentsAssignments

Assoc Prof Cameron StewartAssoc Prof Cameron Stewart

Page 2: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Last week…Last week…

Law vs EquityLaw vs Equity Legal and Equitable estatesLegal and Equitable estates Equitable maximsEquitable maxims Equitable doctrinesEquitable doctrines Priority systemsPriority systems Now onto ways of transferring Now onto ways of transferring

interestsinterests

Page 3: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Legal and Equitable Legal and Equitable assignmentassignment

In the assignment of property, the In the assignment of property, the nature of the assignment is important. nature of the assignment is important. A legal assignment gives the assignee A legal assignment gives the assignee a legal interest in that property. If it is a legal interest in that property. If it is an equitable assignment the assignee an equitable assignment the assignee obtains an equitable interest in obtains an equitable interest in property. The nature of the assignee’s property. The nature of the assignee’s property right is crucial in the context property right is crucial in the context of competing rights to that property of competing rights to that property

Page 4: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Rights and liabilities not Rights and liabilities not capable of assignment capable of assignment

Somethings cannot be assigned at allSomethings cannot be assigned at all

Public payPublic pay

An assignment of pay by the holder of a An assignment of pay by the holder of a public office is prohibited on the basis public office is prohibited on the basis that such pay is made to enable the that such pay is made to enable the office holder to maintain his or her office holder to maintain his or her office with decorum and propriety. office with decorum and propriety.

Page 5: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Rights and liabilities not Rights and liabilities not capable of assignment capable of assignment

Arbuthnov v NortonArbuthnov v Norton (1846) 4 Moore (1846) 4 Moore 219; (1846) 13 ER 474 219; (1846) 13 ER 474 Norton, a judge, assigned the equivalent of six months Norton, a judge, assigned the equivalent of six months pay to which he was entitled to his legal personal pay to which he was entitled to his legal personal representative upon death. The entitlement was representative upon death. The entitlement was assigned as security for an advance. The Privy Council assigned as security for an advance. The Privy Council ruled, after Norton’s death, that the assignment was ruled, after Norton’s death, that the assignment was valid. This was so because the pay that was assigned valid. This was so because the pay that was assigned only fell due upon Norton’s death, that is, when Norton only fell due upon Norton’s death, that is, when Norton no longer held public office. Because the pay was not no longer held public office. Because the pay was not payable during his life, the assignment in no way payable during his life, the assignment in no way diminished Norton’s ability to maintain the dignity of diminished Norton’s ability to maintain the dignity of his office. his office.

Page 6: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Rights and liabilities not Rights and liabilities not capable of assignment capable of assignment

Bare rights to litigateBare rights to litigate

Bare rights to litigate include rights to Bare rights to litigate include rights to sue in tort, rights to sue for sue in tort, rights to sue for unliquidated damages in contract and unliquidated damages in contract and bare rights to sue in equity. None of bare rights to sue in equity. None of these rights are rights of property and these rights are rights of property and therefore they are not assignable. Debts therefore they are not assignable. Debts and rights to sue for liquidated sums in and rights to sue for liquidated sums in contract are assignable because they contract are assignable because they are regarded as rights of propertyare regarded as rights of property..

Page 7: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Rights and liabilities not Rights and liabilities not capable of assignment capable of assignment

Why?Why?

Encourage litigationEncourage litigation

Torts and crimes of barratry, Torts and crimes of barratry, champerty and maintenancechamperty and maintenance

Page 8: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Rights and liabilities not Rights and liabilities not capable of assignment capable of assignment

The rule in Glegg v BromleyThe rule in Glegg v Bromley does not preclude does not preclude the assignment of the verdict (future the assignment of the verdict (future property) to which the assignor may become property) to which the assignor may become entitled as a result of the prosecution of entitled as a result of the prosecution of litigation proceedings. In litigation proceedings. In Glegg v Bromley Glegg v Bromley at at KB 475; All ER Rep 1140, the assignor KB 475; All ER Rep 1140, the assignor assigned ‘all that interest, sum of money, or assigned ‘all that interest, sum of money, or premises to which she is or may become premises to which she is or may become entitled under or by virtue of any verdict, entitled under or by virtue of any verdict, compromise, or agreement which she may compromise, or agreement which she may obtain’ in relation to an action in tort obtain’ in relation to an action in tort

Page 9: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Rights and liabilities not Rights and liabilities not capable of assignment capable of assignment

Vaughan Williams LJ said:Vaughan Williams LJ said:

I know of no rule of law which prevents the I know of no rule of law which prevents the assignment of the fruits of an action. assignment of the fruits of an action. Such an assignment does not give the Such an assignment does not give the assignee any right to interfere in the assignee any right to interfere in the proceedings in the action. The assignee proceedings in the action. The assignee has no right to insist on the action being has no right to insist on the action being carried on … There is in my opinion carried on … There is in my opinion nothing resembling maintenance or nothing resembling maintenance or champerty in the deed of assignment.champerty in the deed of assignment.

Page 10: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Rights and liabilities not Rights and liabilities not capable of assignment capable of assignment

Exceptions to Exceptions to Glegg v BlomleyGlegg v Blomley

IIf the assignee has a genuine f the assignee has a genuine commercial interest in taking the commercial interest in taking the assignment of a bare right to assignment of a bare right to litigate, then the assignment is valid litigate, then the assignment is valid

Page 11: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Rights and liabilities not Rights and liabilities not capable of assignment capable of assignment

Exceptions to Exceptions to Glegg v BlomleyGlegg v BlomleyIf there is an assignment of property with an If there is an assignment of property with an

incidental right to litigate it is valid. This is so incidental right to litigate it is valid. This is so because there is no assignment of a bare right because there is no assignment of a bare right to litigate, the right being incidental to a right to litigate, the right being incidental to a right of property. Accordingly, no issues of of property. Accordingly, no issues of maintenance or champerty can arise. Thus, maintenance or champerty can arise. Thus, the right to rescind for undue influence in the right to rescind for undue influence in Dickinson v Burrell (1866) LR 1 Eq 337 was Dickinson v Burrell (1866) LR 1 Eq 337 was assignable because it was incidental to the assignable because it was incidental to the real property assigned to the assignor.real property assigned to the assignor.

Page 12: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Rights and liabilities not Rights and liabilities not capable of assignmentcapable of assignment

An assignment by an insured to an An assignment by an insured to an insurer of the insured’s right to sue, insurer of the insured’s right to sue, in consideration of a payment made in consideration of a payment made by the insurer to the insured in by the insurer to the insured in satisfaction of a claim pursuant to an satisfaction of a claim pursuant to an insurance policy between the insured insurance policy between the insured and insurer, is valid. This stems from and insurer, is valid. This stems from the insurer’s right of subrogation.the insurer’s right of subrogation.

Page 13: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Rights and liabilities not Rights and liabilities not capable of assignmentcapable of assignment

The benefit of a contract may be The benefit of a contract may be assigned before there is a breach of assigned before there is a breach of the contract. For a breach after the contract. For a breach after assignment the assignee is entitled assignment the assignee is entitled to sue irrespective of whether the to sue irrespective of whether the claim is for liquidated or claim is for liquidated or unliquidated damages unliquidated damages

Page 14: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Assignments at law Assignments at law

Old system titleOld system title Torrens titleTorrens title GoodsGoods

Page 15: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Assignments at law Assignments at law

Debts and other choses in actionDebts and other choses in action

‘‘personal rights of property which personal rights of property which can only be claimed or enforced by can only be claimed or enforced by action, and not by taking physical action, and not by taking physical possession’possession’

Torkington v MageeTorkington v Magee [1902] 2 KB 427 [1902] 2 KB 427 at 430 at 430

Page 16: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Section 12 of the Section 12 of the Conveyancing ActConveyancing Act stipulates: stipulates:

Any absolute assignment by writing under the hand of the Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any assignor (not purporting to be by way of charge only) of any debt or other legal chose in action, of which express notice debt or other legal chose in action, of which express notice in writing has been given to the debtor, trustee, or other in writing has been given to the debtor, trustee, or other person from whom the assignor would have been entitled to person from whom the assignor would have been entitled to receive or claim such debt or chose in action, shall be, and receive or claim such debt or chose in action, shall be, and be deemed to have been effectual in law (subject to all be deemed to have been effectual in law (subject to all equities which would have been entitled to priority over the equities which would have been entitled to priority over the right of the assignee if this Act had not passed) to pass and right of the assignee if this Act had not passed) to pass and transfer the legal right to such debt or chose in action from transfer the legal right to such debt or chose in action from the date of such notice, and all legal and other remedies for the date of such notice, and all legal and other remedies for the same, and the power to give a good discharge for the the same, and the power to give a good discharge for the same without the concurrence of the assignor: Provided same without the concurrence of the assignor: Provided always that if the debtor, trustee, or other person liable in always that if the debtor, trustee, or other person liable in respect of such debt or chose in action has had notice that respect of such debt or chose in action has had notice that such assignment is disputed by the assignor or anyone such assignment is disputed by the assignor or anyone claiming under the assignor, or of any other opposing or claiming under the assignor, or of any other opposing or conflicting claims to such debt or chose in action, the conflicting claims to such debt or chose in action, the debtor, trustee or other person liable shall be entitled, if he debtor, trustee or other person liable shall be entitled, if he or she thinks fit, to call upon the several persons making or she thinks fit, to call upon the several persons making claim thereto to interplead concerning the same, or he or claim thereto to interplead concerning the same, or he or she may, if he or she thinks fit, pay the same into court she may, if he or she thinks fit, pay the same into court under and in conformity with the provisions of the Acts for under and in conformity with the provisions of the Acts for the relief of trustees. the relief of trustees.

Page 17: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Section 12Section 12

1.1. There must be a clear intention There must be a clear intention to assign rather than a mere to assign rather than a mere authorisation that the debtor or authorisation that the debtor or other person pay another.other person pay another.

Page 18: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Section 12Section 12

2.2.The assignment must be absolute and not by The assignment must be absolute and not by way of charge. The basic reason why the way of charge. The basic reason why the assignment must be absolute is to ensure that assignment must be absolute is to ensure that the debtor or other person is protected in that the debtor or other person is protected in that at all times he or she knows to whom payment at all times he or she knows to whom payment must be made. Furthermore, the requirement must be made. Furthermore, the requirement that the assignment must be absolute enables that the assignment must be absolute enables the assignee to sue on the debt or chose in the assignee to sue on the debt or chose in action in his or her name because an absolute action in his or her name because an absolute assignment means that the assignor no longer assignment means that the assignor no longer has any interest at all in the debt or chose in has any interest at all in the debt or chose in action.action.

Page 19: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Section 12Section 12

In In Durham Bros v RobertsonDurham Bros v Robertson [1898] 1 [1898] 1 QB 765 there was an assignment of QB 765 there was an assignment of a book debt which was expressed to a book debt which was expressed to endure until money lent by the endure until money lent by the assignee to the assignor was repaid. assignee to the assignor was repaid.

Not an absolute assignment because it Not an absolute assignment because it was conditional upon repaymentwas conditional upon repayment

Page 20: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Section 12Section 12

Part of a debt or chose in action Part of a debt or chose in action cannot be assigned pursuant to s 12. cannot be assigned pursuant to s 12. This is because the assignor still has This is because the assignor still has an interest in the debt or chose in an interest in the debt or chose in action and thus must be joined in action and thus must be joined in any proceedings instituted against any proceedings instituted against the debtor by the assignee. A part of the debtor by the assignee. A part of a debt of chose in action can only be a debt of chose in action can only be assigned in equity assigned in equity

Page 21: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Section 12Section 12

3.3.The assignment must be in writing signed by The assignment must be in writing signed by the assignor the assignor

4.4. Express notice in writing must be given Express notice in writing must be given to the debtor by either the assignor or to the debtor by either the assignor or assignee. There are no formal requirements assignee. There are no formal requirements as to the notice and it need not even state as to the notice and it need not even state the date of the assignment. The importance the date of the assignment. The importance of the notice is that the debtor be advised as of the notice is that the debtor be advised as to whom he or she must pay. to whom he or she must pay.

Page 22: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Things Section 12 can’t Things Section 12 can’t dodo

1. Future choses1. Future choses

2. Change priorities - An assignment 2. Change priorities - An assignment under s 12 is subject to equities under s 12 is subject to equities having priority over the rights of the having priority over the rights of the assignee assignee

3. Assign equitable interests?????3. Assign equitable interests?????

Everett v Commissioner of TaxationEverett v Commissioner of Taxation (1980) 143 CLR 440 (1980) 143 CLR 440

Page 23: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Assignments in equityAssignments in equity

The assignment of future property The assignment of future property The rule in Holroyd v MarshallThe rule in Holroyd v Marshall

(1862) 10 HLC 191 at 211; (1862) 11 (1862) 10 HLC 191 at 211; (1862) 11 ER 999 at 1007 ER 999 at 1007

Valuable considerationValuable consideration Is the property present or future Is the property present or future

property?property?

Page 24: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Norman v Federal Norman v Federal Commissioner of TaxationCommissioner of Taxation

Voluntary deed between a husband and Voluntary deed between a husband and wife whereby the husband purported to wife whereby the husband purported to assign to the wife two items of property. assign to the wife two items of property. First, there was interest on a loan, which First, there was interest on a loan, which the borrower was entitled to repay to the the borrower was entitled to repay to the assignor at any time and without notice. assignor at any time and without notice. Second, there were dividends on certain Second, there were dividends on certain shares owned by the assignor.shares owned by the assignor.

Tax Com argues that voluntary hence Tax Com argues that voluntary hence ineffectiveineffective

HC – both were future propertyHC – both were future property

Page 25: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Norman v Federal Norman v Federal Commissioner of TaxationCommissioner of Taxation

IS it the right to receive IS it the right to receive money (present property) or money (present property) or the money itself (future the money itself (future property)?property)?

Page 26: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Shepherd v Commissioner Shepherd v Commissioner of Taxationof Taxation

Inventor was entitled to royalties in Inventor was entitled to royalties in relation to the manufacture of castors.relation to the manufacture of castors.

By a voluntary deed he assigned ‘all [his] By a voluntary deed he assigned ‘all [his] right title and interest in and to an amount right title and interest in and to an amount equal to ninety per centum of the income equal to ninety per centum of the income which may accrue during a period of three which may accrue during a period of three years … from [the] royalties’.. years … from [the] royalties’..

Tax Com says ineffective because its future Tax Com says ineffective because its future propertyproperty

HC says present propertyHC says present property

Page 27: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Future or Present?Future or Present?

Everett v Commissioner of TaxationEverett v Commissioner of Taxation (1980) 143 CLR 440; 28 ALR 179 a (1980) 143 CLR 440; 28 ALR 179 a taxpayer purported to assign a fraction taxpayer purported to assign a fraction of his share in a partnership together of his share in a partnership together with the right to receive a with the right to receive a corresponding share of partnership corresponding share of partnership profits. The majority of the High Court profits. The majority of the High Court of Australia held that the assignment of Australia held that the assignment involved present property. involved present property.

Page 28: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Future or Present?Future or Present?

In In Booth v Federal Commissioner of Booth v Federal Commissioner of TaxationTaxation (1987) 164 CLR 159; 76 ALR (1987) 164 CLR 159; 76 ALR 375 the High Court of Australia ruled 375 the High Court of Australia ruled that the assignment by a landlord of a that the assignment by a landlord of a percentage of the right to receive rent percentage of the right to receive rent payable in respect of particular payable in respect of particular premises involved present property, premises involved present property, holding that the assignment was holding that the assignment was analogous to the facts of analogous to the facts of ShepherdShepherd and and not not NormanNorman

Page 29: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Description of the propertyDescription of the property

For a valid assignment of future For a valid assignment of future property the property must be property the property must be described with sufficient described with sufficient particularity to permit its particularity to permit its identification when it comes into identification when it comes into existence or into the possession of existence or into the possession of the assignor. the assignor.

Page 30: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Assignment of future Assignment of future property and specific property and specific

performanceperformance This passage in This passage in Holroyd Holroyd suggests suggests

that the assignment is not valid if, as that the assignment is not valid if, as at the date upon which the subject at the date upon which the subject matter of the assignment comes into matter of the assignment comes into the hands of the assignor, the court the hands of the assignor, the court would decline an order for specific would decline an order for specific performance of the contract to performance of the contract to assign. assign.

Page 31: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Assignment of future Assignment of future property and specific property and specific

performanceperformance If A, for valuable consideration agrees to If A, for valuable consideration agrees to

assign future property to B, and consideration assign future property to B, and consideration has been paid or executed by B, when A has been paid or executed by B, when A acquires property that falls within the acquires property that falls within the description of that which A agreed to assign, description of that which A agreed to assign, equity determines that the property vests in B equity determines that the property vests in B as soon as it is acquired by A and can be as soon as it is acquired by A and can be identified. There is no need for any further identified. There is no need for any further assurance by A or action to be taken by B assurance by A or action to be taken by B

equity looks on that as done which ought to equity looks on that as done which ought to be donebe done

Page 32: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

Nature of the assignee’s Nature of the assignee’s rightright

What is the nature of the right?What is the nature of the right? If debt or similar to debt, if the assignor goes If debt or similar to debt, if the assignor goes

bankrupt and then discharged the debt is bankrupt and then discharged the debt is discharged?discharged?

Re LindRe Lind [1915] 2 Ch 345 [1915] 2 Ch 345 The practical implication of The practical implication of Re LindRe Lind is that an is that an

assignee of an expectancy taken as security assignee of an expectancy taken as security for a loan has the right not to prove his or her for a loan has the right not to prove his or her debt in the assignor’s subsequent bankruptcy, debt in the assignor’s subsequent bankruptcy, and can simply rely on the security, in much and can simply rely on the security, in much the same way as an ordinary secured creditor the same way as an ordinary secured creditor can do upon the bankruptcy of a debtor can do upon the bankruptcy of a debtor

Page 33: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

The equitable assignment The equitable assignment of legal propertyof legal property

Assignment of legal property for Assignment of legal property for considerationconsideration

If no requirement for writing then n If no requirement for writing then n assignment of legal property for assignment of legal property for consideration takes effect immediately consideration takes effect immediately the consideration is paid or executed the consideration is paid or executed

If there is a requirement for writing If there is a requirement for writing then doctrine of part performancethen doctrine of part performance

Page 34: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

The voluntary assignment The voluntary assignment of legal property assignable of legal property assignable

at lawat law Milroy v LordMilroy v Lord (1862) 4 De G F & J (1862) 4 De G F & J

264 at 274; (1862) 45 ER 1185 at 264 at 274; (1862) 45 ER 1185 at 1189 1189

The first limb of The first limb of Milroy v Lord: Milroy v Lord: Corin v PattonCorin v Patton (1990) 169 CLR 540 (1990) 169 CLR 540

The second limb of The second limb of Milroy v Lord: Milroy v Lord: Costin v CostinCostin v Costin (1995) NSW Conv R (1995) NSW Conv R 55-811 55-811

Page 35: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

The voluntary assignment The voluntary assignment of legal property not of legal property not

assignable at lawassignable at law If the legal property cannot be If the legal property cannot be

assigned at law the assignment will assigned at law the assignment will be effective in equity if the assignor be effective in equity if the assignor has manifested an intention to make has manifested an intention to make an immediate and irrevocable an immediate and irrevocable transfer transfer

The principles set out in The principles set out in Milroy v Milroy v LordLord do not apply. Nor is do not apply. Nor is consideration required consideration required

Page 36: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

The equitable assignment The equitable assignment of equitable propertyof equitable property

The assignment of equitable property can The assignment of equitable property can only be achieved in equity. Because only be achieved in equity. Because equitable property is not recognised at equitable property is not recognised at common law it cannot be the subject of a common law it cannot be the subject of a legal assignment. For a voluntary legal assignment. For a voluntary assignment of equitable property the assignment of equitable property the assignment must be absolute. Apart from assignment must be absolute. Apart from any statutory requirement of writing, all any statutory requirement of writing, all that is necessary for a valid equitable that is necessary for a valid equitable assignment is ‘a clear expression of an assignment is ‘a clear expression of an intention to make an immediate intention to make an immediate disposition’ disposition’

Page 37: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

ProblemProblem

Monica, aged 27, and Chandler, aged 26, Monica, aged 27, and Chandler, aged 26, were married five years ago. Three years were married five years ago. Three years ago they purchased, as joint tenants, a ago they purchased, as joint tenants, a house under Torrens title. About a year house under Torrens title. About a year ago their marriage began to break down. ago their marriage began to break down. They decided to keep up the pretence of They decided to keep up the pretence of being married because a divorce would being married because a divorce would have damaged their respective careers. have damaged their respective careers. Six months ago Monica was diagnosed Six months ago Monica was diagnosed as having breast cancer.as having breast cancer.

Page 38: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

One week ago Monica met with her One week ago Monica met with her brother Ross and told him that she wanted brother Ross and told him that she wanted him to have her interest in the house she him to have her interest in the house she had purchased with Chandler. To had purchased with Chandler. To effectuate this gift she handed Ross a duly effectuate this gift she handed Ross a duly executed Memorandum of Transfer executed Memorandum of Transfer transferring her interest in the house to transferring her interest in the house to Ross, together with a letter addressed to Ross, together with a letter addressed to Ally, the solicitor in whose office the Ally, the solicitor in whose office the certificate of title was held. The letter certificate of title was held. The letter directed Ally to release the title deed to directed Ally to release the title deed to Ross.Ross.

Page 39: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

The next day Ross went to Ally’s office to The next day Ross went to Ally’s office to collect the title deed but Ally refused to collect the title deed but Ally refused to release it to Ross on the ground that she release it to Ross on the ground that she could not do so without also having a could not do so without also having a direction to that effect from Chandler. Ross direction to that effect from Chandler. Ross left Ally’s office without the certificate of left Ally’s office without the certificate of title. Before anything else was done in title. Before anything else was done in relation to this matter Monica was killed in relation to this matter Monica was killed in a car accident.a car accident.

Ross seeks your advice as to whether he is Ross seeks your advice as to whether he is entitled to Monica’s interest in the house.entitled to Monica’s interest in the house.

Page 40: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

AnswerAnswer The issue raised by this problem is whether the The issue raised by this problem is whether the

transaction between Monica and Ross amounted to transaction between Monica and Ross amounted to an effective equitable assignment of the property to an effective equitable assignment of the property to Ross. If it did the assignment would have severed the Ross. If it did the assignment would have severed the joint tenancy between Monica and Chandler with the joint tenancy between Monica and Chandler with the result that Chandler would not have inherited result that Chandler would not have inherited Monica’s interest in the property on her death Monica’s interest in the property on her death pursuant to the principle of survivorship. At her death pursuant to the principle of survivorship. At her death Monica would have held her interest in the property Monica would have held her interest in the property as trustee for Ross. If the transaction was not an as trustee for Ross. If the transaction was not an effective equitable assignment of the property, effective equitable assignment of the property, Monica would have died holding her interest in the Monica would have died holding her interest in the property as joint tenant with Chandler who would property as joint tenant with Chandler who would inherit her interest pursuant to the principle of inherit her interest pursuant to the principle of survivorship.survivorship.

Page 41: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

AnswerAnswer Given that Monica sought to assign her legal Given that Monica sought to assign her legal

interest in the property to Ross for no interest in the property to Ross for no consideration, the question of whether it was consideration, the question of whether it was assigned in equity invokes the principles in assigned in equity invokes the principles in Milroy v LordMilroy v Lord (1862) 4 De G F & J 264 at 274; (1862) 4 De G F & J 264 at 274; (1862) 45 ER 1185 at 1189 where it was held (1862) 45 ER 1185 at 1189 where it was held that such an assignment would be valid in that such an assignment would be valid in equity only if Monica had done all that was equity only if Monica had done all that was necessary to be done in order to render the necessary to be done in order to render the assignment binding upon her: see assignment binding upon her: see [4.6.7][4.6.7]. It . It should be noted that there has been no legal should be noted that there has been no legal assignment of the property because the transfer assignment of the property because the transfer document has not been registered: see document has not been registered: see [4.3.4][4.3.4]..

Page 42: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

AnswerAnswer On the basis of the High Court decision in On the basis of the High Court decision in Corin Corin

v Pattonv Patton (1990) 169 CLR 540; 92 ALR 1, or in (1990) 169 CLR 540; 92 ALR 1, or in Queensland pursuant to s 200 of the Property Queensland pursuant to s 200 of the Property Law Act 1974 (Qld), the principles in Law Act 1974 (Qld), the principles in Milroy v Milroy v LordLord mean that Monica would have assigned her mean that Monica would have assigned her interest in the property to Ross if (i) she had interest in the property to Ross if (i) she had performed those acts towards a legal assignment performed those acts towards a legal assignment of the property which she and she alone could of the property which she and she alone could perform and (ii) whether the gift to Ross was perform and (ii) whether the gift to Ross was beyond recall by Monica: see beyond recall by Monica: see [4.6.9]–[4.6.12][4.6.9]–[4.6.12]. . Monica’s actions satisfy the first of these Monica’s actions satisfy the first of these requirementsrequirements

Page 43: Law of Assignments Assoc Prof Cameron Stewart. Last week… Law vs Equity Law vs Equity Legal and Equitable estates Legal and Equitable estates Equitable.

AnswerAnswer However, Ally’s refusal to hand over the title However, Ally’s refusal to hand over the title

deed to Ross without Chandler’s consent means deed to Ross without Chandler’s consent means that the gift to Ross was not beyond Monica’s that the gift to Ross was not beyond Monica’s recall. In recall. In Costin v CostinCostin v Costin (1995) NSW Conv R (1995) NSW Conv R 55–811 the New South Wales Court of Appeal 55–811 the New South Wales Court of Appeal held that a refusal by a solicitor such as Ally to held that a refusal by a solicitor such as Ally to hand over the title deed meant that an hand over the title deed meant that an assignment such as Monica’s would be assignment such as Monica’s would be ineffective in equity :see ineffective in equity :see [4.6.13][4.6.13].. On the basis .. On the basis of this decision Monica would not have of this decision Monica would not have assigned her interest in the land to Ross with assigned her interest in the land to Ross with the result that Chandler inherits the property the result that Chandler inherits the property pursuant to the principle of survivorship.pursuant to the principle of survivorship.


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