ASSIGNMENT—REQUIREMENTS OF WRITINGs3.amazonaws.com/prealliance_oneclass_sample/a3AybxVe4R.pdf ·...

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ASSIGNMENT—REQUIREMENTS OF WRITING Creation of express trusts: The trustee must have the title to the trust property Where the trustee acquires the property, the proper writing and form requirements must be adhered to, in order to perfect a valid transfer → The trustee will gain the property through assignment (transfer) of the property Assignment = the immediate transfer of an existing proprietary right, vested or contingent, from the assignor to the assignee: Norman v Federal Commissioner of Taxation (1963) 109 Disposition includes conveyance, vesting instrument, declaration of trust , disclaimer, release and every other assurance of property: s3 & Sch 6 PLA 1. except by will: Sch 6 PLA Section 59 PLA No action may be brought upon any contract for the sale or other disposition of land or any interest in land unless the contract upon which such action is brought, or some memorandum or note of the contract, is in writing, and signed by the party to be charged , or by some person by the party lawfully authorised. Andrew Trotter LWB241 Trusts 1

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ASSIGNMENT—REQUIREMENTS OF WRITING

Creation of express trusts: • The trustee must have the title to the trust property • Where the trustee acquires the property, the proper writing and form

requirements must be adhered to, in order to perfect a valid transfer → The trustee will gain the property through assignment (transfer) of the property

Assignment = the immediate transfer of an existing proprietary right, vested or contingent, from the assignor to the assignee: Norman v Federal Commissioner of Taxation (1963) 109

s 11(1)(a) s (11)(1)(b) s 11(1)(c)Matter Creation or

disposition of an interest in land

Declaration of trust Disposition of subsisting equitable interest or trust

Object Land only Land only Land & PersonaltyType of writing Actual writing Evidentiary writing Evidentiary writing

By whom Settlor/lawfully authorised agent

Settlor Settlor/lawfully authorised agent

Effect of lack of writing

Disposition void Disposition not void, merely unenforceable

Disposition not void, merely unenforceable

Section 11 PLA(1) Subject to this Act with respect to the creation of interests in land by parol—

(a)no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person’s agent lawfully authorised in writing, or by will, or by operation of law; and

(b)a declaration of trust respecting any land must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person’s will;

(c) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be manifested and proved by some writing signed by the person disposing of the same, or by the person’s agent lawfully authorized in writing, or by will.

(2) This section does not affect the creation or operation of resulting, implied, or constructive trusts.

• Disposition includes conveyance, vesting instrument, declaration of trust, disclaimer, release and every other assurance of property: s3 & Sch 6 PLA

1. except by will: Sch 6 PLA

Section 59 PLANo action may be brought upon any contract for the sale or other disposition of land or any interest in land unless the contract upon which such action is brought, or some memorandum or note of the contract, is in writing, and signed by the party to be charged, or by some person by the party lawfully authorised.

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• Rule in Millroy v Lord—If a trust taking effect as a transfer does not comply with requirements of writing & form, equity will not save it by treating it as one which takes effect as a declaration

o Trust by transfer → requirements of writing & formo Trust by declaration → requirements of writing only

Or no requirements at all, depending on the circumstances

Actual writing v evidential writing • Actual writing : an agreement/deed/document creating the trust

1. Contemporaneous (at time of transfer)• Evidenced in writing : Some documentation to support the trust

← eg a letter saying trust created = sufficient evidentiary proof 1. Need not be contemporaneous2. No particular form is required: Forster v Hale3. The writing must contain the terms of the trust – the parties,

particularly the beneficiaries, the trust property and the nature of the trust: Forster v Hale

4. The original beneficial owner (settlor) must sign the document, not the trustee: Tierney v Wood

5. Evidentiary writing can be satisfied by multiple documents being read together: Secretary, Department of Social Security v James (1990) 95 ALR 615

Types of equitable assignment:1. Declaration by full owner that holding as trustee for third party

O [←B] (trust created by declaration)2. Direct assignment by full owner to trustee for third party

O T [←B] (trust created by transfer)3. Direction to trustee by beneficiary to hold trust property for the third party

T [←B1] [←B2] (trust continues)4. Contract for valuable consideration for beneficiary to assign trust property to a

third partyT [←B1] ($) [←($)B2] (trust continues)

5. Direction to trustee to transfer the trust property to a third person[B→] T O (trust ends)← beneficiary must be of full age and capacity and absolutely entitled to the trust property: Saunders v Vautier

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1. Declaration by full owner that holding as trustee for third partyO [←B] (trust created by declaration)

Land → s11(1)(a) or (b) → actual or evidentiary writing

HCA Approach— s11(1)(a) | Actual Writing: Adamson v Hayes (1973) HCA• All dispositions of interests in land require actual writing: s11(1)(a) PLA• → Disposition includes a declaration of a trust: s3 & Sch 6 Dictionary• → Therefore, declarations of trust require actual writings11(1)(a) applies—

1. only to land | not to personalty2. to the creation of an interest as well as a disposition3. to all interests (legal and equitable), including leasehold interest:

Adamson v Hayes (1973) 130 CLR 276 (Oral agreement for mining rights ← equitable interest mining claim = land → lack of writing is a defence)

Accepted Alternative Approach— s11(1)(b) | Evidentiary Writing : Department of Social Security v James (1990) 95 ALR 615 (lower court) (oral declaration of trust—unit for disabled daughter but no documentation evidentiary writing through joinder did suffice || issue of ownership of property lowering pension)

• Definitions and provisions in the PLA operate “unless a contrary intention appears”

• The express provision in s11(1)(b) that declarations of trust require only evidentiary writing demonstrates such a contrary intention

• To adopt the high court approach would be to neglect s11(1)(b) of any independent operation

• → Therefore, declarations of trust require only evidentiary writing• Also suggested that s11(1)(a) has effect only to legal interests, which avoids

the problem (NSW): Baloglow v Konstantidis [2001] NSWCA 451

→ s11(1)(b)a declaration of trust respecting any land must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person’s will; Requirements of Writing—Evidentiary writing—an agreement/deed/document creating the trust← eg a letter saying trust created = sufficient evidentiary proof 6. Need not be contemporaneous7. No particular form is required: Forster v Hale8. The writing must contain the terms of the trust – the parties, particularly the

beneficiaries, the trust property and the nature of the trust: Forster v Hale 9. The original beneficial owner (settlor) must sign the document, not the trustee:

Tierney v Wood 10. Evidentiary writing can be satisfied by multiple documents being read together:

Secretary, Department of Social Security v James (1990) 95 ALR 615Required by—settlorFailure of writing → Disposition not void, merely unenforceable

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Personalty → no section applies → no requirements of writing• s11(1)(a) applies only to creations or dispositions of interests in land, not

personalty• s11(1)(b) applies only to trusts created by declaration, not by transfer• s11(1)(c) applies only to dispositions of subsisting interest, not to the creation

of new interests

2. Direct assignment by full owner to trustee for third party → s11(1)(a)O T [←B] (trust created by transfer)

Land → s11(1)(a) → actual writing• Because it is the creation by transfer of a legal or equitable interest in land, it

is a disposition and must therefore be in actual writing: s11(1)(a) Some contrary NSW authority that it would only apply to legal

interests: Baloglow v Konstantidis [2001] NSWCA 451s11(1)(a) applies—

only to land | not to personalty to the creation of an interest as well as a disposition to all interests (legal and equitable), including leasehold interest:

Adamson v Hayes (1973) 130 CLR 276 (Oral agreement for mining rights ← equitable interest mining claim = land → lack of writing is a defence)

• Void unless actual writing: s11(1)(a) • Some academic authority that it would only apply to the transfer of equitable

interests which is not a declaration of trust: see Ford and Lee, at [6060] → s11(1)(a)no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person’s agent lawfully authorised in writing, or by will, or by operation of law; Requirements of Writing—• Actual writing —an agreement/deed/document creating the trust• Contemporaneous (at time of transfer)Required by—settlor / lawfully authorised agentFailure of writing → Disposition is void

Personalty → no section applies → no requirements of writing• s11(1)(a) applies only to creations or dispositions of interests in land, not

personalty• s11(1)(b) applies only to trusts created by declaration, not by transfer• s11(1)(c) applies only to dispositions of subsisting interest, not to the creation

of new interests

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3. Direction to trustee by beneficiary to hold trust property for the third partyT [←B1] [←B2] (trust continues)

Land → s11(1)(a) or (b)→ evidentiary or actual writing• Direction to trustees is a disposition: Grey v IRC [1960] AC 1 (H creates trusts

for benefit of grandchildren (B)—oral direction to T to hold on trust (no stamp duty payable on oral direction)—no beneficiaries named: resulting trust to H, to B upon death—T executed declarations of trust oral declarations ineffective, because disposition of trust & not in writing | trustee writing direction saved the trust, subject to stamp duty)

s11(1)(a) applies— only to land | not to personalty to the creation of an interest as well as a disposition to all interests (legal and equitable), including leasehold interest:

Adamson v Hayes (1973) 130 CLR 276 (Oral agreement for mining rights ← equitable interest mining claim = land → lack of writing is a defence)

Minority alternative—• ‘Declaration of trust (s11(1)(b)’ includes direction —determines completely

the equitable interest of the person making the direction, as with a declaration → s11(1)(b) applies → evidentiary writing will suffice: Grey v IRC [1960] AC 1 (minority)

→ s11(1)(a)no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person’s agent lawfully authorised in writing, or by will, or by operation of law; Requirements of Writing—• Actual writing —an agreement/deed/document creating the trust• Contemporaneous (at time of transfer)Required by—settlor / lawfully authorised agentFailure of writing → Disposition is void

Personalty → Passive Subtrust → s11(1)(c) → evidentiary writingIf the holder of the equitable interest purports to assign his or her interest, they are creating a sub-trust• Effect of this depends on whether the sub-trust is active or passive: Re Lashmar

[1891]o Active subtrust—s11(1)(c) does not apply → no writing required

• B1 (settlor of subtrust) passes only part of equitable interest to B2

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• B1 reserves some active duties for himself (= an interest: Onslow v Wallis)

o Passive subtrust—s11(1)(c) applies → evidentiary writing required• B1 passes full interest to B2• B1 totally substituted by B2—has no active role: Re Lashmar

← Designed to prevent a hidden oral transaction in equitable interests: Vandervell v Internal Revenue Commissioners [1967] 2 AC 291 per Lord Upjohn

• s11(1)(c) applies to both land and personalty, but is rendered practically ineffective with regard to land by s11(1)(a): Adamson v Hayes (1973) 130 CLR 276

• Does not apply to a resulting trust—where new trusts declared and the beneficiaries directs the trustees to declare new trusts of the property received upon the exercise of the option: Re Vanvervell’s Trusts (No 2) [1974] Ch 269

→ s11(1)(c)a disposition of an equitable interest or trust subsisting at the time of the disposition, must be manifested and proved by some writing signed by the person disposing of the same, or by the person’s agent lawfully authorized in writing, or by will.Requirements of Writing—Evidentiary writing—an agreement/deed/document creating the trust← eg a letter saying trust created = sufficient evidentiary proof 1. Need not be contemporaneous2. No particular form is required: Forster v Hale3. The writing must contain the terms of the trust – the parties, particularly the

beneficiaries, the trust property and the nature of the trust: Forster v Hale 4. The original beneficial owner (settlor) must sign the document, not the trustee:

Tierney v Wood 5. Evidentiary writing can be satisfied by multiple documents being read together:

Secretary, Department of Social Security v James (1990) 95 ALR 615Required by—settlor / lawfully authorised agentFailure of writing → Disposition not void, merely unenforceable

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4. Contract for valuable consideration for beneficiary to assign trust property to a third partyT [←B1] ($) [←($)B2] (trust continues)

Land → s11(1)(a) or s59 → actual or evidentiary writing

HCA Approach— s11(1)(a) | Actual Writing: Adamson v Hayes (1973) HCA per Gibbs J

• All dispositions of interests in land require actual writing: s11(1)(a) PLA• → Disposition has its ordinary, wide meaning (Chrichton v Chricton (1940))

which includes a disposition for consideration (a sale): s3 & Sch 6 Dictionary• → s59 & s11(1)(a) both apply, so higher standard is imposed• actual writing required s11(1)(a) applies—

1. only to land | not to personalty2. to the creation of an interest as well as a disposition3. to all interests (legal and equitable), including leasehold interest:

Adamson v Hayes (1973) 130 CLR 276 (Oral agreement for mining rights ← equitable interest mining claim = land → lack of writing is a defence)

Accepted Alternative Approach —s59 | Evidentiary Writing : Abjornson v Urban Newspapers [1989] WAR 191; Theodore

• s59 covers the field for contracts for sale of land with valuable consideration • Definitions and provisions in the PLA operate “unless a contrary intention

appears”• s 59 provides that contrary intention• → actual or evidentiary writing sufficient

Even if High Court reasoning is accepted—• The passing of consideration binds the receiver’s conscience and creates a

constructive trust until the goods are passed• s11(2) states that s11(1)(a) doesn’t apply to constructive trusts • → s59 applies and actual or evidentiary writing sufficient: Oughtred v Inland

Revenue Commissioners [1960] AC 206 (Trustee holding shares X for B1 (life interest) & B2 (remainder)—oral agreement that B1 transfer shares Y to B2 in return for B2’s remainder interest in shares X contract of sale of remainder interest is specifically enforceable—upon signing: B2 becomes constructive sub-trustee of remainder interest in shares X for B1—when shares transferred, full constructive trust established → s11(1)(a) doesn’t apply → evidentiary writing will suffice → agreement enforceable)

→ s59No action may be brought upon any contract for the sale or other disposition of land or any interest in land unless the contract upon which such action is brought, or some memorandum or note of the contract, is in writing, and signed by the party to be charged, or by some person by the party lawfully authorised.

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Requirements of Writing—Evidentiary writing—an agreement/deed/document creating the trust← eg a letter saying trust created = sufficient evidentiary proof 6. Need not be contemporaneous7. No particular form is required: Forster v Hale8. The writing must contain the terms of the trust – the parties, particularly the

beneficiaries, the trust property and the nature of the trust: Forster v Hale 9. The original beneficial owner (settlor) must sign the document, not the trustee:

Tierney v Wood 10. Evidentiary writing can be satisfied by multiple documents being read together:

Secretary, Department of Social Security v James (1990) 95 ALR 615Required by—signed by the party to be chargedFailure of writing → Disposition not void, merely unenforceable

Personalty → Passive Subtrust → s11(1)(c) → evidentiary writingIf the holder of the equitable interest purports to assign his or her interest, they are creating a sub-trust• Effect of this depends on whether the sub-trust is active or passive: Re Lashmar

[1891]o Active subtrust—s11(1)(c) does not apply → no writing required

• B1 (settlor of subtrust) passes only part of equitable interest to B2• B1 reserves some active duties for himself (= an interest: Onslow v

Wallis)o Passive subtrust—s11(1)(c) applies → evidentiary writing required

• B1 passes full interest to B2• B1 totally substituted by B2—has no active role: Re Lashmar

← Designed to prevent a hidden oral transaction in equitable interests: Vandervell v Internal Revenue Commissioners [1967] 2 AC 291 per Lord Upjohn

• s11(1)(c) applies to both land and personalty, but is rendered practically ineffective with regard to land by s11(1)(a): Adamson v Hayes (1973) 130 CLR 276

• Does not apply to a resulting trust—where new trusts declared and the beneficiaries directs the trustees to declare new trusts of the property received upon the exercise of the option: Re Vanvervell’s Trusts (No 2) [1974] Ch 269

→ s11(1)(c)a disposition of an equitable interest or trust subsisting at the time of the disposition, must be manifested and proved by some writing signed by the person disposing of the same, or by the person’s agent lawfully authorized in writing, or by will.Requirements of Writing—Evidentiary writing—an agreement/deed/document creating the trust← eg a letter saying trust created = sufficient evidentiary proof 11. Need not be contemporaneous12. No particular form is required: Forster v Hale13. The writing must contain the terms of the trust – the parties, particularly the

beneficiaries, the trust property and the nature of the trust: Forster v Hale 14. The original beneficial owner (settlor) must sign the document, not the trustee:

Tierney v Wood

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15. Evidentiary writing can be satisfied by multiple documents being read together: Secretary, Department of Social Security v James (1990) 95 ALR 615

Required by—settlor / lawfully authorised agentFailure of writing → Disposition not void, merely unenforceable

5. Direction to trustee to transfer the trust property to a third person[B→] T O (trust ends)

Land → s11(1)(a) → actual writing• It is a disposition in equity, and therefore will need to comply with the writing

requirements• The greater includes the less — as long as the requirements are followed in

regards to the legal interest (of the trustee), then that will be sufficient to pass the equitable interest also: Vandervell v Inland Revenue Commissioners [1967] 2 AC 291 (Bank holds shares on trust for V—V directs B to transfer to Charity—option to repurchase granted in favour of R—after dividend paid, transferred beneficial interest to avoid paying tax oral direction effective—but shares held on resulting trust for V—transfer of legal title included transfer of lesser parts—option not enforceable—had to pay tax); applied into Australia: DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (New South Wales) (1982) 149 CLR 431 ← reasoning has been criticised as being unconvincing and based on policy considerations

s11(1)(a) applies— only to land | not to personalty to the creation of an interest as well as a disposition to all interests (legal and equitable), including leasehold interest:

Adamson v Hayes (1973) 130 CLR 276 (Oral agreement for mining rights ← equitable interest mining claim = land → lack of writing is a defence)

→ s11(1)(a)no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person’s agent lawfully authorised in writing, or by will, or by operation of law; Requirements of Writing—• Actual writing —an agreement/deed/document creating the trust• Contemporaneous (at time of transfer)Required by—settlor / lawfully authorised agentFailure of writing → Disposition is void

Personalty → No requirements of Writing• The greater includes the less —therefore the legal title is being transferred

rather than merely the subsisting equitable interest—s11(1)(c) does not apply: Vandervell v Inland Revenue Commissioners [1967] 2 AC 291 (Bank holds shares on trust for V—V directs B to transfer to Charity—option to repurchase

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granted in favour of R—after dividend paid, transferred beneficial interest to avoid paying tax oral direction effective—but shares held on resulting trust for V—transfer of legal title included transfer of lesser parts—option not enforceable—had to pay tax); applied in Australia: DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (New South Wales) (1982) 149 CLR 431

Exceptions to writing requirements• Does not affect resulting, implied or constructive trusts: s11(2) PLA• Equity will allow the admission of oral evidence to prevent the commission of

fraud: Rochefoucauld v Boustead [1897] (land is being conveyed to a party as trustee, equity will not tolerate a party then backing out of their obligations because they don’t comply with the statute)

• Unconscionability and part performance : Equity may also intervene where they has been unconscionability, and part performance

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PROPERTY IS ASSIGNABLE

(Some property not assignable because of statute or public policy)

Public pay• The assignment of pay of a holder of a public office is invalid: Arbuthnot v

Norton (1846) 13 ER 474

Certain contractual rights• Contract not breached—

o Where the right is from a subsisting contract, the right of the benefit could be assigned, and the assignment would take the benefit of a legal chose in action

→Would have to comply with PLA s199 Fine where it isn’t for personal services: Bruce v Tyler (1916)

o ← not certain; reasons are based heavily on the rationale for not allowing bare rights to litigate to surface

• Contract may stipulate that rights aren’t assignable: Linden Gardens Trust Ltd v Lenesta Sludge Disposal Ltd [1994]

• Contracts for personal services—the right to have a person perform the personal services ought not to be prejudiced by the substitution of an assignee

• Relating to property – aren’t assignable

Rights to litigateVerdictis assignable: Gleg v Blomley per Vaughan Williams LJ and Campbells Cash and Carry Pty Ltd v Fostif Ltd [2006] HCA 41← because it is a judgment debt—chose in action

• If verdict is not yet reached in action for defamation → action dies with the plaintiff: s 66(1) Succession Act

Bare right to litigateGenerally cannot be assigned: Glegg v Bromley [1912] 3 KB 474 and Campbells Cash and Carry Pty Ltd v Fostif Ltd [2006] HCA 41 (litigation funding a class action)

• Old approach—where property contains an incidental right to litigate (↔ bare right to litigate) → can be assigned: Dickson v Burnell (1866)

o Problematic flexible definition & arbitrary distinctiono Policy grounds—prevention of Maintenance (= funding of litigation by

a non-party – pecuniary monetary assistance, without lawful excuse) and Champerty (= funding litigation with agreement that there would be a splitting of the proceeds of litigation)

o ← cases should only be continued by persons who have an interest, rather than turning litigation into a commodity

o ← to promote equal access to justice• Modern approach—where assignee has a genuine and substantial

commercial interest in the outcome of the action → assignment valid: Trendtex Trading Corporation v Credit Suisse [1982] AC 679 (T in litigation with N for failure to pay for goods—T assigned to CS (=creditor)

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assignment to creditor valid || but invalid because did so with intention to reassign for a profit)

o BUT not if on intention to profit by passing on right to uninterested person for profit: Trendtex Trading Corporation v Credit Suisse [1982] AC 679 (T in litigation with N for failure to pay for goods—T assigned to CS (=creditor) for $800k—CS reassigned to B for $1.1m assignment invalid because did so with intention to immediately reassign for a profit)

Prospect of a profit not fatal: Browntown v Edward Moore Inbucon Ltd [1985] 3 All ER 499 (P suing B (installer) & E (advisor)—E settles with P—P assigns to E—E sues B to recover for partial liability valid despite potential for B to profit out of transaction || E limited itself to recovery of half of the damages—so did not arise)

Prospect of excessive profit may go towards an inference of an intention to profit: Browntown v Edward Moore Inbucon Ltd

o Parties with a sufficient commercial interest— Co-defendants and parties to commercial dealings: Browntown

v Edward Moore Inbucon Ltd [1985] 3 All ER 499 (P suing B (installer) & E (advisor)—E settles with P—P assigns to E—E sues B to recover for partial liability valid || E limited itself to recovery of half of the damages)

Creditors : Re Timothys Pty Ltd [1981] 2 NSWLR 706; Trendtex Trading Corporation v Credit Suisse [1982] AC 679 (T in litigation with N for failure to pay for goods—T assigned to CS (=creditor) assignment to creditor valid || but invalid because did so with intention to reassign for a profit)

Insurers : Compania Colombiana De Seguros v Pacific Steam Navigation Co [1965] 1 QB 101

(for more detail see 3 Certainties)[Intention to Assign]

• Settlor must exhibit an expressed or implied intention to create a trust• Intention must be to create a trust relationship (as opposed to other legal

relationship)← Important in bankruptcy cases

o revocable mandate ↔ trust Comptroller of Stamps (Vic) v Howard-Smith (1936) (beneficiary of will sends letter to executors—allowing to pay monies to creditors listed in letter—creditors not aware letter merely amounted to giving a power to pass property under power of attorney, not conferring interest → no trust, merely revocable mandate)

↑ Indicative of revocable mandate—• Language of request (“I hereby request you”)• Recipients of money not aware• Allocator of money a residuary beneficiary (= amount

uncertain)o Debt ↔ trust [see also general notes]

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• Equity looks to the substance, not the form • Precatory words will not suffice• Where left to someone ‘absolutely’—they are not a trustee holding it for the

benefit of others: Re Williams

[Certainty of Subject Matter][Certainty of Object]

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REQUIREMENTS OF FORM

• Only relevant if trust by transfer—not by declaration • If by declaration, trust property already in the name of the trustee → only transfer

of beneficial interest not legal interest

Form Required

Torrens title land• Dependent on registration: s181 LTA• On registration, the interest is said to be transferred in the lot: s182 LTA

Choses in possession= Personal property, with a tangible, physical existence• Sale —must comply with Sale of Goods Act• Gift — (Cochrane v Moore)

o Deliver possession (actual or constructive) with intention to give; oro Deed of gift

Choses in action: = intangible property right, only enforceable only by court proceedings:

Torkington v McGee (1920 KB)• Legal chose in action—enforced by common law courts

o ← debts, company shareso → Compliance with s199 (legal assignment) or equitable assignment

(s200)• Equitable chose in action—enforced by courts of equity

o ← interest of a beneficiary under a trust; partner in a partnership o → Equitable assignment only (although some HCA authority that s199

applies: Everett v FCT)

Form Requirements

Legal Assignment: s199• Applicable to legal choses in action where no specific rule

= debt= shares—specific rule that must be registered: Corporations Acto ← “any debt or other legal thing in action”

• Possibly applicable to equitable choses in action: Everett v FCT (partnership)= interest of beneficiary under a trust | partner under a partnership o ← “legal” thing in action refers to any chose in action which can be

assigned—includes legal & equitable o ← Section refers to a trustee—indicating an equitable chose in action

• Better view is that it does not apply to equitable choses in action: William Barendt v Dunlop Rubber [1906] (“trustee” means “trustee in bankruptcy)

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o To assign in equity—only requirement is intention to assign: Comptroller of Stamps (Victoria) v Howard-Smith (1936)

o However, prudent to follow s199 procedure—will give a purchaser who gives notice priority under the rule in Dearle v Hall (1828)

(1) Any absolute assignment • by writing under the hand of the assignor (not purporting to be by way of

charge only) • of any debt or other legal thing in action, • of which express notice in writing has been given to the debtor, trustee or

other person from whom the assignor would have been entitled to claim such debt or thing in action,

• is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice—

(a) the legal right to such debt or thing in action; and(b) all legal and other remedies for the same; and(c) the power to give a good discharge for the same without the concurrence of

the assignor.

Elements—1. Intention to assign

o As opposed to revocable mandate: Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 [see above]

2. Property sufficiently described : Percival v Dunn (1885)

3. Assignment absolute o not in the way of a charge: Durham Bros v Robertson [1898] (eg

similarly to old system mortgages—transfers of book debts for security || floating charge more common now in any case)

← to ensure at all times that a debtor knows to whom they have to pay

o Not a part assignment ← intention is that the person who has the interest transferred

to them can sue on their own—otherwise must be joined in any proceedings against the debtor: Re Steel Wing Company, Limited [1921] (if partial—equity—only intention required—not s200)

4. Assignment in writing signed by the assignor (evidentiary)

5. Written notice to the debtor, trustee etco express notice must be given to the debtor: Norman v Federal

Commissioner of Taxation or authorised agent: Saffron Walden Second Building Society v

Raynor (1880)

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o Giving notice to one debtor or trustee is sufficient: Ward v Duncombe [1893]

o Doesn’t matter— who gives the notice no formal requirements: Lloyd v Banks (1868)

o Change of trustee does not negate notice: Re Wasdale [1879]o Notice to prospective trustee not sufficiento Debtor can request to see the assignment to check the validity before

paying: Grey v Australian Motorists & General insurance Co Pty Ltd [1976] 1 NSWLR 669

o Until notice is received , the third party debtor may continue to pay the assignor, and not the assignee (who has got the chose in action): Magee v UDC Finance Ltd [1983] NZLR 438

o Where notice delivered by post, and it is properly addressed and posted, receipt of the notice will be presumed in the absence of contrary evidence: Watson v Shepherd [1904]

• Priorities o Generally—the first assignment in time will prevailo However—later assignee will have priority where:

Bona fide purchaser for value without notice (not a volunteer) Gives notice to debtor or trustee (fulfils requirements of s199)

• same day = same timeDearle v Hall (D assigns to A—assigns to B—assigns to H (for consideration without notice of A&B)—H gives notice to trustee H has priority over A&B)← Because s199 provides expressly that the assignment is effective subject to equities having priority over the right of the assignee so the priorities rule applies to choses in action: Marchant v Morton Downs & Co [1901] 2 KB 829

o Exception applies only to personalty, not to realty: Gresham Life Assurance Company v Crowther [1915]

• Assignor must own the property he is assigning: BS Lyle Ltd v Rosher [1957] (trustee assigning property to mortgagee mortgagee cannot gain priority by giving notice to beneficiaries)

• Assignment by deed or gift possible under s199: Re Westerton [1919] • Future choses in action cannot be assigned under s199—can only be assigned

in equity for consideration: Norman v Federal Commissioner of Taxation

Assignment in Equity

• Fallback where—o Legal chose in action which can’t be assigned at law (eg part of a debt)

Must have an intention to have the interest pass at law: Shepherd v Federal Commissioner of Taxation

Consideration is not required: Norman v Federal Commissioner of Taxation

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o Failed attempt to assign the property at law → may be saved by s200

(1) A voluntary assignment of property shall in equity be effective and complete when, and as soon as, the assignor has done everything to be done by the assignor that is necessary in order to transfer the property to the assignee—(a) even though anything remains to be done in order to transfer to the assignee

complete and perfect title to the property; and(b) provided that anything so remaining to be done is such as may afterwards be

done without intervention of or assistance from the assignor.

• Assignment can be effective in equity where everything that must be done by the assignor has been done: s200; Corin v Patton (common law equivalent)

o Steps can be taken by others to complete (ie registration, giving notice)• Still in possession of share certificates → probably not effective: Corin v

Patten• Assignor must deliver title deed | execute transfer etc: Corin v Patton (wife

transferring joint tenancy interest to brother to avoid falling back into estate—did not give authority to bank to deliver up title deed—did not direct solicitor to hold documents for brother rather than herself did not do everything necessary for assignment in equity)

• Assignor must execute transfer | power of attorney not sufficient: Milroy v Lord (M → L [←P] || transfer to L not executed by M—only on power of attorney—revoked upon death no equitable assignment)

Assignment in Equity for Consideration (Future Property)• Future property can only be assigned in equity for consideration: Norman v

FCT (interest)o ← consideration binds the conscience of the assigneeo ← equity regards what should be done as being done: Talby v Official

Receiver; Palette Shoes Pty Ltd v Krohn• Ability to gain specific performance of the contract not required: Holroyd v

Marshall (1862) • Property must be sufficiently described to allow for identification upon its

coming into existence: Talby v Official Receiver • Nature of rights for future property—

o Merely contractual → discharged by a bankruptcy: s153(1) Bankruptcy Act All debts and liabilities, present and future, provable in

bankruptcy: s82 o Better view—rights are proprietary as well as contractual,

→ security over land, rather than a mere debt. Re Lind [1915] → Will survive the bankruptcy: Re Lind [1915] (L assigns

future expectancy under will to A—then to B (for consideration)—then bankrupt—then to C assignments to A&B not extinguished → A&B had priority)

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