Assignment

Question 1

Colonial Bank v Whinney (1885) CA, FRY LJ at 285:

Answer 1

“All person things are either in possesion or action. The law knows no tertium quid between the two”

Question 2

Channell J in Torkington v Magee (1902)

Answer 2

“Chose in action is a known legal expression used to describe all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession”

Question 3

OBG v Allen, Hale @ 309

Answer 3

“The essential feature of property is that it has an existence independence of a particular person: it can be bought and sold, given and received, bequeathed and inherited, pledged or seized to secure debts”

Question 4

What is Novation?

Answer 4

A-X contract replaced by new B-X contract, so that B can bring direct contractual claim against X
Consent of A B and X required
B must provide consideration under new conract
B gains new right directly agianst X
New contract also imposes duties on B to X

Question 5

Contract (Rights of Third Parties) Act 1999:

Answer 5

If X makes contractual promise to A to pay B, even if consideration provided only by A, B may then be able to bring direct stautory claim against X
Only consent of A and X is required
B need not provide consideration
B gains new right directly against X
No duties can be imposed on B under the Act
Not ideal, would rather not involve X

Question 6

Acknowledgement

Answer 6

If X holds specific fund from which his debt to A must be satisified, and A instructs X to pay (part of) the debt from that fund to B, and X agrees, B can bring direct claim against X
Claim is for money had and received to the use of B
e.g. Griffin and Wetherby
Consent of A and X required
B need not provide conideration
B gains a new right direct againt X
No duties can be imposed on B
Shamia v Joory, said pricniple could apply even where X did not hold specificfund from whcih debt should be paid, but this = difficutl to justify

Question 7

Declaration of Trust

Answer 7

A declares he holds the contractual right to payment against X on trust for B
Consent of X not required
B need not provide consideration
B does not gain new right directly against X (though can force A to sue by joining A as D (Vandepitte procedure))
No duties can be imposed on B
More useful than the other three, as don’t need X’s consent

Question 8

Norman v Federal Commission of Taxation (1963) HCA

Answer 8

Windeyer J
Ass means the immediate transfer of an existing prop right, vested or contingent, from assor to assee
Such transfer would involve:
A’s loss of A’s right against X
B’s acquisition of a direct right against X
No requirement for X’s consent
Novation, Rights of Third Parties Act, Acknowledgement, DOT, none of these have all those feature

Question 9

Basic rule of CL assignment

Answer 9

Rights that cannot be asserted by taking possession of a physical things cannot be transferred
i.e. cannot assign CIA, purely contractual rights

Question 10

Exceptions to basic rule of CL Ass

Answer 10

i) Debts owed by and to Crown (historical)
ii) debts physically embodied by negotiable instrument (cheques, bills of exchange, bearer bonds)
iii) registered company shares and debentures

Question 11

Why have the CL Ass basic rule?

Answer 11

Conventional view = concern about maintenance
But then why allow EA? Burrows points out odd that CL doesnt allow A by E does
More fundamental issue, you agree to contract w and pay A, then its w B?? Tham says its not right, its not hwat you agreed to do and not who you made agreement with

Question 12

Why is it okay to have EA, when we know its wrong in CL?

Answer 12

It doesn’t operate like a transfer, which would raise the same problem

Question 13

E Peel, Treitel’s Law of Contract (12th edn, 2007) 15-002:

Answer 13

“The early lawyers found it hard to think of a transfer of something intangible like a contractual right. Later the rule was based on the fear that assignments of choses in action might lead to maintenance [i.e. meddling in litigation in which a party has no concern.]”

Question 14

Coke in Lampet’s Case (1612)

Answer 14

“the great wisdom and policy of the sages and founders of our law, who have provided that no possibility, right, title, nor thing in action, shall be granted or assigned to strangers, for that would be the occasion of multiplying of contentions and suits.”

Question 15

“Type 1” Equitable Assignment

Answer 15

X owes A
A expresses intention to make immediate transfer of benefit of that right to B
This constitutes EA of A's right
X's consent not required
B need not provide consideration
No notice need be given to X
Writing not required

Question 16

Brandt’s Sons v Dunlop Rubber Co (1905)

Answer 16

per Lord Macnahten
A need not use term “ass”
An EA may be addressed to X
Language is immaterial if meaning is plain
All that is necessary is that X should be given to understand that the debt has been made over by A to B

Question 17

Gorringe v Irwell India Rubber (1886)

Answer 17

X owes A, A owes B. A writes to B agreeing to hold at B’s disposal the debt due from X
Neither A nor B notifies X
A goes into liquidation
Cotton LJ: “Though there is no notice to D the title of the assee is complete as against the assor

Question 18

Brandt’s Sons v Dunlop Rubber

Re effect of Type 1 EA

Answer 18

Lord Macnaghten
A, or their T in bankruptcy, should have been brought before the court
But no action is now dismissed for want of parties, and the T really had no interest in the matter
X disclaimed any with to have him present
(But technically A should be there)

Question 19

Roberts v Gill (2011)

Answer 19

Lord Collins
Other than in most exceptional circumstnaces (e.g. Brandt’s), even in case of EA B cannot proceed to judgment without joining A
Starting point is that if EAee sues 3P, Assor must be joined as D
Bradnt’s exceptional as whole focus was on whether instruciton given by A to X to pay B amounted to EA, fact that A was not party was overlooked until hL held that there had been EA
In more modern times, has been held that lathough practice was to join A, the requirement is procedural and absence can be cured. A msut be joined before a final judgment, but the action is validly constituted whitout joinder
No such relaxation permissible here. EA cases are different from this case, as in EA b = true owner and A = bare T

Question 20

MH Smith (Plant Hire) v DL Mainwaring (1968)

Answer 20

Kerr LJ
Considering position of insurer (B) who has right of subrogation to claim of the insured (A) against wrongdoer (X), where A = company that no longer exists
Effect of right is B can compel A to bring action against X in respect of loss for which they have indeminified B or sue in the name of B
Does not transfer the cause of action to B
If A wont bring the action, the B can join him in the action in order to compel him to do so.
If Assor no longer exists, nothing can be done by assee bc he himself has no cause of action
To contend the problem is one of form and not substance is as untenable in present state of the law as it would be in relation to the different conseqences of an equitable, as opposed to legal, assignment

Question 21

Other effects of type 1 EA

Answer 21

If X has not received notice of the ass, X will be discharged from his debt if he pays A
If A goes into insovency, his right against X is not available to A’s unsecured Creditors (e.g. Holt v Heatherfield Trust (1942))

Question 22

EA vs DOT

Answer 22

A retains A’s right against X, W’s duty is still owed to A
A is under duty to use his right agaisnt X for B’s benefit
B can force A to sue X, but cannot sue X directly
B’s right is capable of binding T’s in bankruptcy
B’s right can arise without notice to X
B’s right can arise without any formality being used by A
B’s right can arise without any consideration being provided by B, but A must have the right at the time of the dec/ass

Question 23

Type 2 EA

Answer 23

A expects to acquire rights against X, promises B it will transfer those rights to b. If B gives consideration this constitutes EA
Cant have immediate gratuitous EA of future right, need contractual agreement
Similar to DOT again

Question 24

How is type 2 different to type 1?

Answer 24

Dont intend for B to immediately acquire benefit of A’s right
b’s acquisition of a right depends on B’s providing consideration
B does not acquire the equitable interest immediately, but only when A acquires its rights against X

Question 25

re McArdle (1951)

Answer 25

Jenkins
An existing right can be assigned in equity without consideration
Also Shepherd v Federal Comr of Taxation (1965)
Contrary dictum of Sargant J in re Westerson (1919) seems to be incorrect

Question 26

Tailby v Official Receiver (1888)

Answer 26

If A atttempts to assign right he does not yet have, assignment will be immediately effective on A acquiring th right, but only if consideration has been provded by B
Lord Eveshed “where the property is not in existennce something else has to be done by the giver to give effect to the gift. It can only operate in contract, if there is no subject-matter then capable of being given”

Question 27

What is statutory assignment?

Answer 27

Allows B to sue X directly if certain conitions met
Has to be in wiritng
Has to be absolute
Notice must be given toX
SA = subject to equities.
SA =/= CL transfer
SA = EA w b having direct claim (jsutified by extra formalities so X can’t complain)

Question 28

Torkington v Magee

Answer 28

Channel J sys by words of section the ass is effective subject to all the equities
Means the case deals w case where Aee had some right before the act where his right was previously recognised by Court of Equity
Statutejsut allows B to sue in own name
So not extending ass, just wasy to give additional effects to EA

Question 29

Judicature Act 1873 s25(6), re-enated as LPA 1925 s136(10

Answer 29

Any absolute assignment by writing by Aor of any debt r thing in action, of which express notice in writing given to X from whom A would have been enitled to claim such debt/thing, is effectual in lawto pass from the date of such notice:
(a) the legal right to such debt/thing
(b) all legal and other remedies for the same; and
(c) power to give good discharge for the same without concurrence of A
Provided that, if X has notice
(a) that the ass is disputed by A or any person claiming ot eb udner him or
(b) of any other opposing or conflicting claims to such debt or thing in action
he may either call upon the persons making claim thereto to interpelad concerning the same, or py the debt or other thing in action into court under the provision of the trustee Act 1925

Question 30

Durham Bros v Robertson (1898)

Answer 30

Chittly LJ
The ass before us complies with all the terms of the enactmen save one, which is essential
It is conditional, rather than absolute
Repayment of money advanced = uncertain event, and makes the ass conditional
Where act applies it does not leave X uncertain re to whom legla right is transferred
Does not involve him in any question re state of accounts between A and B. So:
(i) a ass by way of mortgage can fall w/in s136 as it putports to pass entire interest of A. When A reddems, transfer back to A from B under s136 woudl require tnotice to X, so X could knoow w certainty in whom legal right to sue was vested
(ii) but an ass ppurporting to eb by way of charge is not within s136, as then B’s right terminates when A’s sacred duty is performed, and so X may be unaware of the event that means X’s duty = owed to A not B
(iii) and an ass of part of a debt cannot be within s136 (e.g. per Lord Borwne-Wilkinson in Depositi Protection Board v Barclays) as then x is exposed to multiple acitons with risk of conflicitig decision

Question 31

Curran v Newpark Cinemas (1951)

Answer 31

Same doc acn serve as written notivce to X and as writing udner hand of A required for SA

Question 32

Tham “Notice of Assignment and Discharge by Performance”

Answer 32

Unless on its true construction the debt contains terms whereby X is obliged to pay not jsut A, buut other parties such A’s assees or nominees, all B is entitled to is to insist X amke payment due to A
Just as w EA, although SA addressesthe Q to whom X is liabe, its has nothing to say re what X is liable to do

Question 33

Priorities

Answer 33

If SA made in favour of B2 (w GF, good value, no notice of B1) priority depends on whether B1 or 2 first gave notice to X
Exact same rules as when ass in favour of B2 = EA

Question 34

Dearle v Hall (1828)

Answer 34

Concerned successive assignmnents of A’s equitable interest under a trust
Basic rule = B1 has priority as first in time
But if B2 has given value, GF, not notice, he can get priority over B1 if B2 gives notice to X before B1 gives such notice

Question 35

s137(3) LPA

Answer 35

A notice, not in writing, given to/received by a T, as resects any dealing w an equitable interest in real or personal prop, shall not affect the priority of competing claims or purchasers in that equitable interest
So notice has to be in writing

Question 36

Compaq Computer v Abercorn Group (1991)

Answer 36

Rule in Dearle v Hall also applies to ass of legal CIAs and where an EA to B1 is followed by SA to B2
So, if there is EA to B1 then SA to B2, B2 cannot use BFP for value w/out notice defence to get priority
This has been criticised (e.g. Oditah “Priorities: Equitable versus Legal Assignments of Book Debts”)
May create problem for B2, as it is often impractical for B2 to check w X to see if any earlier assignee has given notice to X

Question 37

Dawson v GN & City Rwy (1905)

Answer 37

Assinment to B of statutory claim against rwy co for interference w A’s land
B cannot recover for additional loss suffered as result of trade carried on by B but not by A

Question 38

Linen Gardens (1992)

Answer 38

Staughton LJ
“[B] can recover no more than [A] could have recovered if there had been no assignment, and if the building had not been transferred to [B].”

Question 39

Offer-Hoar v Larkstore (2006)

Answer 39

Mummery LJ
Principle that B cannot recover more than A is to protect X from prejudice, e.g. by haing to pay damages to B which he would not have to pay A had the ass never happened
Principle is not inteded to enable X to rely on fact of ass in order to escape all legal liability for BOC
Rix LJ
Rule that a party may only recover in respect of his own loss does not create any difficulty in case where cause of action and loss are united in same party

Question 40

Young v Kitchin (1878)

Answer 40

If X’s claim v A arises out of same con as assigned debt, X can rely on that claim

Question 41

Business Computers v Anglo-African Leasing (1977)

Answer 41

If X’s claim v A arises out of different circumstances, X can rely on that claim v B only if the claim arose before notice of the ass was given to X
TemplemanJ
“a debt which is neither accrued not connected may not be set off even though it arises from a contract made before the assignment.”

Question 42

Nokes v Doncaster Amalgamated (19)

Answer 42

Employment contracts= inherently non-assignable
Lord Atkin
Astonishing that power should be gien to a court or anyone else to transfer a man without his knowledge and possibly against his will from service of one man to that of another
right to choose for himself who he would serve is ingrained in personal stautus of citizen
this constitutes main difference between servant and serf

Question 43

Don King v Warren (2000)

Answer 43

Contracts involving personal confidence = inherently unassignable
Lightman J
the promotion, a=management and asociated agreements could not be assined bc “they were contracts based on the personal mutual confidence of the boxer and the promoter and manager”

Question 44

Other personal contracts = inherently unassignable, auth?

Answer 44

Tolhurst v Associated Portland (1903)
Kemp v Barselman (1906)
Lord Alverstone
In Tolhurst threr was con for supply of chalk treated as con for supply to given cement-making place, not a personal contract
Nothing in this con to say it is con to supply to particular lace
Would need novation

Question 45

Don King v Warren, Lightman J at 319

Answer 45

Unless the con express/impliedly provides otherwise, the character of an obligation precludes ass of the benefit of the obligaiton if the identity of the obligee is material to the obligor
For the effect of such an ass can alter the substance of the obligation

Question 46

Trendtex Trading v Credit Suisse (1982)

Answer 46

“Mere rights of action”
B sells claim on for $1.1mn to Z who settles for $8mn
A-B ass was champertous as made for purpose of enabling B to sell to Z so profit from enforcement could be divided between B and Z
Lord Roskill
Old saying that you cannot assign a bare right to litigate is gone. An Aee who can show he has genuine commercial interest in enforcement of the claim and to that extent takes ass of that claim to himself is entitled to enforce that ass unless by the terms of that ass he falls foul of law of champerty (branch of maintenance)

Question 47

Glegg v Bromley (1912)

Answer 47

per Roskill in trendtex
N objection was raidsed to asiignments of the proceeds of an action for defmation in Glegg, for such an assignment would in no way give the assee the right to intervene in the action and be so contrary to public policy

Question 48

Linden Garden Trust Ltd v Lenesta Sludge Disposals Ltd (1994)

Answer 48

Lord BW
Normally unlawful as contrary to public policy to seek to render prop inalienable
Since contractual rights are prop, prohibition against assigning such rights is void as illegal
This submission faces difficulties in authority and principle
Attempted ass of contractual rights in breach of contractual prohibition is ineffective. Otherwise would defear legitimate commercilal reason for inserting the prohibition

Question 49

St Martins dispuute

Answer 49

Lord BW
exception to general rule that C can only recover damages for his own loss
Con was for large development of property which as to be occupied and possibly purchased by 3Ps and not A itself
Therefore could be foreseen that damages caused by a breach would cause loss to a later owner and not merely to A
X had sepcifically contracted that the risghts of aciton udner the building contract could not without X’s consent b transferred to 3Ps who became owners or occupiers and might suffer loss
Seems proper to treat parties as having entere con on footing that A would be entitled to enforce contractual rights for the benefit of those who suffered from defective performance, but under the con, could not acquire any right to hold X liable

Question 50

Don Kinng Producitons v Warren

Re: contractually agreed limits on ssignment

Answer 50

Lightman J
Important to recognise that a trust of the benefit of the con may be more beneficial to the beneficiaries athat mere assignment. Bc accoridng to established pricnples the T will hold any benefit arising from his trusteeship (such as renewals of the con) on trust for beneficiaries whether or not the renewal would have been granted to anyone other than the trustee or was assignable
A DOT infavour of a 3P of the benefit of obligations or the profits botained from a con is different from ass of benefit to 3P. Whether the con contains a provision prohibtiting such a DOT must be determined as matter of construciton. Such a limitation on freedom of the party is not lightly to be inferred and a clause prohibiting assignments is prima facie restricted to assignments and does not extend to DOTs
Morritt LJ
Does not agree that existince of a trust would enable B to intefere in A-X con
B cannot insist on rendering vicarious performance of the personal obligaitons arising under the con
Rules and procedures designed to enable a B to sue in respect of a con held in trust fror him would not be applied so as to jeopardise the trust property

Question 51

Barbados Trust Co v Bank of Zamibia (2007)

Answer 51

X owes debt, which can only be assigned to financial isntitutions
B1 assigns to B2 who then assigns to B3, B2 and B3 are not financial institutions
B1 instead declares it holds right to debt on trust for B3
B1 does not want sue X, B3 brings proceedings against X and joins B1 as D

Question 52

Barbados Trust Co v Bank of Zamibia (2007)

(i) had B1 validly acquired the debt?

Answer 52

This depended on whether a term in the original contract, deeming X’s consent to have been given to an attempted assignment, applied: Waller LJ says it did; Rix and Hooper LJJ say it did not.

Question 53

Barbados Trust Co v Bank of Zamibia (2007)

(ii) if B1 had validly acquired the debt, could it validly declare a trust in favour of B3?

Answer 53

Yes
Waller J
A DOT is not an EA
An EA if in writing cn be converted into a legal assignment under s136 LPA and that is not true of a DOT
The anti-assignment clause does not include prohibition of DOT
Court should be slow to contemplate that parties intended to restrict transfer of property

Question 54

Barbados Trust Co v Bank of Zamibia (2007)

(iii) If there is valid DOT, can B3 use Vandepitte procedure

Answer 54

Waller LJ: Yes
Vandepitte short cut = matter of procedure to enable B under T to obtain what he is beneficially entitled to in a situation in which the trustee will not sue
Would be understandable ofr court to not allow it to be misused for B to obtiain rights he is not entitled to, but otherwise why should the court’s procedure not be available to enable te rights to be established or brought to fruition?
Albeit B3 is the C, it is as if B1 were the C seekign to recover what is due whcih they will then hold for B3. There is thus no interference by B3
Hooper LJ: the anti-assignment clause prevents an assignment to a body such as B3 and msut therefore be construed so as to prevent B3 from enforcing the debbt directly against X
Rix LJ: Probably yes on facts of this case, but not if the DOT is used simply as a device