Assignments of Choses in Action Flashcards
What is an assignment?
Norman v Federal Commissioner of Taxation says ‘immediate transfer of existing proprietary right from assignor to assignee’
Is the right capable of assignment?
Recognised if the assignee had a general commercial interest in being able to assign the right Debts and contractual rights are inherently capable of assignments.
Presently existing right
can be assigned immediately, voluntary and without consideration. Can be gifted.
Expectancy
future rights which haven’t come into existence yet but may come into existence at some time in the future. Can’t make outright gift of an expectancy right now. Need agreement and consideration
Agreement to assign expectancy
If consideration has been given by the assignee, the assignors conscience will be bound to deal with the thing assigned for the benefit of the assignee as soon as, but not before, the assignor has a presently existing right to the thing. If there is consideration, equity will enforce that agreement (Palette Shoes Pty Ltd v Krohn)
Is there a method of assigning under law?
s12 of Conveyancing Act for NSW
- Must be absolute: cannot assign 50% of a chose in action.
- Must be an assignment in writing
- someone has to give notice to whoever is liable (i.e. the debtor)
s205 of Civil Law Property Act for ACT
- same
Company Shares: Corporations Act. What the company’s constitution says. (SECT 1072F?)
Assignment of copyright, assignable under s196 of the Copyright Act 1968
If YES to method of assigning under law: Has the assignor done everything the assignor needs to do?
Milroy v Lord
Has the assignor done everything under relevant legislation? i.e. in writing.
If debtor not notified, this is fine. Assignor has done everything THEY can do - assignee can notify the debtor.
If they have NOT done everything, may still be an assignment at equity.
What if law does NOT provide method of assignment?
May be an assignment at equity. Must show manifest intention to assign e.g. an action that show intention to assign the chose in action.
Conveyancing Act 1919 (NSW) s 23C: instrument must be in writing?
Norman v Federal Commissioner of Taxation
Norman was attempting to assign interest payable on the future in respect of a loan which he had given to someone else and the loan was repayable at will. The legal right to be paid money at a future date is a present chose in action when it depends upon an existing contract. However in this case, the interest was not a presently existing right as it could be repaid at any time and hence the amount of interest was not certain - there could be no interest.
Dividends: Right to receive dividend depends on company making profit and also upon the company declaring a dividend. Shareholder does not have right to payment of a dividend until the company declares the dividend. Not a presently existing right.
Shepherd v Federal Commissioner of Taxation
Shepherd was assigning ‘all his right title and interest in and to an amount equal to 90% of the income’ derived from royalty payments under his agreement with C. Effective without consideration as was a presently existing right. S was giving away 90% of his contractual right to receive the fruit of this tree and keeping the other 10% of the right. The tree may or may not bear fruit in the future but S still had a right which he could give away. S was assigning 90% of a presently-existing right.
Manifest intention to assign?
Comptroller of Stamps (Vic) v Howard-Smith
language or conduct which indicates intention to give away the right immediately and irrevocably. In this case, it was conveyed in the language of request and it is revocable
Defences?
Debtor was entitled to pay the assignor and entitled to rely upon the defence of payment. If assignee notifies the debtor? Then could not use defence as he knew about the assignee. Take priority in order of which the debtor was notified
