Document



ASSIGNMENT (introduction)

Definitions:

Assignment:

• Immediate transfer of an existing prop right from the Aor to the Aee inter vivos (for value or as a gift): Norman v. FCT (1963) 109 CLR 9 at 26 per Windeyer J.

Equitable assignment:

• Simply the recognition in E of the transfer of property – EVEN IF the prescribed method of assignment in law (e.g., registration) has not been completed

Terminology

• Assignment – transfer – disposition/disposal

• Assignor – transferor – disponor – donor

• Assignee – transferee – disponee – donee

Key Concepts

• L Prop – assignable at L OR E [thus: need to identify if Prop is L or E]

• E Prop – only recog in E and only assignable in E [thus: need to identify if Prop is L or E]

• Assignment of L ( vested in Aee L OR E interest in that Prop

• Assignment of E ( vested in Aee E interest only.

• Need to distinguish Present (debt) v Future Prop (eg. right to dividend on shares)

o Future can only be assigned in E if consideration

• NOTE: do not confuse subject matter of assignment v nature of interest obtained (after assignment)

o Example: assignment of L prop ( gives Aee E interest in Prop BUT Prop still remains L Prop.

• NOTE: generally: assignment among living ppl (inter vivos) – NOT assignments contingent on death of individual (effected via will).

o Exception: donatio mortis causa (gift/personal in a lifetime in anticipation of death)

o Exception: Strong v Bird.

• NOTE: is there a writing requirement?

1. RELATED CONCEPTS

Assignment must be distinguished from:

i) an agreement to assign (not an “immediate transfer” - promise to assign in the future, requires consideration);

ii) a declaration of Trust of the legal interest (an equitable interest is created but not by transfer)

iii) a revocable mandate ( eg:a direction to pay revocable on death)

(i) AGREEMENT TO ASSIGN (the legal interest of the property)

• Example: defective T supplied with consideration

• Mere promise unless supplied by valuable consideration ( no effect in E.

• NOTE: applies even if promise is in Deed form.

• If consideration – gives rise to SP (recog as having E interest).

Chang v. Registrar of Titles (1976) 137 CLR 177

• Right of P with valuable consideration under agreement ( E interest.

• Once paid P price – V becomes constructive Trustee.

(ii) DECLARATION OF TRUST (of the legal interest of the property)

• Is statement by absolute owner of property (intended final and binding) that he thereafter holds L interest of Prop in trust for another.

• Also possible to have Decl of Trust over E Prop.

• If re land ( formal writing requirement: s. 23C (1) (a), (b) Conveyancing Act

Paul v. Constance [1977] 1 All ER 195

• FACT: C sep from wife 1965, live with P 1967 til death 1974. 1969 WC got 950 pds comp. C bank for C + P benefit (tell bank manager, told not married). Accn in C’s name. Say many times “that money is as much yours as mine” (oral decl of trust over personalty?). Wife claim money in accn as next of kin.

• HELD: statement suff evidence ( decl of trust

o Existence of decl of trust: question of intention and proof

o C + P not educated legal persons – not expected to use E lawyer’s language

• NOTE: decl of trust NOT transfer to P (effect is P gets 50% ben interest of accn).

CSD (Qld.) v. Jolliffe (1920) 28 CLR 178

• FACT: QLD savings bank. Stat: only 1 accn unless held as Trustee. J open accn for “Mrs Hannah J” with J as Trustee. H dies – ben accn interest in estate? J claim NO – intention was to get other interest (hide) and avoid stat.

• MAJ: Not suff evidence to create Trust (not in estate).

o Existence of decl of trust ( question of suff evidence

• Issacs J (dissent): umambiguous decl of trust – should not allow later conduct to undermine properly constituted Trust.

Kauter v. Hilton (1953) 90 CLR 86:

• HC: determine if Trust created ( look at all relevant circumstances

o Use of word “trust” may not always suffice.

WHY AND HOW DOES E BECOME INVOLVED?

• Where assignment of L Prop (eg. L chose in action – debt) BUT does not satisfy requirements to be valid assignment at law.

• E court aims to give effect to true intention of person dealing with Prop, by:

o Intention, not form: E may not demand strict compliance with stat provisions that impose legal formalities for legal assignment of Prop: William Brandt’s & Sons v. Dunlop Rubber Co [1905] AC 454 per Lord McNaughten at 461.

▪ E thinks Aor (by conduct) has done enough to assign Prop in E.

o Recog E interest: if valuable consideration in assignment ( E interest.

▪ Maxim: E regards as done what ought to be done

▪ Eg. agreement to assign for value ( may create E interest

▪ Eg. improper actual assignment for value ( treated as agreement to assign for value.

…………………………………………………………………………………………………………………

ISSUE FOR E ASSIGNMENT OF L PROP

• Ineffective assignment of L Prop ( question: effective assignment in E then?

Look at these issues:

a) Is the relevant property capable of being assigned?

b) IF assignable, is it “presently existing” (eg: a debt) OR “future” property? (eg: dividends on shares)?

c) Is the subject matter L (eg. debt) or E interest (eg. Ben rights)?

d) If subject matter L interest: what kind of dealing is it?

- AGREEMENT FOR VALUE TO ASSIGN L interest:

➢ Con for value EVEN IF not comply with stat ( effective in E: Equity regards as done that which ought to be done).

See Tailby v. Official Receiver [1888] 12 App Cas 523

See also Norman v. FCT (1963) 109 CLR 9

- DECLARATION OF TRUST L interest:

➢ if VALID = creates E interest in assignee, owner of L interest is trustee

- ASSIGNMENT of the L interest

➢ if VALID L assignment = transfers L + E ownership to Aee (i.e., absolute owner)

➢ if INVALID L assignment: investigate whether effective assignment in E

Equitable assignment of legal interest:

• for valuable consideration (see section E below);or

• by way of gift (see section F below)

e) Is there a method for transferring the particular Prop (L interest) at law?

o Examples at paragraph 4 above.

f) Has that legal method been followed/completed? (effective at law)

i) IF completed ( transfer the L + E ownership (i.e., full title) to the Aee

➢ i.e., no need to look at E.

g) If the assignment is NOT effective at law: effective to be transfer in equity?

(A) NON-ASSIGNABLE PROP AT ALL (either in E or L)

• Generally: all Prop is assignable

Exceptions:

(a) Contractual prohibition of an assignment

Linden Gardens Trust v. Lenesta Sludge Disposals [1994] 1 AC 85:

• HOL: assignment of contractual rights (in breach of con) ( ineffective to vest rights in Aee.

• THUS: contractual clauses prohibiting ( valid and enforceable.

(b) Personal contracts

Benefit of personal services contracts CANNOT be assigned (eg. employer-employee)

AUTH: Nokes v. Doncaster Amalgamated Collieries Ltd [1940] AC 1014; [1940] 3 All ER 549

• Work for Comp A. Schedule under arrangement, was deemed employee of Comp B. Breach of services to Comp B?

• HELD: no breach as UNASSIGNABLE (not rights against worker).

Peters v. General Accident and Life Assurance Corp Ltd [1937] 4 All ER 628

• FACT: MV insurance policy.

• HELD: personal to driver (based on personal record) ( not assignable.

(c) Bare rights to litigate

• Rule 1: a “bare right” to litigate is unassignable to someone without genuine interest in litigation.

Trendtex Trading Corp v. Credit Suisse [1982] AC 679

• FACT: CBN (bank) owe T $14 mil. CBN default. T assign right to litigate to CS. CS assign to 3rd party for $1.1 mil. Got paid by CBN (thus profit). T argue – assignment not valid.

• HELD: 1st assignment to CS VALID (finance to T, who looked to CBN for payment ie. CBN ( T ( CS). 2nd assignment to rd party INVALID – no interest in particular litigation of CBN v T at all.

• Roseo J: look at “totality of transaction”:

• If Aee have genuine commercial interest ( no reason to strike down

• Assignment of Prop right can include “incidental/ancillary right to enforce that right by litigation”.

Rule 2: assignment of Prop with incidental right to litigation is valid (eg. proceeds of case)

Glegg v. Bromley [1912] 3 KB 474:

• FACT: G 2 actions. 1st v H lost with 200 pd costs. 2nd v B won with 200 pds. G assign right to action (against B) to husband. H claim garnishee action against G.

• HELD: can’t assign right to litigate BUT distinguish from assigning the possible PROCEEDS of litigation.

(B) FUTURE PROPERTY – ONLY assignable in E

• Cannot assign FP at law (no present right to it) BUT can at E if valuable consideration

• Once subject of Prop comes into existence ( Aor if bound.

• Interest is THEN treated as if existing from date of agreement to assign.

Norman v. FCT (1963) 109 CLR 9

• FACT: Assignment of “all his right title and interest in and to certain INTEREST to accrue due on loan repayable by the borrower at will”, and “all his right title and interest in and to all the DIVIDENDS”.

• HELD: interest/div ( FUTURE: “expectancies or possibilities which could not be assigned without consideration.

o Could end debt at any time.

o No certainty that interest payable during life of loan.

• Windeyer (dissent): assigned RIGHT to be paid interest ( present Prop.

o NOW: leading judgment in this area

Shepherd v. Comm. Of Taxation (1965) 113 CLR 385

• FACT: Inventor license to distributor. Paid 5% royalties. S Deed assign right, title, interest to 90% of income for 3 yrs from royalties. What was assigned? Right to receive (present) or the royalties (future).

• HELD: May or mat not occur BUT right to receive (not the fruit) ( present

• Kitto J: analogy ( tree (the existing right to receive royalties) v fruit (the payment which might accrue under the contract). BUT matter of construction of document.

NOTE: distinction between Shepherd and Norman not all that clear. …………………………………………………………………………………………………………………

L ASSIGNMENT

Needs:

• Prop recognised at law (eg debt) – not E Property; AND

• Comply with stipulated requirements to vest L title in Aee.

Thus:

• Need to identify TYPE of Prop and legal method required to transfer Prop AT LAW:

TORRENS TITLE LAND

• Registration (e.g., of a executed memorandum of Transfer): ss. 40-42 Real Property Act

• s. 23C(1)(a) Conveyancing Act: writing requirement

SHARES (distinct CIA)

• Involve registration (stipulations in comp Constitution)

L requirements for assigning company shares are governed by

• the Corporations Law and

• the requirements set out by the Articles of Association of the company.

CHOSES IN ACTION

• Stat method of Ament of CIA: s12 CA.

“Any absolute (2) assignment in writing (3) under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal chose in action, of which express notice in writing (4) has been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim such debt or chose in action, shall be, and be deemed to be effectual in law … to pass and transfer the legal right to such debt or chose in action from the date of such notice …”

• Must have (to be valid at law):

• Intention to assign

• Absolute (whole of CIA), assigned in T

• Writing

• Notice in writing to Debtor (by Aor or Aee)

• Aee can sue in own name

• THUS: CIA does not need consideration/Deed:

o written notice of the assignment is sufficient

o if the above conditions have been complied with ( valid at law

• IF NOT VALID AT LAW: might be valid at E: William Brandt’s Sons & Co v. Dunlop Rubber Co Ltd [1905] 454 at 462

…………………………………………………………………………………………………………………

E ASSIGNMENT OF L PROP – for value

• Assignment for value of L Prop ( fails at law ( E assignment once consideration executed.

• Aor becomes trustee of Prop for Aee: Equity regards as done that which ought to be done.

• If after contract, but before value passed ( “conditional T”.

Holroyd v Marshall

• FACT: T (run mill) Mg to H over existing machiney on mill site and “any future plant/equipment” which may be put into mill in substitution/addition of equipment. T default to another creditor. Sheriff (M) execute writ of execution at mill site. H v Sheriff – priority?

• HELD: H Mgee win.

o No L interest – only agreement to charge future Prop

o BUT in E, no need for formal Deed of Conveyance

o Valuable contract: agrees to make present transfer ( passes ben interest (E decree SP).

Tailby v. Official Receiver

• FACT: Assignment of book debts

• HELD: 1st lender (for value) won ( used SP concept.

…………………………………………………………………………………………………………………

E ASSIGNMENT OF L PROP - voluntary

• Vol assignment effective in E – must have:

1. Clear manifestation of intention by Aor.

1. GENERAL RULES: Milroy v. Lord

Milroy v. Lord (1862) (1862) 4 De GF & J 264; 45 ER 1185

Turner LJ:

2. …Aor must have done everything, which according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him; and

3. …if Ament intended by Aor in particular mode/form (e.g., direct assignment, declaration of Trust, or direction to trustee) Ct will not give effect to it by applying another form. An imperfect assignment will not, for example, be held to be a declaration of trust

“everything necessary” – definition?

Anning v. Anning (1907) 4 CLR 1049

• HC – 3 interpretations of Milroy v Lord to be E assignment:

1. Isaacs J: nothing short of full completion of the L requirements (set out in stat) for transfer

2. Higgins J: done everything in his power to comply with the L requirements

3. Griffith CJ: did everything necessary he had to do himself alone to comply with L requirements

▪ Eg. Aor signed T but someone else deliver to Aee

▪ Eg. s12 CA Ament (assign all chose in action) must be in writing and notice to Debtor, BUT notice can be delivered by Aee.

▪ Eg. T of shares (T, share cert, reg by comp share register). Aor give T and share cert. Aee register.

Corin v. Patton (1990):

• LAW: Griffith CJ is the test used now.

• ISSUE: Aor must have done all himself that is necessary OR only have to do all that was necessary to be done by him?

• ANSWER: just needs to do everything which is necessary for him to have done ( E recog gift. Once Aee equipped to achieve the transfer of legal ownership ( gift complete in E.

• ‘Necessary’ used in this sense means ‘necessary to effect a transfer’ – done enough to enable the legal transfer to be effected without further action on his part.”

2. SHARES

Milroy v. Lord (1862) (1862) 4 De GF & J 264, 45 ER 1185

• FACT: Medley shares in LB (bank) vol assign 50 to L. Not sign T but give POA (let L sign T) and share cert. L held shares on Trust for M, who get dividends. Med die. Shares part of Med estate or effective assignment?

• HELD: No – Med estate.

o Before death – L had not executed POA (Med can recall at any time), and POA auto revoked at death. L ( too late!

Re Rose [1952] Ch 499

• FACT: R execute T and share cert. R die. 3 mths after, Aee try to reg shares.

• HELD: once T signed/delivered with share cert ( gift complete.

o R did everything necessary for him to do.

o Pre-reg, Aor holds on Trust for Aee.

3. TORRENS TITLE LAND

• If stat NOT fully complied with ( Prop can still be assigned in E (subject to Milroy v Lord).

Brunker v. Perpetual Trustee Co (1937) 57 CLR 555

FACT: vol T of land, give to law stationer. Gift to housekeeper. Went to HK and her sol completed gaps in T (deficient in form). Prop subject to Mg. Sol try reg T. Deceased Exec caveat and claim T void.

• HELD: Exec win (not consistent with other auth).

o Ament ineffective unless FULL reg occur.

o Follows Issacs J test in Milroy.

o Don’t recog E right under TT

o In certain cirm, vol Aee may reg under TT BUT HK cannot – need T in reg form + CT.

• NOTE: repudiated in Corin v Patton

Corin v. Patton (1990) 169 CLR 540

• FACT: P term ill and not want C (JT) to get Prop – go to children. T (1/2 interest) to Bro (sub to Mg). Bro Deed as Trustee for P, then Will RP to children. T not reg. Eff T in E?

• HELD: NO - fail at E

o CT with Mgee (took no steps to arrange production of CT) – not done “everything necessary”.

• Brennan and Deane JJ (separate judgments) approach:

o Ament was complete? Use Griffith J test.

o P’s steps to point beyond her control or intervention ( can not recall the gift? No CT missing.

• Brennan J:

• Still talked of distinction btw “statutory right to be registered” and passing of E title to donee (Dixon J in Brunker)

Mason CJ and McHugh J (joint judgment), at 559: - Griffith test.

• Principle: Aor done everything which is necessary for him to have done to effect a transfer of legal title, then equity will recognize that gift.

• ‘Necessary’ means ‘necessary to effect a transfer’.

• Look at: suff to enable L transfer to be effected without further action on Aor’s part.

Taylor v. Deputy Commissioners of Tax (1969) 123 CLR 206

• If completion of Ament requires 3rd party (eg. reg of TT) ( no E title passes.

• BUT Dor is still bound to complete Transfer.

Costin v. Costin (1997) 7 BPR 15 (NSW CA)

• FACTS: E (father) 2 sons (R, N). E/R JTs. E T his interest to N. T ($1 consideration) stamped, give to N. CT held by A (firm) for E/R. E letter auth A to release CT to N’s sol (to be reg). A need R’s consent – not produced. E change mind – tell A not to give CT, but give to R then die. Deliver of T eff?

• SANTOW HELD: E put gift beyond recall (Corin).

• COA (overturned Santow): NO

o Not done all ( CT needed joint auth of E/R

o E could revoke auth (manifested by T to R) – Deane J test in Corin

• THUS: use Deane J, Mason and McHugh J in Corin.

4. CHOSE IN ACTION

Norman v. FCT (1963) and Shepherd v. FCT (1965):

CIA assignable in E if:

• Evidence of intention by Aor to immediately bind himself (not mere revocable mandate).

- intention;

- immediate;

- irrevocable

No need for notice to Debtor (can be done by donee): Comptroller of Stamps (Vict) v Howard-Smith (1936)

Anning v. Anning (1907) 4 CLR 1049

• FACT: avoid death duty. Gift accn money to wife/children. In writing to wife. No notice to bank. Ineff at law (s12CA – no notice). Aor die – eff T at E?

• 2 reasonings (from Milroy):

• Issacs/Higgins: fail 1st limb of Milroy test – no notice to bank (not full completion).

• Griffith: sat 1st limb of Milroy test – wife can give notice.

• HELD: W win.

• Implied cov in Deed that Aor not derogate from gift

• Apply Strong v Bird – exception to “equity will not perfect an imperfect gift”

“EQUITY WILL NOT PERFECT AN IMPERFECT GIFT”

• Voluntary ament – imperfect/unassignable at L.

Exception 1: Rule in Strong v Bird – narrow application

Strong v. Bird (1874) LR 18 Eq 315:

• If Dor make IMPERFECT gift of L Prop, L title becomes lawfully vested in Dee, Dor manifests intention to give which continues until that vesting ( gift complete in Equity.

• “If a donor makes an imperfect gift of legal property, the legal title later becomes lawfully vested in donee, and the donor manifests intention to give which continues until that vesting, then the gift is complete in Equity”

Re Appleby [1891] 3 Ch 422

Re Hince [1946] SASR 323:

• Dee/Exec need not prove will ( suff that they are simply named as Exec.

Re Stewart [1908] 2 Ch 251:

• It is ok if Dee is one of SEVERAL Execs.

Cope v. Keene (1968) 118 CLR 1 per Kitto J

• Doubt: Strong v. Bird apply to RP?

• Set out requirements of Strong v Bird exception:

o Sometime in life – Testator made purported immediate gift of specific Prop to person

o Testator intention was a present gift – but failed because not comply with legal requirements

o Testator (at death) still have intention that Prop be treated as eff given

o Testator left will appointing intended Dee as executor

Exception 2: Donationes Mortis Causa

Sen v. Headley [1991] 2 All ER 636: requirements:

• Gift made in contemplation (not necessarily expectation) of Dor death.

• Dor intend gift to be conditional on the Dor’s death (ie. condition that gift revocable while person alive and only absolute on death)

• Subject of the gift or the essential indicia of title delivered to Dee.

Exception 3: Equitable estoppel

• Prevent person from acting inconsistently with earlier representation

• Equity arises – conduct of Dor after making voluntary promise to Dee: see Olsson v. Dyson (1969) 120 CLR 365

o FACT: oral H to W to have money owed by Debtor. Gave Debtor oral instructions too.

o HELD:

▪ Fail at law (no writing – s12 CA)

▪ Fail at E: Griffith test – very minimum is to sign something in writing.

o Kitto J: fail at law/equity BUT if estoppel – can use.

5. PART OF A CHOSE IN ACTION

• PART of CIA cannot be assigned at law: Williams v. Atlantic Assurance Co [1933] 1 KB 81

• BUT PART can be assigned in equity (using old E rules): Shepherd v. FCT (1965) 113 CLR 385

Norman v. FCT (1963) and Shepherd v. FCT (1965):

PART of CIA assignable in E if:

• Evidence of intention by Aor to immediately bind himself (not mere revocable mandate).

- intention;

- immediate;

- irrevocable

• Can be oral (no need for writing) – s12 does not apply to PART of CIA: Williams v. Atlantic Assurance Co [1933] 1 KB 81 and s23C(1)(c) does not apply (not E interest).

• One way to evidence 3 Is ( execute Deed assigning interest

o If Deed complete

▪ no need for consideration to be paid: intention is paramount

▪ no need for notice to Debtor: s12 CA does not apply to PART of CIA.

▪ no need for writing

…………………………………………………………………………………………………………………

E ASSIGNMENT OF E PROP

INTRODUCTION

E Prop:

• May be assigned ONLY in E – not law

• May be assigned for value OR voluntarily

Timpson’s Executors v. Yerbury [1936] 1 All ER 186, per Romer LJ at 194:

• E interest in Prop in hands of Trustee can be disposed of by the entitled person (Ben) in favour of a 3rd party in any one of four ways:

1) can assign E interest to a 3rd party directly;

2) can direct the current Trustees to hold the property on Trust for 3rd party (E interest moves from Aor/1st Ben ( Aee/2nd Ben)

3) can declare himself to be Trustee for the new Ben (i.e., declaration of Trust)

4) can contract for valuable consideration to assign to a 3rd party;

STAT REQUIREMENTS of WRITING:

s23C (1) Conveyancing Act 1919 (NSW):

• s. 23C(1)(a): no interest in land can be created/disposed of except by writing signed by the person creating or conveying the same, or by the person’s agent lawfully authorized in writing, or by will, or by operation of law

• s. 23C(1)(b): a declaration of trust relating to land/interest in land must be in writing signed by some person who is able to declare such trust or by the person’s will

• s. 23C(1)(c): a disposition of an equitable interest or trust subsisting at time of disposition, must be in writing signed by the person disposing the same or by the person’s will, or by agent lawfully authorized in writing – [cf s54A CA – agent does not need to be authorised in writing]

• s. 23C(2): the section does not affect the creation/operation of Resulting, Implied or Constructive Trusts - [way to avoid paying Stamp Duty]

1. DIRECT ASSIGNMENT of equitable property

• Language is immaterial if the meaning is plain:

William Brandt’s Sons & Co v. Dunlop Rubber Co Ltd [1905] 454 at 462

Elders Pastoral Ltd v. Bank of New Zealand [1991] 1 NZLR 385 at 387

Cf. Comptroller of Stamps (Vic) v. Howard–Smith (1936) 54 CLR 614

STEPS re: Present E Prop

1. Examine the subject matter of the assignment = (“assignable” property?)

2. Was there an intention to assign?

Comptroller of Stamps (Vic.) v. Howard-Smith (1936) 54 CLR 614

• FACT: H resid Ben of W estate (E CIA). Written request to Trustee to pay out his interest in gifts. Letter got to Vic stamp office.

• ISSUE: either:

o Assignment by H of his E CIA to Dees.

o Direction to Exec to hold parts of estate for Dee

o Revocable mandate.

• HC: Dixon J:

• Ament must have “expression of intention then and there to set over the E interest” – no immediate divesting ( construction of language of letter ( rev man

• Distinction between:

- “assignment” (e.g., direction to trustee to hold property thenceforth for new Ben)

➢ 3 Is test: Norman v. FCT (1963)

- “revocable mandate” (e.g., request trustee to do certain things, not “assignment” by itself)

➢ “The test in each case is whether the holder of the interest intends to part with his dominion over the property”: Smith v. Perpetual Trustee Co Ltd (1910) 11 CLR 148, at 159 per Griffith CJ

➢ Ament must sufficiently identify the property to which it relates: Percival v. Dunn (1885) 29 Ch D 128

• No notice to Trustee/Fund holder is required.

DISPOSITION OF REAL PROP

o E disposition of existing L or E interest in land ( must be evidenced by writing: s. 23C (1) (c)

o A contract for the sale of land must be in writing: s54A CA

o ISSUE: a contract to sell land a disposition of an interest in land under s. 23C (1)?

Baloglow v. Konstantinidis [2001] NSWCA 451 at [162] per Giles JA

• FACT: Prop devs fall out. Settlement agt. Sol for 1 party bind client – no authority in writing to do so.

o ISSUE: does s23C or s54A cover RP (agent must have auth in writing)?

o HELD: s23C

(a) an executory contract to sell = does not have immediate dispositive effect (merely agreement to sell/dispose in the future)

(b) an executed contract of sale = contract has been completed (rights in Prop disposed)

• LAW:

• s.54A arises: agreement (contracts of land) to “create or dispose” of an interest in land

• S.23C(1)(a) arises: performance (actual disposition – instruments of transfer) of agreement.

DISPOSITION OF PERSONAL PROP

• Does s23C (1)(c) apply only to dispositions of E interests in land or in personal property as well?

• s. 23C(1)(a) and (b) are expressly restricted to land; but s. 23C(1)(c) is not

• s. 7: definition of “disposition” as including dealings of interests in personalty

• s. 23C is found in section headed: “Assurances of land”

• if it were confined to “land”, it would add nothing to the section

Adamson v. Hayes (1973) 130 CLR 276, per Walsh and Gibbs JJ, disagreeing with Menzies J, as to corresponding provisions in WA legislation:

• FACT: A, B, C interest in mining claims. A agree hold interest for self, B, C (decl of Trust). B, C do same. C give A, B option over his interest. A,B seek SP of option. C argue WA equivalent of s23C.

• HC:

o Maj (Gibbs/Walsh): C win – non compliance with s23C.

▪ s. 23C (1) (a) applies to E as well as L interests in land

▪ s. 23C (1) (a) applies to interest arising on contract formation

• cf Giles in Baloglow – only covered by s54A

• s23C(1)(a) and s54A cover same scope.

1 s. 23 C (1) (c) applies to personal property as well as real property:

2 Oughtred v IRC [1967] AC 206

• Adamson v. Hayes (1973) 130 CLR 276

• Grey v. IRC [1960] AC 1; Vandervell v IRC [1967] 2 AC 291

o Menzies (disagree): s23C N/A

▪ s23C(1)(a) applies to L interest ONLY.

▪ s23C(1)(c) applies to E interest ONLY and RP interest ONLY.

DISPOSITION OF CHOSES IN ACTION – s12

• s12 CA ‘legal chose in action’ ( ‘lawfully assignable chose in action’: FCT v. Everett (1979) 143 CLR 440 at 447 per Barwick CJ, Stephen, Mason and Wilson JJ

o FACT: partnership. Assign (Deed) W) part of right to receive profits. Ament of part CIA and for value.

o ISSUE: s12 applies to E CIA?

o HELD: yes – “legal” means “lawfully assignable” not as in L v E.

o NOTE: Obiter: inconsistent with general law prior to s12 (can always assign CIA in E).

• If s12 not complied with (L assignment), can use E:

o s12 is not mandatory for effective assignment of E CIA in E (cf with L CIA at law)

o Can still assign in E:

▪ 3 Is test: Norman v. FCT (1963)

▪ Writing required by s23C(1)(c)

2. DIRECTION to trustee (hold the property on Trust for a new beneficiary)

Saunders v. Vautier (1841) Cr & Ph 240; [1835-42] All ER Rep 58:

• Ben does not need to transfer interest to self THEN create new trust.

• Can just issue direction that henceforth their interest is to be on trust for another Ben.

(a) Simple direction – to hold on Trust for B

Grey v. Inland Revenue Commissioners [1960] AC 1

▪ FACT: H (Ben) in Trust – orally directed Trustee to hold E interest (Trust) for family (new Ben). Trustee exec Deed of Acknowledgement and Deed of Trust – recited oral direction and Trustee acceptance.

o UK tax instruments – transfer H interest to new Ben. Oral direction not eff, but Deed was ( in writing s23C(1)(c) to be effect.

o H – oral direction completely effective to vest interest in new Ben. Deed just acknowledge (not effect) Transfer.

▪ HOL: H lose.

o Direction to trustees was “disposition of a subsisting E interest”

o THUS S23C(1)(c) apply: Direction to trustee must be in writing to be effective’ – oral ineffective.

(b) Direction to wind up the Trust – to transfer trust Prop to B.

Vandervell v. IRC [1967] 2 AC 291

▪ V donate to IRC and avoid tax. Shares by Trustee in V’s family comp on Trust for V absolutely. V oral direct Trustee to transfer shares to RCS (dispose of entire interest). Share cert and T delivered. RCS reg as share owners. Option for RCS to let former Trustee buy back shares at 5K pd. Dividend on shares for 150K pd. Option exercised – RCS get 150K – tax?

▪ ISSUE: L/E intended to pass at same time BUT oral direction of E transfer to Trustee eff?

▪ HOL: no need for writing –

o Issue: how/when V dispose of E interest? 3 possibilities

- 1. When V made oral direction to trustee to transfer the legal title to RCS

- 2. When registrable documents of title were handed to RCS by trustee

- 3. When RCS registered as legal owner of the shares

• Reasoning:

- Oral direction to transfer L interest (intend also to pass E interest) ( E will be eff disposed upon L being transferred.

- THUS: No disposition of the E interest until registration (3 – RCS become L owner)

- V’s direction ( “revocable mandate” and not an outright assignment.

• NOTE: severely criticised decision – inconsistent with Grey.

Parker and Parker v. Ledsham [1988] WAR 32

• FACT: Ben written instruction to dispose of E interest. Died before Trustee act on instructions. Bens argue entitled to gift (writing s23C(1)(c)).

• HELD: Ben lose.

• “even a written direction to trustee, which is only intended to be a ‘revocable mandate’, will be revoked on death of original ben (i.e., before transfer is effected) and there will be no disposition”

• THUS: a direction to trustee will usually be characterised as “revocable mandate” and will be revoked on death of person directing it;

• NOTE: accepted Grey v. Inland Revenue Commissioners [1960] AC 1;

• NOTE: followed HC maj in Adamson v. Hayes (1973) - s.23C(1)(c) is not confined to interests in land

3. DECLARATION of Trust

• “I now hold my interest as ben of the XYZ trust on trust for B”

• E interest may be the subject matter of a Trust (i.e., it can be held on Trust): Gilbert v. Overton (1864) 2 H & M 109

• T holds Trust for A. A declares Trust over that E interest for B. A has not active duty to perform.

Grey v. IRC [1960] AC 1 – concept of disappearing A!

• Upjohn J: in above sit ( A disappears + whole Ben interest passes to B ( direct Trust rel between T and B.

Comptroller of Stamps (Vic) v. Howard-Smith (1936) 54 CLR 614 per Dixon J – concept of subTrust

• A orig Ben (E interest in Prop) makes decl of Trust ( creates a sub-trust in favour of B (new Ben)

• Orig Trustee still owe trust duties to A + A continues to hold E interest

• BUT A impose trust duties on himself for new Ben (B) under 2nd Trust (subtrust).

• A ( hold a mere scintilla of E interest

• B ( hold the bulk of the Ben interest ( subsist.

Writing req for s23C?

• 23C(1)(a):

▪ Dixon: writing – follow Gibbs/Walsh view that E interest is created by decl.

▪ Upjohn: writing – E interest is disposed of.

• 23C(1)(b): applies

• 23C(1)(c): difficult

▪ Upjohn: writing – E interest is disposed of.

• s7 CA defines disposition – includes decl of T.

▪ Dixon: no writing – no disposal, only creating of subtrust (carving out of new interest).

4. CONTRACT FOR VALUE TO ASSIGN

▪ E rights arising from contract for value:

o Con exchanged: E interest in Prop measured (enf) by SP

o Value paid but L title not transferred yet: V holds L title on bare Trust for P. No need to be measured (enf) by SP.

Oughtred v. Inland Revenue Commissioners [1960] AC 206

• FACT:

o Trust of 200K shares for Mrs O for life, remainder to Son. O also own 72, 700 outright.

o 18/06/1956: O oral agree to S that on 26/6 ( transfer 72,700 to S and S make her absolute owner of 200K by giving up remainder.

o 26/6: docs executed:

▪ Deed of Release (reciting 200K on trust for O absolutely and intention to transfer L title to O – release Trustee).

▪ Transfer from O to S for 72,700 for value

▪ Transfer from Trustee to O of 200K for value

• ISSUE: IRC – 3rd Doc (transfer of 200K) have stamp duty ( evidence and gave effect to Transfer by way of sale of shares.

• UPJOHN: on oral agree ( son Con Trust of remainder of E interest.

o Follow Grey: agt operate as decl of Trust for mother ( fully eff to pass E interest ( excepted by s23C(2)

o BUT Con Trust – S stil have some interest (which was passed on Transfer docs).

o Transfer docs just Transfer of bare L title.

• COA: Leg impose duty on “conveyance or transfer on sale” ( a Transfer to perform oral agt

o THUS: irrelevant to consider nature of Prop/interest.

• HOL Maj (Denning, Jenkins, Keith L):

o Follow COA: equivalent to conveyance/transfer.

o EVEN if oral agt effective to transfer E interest ( when oral agt used to transfer ( still liable for stamp duty

HOL Min (Radcliff/Cohen):

o Radcliffe: agree with Upjohn.

▪ Oral agt create imperfect conditional trust: excepted by s23C(2) equivalent

▪ Transfer: O become absolute owner but S still have scintilla E interest.

▪ S interest exist BUT unassertable against O.

o Cohen:

▪ Oral agt create Con SubTrust – NOT transfer of E interest: excepted by s23C(2)

▪ Transfer: value/transfer – S estopped from denying Transfer to O.

▪ S interest never disposed and have better E title to remainder BUT estoppel prevent him from asserting right to interest.

• NOTE: Oughtred’s case does not resolve the relevant issues clearly.

Halloran v Minister Administering National Parks and Wildlife Act (2006) 224 ALR 79

▪ Resume land. Leg give owners comp for resumption if ben interest/E in Prop. Idea: more comp if ownership split. Sol for H got into 765 contracts to various trusts (avoid stamp duty). P written offer, accepted orally and evidence by Board minutes of S. Consideration was S unit in unit Trust.

▪ ISSUE: suff to transfer S’s interest to P? No need for writing (s23C(2))?

▪ HC: C Con Trust for P (

o Written offer + oral acceptance ( eff to pass E interest

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