LLB270 Chapter Notes - Chapter 5; 6: One Direction, Revenue Commissioners, Life Estate
WEEK 9 – GIFTS AND SALES:
Equity Textbook:
Paragraphs [5.46]-[5.91]:
5.46 – Assignments in Equity:
oOccur in the following situations:
Assignment of future property
Failure to comply with the requirements of a legal assignment of a legal interest
Assignment of equitable property
oEffectiveness: depends on the assignors display of an intention to assign
Clear words indicating intention are required, but there is no particular form – William
Brandts Son & Co v Dunlop Rubber Company Ltd [1905] AC 454
oIntention to grant a revocable mandate, while retaining ownership, does not qualify as an
equitable assignment
5.49 – Overview of Principles on Assignments in Equity:
oOnce intention to assign is established
oELEMENTS:
Assignment of existing property or future property?
Existing property – Holroyd v Marshall
oEquitable property – requires writing for valid transfer
oLegal property –
Consideration given: writing may be required in some instances, but the
intention to assign will most likely be sufficient
Voluntary assignment:
Is the property capable of being assigned as law?
Cannot be assigned at law: equitable assignment
oIntention to assign is sufficient
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5.50: Equitable Assignment of Future Property:
oProperty that may come into existence later
o‘expectancy’ is also used to describe this concept
oAnsett Australia Ltd v Travel Software Solutions Pty Ltd: ‘[i]t is not strictly possible to assign
a mere expectancy or possibility, because it is not an existing chose in action’
Equity – agreement to assign future property for valuable consideration is treated as a
contract to assign the property
Must be a sufficiently clear intention to assign (Ansett failed on this ground)
oProperty comes into existence:
Assignor automatically becomes a trustee for the assignee
Palette Shoes Pty Ltd v Krohn – Dixon J:
‘As the subject to be made over does not exist, the matter primarily rests in
contract. Because value has been given on the one side, the conscience of the
other party is bound when the subject matter comes into existence, that is, when,
as is generally the case, the legal property vests in him. Because his conscience is
bound in respect of a subject of property, equity fastens upon the property itself
and makes him a trustee of the legal rights or ownership for the assignee.’
Underpinned by the equitable maxim – equity looks on that done which ought to be
done
oRULE – Holroyd v Marshall:
‘[I]f a vendor or mortgagor agrees to sell or mortgage property, real or personal, of
which he is not possessed at the time, and he receives the consideration for the
contract, and afterwards becomes possessed of property answering the description in
the contract, there is no doubt that a Court of Equity would compel him to perform the
contract, and that the contract would, in equity, transfer the beneficial interest to the
mortgagee or purchaser immediately on the property being acquired. This, of course,
assumes that the supposed contract is one of that class which a Court of Equity would
decree specific performance. If it be so, then immediately on the acquisition of the
property described the vendor or mortgagor would hold it on trust for the purchaser
or mortgagee, according to the terms of the contract.’
Consideration must be VALUABLE (made clear in this matter)
oNorman v Federal Commissioner of Taxation – Windeyer J:
‘In equity a would-be present assignment of something to be acquired in the future is,
when made for value, construed as an agreement to assign the thing when it is
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acquired. A court of equity will ensure that the would-be assignor performs his
agreement, his conscience being bound by the consideration.’
oConsideration must be paid or executed by the assignee – JT Nominees Pty Ltd v Macks
oSUMMARY:
Whether the property is future or present property?
How certain the description of the property is?
Whether the contract is capable of being specifically enforced for the assignment to be
valid?
Natures of the assignee’s right as a result of the assignment?
5.58 – Present or Future Property??
oSimple example of future property: beneficiaries expectancy under a will
Beneficiary has a hope or prospect, as the will can be altered – Re Ellenborough
oVoluntary assignments cannot involve future property
oNorman v Federal Commissioner of Taxation:
Unanimous finding in relation to dividends – future property – Windeyer J
Would only come into existence if the company declared dividends
‘Is it a present chose in action or a mere possibility?’
‘A dividend is not a debt until it is declared. Until then it is in the eye of the law a
possibility only. When it is declared it becomes a debt for which the shareholder
who is on the register at that date of declaration may sue.’
Loan repayments:
Bare majority – ‘I regard interest which may accrue in the future upon an existing
loan repayable without notice as having the character of a right to come into
existence rather than a right already in existence’ (Menzies J)
Minority view – ‘But a contract to pay a sum of money on a future day, call it
interest or what you will, calculable in amount according to conditions presently
agreed, is in my view a presently existing chose in action.’ (Windeyer J)
Distinction between present and future property – Windeyer J
Contractual obligation to pay money at a future date – present property
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find more resources at oneclass.com
Document Summary
5. 46 assignments in equity: occur in the following situations: Failure to comply with the requirements of a legal assignment of a legal interest. Assignment of equitable property: effectiveness: depends on the assignors display of an intention to assign. Clear words indicating intention are required, but there is no particular form william. Brandts son & co v dunlop rubber company ltd [1905] ac 454: intention to grant a revocable mandate, while retaining ownership, does not qualify as an equitable assignment. 5. 49 overview of principles on assignments in equity: once intention to assign is established, elements: Existing property holroyd v marshall: equitable property requires writing for valid transfer, legal property . Consideration given: writing may be required in some instances, but the intention to assign will most likely be sufficient. Cannot be assigned at law: equitable assignment: intention to assign is sufficient. Equity agreement to assign future property for valuable consideration is treated as a contract to assign the property.
