07 Equity Assignment 1 2012

Oliver Johnson

(a) The Royalties Anna has a contract with Brutus whereby Brutus would have the copyright to her wor !or the year 2012" #he price o! the rights was 10$ o! the boo sales !or 2012% payable on or be!ore &ebruary 1 201'" Anna then ostensibly assigned the bene!it o! the contract to (eter" )he did so in writing to (eter% though not in deed !orm% and noti!ied the obligee verbally" Because there was no consideration% the issue is whether the assignment was !or !uture or present property" *! the assignment was !or !uture property it will !ail" #he letter% ta en together with the phone message seem to be su!!icient to demonstrate donative intent su!!icient to ma e an immediate gi!t" #he right to receive royalties is not a personal right1 because it ma es no di!!erence to the obligee to whom he owes per!ormance2" *t is an assignable chose in action% a personal proprietary right to the bene!it o! a contract that can be trans!erred to a third party in accordance with the !ormal rules"+ #he royalties themselves% on the other hand are !uture property because they have not yet come into e,istence" #he issues is- did Anna intend to assign this right to the royalties or the royalties themselves when they became due" *! it is the royalties% it is ine!!ective because equity will not give e!!ect to an assignment o! !uture property without consideration '" #o determine whether the assignment is one !or !uture property% one loo s to the wording and the nature o! the sub.ect matter/" *n this case% the sub.ect matter is the money due under the publishing contract" As in Shepherd% the obligee cannot e!!ect the crystallisation o! the right% the money will certainly become due" By contrast% the interest on the deposit in Norman v Federal Commissioner of Taxation0 was a e,pectancy on property that% i! the obligee had paid bac early% would never have come into e,istence" #he sub.ect matter% there!ore% is su!!iciently certain so as to comprise both a right to receive the money and the money itsel!% rather than simply an e,pectancy that money may arise" 1owever% in this case% the letter and the telephone message both re!er to 2royalties3% or the money itsel!" #his contrasts to )hepherd in which the court held that the words
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Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd 4155'6 1 A7 8/ at 10/ Tolhurst v Associated Portland Cement Manufacturers 91500: ;td 415026 2 <B 000 at 008 + Pacific rands Sport ! Leisure Pt" Ltd v #nder$or%s Pt" Ltd 92000: 1'5 &7= +5/ at +2 ' #he rule in &olro"d v Marshall 91802: 10 1;7 151 at 211" / Shepherd v' Federal Commissioner of Taxation 4150/6 17A 70 0 9150+: 105 7;= 5

07 Equity Assignment 1 2012

Oliver Johnson

2my right title and interest in3 re!erred to a present right to money payable 7" Because the assignment re!ers to the money itsel! rather than the right to receive it% it is !uture property and there!ore not e!!ective because no consideration was given" Bruce gets the royalties" (b) (1) The Rio Tinto Shares Anna>s interest in the shares was that o! a bene!iciary in a subsisting e,press trust" Anna purportedly e!!ected a trans!er to Bruce o! both the legal and equitable title in the shares either by delivering written notice to him o! a direct assignment or by instructing her trustee to trans!er the shares to Bruce" Anna intended the trans!er to ta e place immediately" #hat Anna had the power to ma e such an instruction is !ound in the rule in Saunders v (autier)' #he written notice o! the assignment to Bruce does not seem to be e!!ective at law because it purports to trans!er legal title when Anna did not have legal title" Because Anna intended to trans!er both the legal and equitable title in the shares to Bruce% )2+791:9c: does not apply and the assignment need only be oral 5 and was e!!ective when the trustee carried out the directions" )ince #ara had not carried out the directions be!ore Anna>s death% there is a .udicial bone o! contention" *n (andervell*+% ;ord ?ilber!orce opined that the gi!t would still be e!!ective even i! the settlor had died be!ore the directions were carried out but in Par%er ! Par%er v Ledsham11 it was held that it was not" *n Par%er the sub.ect o! the trans!er was a revocable mandate that was revo ed as a matter o! law by her death" *n this case% however% the instructions were 2trans!er the =io #into shares@ please do it quic ly3 which would suggest% along with notice o! the assignment to the recipient% the necessary donative intention so that it is an irrevocable instruction 12 that ta es e!!ect as an assignment" Bruce gets the shares" (b) (2) The Westpac Shares #he ?estpac )hares are part o! an unadministered estate so Anna holds her interest in them as a residual bene!iciary and the e,ecutors hold the legal and equitable

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(er Barwic 7J at +51% per <itto J at +57 918'1: E?17 7h J82 5 (andervell v ,nland -evenue Commissioners 415076 1 AllEr 1 unanimously 10 *bid" at 1+ 11 415886 ?A= +2 at +7 per =owland J 12 7!" Comptroller of Stamps .(ic/ v &o$ard0Smith 415+06 17A 12 and Ai,on J>s analysis"

07 Equity Assignment 1 2012

Oliver Johnson

property1+ in the shares" Anna is attempting to assign her share in a subsisting trust so )2+791:9c: applies and the assignment must be in writing 1'" #he oral disposition o! the shares to =achel is not su!!icient" (eter gets the ?estpac )hares" (c) The Car #he disposition o! the car is an attempted voluntary legal assignment o! present property evidenced in writing" #he assignment is equitable because the trans!er documents have not yet been registered" #his assignment will be e!!ective i! Anna has done everything necessary to ma e the assignment binding upon her1/" *n 7orin v (atton10 2everything necessary to ma e the assignment binding3 was de!ined as everything which the assignee only would need to do in order to trans!er" *n this case Anna verbally assigned the car and signed a trans!er notice made out to =achel" #his is all that is necessary !or Anna to do% =achel could register the trans!er hersel!" 7orin v (atton also requires that the trans!eror places the property beyond their recall" #his is problematical in this case" Anna gave =achel the eys to the car and told her the trans!er documents were in the glove bo, and this seems to satis!y the test but the intervention o! the thie! brings up di!!iculties" ?hen a thie! steals property% he holds that property on a resulting trust !or the true owner17 !rom the time the property is in their possession" #he true owner may be di!!icult to determine because the time o! the the!t is un nown" *! the thie!>s resulting trust sprang up be!ore eys were handed over and the second limb in 7orrin v (atton having not yet been satis!ied% (eter would be the true owner as Anna>s representative" *! the the!t is ta en to have occurred a!ter the eys have been handed over% =achel is the true owner because the property has been placed beyond the revocation o! the trans!error and the trans!error has done everything that she alone can do" (d) The House Anna has% in e,change !or valuable consideration% made a contract to sell the land to Jonas on a speci!ic date and% absent any modi!ying contractual term18% is bound as constructive trustee !or the land" Bnder the doctrine o! conversion% i! a contract is
1+ 1' 1/

Commissioner of Stamp Duties .1ueensland/ v Livingston 4150/6 A7 05'

Gre" v ,nland -evenue Commissioners 415/86 2 All E= '28% per Evershed C= at ''2 Milro" v Lord 91802: ' Ae D & E J 20' at 27' 10 91550: 105 7;= /'0 17 lac% ! lac% v S Friedman and Co 415106 12 7;= 10/ per Dri!!ith 7J 18 Tan$ar 2nterprises Pt" Ltd v Cauchi 9200+: 217 7;= +1/

07 Equity Assignment 1 2012

'

Oliver Johnson

speci!ically en!orceable% it creates upon !ormation an equitable interest in its completion15 so Jonas has bene!icial ownership as a cestui 3ue trust and Anna has a lien over the purchase money when it becomes due" #his approach has been criticised in Tan$ar 2nterprises Pt" Ltd v Cauchi 20 by Dleeson 7J% Cc1ugh% Dummow% 1ayne and 1eydon JJ who re.ected the !ormation o! a constructive trust so as to allow speci!ic per!ormance in the !ace o! contracual breach by the purchaser" 7ourts have been slow to accept the end o! the constructive trust% however% and a modi!ied 2special equitable interest3 will arise such as to open the door to speci!ic per!ormance 21 where there has been no !ault on the part o! the purchaser" #he contract is speci!ically en!orceable because- the parties intended to be legally bound% as evidenced by the written contractF valuable consideration re!errable to the promise was given in the /$ deposit22 and the underta ing to sell the propertyF and compensation is not an adequate remedy because the sub.ect o! the contract is land and land is considered unique2+" Although speci!ic per!ormance acts in personam4 (eter% as the e,ecutor% steps into the shoes o! Anna and is sub.ect to all the equities outstanding on the property in the estate2'" Jonas gets the house" BIBLIO R!"H# $al "ont% & Chal'ers R $ C - 23uit" And Trusts4 Commentar" and Materials 2nd Edition% ;B7 *n!ormation )ervices% 2000 Hepburn% S (& Clar)e " H& *a+ton% ( - Principles of 23uit" and Trusts 2nd Edition% 7avendish (ublishing 2001 Heydon ( $& Lou,hlan " L - Cases and Materials on 23uit" and Trusts 7th Edition% ;e,isGe,is Butterworths% 2007 -.ai/Lian% L- The 2verett Assignment -econsidered4 &adlee v Commissioner of ,nland -evenue% =evenue ;aw Journal Hol 1 *ssue 1 1550 Radan% "& Ste.art% C- Principles of Australian 23uit" and Trusts 2nd Edition% ;e,isGe,is Butterworths% 2010 Tolhurst (- The Assignment of Contractual -ights4 1art (ublishing% 2000

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(er Jessel C= in L"saght v 2d$ards 91870: 2 7h A +55 at /00 9200+: 77 A;J= 18/+ at 1800 21 5hu v Treasurer of NS6 4200'6 17A /0 per 22 Maddison v Alderson 9188+: 8 App 7as '07 2+ Golds7rough Mort ! Co' Ltd v 1uinn 91510: 10 7;= 07' per O>7onnor J 2' (robate and Administration Act 1858 9G)?: )'/"