LAW EXTENSION COMMITTEE - EQUITY SUMMER 2006-07 SESSION LECTURE 3 EQUITABLE ASSIGNMENTS 3.1 Intro !"t#on $3.

1% An assignment is the immediate transfer of an existing proprietary right, vested or contingent, from the assignor to the assignee: Norman v FCT (19 !" 1#9 C$% 9 at & , per 'indeyer () An e*+ita,-e assignment simp-y means the recognition in e*+ity of the transfer of property . a recognition that may ,e granted even tho+gh some prescri,ed method of assignment at -a/, s+ch as registration, has not ,een comp-eted) 0n this sense, a co+rt of e*+ity /i-- over-oo1 a fai-+re to comp-y /ith stat+tory re*+irements, provided the e*+ita,-e r+-es are satisfied) The princip-es governing the recognition of assignments in e*+ity i--+strate the operation of some of the maxims of e*+ity2 in partic+-ar, that &'!#t( r&)*r + *+ on& t,*t -,#", o!),t to .& on& 2 that &'!#t( -#// not 0&r1&"t *n #20&r1&"t )#1t2 and, that &'!#t( -#// not *++#+t * 3o/!nt&&r) $3.3% 0t is important to identify the form of any given transaction 3 that is to say, precise-y ho/, and sometimes /hen, the donor intended the gift to ta1e effect) The intention of the s+pposed assignor is a-- important in determining, in the first case, /hether there /as a gift2 and, second, the /ay in /hich the gift /as to ta1e effect: 4mith v 5erpet+a- Tr+stee Co $td (191#" 11 C$% 167) 0n that case 8iggins ( expressed the princip-e in these terms, at 1 9: 0 do not 1no/ ho/ there can ,e any assignment of property . p+tting aside an assignment ,y operation of -a/ ))) /itho+t the intention of the assignor to assign : to pass the property o+t of himse-f into someone e-se) The intention of the donor as to /hen and ho/ a gift is to ,e effected /i-- ,e cr+cia-) ;nce the intended form of the dea-ing can ,e identified it /i-- ,e possi,-e to consider /hat test to app-y to determine /hether the

2 a--eged assignment is effective) For examp-e, the vo-+ntary assignment of e*+ita,-e property ,y /ay of direction to a tr+stee /i-- re*+ire the comm+nication of a ,inding direction to the tr+stee) An assignment of the same interest ,y /ay of dec-aration of tr+st, that is, ,y the creation of a s+,:tr+st, can ,e effected /itho+t any comm+nication to the tr+stee) 0n Comptro--er of 4tamps (<ic" v 8o/ard:4mith (19! " =6 C$% 16, 8o/ard: 4mith /rote to the manager of a tr+stee company that /as ,oth his attorney +nder a po/er and the exec+tor and tr+stee of the /i-- of his -ate /ife, +nder /hich 8o/ard:4mith /as the so-e resid+ary ,eneficiary) The -etter re*+ested the tr+stee company, as exec+tor of the /i-- and as 8o/ard:4miths attorney, to pay o+t of the resid+e of the estate, +pon iss+e of pro,ate, either in shares or money at the tr+stees discretion, certain s+ms to certain peop-e as sho/n in a -ist appended to the -etter, those gifts to ,e free of gift and stamp d+ty) The -etter a-so said that if there /as ins+fficient in the resid+e to ma1e a-- the payments in f+-- they /ere to a,ate proportionate-y) The *+estion arose -ater /hether that -etter constit+ted an assignment of 8o/ard:4miths interest in the resid+e) >ixon ( he-d that the -etter /as a mere a+thorisation revoca,-e ,y the donor and had no dispositive effect +ntiacted +pon ,y the tr+stee) The contents of the -etter disp-ayed an intention on the part of the a+thor that the recipients sho+-d ta1e on distri,+tion ,y the tr+stee company and not ,efore) 0n addition, the discretion given to the tr+stee as to the form of the gift and the provision for proportionate a,atement in the event of a shortfa-- rendered the *+ant+m and nat+re of the ,enefit ,eing assigned to each of the -isted persons +ncertain at the time of the -etter)

34 2

5o/!nt*r( A++#)n2&nt+ o1 L&)*/ 6ro0&rt(

A++#)n2&nt+ o1 0ro0&rt( *++#)n*./& *t /*!)6 $3.7% This covers most forms of -ega- property) ;n-y s+ch things as part of a chose in action fa-- o+tside this net, a-tho+gh ,efore the creation of a stat+tory po/er to assign choses in action

3 at -a/ ,y the Conveyancing Act 1919 (N4'", s 1&, no chose in action co+-d ,e assigned at -a/) The enactment of that po/er high-ights the centra- *+estion in this topic: /here there is some method of assigning partic+-ar -ega- property at -a/, m+st the -ega- re*+irements ,e satisfied ,efore e*+ity /i-- recognise a vo-+ntary assignment of s+ch property (+nder the maxims that e*+ity /i-- not assist a vo-+nteer nor perfect an imperfect gift" or /i-- e*+ity recognise s+ch a gift as effective at some point ,efore the -ega- tit-e passes (+nder the maxim that e*+ity -oo1s to the intent rather than the form"? $3.8% The ,asic r+-e for the recognition of vo-+ntary assignments of -ega- property /as stated ,y T+rner $( in @i-roy v $ord (17 &" 6 >e AF B ( & 62 6= C% 117=)

Thomas @ed-ey exec+ted a vo-+ntary deed in Apri- 17=& p+rporting to assign =# shares in the Dan1 of $o+isiana to $ord to ,e he-d on certain tr+sts for the p-aintiffs) At -a/ transfer of the shares co+-d on-y ta1e p-ace ,y entry in the ,oo1s of the ,an1) That /as never done) @ed-ey -ived for three years after ma1ing the deed, d+ring /hich time dividends on the shares /ere received ,y $ord and remitted to the p-aintiffs) $ord a-so he-d the share certificates and a po/er of attorney from @ed-ey empo/ering him to exec+te a transfer of the shares) ;n @ed-eys death the *+estion arose /hether the shares formed part of @ed-eys estate) 0t /as he-d that they did) T+rner $( -aid do/n t/o r+-es: (a" 0n order to render a vo-+ntary sett-ement va-id and effect+a-, the sett-or m+st have done everything /hich, according to the nat+re of the property comprised in the sett-ement, /as necessary to ,e done in order to transfer the property and render the sett-ement ,inding +pon him2 and (," 0f a sett-ement is intended to ,e effected ,y a partic+-ar mode or form (ie, direct assignment, dec-aration of tr+st, direction to tr+stee and so forth", the Co+rt /i-- not give effect to it ,y app-ying another form) An imperfect assignment /i-- not, for examp-e, ,e he-d to ,e a dec-aration of tr+st) T,& 1#r+t 9/&): o1 M#/ro( 3 Lor

4 !) $3.6% The /ords necessary to ,e done in the first -eg of @i-roy v $ord raise t/o *+es tions) The first ,eing /hether a-- the -ega- steps m+st ,e comp-eted /here there is a method of assignment avai-a,-e at -a/2 and the second ,eing done ,y /hom?) Doth those *+estions /ere raised in the 8igh Co+rt in Anning v Anning (19#9" 6 C$% 1#69 ,+t the divergence ,et/een the E+dgments given in that case -eft the iss+e in an +nsett-ed state in A+stra-ia for over 7# years) 'i--iam Anning exec+ted a deed of gift p+rporting to convey a-- his property to his /ife and five chi-dren severa- days ,efore he died) Nothing f+rther /as done to ass+re the property to the donees) The property covered ,y the deed inc-+ded ,oo1 de,ts and money -ying to Annings credit in three ,an1s) 0t /as he-d that the deed fai-ed as an assignment of everything except the ,an1 deposits and ,oo1 de,ts) Ariffith C( too1 the vie/ that necessary to ,e done meant necessary to ,e done ,y the donor, in the sense that if anything remained to ,e done ,y the donor /itho+t /hich the donee co+-d not esta,-ish tit-e to the property, the gift /o+-d ,e imperfect, and in the a,sence of consideration, the co+rt /o+-d not assist the donee as against the donor) D+t, if a-- that remained to ,e done co+-d ,e done ,y the donee /itho+t the assistance of the donor or the co+rt, the gift /o+-d ,e comp-ete) 0saacs ( too1 the vie/ that if the -ega- tit-e /as assigna,-e at -a/ it had to ,e assigned at -a/ or other/ise e*+ity /o+-d not enforce the gift) 0f for any reason the transfer of the -ega- tit-e /as incomp-ete /hen the -a/ permitted it to ,e comp-ete, 0saacs ( /as of the vie/ that e*+ity sho+-d regard the gift as imperfect and not enforce it) 8iggins ( said that the donor m+st do everything he co+-d do, /hether o,-igatory or not, to pass the tit-e) !)9 $3.7% 8iggins (s vie/ /as not adopted in -ater cases and p-ayed on-y a minor ro-e in the conf+sion that fo--o/ed) The other t/o E+dgments remained the s+,Eect of de,ate for decades) 0saacs (s stip+-ation that a-- -ega- re*+irements ,e met, inc-+ding registration, -eft no apparent room for the recognition in e*+ity of assignments that /ere incomp-ete at -a/) 8o/ever, his 8ono+r did not ma1e it c-ear, /hen ta-1ing of the donee enforcing the gift, /hether he contemp-ated that the co+rt /o+-d intervene to fr+strate a donee /ho had the po/er to comp-ete the gift on his o/n ,eha-f) C*+ity may not assist a vo-+nteer ,+t there is no maxim that it /i-- fr+strate one /ho has no need of assistance from the co+rt to enforce his or her rights and see1s mere-y to exercise rights a-ready avai-a,-e) The de,ate remained a-ive

5 -arge-y ,eca+se there /as no categorica- reEection of 0saacs (s vie/ ,y the 8igh Co+rt +nti199#, /hi-e s+pport for the vie/ of 4ir 4am+e- Ariffith /as often e*+ivoca-)) !)7 $3.;% D+t that changed /ith the decision of the 8igh Co+rt in Corin v 5atton (199#" 1 9 C$% =6#) @rs 5atton /as a Eoint registered proprietor of -and +nder Torrens tit-e /ith her h+s,and, the respondent) @rs 5atton /as termina--y i-- and /anted to arrange her affairs so as to sever the Eoint tenancy) 4he exec+ted a memorand+m of transfer of her interest in the -and in favo+r of her ,rother @r Corin, /ho accepted the transfer as transferee) The transfer /as expressed to ,e in consideration of a deed of tr+st) Fnder the deed of tr+st, Corin dec-ared that he he-d the ha-f interest in the -and as tenant in common on tr+st for @rs 5atton) The 4tate Dan1 of N4' he-d the certificate of tit-e +nder an +nregistered mortgage) @rs 5atton too1 no action to proc+re the prod+ction of the certificate of tit-e to ena,-e the transfer of tit-e and died ,efore the transfer /as registered) 8er h+s,and so+ght a dec-aration that he /as entit-ed to the -and as so-e proprietor) Dy a cross:c-aim Corin so+ght a dec-aration that the Eoint tenancy had ,een severed and that he he-d a one ha-f interest as tenant in common) Doth at first instance and on appea- it /as dec-ared that @rs 5atton had not effective-y a-ienated her interest in the -and and @r 5atton /as entit-ed to the -and ,y s+rvivorship) The 8igh Co+rt he-d the exec+tion of the transfer did not sever the Eoint tenancy ,eca+se at the time of her death @rs 5atton had not a-ienated any interest in the -and: per @ason C(, >eane B @c8+gh (( on the gro+nd that she had not done a-- that /as necessary to effect s+ch a transfer ,eca+se she had not a+thorised the mortgagee to hand the certificate of tit-e to the transferee2 per Drennan (, app-ying Dr+n1er, on the gro+nd that in the a,sence of the certificate of tit-e or dispensation from prod+ction the transfer /as not registra,-e2 and, per Toohey ( that ,eca+se no consideration had ,een given for the transfer there /as no transaction for e*+ity to enforce) !)1&

6 $3.<% The maEority of the 8igh Co+rt too1 the opport+nity to consider the *+estion and, in the process, pro,a,-y -aid to rest the -ongest r+nning sore in A+stra-ian e*+ity) 1 @ason C( and @c8+gh ( recognised the +ncertainty arising from the first -eg of @i-roy v $ord) 8aving disc+ssed the point and its che*+ered history, their 8ono+rs endorsed the test preferred ,y Ariffith C( giving their o/n statement of the r+-e, at ==9: According-y, /e conc-+de it is desira,-e to state that the princip-e is that, if an intending donor of property has done everything /hich it is necessary for him to have done to effect a transfer of -ega- tit-e, then e*+ity /i-- recognise the gift) 4o -ong as the donee has ,een e*+ipped to achieve the transfer of -ega- o/nership, the gift is comp-ete in e*+ity) Necessary +sed in this sense means necessary to effect a transfer) From the vie/point of the intending donor, the *+estion is /hether /hat he has done is s+fficient to ena,-e the -ega- transfer to ,e effected /itho+t f+rther action on his part) As for the %ea- 5roperty Act, s 61, /hich provides that +nti- registration an instr+ment of transfer sha-- ,e ineffect+a- to pass an estate or interest in the -and, @ason C( and @c8+gh ( he-d, at = #, that s 61 does not to+ch /hatever rights are ,ehind the instr+ment: Darry v 8eider (1916" 19 C$% 199 at &1 , per 0saacs (, and th+s does not prevent the passing of an e*+ita,-e estate to the donee +nder a comp-eted transaction) 0n the process their 8ono+rs noted, at ==9, that the Ariffith test imp-icit-y recognises that the donee ac*+ires an e*+ita,-e estate or interest in the s+,Eect matter of the gift once the transaction is comp-ete so far as the donor is concerned) $3.10% >eane ( came to a conc-+sion simi-ar to that of @ason C( and @c8+gh () 8e said that >ixon (s test, sho+-d ,e accepted not as esta,-ishing a ne/ 1ind of stat+tory right ,+t as identifying the test for determining /hether the stage has ,een reached /hen a gift of %ea5roperty Act -and +nder an +nregistered memorand+m of transfer is comp-ete and effective in e*+ity) 8is 8ono+r then descri,ed that test as a t/ofo-d one: 0 say pro,a,-y ,eca+se it has ,een s+ggested that the fact that the statements in Corin v 5atton on @i-roy v $ord /ere o,iter provides scope for the res+rrection of the >ixon test from Dr+n1er: @A B $ para G !#H) 0 s+ppose someone might regenerate the sma--pox vir+s too and 5ar-iament might repea- @arried 'omenIs 5roperty -egis-ation) 8opef+--y no E+dge /i-- ,e tempted, -et a-one pers+aded to ind+-ge in any s+ch /anton vanda-ism) $a/ st+dents have s+ffered eno+gh)
1

7 0t is /hether the donor has done a-- that is necessary to p-ace the vesting of the -ega- tit-e /ithin the contro- of the donee and ,eyond the reca-- or intervention of the donor) ;nce that stage is reached and the gift is comp-ete and effective in e*+ity, the e*+ita,-e interest in the -and vests in the donee and, that ,eing so, the donor is ,o+nd in conscience to ho-d the property as tr+stee for the donee pending the vesting of the -ega- tit-e)

$3.11% 4ome *+estions may remain open after Corin v 5atton) The first is /hether an exec+ted memorand+m of transfer, other/ise registra,-e, can ,e registered after the death of the transferor /itho+t f+rther endorsement or approva- ,y the exec+tor of the estate of that proprietor) Drennan ( tho+ght, at = , that the /eight of a+thority s+pported the vie/ that s+ch a transfer co+-d ,e registered after the death of the transferor, a-tho+gh, he noted that Jitto ( (/ith /hom @cTiernan ( agreed" tho+ght other/ise in Cope v Jeene (19 7" 117 C$% 1 at 9) Toohey ( tho+ght, at =91, the iss+e /as conc-+ded in favo+r of the registra,i-ity of the transfer after the death of the transferor) That m+st ,e the ,etter vie/, a-tho+gh the Jitto vie/ from Cope v Jeene cannot ,e ta1en to have ,een dismissed) 0f Drennan and Toohey (( are /rong, no one co+-d safe-y accept a signed transfer on sett-ement of a conveyance /itho+t proof that the proprietor /as sti-- a-ive) !)&# $3.12% The second *+estion as1s /hether it is necessary, in Ne/ 4o+th 'a-es at -east, for the donor to de-iver the certificate of tit-e to the donee, or other/ise ma1e the tit-e deed avai-a,-e for registration of the transfer to the donee) 4ection 9 (&" of the Conveyancing Act 1919 (N4'" provides that a mortgagor sha-- ,e entit-ed to have the re-evant certificate of tit-e ))) -odged at the office of the %egistrar:Aenera- to a--o/ ))) the registration of any a+thorised dea-ing ,y the mortgagor /ith the -and) @ortgagor is defined to inc-+de a person deriving tit-e to the e*+ity of redemption +nder the origina- mortgagor, or entit-ed to redeem a mortgage) @ason C( and @c8+gh (, at = 1, /ith /hom >eane (, at =7!, agreed, too1 the vie/ that s 9 did not he-p @r Corin ,eca+se he /as not a person entit-ed to redeem the mortgage +nti- there had ,een a transfer of @rs 5attons interest, /hich does rather ,eg the *+estion) @ason C( and @c8+gh (, at = #, dea-t /ith the *+estion of prod+ction of the certificate of tit-e genera--y saying that it can scarce-y ,e said that the donor has done everything necessary to ,e

8 done ,y him if he has retained the certificate of tit-e, ,y virt+e of the possession of /hich the gift might /e-- ,e th/arted) Drennan (, at = 39, agreed /ith the maEority on the effect of s and o,tain 9 ) None of the E+dges expressed a vie/ on /hether a donee in possession of an exec+ted memorand+m of transfer in registra,-e form co+-d c-aim the ,enefit of s 9 of paying o+t the mortgage) &1 $3.13% The operation of the r+-e in @i-roy v $ord /as a-so considered ,efore Corin v 5atton in Noonan v @artin (1979" 1# N4'$% 6#&: An e-der-y /ido/ gave her grandson severa- signed /ithdra/a- s-ips for an Access acco+nt /ith the ANK Dan1 in her name) 8e visited her fre*+ent-y and she had made advances of money to him in the past) 4he died on 7 @ay 197=) At that time she had a credit ,a-ance in the Access acco+nt of L79,1!#)76) ;n the day of the /ido/s death, ,+t after she had died, the grandson comp-eted a /ithdra/a- s-ip, for the s+m of L79,1!#)##, dating it &1 Apri197=, and sent his /ife /ith it to the ,an1 /here she /ithdre/ the amo+nt and deposited it into an acco+nt in the names of herse-f and her h+s,and) The exec+tors of the /ido/s estate too1 proceedings against the grandson and his /ife see1ing a dec-aration that the L79,1!#)## formed part of the /ido/s estate) Dryson ( he-d that it did and that a signed /ithdra/a- s-ip, ,eing mere-y an a+thority to /ithdra/ moneys from an acco+nt, did not effect an assignment of the moneys in the acco+nt) F+rthermore, any a+thority conferred ,y possession of the signed /ithdra/a- s-ip /as revo1ed on the death of the acco+nt ho-der) The moneys in the acco+nt constit+ted a de,t o/ed to the c+stomer ,y the ,an1 and co+-d on-y ,e assigned at -a/ +nder s 1& of the Conveyancing Act 1919 (N4'") 0n many respects the decision in Noonan v @artin /as fair-y straightfor/ard) There co+-d have ,een no other o+tcome) The case did give Dryson ( the opport+nity to comment on some aspects of the -a/ of e*+ita,-e assignments that are /orth noting) 8aving cited @i-roy v $ord (17 &" 6 >e A B F B ( & 62 6= C% 117=, Dryson ( emphasised the -ast /ords of T+rner $(s c-assic test, and render the sett-ement ,inding +pon him) 8aving p-aced stress on those /ords, Dryson ( then said, at 61#: possession of the certificate of tit-e, /here it /as he-d ,y a mortgagee, ,y the simp-e expedient

9 The /ords to /hich 0 have added emphasis sho/ that it is not eno+gh that a sett-or sho+-d p+t a donee in a position to carry registration thro+gh, so that the donee has for examp-e the opport+nity to comp-ete ,-an1 forms in a+thorised /ays or in /ays s+ggested ,y the nat+re of the forms, o,tain necessary approva-s, present them to the registration officer and act+a--y see the process of registration thro+gh) 0t is a-so necessary that for some -egareason the sett-or sho+-d ,e prevented from interr+pting and sho+-d have no right to interr+pt that process) !)&& $3.17% Noonan v @artin /as, of co+rse, decided ,efore Corin v 5atton) Dryson ( /as th+s ,o+nd, at -east to some extent, ,y Dr+n1ers case) 8is 8ono+r referred to the test -aid do/n ,y that case as an app-ication of and not a g-oss on the passage in @i-roy v $ord to /hich 0 ear-ier gave emphasis) The iss+e then ,ecame, in Dryson (s vie/, a *+estion of /hether the donee had o,tained the property in the memorand+m of transfer itse-f (considered as a piece of paper, ie, as a chatte-) 0f the donee had property in the memorand+m of transfer, and either had property a-so in the certificate of tit-e or an +nimpeacha,-e means of o,taining prod+ction of the tit-e deed for the p+rposes of registering the transfer, so that the gift /as, as >eane ( p+t it, ,eyond the reca-- or intervention of the donor (see G!)16H" then the e*+ita,-e tit-e /o+-d have passed) The re-evant *+estion then is, can the donor reca-- the transaction? !)&! $3.18% The approach ta1en ,y the 8igh Co+rt in Corin v 5atton /as app-ied ,y the Ne/ 4o+th 'a-es Co+rt of Appea- in Costin v Costin (+nrep N4'CA & Fe,r+ary 1999" G4ee s+mmary in Co+rse ;+t-ineH 34 3 5o/!nt*r( A++#)n2&nt+ o1 E'!#t*./& 6ro0&rt(

$3.16% C*+ita,-e property means property recognised on-y in, or rights on-y enforcea,-e in e*+ity, s+ch as the interest of a ,eneficiary +nder a tr+st, the rights of a partner in the assets of a partnership or any other e*+ita,-e chose in action, that is, a thing prova,-e in an action in e*+ity) The effectiveness of any p+rported assignment of s+ch e*+ita,-e property re*+ires consideration of t/o different *+estions) First, the assignment m+st satisfy the genera- -a/ test

10 for the va-idity of assignments appropriate for assignments in that partic+-ar form, /hether the assignment is in the form of a direct assignment, a dec-aration of tr+st, direction to the tr+stee or /hatever) 4econd, even if the assignment satisfies the genera- -a/ test it may fai- if it is not in /riting /hen it is re*+ired to ,e ,y the 4tat+te of Fra+ds, the Conveyancing Act 1919 (N4'", s &!C, or its e*+iva-ent in other 4tates)& Those t/o *+estions are dea-t /ith together as the va-idity of any assignment of e*+ita,-e property is inevita,-y scr+tinised +nder ,oth heads) 'here e*+ita,-e property is assigned for va-+e different considerations /i-- app-y in determining its effectiveness) As /ith -ega- property, the payment of consideration can c+re many forma- defects, inc-+ding the a,sence of /riting, /here /riting is other/ise re*+ired) ;n the other hand, a vo-+ntary assignment of e*+ita,-e property m+st satisfy the necessary formare*+irements ,efore it can ,e recognised) !)&7 $3.17% 0dentification of the form of the dea-ing is o,vio+s-y cr+cia- in this scheme ,eca+se that form /i-- determine the test to ,e app-ied to esta,-ish the va-idity of any vo-+ntary assignment of e*+ita,-e property) The form of the dea-ing is determined ,y the intention of the donor in the circ+mstances of the transaction: 4mith v 5erpet+a- Tr+stee Co $td (191#" 11 C$% 167 at 1 !) As /e-- as ascertaining the form in /hich the dea-ing is intended to ta1e effect it is a-so important to ascertain the intention of the donor to determine /hether the assignment is to ,e immediate-y ,inding) 0n other /ords, consider /hether the donor intends to part /ith dominion over the property then and there, or /hether the passing of dominion is intended to occ+r -ater, s+ch as on the happening of some given event, thro+gh the exercise of a revoca,-e mandate, as i--+strated ,y Comptro--er of 4tamps (<ic" v 8o/ard:4mith (19! " =6 C$% 16 (see G!)!H a,ove") 0n that case >ixon ( stated his vie/ on the recognition of the form of a p+rported e*+ita,-e assignment, at &13!: A vo-+ntary disposition of an e*+ita,-e interest may ta1e one of at -east three forms) 0t may consist of an expression or indication of intention on the part of the donor that he sha-- ho-d 5roperty $a/ Act 1996 (M-d", ss = B 92 $a/ of 5roperty Act 19! (4A", s &92 Conveyancing and $a/ of 5roperty Act 1776 (Tas", s # (&"2 5roperty $a/ Act 19=7 (<ic", s =!2 5roperty $a/ Act 19 9 ('A", s !6)
&

11 the e*+ita,-e interest vested in him +pon tr+st for the persons intended to ,enefit) 0n that case he retains the tit-e to the e*+ita,-e interest, ,+t constit+tes himse-f tr+stee, and, ,y his dec-aration imposes +pon himse-f an o,-igation to ho-d it for the ,enefit of others, name-y, the donees) 0n the second p-ace, the disposition may consist of a s+fficient expression of an immediate intention to ma1e over to the persons intended to ,enefit the e*+ita,-e interest vested in the donor, or some -esser interest carved o+t of it) 0n that case comm+nication to the tr+stee or person in /hom the -ega- tit-e to the property is vested is not re*+ired in order effect+a--y to assign the e*+ita,-e property) Notice to the tr+stee may ,e important to ,ind him to respect the assignment and in order to preserve priorities) D+t it is not a condition precedent to the operation of the expression of intention as an assignment) Nor does it appear necessary that the intention to pass the e*+ita,-e property sha-- ,e comm+nicated to the assignee) 'hat is necessary is that there sha-- ,e an expression of intention then and there to set over the e*+ita,-e interest, and, perhaps, it sho+-d ,e comm+nicated to someone /ho does not receive the comm+nication +nder confidence or in the capacity on-y of an agent for the donor) 0n the third p-ace, the intending donor for /hom property is he-d +pon tr+st may give to his tr+stee a direction re*+iring him thenceforth to ho-d the property +pon tr+st for the intended donee)

))) a vo-+ntary disposition of an e*+ita,-e interest may (a-so" ,e effected ,y the comm+nication to the tr+stee of a direction, intended to ,e ,inding on him, thencefor/ard to ho-d the tr+st property +pon tr+st for the donee (provided the ,eneficiary giving the direction is s+i E+ris and entit-ed to an e*+ita,-e interest corresponding to the f+-- -egainterest in property vested in his tr+stee") D+t it m+st ,e a direction, and not a mere a+thority revoca,-e +nti- acted +pon) 4+ch an a+thority is not in itse-f an assignment) 0t may, it is tr+e, res+-t in a transfer of an e*+ita,-e interest 0n addition to those fo+r methods e*+ita,-e property can a-so ,e assigned ,y /ay of re-ease, in the sense that a ,eneficiary of a tr+st can re-ease the tr+stee from his or her o,-igations as tr+stee, there,y ena,-ing the tr+stee to enEoy comp-ete ,eneficia- o/nership of the tr+st

12 property) 'hi-e expressed as a re-ease s+ch a transaction has the effect of transferring the e*+ita,-e interest in the property from the ,eneficiary to the tr+stee) T,& r&'!#r&2&nt o1 -r#t#n) !)&9 $3.1;% The necessity for /riting to effect an assignment of e*+ita,-e property arises from the Conveyancing Act 1919 (N4'", s &!C and its e*+iva-ents in other 4tates) ! 4ection &!C provides: 23C =1> S!.?&"t to t,& 0ro3#+#on+ o1 t,#+ A"t -#t, r&+0&"t to t,& "r&*t#on o1

#nt&r&+t+ #n /*n .( 0*ro/@ =*> no #nt&r&+t #n /*n "*n .& "r&*t& or #+0o+& o1 &A"&0t .( -r#t#n) +#)n& .( t,& 0&r+on "r&*t#n) or "on3&(#n) t,& +*2&B or .( ,#+ *)&nt t,&r&!nto /*-1!//( *!t,or#+& #n -r#t#n)B or .( -#//B or .( o0&r*t#on o1 /*-C =.> * &"/*r*t#on o1 tr!+t r&+0&"t#n) *n( /*n *n 0ro3& &"/*r& +!", tr!+t or .( ,#+ -#//C ="> * #+0o+#t#on o1 *n &'!#t*./& #nt&r&+t or tr!+t +!.+#+t#n) *t t,& t#2& o1 t,& #+0o+#t#onB 2!+t .& #n -r#t#n) +#)n& .( t,& 0&r+on #+0o+#n) o1 t,& +*2& or .( ,#+ -#//B or .( ,#+ *)&nt t,&r&!nto /*-1!//( *!t,or#+& #n -r#t#n). =2> T,#+ +&"t#on "on+tr!"t#3& tr!+t+. o&+ not *11&"t t,& "r&*t#on or o0&r*t#on o1 r&+!/t#n) #20/#& or or *n( #nt&r&+t t,&r&#n 2!+t .& .( +o2& 0&r+on -,o #+ *./& to

2*n#1&+t&

.( +o2& -r#t#n) +#)n&

$3.1<% Fnder s &!C, /riting is c-ear-y re*+ired for the disposition or creation of e*+ita,-e interests in -and, except /here they arise ,y operation of -a/ +nder the princip-es of res+-ting or imp-ied tr+sts or of constr+ctive tr+sts) 0n other /ords, any transfer or other disposition of an e*+ita,-e interest in -and m+st ,e in /riting) The creation of an e*+ita,-e interest in -and s+ggests a dec-aration of tr+st or other act that gives rise to a ne/ e*+ita,-e interest in -and) Any p+rported disposition that does not comp-y /ith s &!C(1" is void) This app-ies e*+a--y to
!

4ee note a,ove)

13 dispositions of s+,sisting e*+ita,-e interests in rea- property and persona-ty: 5T $td v @aradona 5ty $td (199&" &9 N4'$% &61) As a disposition of an e*+ita,-e interest ))) s+,sisting at the time s+ch an assignment m+st ,e in /riting signed ,y the (assignee" ))) (etc") Fai-+re to comp-y /ith s &!C(1"(c" /o+-d render the p+rported assignment void) >ec-arations of tr+st respecting any -and or any interest therein need on-y ,e manifested and proved ,y some /riting in accordance /ith s &!C(1"(,") 0n other /ords, s+ch a dec-aration can ,e satisfied ,y -ater /riting and is not necessari-y void if not expressed in /riting at the time of the a--eged dec-aration) This s+ggests some inconsistency ,et/een s &!C(1"(a" and s &!C(1"(," as to the re*+irements for the va-idity of dec-arations of tr+st re-ating to -and or any interest in -and /hich -ead to the creation of an e*+ita,-e interest in -and) Fnder s &!C(1"(a", no e*+ita,-e interest in -and can ,e created ,y a dec-aration of tr+st +n-ess the dec-aration is in /riting) Fnder s &!C(1"(,", -ater /riting manifesting and proving the dec-aration may va-idate s+ch a dec-aration) As s &!C(1"(," express-y dea-s /ith dec-arations of tr+st regarding -and, it /o+-d appear to operate as a *+a-ifier on s &!C(1"(a", re*+iring that it not ,e constr+ed as app-ying strict-y to dec-arations of tr+st) >ispositions of e*+ita,-e interests in persona-ty m+st a-so ,e in /riting ,y virt+e of s &!C(1"(c") There is a vie/ to the contrary, that is, to the effect that s &!C app-ies on-y to ass+rances of -and or interests in -and ,eca+se of the heading given to the part of the Conveyancing Act in /hich s &!C is fo+nd) 8o/ever, apart from anything e-se, the fact that s &!C(1"(c" /o+-d ,e +nnecessary if that /as so . the gro+nd ,eing entire-y covered ,y paras (a" and (," . appears to defeat that arg+ment . +n-ess para (a" /as confined to dea-ings /ith -ega- interests in -and on-y, a vie/ /hich appears to defy -ang+age, -a/ and -ogic) 0n Adamson v 8ayes (199!" 1!# C$% &9 at &9&, @enNies ( /as prepared to give para (a", or its 'estern A+stra-ian e*+iva-ent, s+ch a restricted definition) 8o/ever, 'a-sh (, at &99, and Ai,,s (, at !#&36, /ere of a different vie/ and that seems to ,e the vie/ preferred ,y the commentators) The -egis-at+re has dra/n a c-ear distinction ,et/een a disposition of an interest and the creation of an interest) From that it appears that s &!C does not re*+ire /riting for a dec-aration of tr+st of persona-ty ,y a person /ho is at the time of the dec-aration the a,so-+te o/ner of the persona-ty) 4+ch a dec-aration /o+-d -ead to the creation of an e*+ita,-e interest in the persona-ty, there ,eing no s+ch separate interest ,efore) 'hi-e the definition of disposition in the Conveyancing Act (N4'", s 9 inc-+des dec-aration of tr+st, the on-y disposition of an e*+ita,-e interest in persona-ty re*+ired to ,e in /riting ,y s &!C is

14 a disposition of a s+,sisting e*+ita,-e interest) According-y, it m+st ,e the case that an oradec-aration of tr+st in persona-ty, s+ch as, say, shares in a company, m+st ,e effective ,eca+se it -eads to the creation of an e*+ita,-e interest and cannot ,e characterised as a disposition of a s+,sisting e*+ita,-e interest) 0n 8+nter v @oss G1996H ! A-- C% &1=, the p-aintiff c-aimed that the defendant had made an ora- dec-aration of tr+st in his favo+r of = per cent of the shares in a certain company) The case t+rned on the *+estion of /hether there /as s+fficient certainty of description of the s+,Eect matter of the tr+st, and not /hether /riting /as needed for its creation) At first instance the E+dge fo+nd for the p-aintiff and +phe-d the tr+st) The Co+rt of Appeadismissed an appea- against that decision) @i-roy v $ord /as referred to in the E+dgment of >i--on $(, /ith /hom @ann and 8irst $(( agreed, at &193&#) 0n doing a-- that necessary to ,e done to effect a sett-ement of these shares ,y dec-aration of tr+st it /as not considered necessary to express the dec-aration in /riting) 0n 4ecretary >epartment of 4ocia- 4ec+rity v (ames (199#" 9= A$% 1=, a /oman

p+rchased a home +nit in order to provide accommodation for her != year o-d inva-id da+ghter and her grandda+ghter at a nomina- rent) 'hi-e she p+rchased the +nit in her o/n name her evidence /as that she regarded the +nit as her da+ghters and that she retained it in her o/n name for her da+ghters protection and +nder her /i-- the +nit /o+-d go to her da+ghter a-one) The >epartment of 4ocia- 4ec+rity inc-+ded the va-+e of the +nit as part of the va-+e of the /omans property for the p+rpose of s 7 of the 4ocia- 4ec+rity Act 1969 (Cth") The Administrative Appea-s Tri,+na- fo+nd as a fact that the respondent had dec-ared an intention to ho-d the +nit on tr+st for her da+ghter and grandda+ghter at the time it /as p+rchased) $ee (, on appea- to the Federa- Co+rt, he-d that the materia- ,efore the Tri,+na- permitted it to come to that conc-+sion even tho+gh the evidence raised competing inferences) 0n constr+ing s !6(1"(," of the 5roperty $a/ Act 19 9 ('A" $ee ( said the s+,:section may ,e satisfied ,y a com,ination of doc+ments capa,-e of ,eing read together and that any informa- /riting may stand as existence of tr+st inc-+ding correspondence from third parties, a te-egram, an affidavit, or ans/er to interrogatories) 8is 8ono+r he-d f+rther that the date of creation of the /riting is not materia-) 0t may come into existence at any time after the dec-aration of the tr+st) 'hi-e $ee ( accepted the finding of the Tri,+na- as to the dec-aration of the tr+st he considered that it had erred in -a/ in

15 finding that s !6(1"(," /as satisfied, in that there /as no /riting s+fficient to evidence the tr+st) 8o/ever, he ret+rned the matter to the Tri,+na- for f+rther hearing and said it /o+-d ,e appropriate for the Tri,+na- to receive s+ch f+rther evidence as it sa/ fit) ;ne can ass+me that the -a/yers for the /oman read that message -o+d and c-ear) This decision /as affirmed ,y Jearney ( in 8agan v 'aterho+se (1991" !6 N4'$% !#7 at !7=3 ) The re*+irements of s &!C(1"(," /o+-d ,e satisfied /here a tr+stee ac1no/-edged a s+,sisting tr+st over -and in -etters) Those -etters /o+-d constit+te s+fficient /ritten proof of the tr+st to ena,-e its enforcement: 8agan v 'aterho+se, at !7 ) D&*/#n)+ #n t,& 1or2 o1 #r&"t *++#)n2&nt+ !)!# $3.20% 'indeyer ( stated the genera- -a/ r+-e here in Normans case, ))) except that /riting is re*+ired ,y s 9 of the 4tat+te of Fra+ds, no forma-ity is necessary ,eyond a c-ear expression of an intention to ma1e an immediate disposition) !)!# $3.21% 0f the interest ,eing assigned is an e*+ita,-e chose in action it /o+-d, prima facie, a-so have to comp-y /ith -egis-ative provisions dea-ing /ith the assignment of choses in action, s+ch as s 1& Conveyancing Act 1919 (N4'")6 4ection 1& provides: Any a,so-+te assignment in /riting +nder the hand of the assignor ))) of any de,t or other -ega- chose in action, of /hich express notice in /riting has ,een given to the de,tor, tr+stee, or other person from /hom the assignor /o+-d have ,een entit-ed to receive or c-aim s+ch de,t or chose in action, sha-- ,e, and ,e deemed to ,e effect+a- in -a/ ))) to pass and transfer the -ega- right to s+ch de,t or chose in action from the date of s+ch notice )))

The expression -ega- chose in action in that section /as said to cover to e*+ita,-e choses as /e-- in FCT v Cverett (1999" 16! C$% 66# at 669, per Dar/ic1 C(, 4tephen, @ason and $a/ of 5roperty (@isce--aneo+s 5rovisions" Act 19=7 (ACT" s !2 5roperty $a/ Act 1996 (M-d" ss 199, &##2 $a/ of 5roperty Act 19! (4A" s 1=2 Conveyancing and $a/ of 5roperty Act 1776 (Tas" s 7 2 5roperty $a/ Act 19=7 (<ic" s 1!62 5roperty $a/ Act 19 9 ('A" s &#)
6

16 'i-son (() An assignment of an e*+ita,-e chose /o+-d not need to comp-y strict-y /ith s 1&) That section provides a method /here,y e*+ita,-e choses in action may ,e assigned, ,+t it is not mandatory for the effective assignment of e*+ita,-e interests in e*+ity, as it is for the va-id assignment of -ega- choses at -a/) !)!1 D&*/#n)+ #n t,& 1or2 o1 &"/*r*t#on+ o1 tr!+t !)!& $3.22% This, of co+rse, invo-ves the creation of a s+,:tr+st, as the interest he-d in the first p-ace is e*+ita,-e) The genera- -a/ test for the va-idity of assignments in this form is simi-ar to that /hich app-ies to dec-arations of tr+st of -ega- property: the assignor m+st indicate an intention to immediate-y and thenceforth ho-d the property on tr+st for the intended ,eneficiary) 4pecific /ords need not ,e +sed provided the intention is c-ear: %ichards v >e-,ridge (1796" $% 17 C* 112 nor is it essentia- for the dec-aration to ,e comm+nicated to the assignee: 4tanding v Do/ring (177=" !1 Ch > &7&) 4ection 9 of the Conveeyancing Act defines OdispositionP as inc-+ding Odec-aration of tr+stP so that a disposition of a s+,sisting e*+ita,-e interest ,y this method /o+-d need to ,e in /riting +nder s &!C(1"(c") !)!6 D&*/#n)+ #n t,& 1or2 o1 #r&"t#on+ to t,& tr!+t&& =*> !)!= $3.23% The genera- -a/ test for assignments in this form /as set ,y >ixon ( in 8o/ard:4mith, at &&: provided the ,eneficiary is s+i E+ris and entit-ed to a ,eneficia- interest corresponding to the f+-- -ega- interest, he or she may impose a ne/ o,Eect on the tr+stee, ,y a vo-+ntary disposition /hich may ,e effected ,y the comm+nication to the tr+stee of a direction, intended to ,e ,inding on him, thencefor/ard to ho-d the tr+st property +pon tr+st for the donee) D+t it m+st ,e a direction, and not a mere a+thority revoca,-e +nti- acted +pon) 4+ch an a+thority is not in itse-f an assignment, a-tho+gh it may res+-t in the transfer of an e*+ita,-e interest) 0f the direction does not amo+nt to an immediate and irrevoca,-e assignment, and it is not acted on prior to the death of the assignor, the a+thority /i-- ,e revo1ed ,y death: 5ar1er B 5ar1er v To &*/ -#t, t,& &'!#t*./& &+t*t&.

17 $edsham G1977H 'A% !&) Assignments in the form of directions to the tr+stee to dea- /ith the e*+ita,-e estate, if intended to ta1e effect immediate-y, m+st ,e in /riting:

0n Arey v 0%C G19 #H AC 1, a @r 8+nter transferred shares to certain nominees and -ater gave them an ora- direction to ho-d the shares thereafter on tr+st, in a n+m,er of parce-s, for his present and f+t+re grandchi-dren /ith the intent that he ,e exc-+ded from a-- rights or ,enefit to or in the shares) >ec-arations of tr+st /ere s+,se*+ent-y exec+ted ac1no/-edging the ne/ tr+sts) The dec-arations /ere assessed for stamp d+ty as vo-+ntary dispositions) The tr+stees appea-ed against that assessment arg+ing that 8+nters interest had ,een disposed of ,y the ora- direction and the /ritten dec-arations simp-y noted tr+sts to /hich the shares /ere a-ready s+,Eect) 0t /as he-d that 8+nters ora- direction /as a disposition of a s+,sisting e*+ita,-e interest and th+s ineffective /itho+t /riting) Th+s, the -ater dec-aration did effect the disposition of the ,eneficia- interest in the shares and /as -ia,-e to the d+ty) !)! =.> To &*/ -#t, t,& /&)*/ &+t*t& !)!9 $3.27% The -a/ on this topic t+rns on the cr+cia-, if c+rio+s, case of <anderve-- v 0%C G19 9H & AC &91 in /hich the *+estion arose /hether s+ch an assignment had to ,e in /riting to satisfy the $a/ of 5roperty Act 19&= (FJ", s =!(1"(c", the Cng-ish e*+iva-ent of the Conveyancing Act 1919 (N4'", s &!C(1"(c") ;n 16 Novem,er 19=7 the Nationa- 5rovincia- Dan1 /as registered as the o/ner of a parce- of 1##,### shares in a private company, <anderve-- 5rod+cts $td, /hich shares the ,an1 he-d on tr+st for @r <anderve--) The shares he-d rights to dividend ,+t no voting rights and /ere pregnant /ith dividend) <anderve--, thro+gh an advisor, directed the ,an1 to transfer the shares to the %oya- Co--ege of 4+rgeons) The ,an1 exec+ted a deed of transfer of the shares in ,-an1 and handed the deed to <anderve--s so-icitor /ho handed it on to the Co--ege of 4+rgeons, together /ith a f+rther deed giving a tr+stee company associated /ith <anderve-- an option to p+rchase the shares ,ac1 for Q=,###) The Co--ege of 4+rgeons exec+ted ,oth deeds and ret+rned them to <anderve--s advisors /ho

18 registered the transfer of shares in the ,oo1s of <anderve-- 5rod+cts $td) ;ver the next t/o years dividends tota--ing Q&=#,### /ere dec-ared and paid to the Co--ege) At the end of those t/o years tr+stees for <anderve-- exercised the option to rep+rchase the shares for Q=###) <anderve-- /as assessed for s+rtax on the dividends and s+,mitted that it /as income from property of /hich he had a,so-+te-y divested himse-f) The reven+e arg+ed, inter a-ia, that ,eca+se there /as no /ritten disposition of <anderve--s e*+ita,-e interest there /as no effective assignment of the ,eneficia- interest in the shares) The 8o+se of $ords he-d that s =!(1"(c" did not app-y to this assignment) $ord %eid, at !#9, simp-y said that the arg+ment of the %even+e Commissioners that <anderve-- had not divested himse-f of his e*+ita,-e interest in the shares ,eca+se of s =!c(1"(c" /as +nso+nd, /itho+t giving reasons) $ord >onovan, at !19, seemed to ,e of the vie/ that a transfer of the -ega- estate exec+ted ,y a tr+stee +nder direction from a ,eneficiary /ho intended there,y to transfer his ,eneficia- interest as /e-- effected a disposition of the /ho-e -ega- and ,eneficiainterest) 0n s+ch a case, in his $ordships vie/, there /as no room for the operation of s =!c(1"(c") $ord FpEohn, /ith /hom $ord 5earce agreed, said, at !11, that the section had ,een invo1ed in Arey and ;+ghtred v 0%C G19 #H AC &# ,eca+se there the ,eneficia- o/ner /as dea-ing on-y /ith the e*+ita,-e estate) That /as +nderstanda,-e, in his $ordships vie/ ,eca+se, the o,Eect of the section, as /e-- as the o,Eect of the o-d 4tat+te of Fra+ds, is to prevent hidden ora- transactions in e*+ita,-e interests in fra+d of those tr+-y entit-ed, ma1ing it diffic+-t if not impossi,-e to ascertain /ho are in tr+th his ,eneficiaries) D+t /here the ,eneficia- o/ner o/ns the /ho-e ,eneficia- estate and is in a position to give directions to his ,are tr+stee /ith regard to the -ega- as /e-- as the e*+ita,-e estate there can ,e no possi,-e gro+nd for invo1ing the section /here the ,eneficia- o/ner /ants to dea- /ith the -ega- estate as /e-- as the e*+ita,-e estate) $ord 'i-,erforce, at !!#, said that <anderve-- had done everything in his po/er to transfer the -ega- interest, /ith an intention to give to the Co--ege and that, th+s, no separate transfer of the e*+ita,-e interest /as ever needed) !)!7

19 $3.28% The res+-t in <anderve-- seems satisfactory on the facts, a-tho+gh @r <anderve-- /as sti-- fo+nd -ia,-e to s+rtax ,eca+se of the option vested in the tr+stee company) The E+dgments in the case are, ho/ever, nota,-e for their -ac1 of proper ana-ysis of the mechanics of the assignment) At no stage in any E+dgment is any exp-anation given as to ho/, -et a-one /hen, the ,eneficia- interest in the shares passed from <anderve--) 0f the transaction is ana-ysed c-ose-y it m+st sho/ the fo--o/ing: (a" The ,an1 co+-d not give /hat it did not have and a-- it had /as a ,are -ega- tit-e) (," 0t m+st fo--o/, the transaction ,eing vo-+ntary, that the assignor, <anderve--, co+-d have revo1ed it at any time ,efore it /as comp-ete at -a/) = That m+st have ,een the case even after the Co--ege had ,een handed the deed of transfer) (c" The %oyaCo--ege of 4+rgeons /as not armed /ith the means of comp-eting the gift ,eca+se it /as a-/ays intended that the transfer ,e ret+rned to <anderve--s so-icitor2 it is a-so the case that a-the Co--ege might have ,een armed /ith /as a transfer that /o+-d give it the ,an1s tit-e, the ,are -ega- tit-e 3 not a,so-+te -ega- and ,eneficia- o/nership) (d" Cven after registration of the shares in the name of the Co--ege it /as open to <anderve-- to advise them that they he-d the shares as tr+stees) The ,an1 did not ,ecome a,so-+te o/ner of the shares in some /ay ,efore their registration in the name of the Co--ege) As the -ega- tit-e, therefore, had to vest in the assignee ,efore the assignment /as comp-ete, e*+ita,-e tit-e co+-d on-y pass ,y /ay of a re-ease ,y the assignor at or after that time) 0n that case, it is arg+a,-e that <anderve-- cannot ,e good -a/ in Ne/ 4o+th 'a-es /here re-ease is inc-+ded in the definition of disposition in s 9 of the Conveyancing Act) 34 7 T,& R!/& #n Stron) 3 B#r

$3.26% There are three maEor exceptions to the maxim that e*+ity /i-- not perfect an imperfect gift: the doctrine of e*+ita,-e estoppe- (see Chapter 6", donationes mortis ca+sa (see !3= ,e-o/" and the r+-e in 4trong v Dird (1796" $% 17 C* !1=) Fnder that r+-e, /here a donor attempts to ma1e a present gift of -ega- property /hich is imperfect as a gift and the donee is
=

0,id, paras G9& H3G9&9H)

A-tho+gh the fo+ndation case /as concerned /ith e*+itys acceptance of the common r+-e concerning re-eases of de,ts: see @A B $ para G&9#7H)

20 -ater named as exec+tor, or as one of the exec+tors, in the /i-- of the donor, and the donor maintained the intention to ma1e the gift +nti- death, then e*+ity /i-- regard the gift as having ,een comp-eted on the death of the donor) 0t /as do+,ted /hether the r+-e extends to interests in -and: Cope v Jeene (19 7" 117 C$% 12 except perhaps in systems /here the -and passes to the exec+tor ,y stat+te: %e @+-ho--and (191 " !! 'N (N4'" 79)9 Those do+,ts have ,een dismissed, at -east in Ne/ 4o+th 'a-es) 0n DenEamin v $eicher (1997" 6= N4'$% !79 Cohen ( he-d that the r+-e app-ied to a gift of -and) 0n Apri- 199& Jatarina $eicher p+rchased a Torrens tit-e home +nit in her o/n name and /ith her o/n f+nds, for the ,enefit of her granda+ghter) The +nit ,ecame a home for the grandda+ghter and her chi-dren) The grandmother p+rchased the +nit in that /ay ,eca+se she /as concerned that the +nit might ,ecome the s+,Eect of a fami-y -a/ property c-aim ,y the grandda+ghters second h+s,and) Cohen ( accepted that the grandmother had expressed an intention that the +nit /as the grandda+ghters, in effect, and /o+-d ,e transferred to her at some time in the f+t+re) @rs $eicher s+ffered a stro1e in @arch 1996 and died in Novem,er of that year /itho+t exec+ting a transfer of the +nit) 4he maintained her intention that the +nit /as the grandda+ghters +nti- her death) The grandda+ghter separated from her second h+s,and in 1996 and they /ere divorced in 199 ) The grandda+ghter /as named as exec+tor of her grandmothers /i-- and o,tained pro,ate of that /i-- after @rs $eichers death) There /as no /ritten memorand+m of the intended gift) Cohen ( dre/ s+pport for his app-ication of the %+-e in 4trong v Dird from the 8igh Co+rts decision in @atthe/s v @atthe/s (191!" 19 C$% 7, /hich concerned a p+rported gift ,y a farmer to his son of certain -and, the son having ,een named as exec+tor of the fathers estate) The maEority fo+nd that the father had not he-d the re*+isite intention to ma1e a gift of the -and at the time he a--o/ed the son onto it in the first p-ace) 0saacs ( and 5o/ers ( disagreed /ith the maEority on that iss+e and /ere prepared to +pho-d the decision ,e-o/, /hich had he-d that the %+-e in 4trong v Dird app-ied) !)6!
9

@A B $ para G&9# H)

21 34 8 Don*t#on&+ Mort#+ C*!+* $3.27% 'here a person, in contemp-ation of death, ma1es a gift of property conditiona- +pon his or her death, in the sense that it can ,e retrieved if the donor recovers from i--ness or other peri-, and de-ivers the property /hich is the s+,Eect of the gift, or its indicia of tit-e to the donee prior to death, then the gift /i-- ,e comp-eted ,y the death of the donor s+,Eect to the odd r+-e that the property /i-- ,e avai-a,-e to satisfy the deceaseds creditors if there is a shortfa-- in the rest of the estate: 4mith v Casen (1917" 1 5 'ms 6# ) There are three e-ements /hich m+st ,e satisfied to esta,-ish a va-id donatio, 4en v 8ead-ey, G1991H & A-- C% ! at !9, per No+rse $(: 1) The gift m+st ,e made in contemp-ation, a-tho+gh not necessari-y in

expectation, of impending death2 &) The gift m+st ,e made on condition that it is to ,e a,so-+te and perfected on-y

on the donors death, ,eing revoca,-e +nti- then2 !) There m+st ,e a de-ivery of the s+,Eect matter of the gift, or the essentia- indicia

of tit-e to that s+,Eect matter amo+nting to a parting /ith dominion over, and not mere physica- possession of the s+,Eect matter of the gift) !)6= $3.2;% Traditiona--y, rea- property has not ,een considered capa,-e of ,eing the s+,Eect of donationes mortis ca+sa in A+stra-ia: 'atts v 5+,-ic Tr+stee (1969" =# 4% (N4'" 1!#2 Day-iss v 5+,-ic Tr+stee (1977" 1& N4'$% =6#, nor in Canada: %e 4orenson and 4orenson (1999" 9# >$% (!d" & ) 0n the case of Torrens tit-e -and it is diffic+-t to see ho/ a gift of the certificate of tit-e a-one co+-d act as a donatio in vie/ of the decision of the 8igh Co+rt in Corin v 5atton (199#"1 9 C$% =6# (see G!)1!H3G!)&#H") 8o/ever, the vie/ that the princip-e of donatio mortis ca+sa does not extend to -and re-ies on dicta ,y $ord C-don in >+ffie-d v C-/es (17&9" 1 D-igh (N4" 699 at =!62 6 C% 9=9 at 99&2 G17&63!6H A-- C% &69 and the a,sence of any c-ear Cng-ish a+thority for or against that vie/) A different opinion no/ prevai-s in Cng-and /here the Co+rt of Appea- he-d in 4en v 8ead-ey G1991H & A-- C% ! that there co+-d ,e a donatio mortis ca+sa of -and, in that case ,y constr+ctive de-ivery of the tit-e deeds to +nregistered -and)

22

$3.2<% @r 8ead-eyIs app-ication for -eave to appea- to the 8o+se of $ords /as ref+sed) 4en v 8ead-ey m+st th+s ,e recognised as a conc-+sive statement of the -a/ on this point in Cng-and) 0n Day-iss v 5+,-ic Tr+stee (1977" 1& N4'$% =6#, Needham ( noted that there /as then no c-ear Cng-ish a+thority on the point and conc-+ded that, Cng-ish -a/ has not a--o/ed donatio mortis ca+sa of rea- property even tho+gh he co+-d not identify the reason /hy it had not done so) 8aving come to that conc-+sion Needham ( fo+nd it impossi,-e to extend the doctrine and he-d that there /as no E+stification for the extension of the anoma-o+s princip-e of donatio mortis ca+sa ,eyond the scope a--o/ed to it ,y adE+dged cases and a+thorities) No/ that Cng-ish -a/ has recognised a donatio mortis ca+sa of rea- property, it /o+-d seem, on the -ogic emp-oyed in Day-iss, that A+stra-ian co+rts /o+-d have to do -i1e/ise, +n-ess they can come +p /ith a ne/ reason for not extending the doctrine to gifts of -and) The o-d reason . that Cng-ish co+rts have never done it . has gone)

34 6

A++#)n2&nt+ 1or 5*/!&3)67

$3.30% An assignment for va-+a,-e consideration of property capa,-e of ,eing assigned, /hether -ega- or e*+ita,-e, /i-- effect a transfer of that property in e*+ity /hen the consideration is paid or exec+ted not/ithstanding any fai-+re to comp-y /ith stat+tory or other forma- re*+irements for s+ch an assignment: 8o-royd v @arsha-- (17 &" 1# 8$C 1912 11 C% 9992 Tai-,y v ;fficia- %eceiver (1777" 1! App Cas =&!) 'hi-e a contract remains exec+tory, that is, simp-y an exchange of m+t+a- promises, the position of the assignee is not as so-id) 0t is common in the cases to find the interest of the assignee at the point of contract, ,+t ,efore consideration has ,een provided, descri,ed as an e*+ita,-e interest /ith the vendor ho-ding the property as constr+ctive tr+stee for the assignee pending comp-etion of the contract: 5aine v @e--er (17#1" <es !692 4ha/ v Foster (179&" $% = 8$ !&1 at !!7, per $ord Cairns2 a-tho+gh 4ir Aeorge (esse- @% in $ysaght v Cd/ards (179 " & Ch > 699 at =#9, he-d that this constr+ctive tr+st on-y arose /hen the tit-e /as made o+t ,y the vendor, or accepted ,y the p+rchaser, and that a tr+st s+, modo

23 existed prior to that and after contract) Neither description is partic+-ar-y he-pf+-) 'hi-e it may ,e appropriate to say that the p+rchaser has some interest, even an e*+ity in the s+,Eect property +pon contract, his or her rights remain conditiona- +n-ess and +nti- the consideration is provided) 0n the meantime the vendor cannot ,e said to ho-d the property +nder any fid+ciary o,-igation) The interest of the p+rchaser in the property m+st ,e meas+red against his or her right, if any, to o,tain a decree of specific performance) That /i-- depend +pon /hether the contract is one of /hich specific performance can ,e decreed, that is, not a contract for /hich damages /o+-d ,e an ade*+ate remedy for any ,reach, and +pon the /i--ingness and a,i-ity of the p+rchaser to perform his or her part of the ,argain ,y exec+ting the consideration re*+ired ,y the contract) To say the vendor ho-ds as constr+ctive tr+stee for the p+rchaser +pon contract pending comp-etion is something of an a,+se of that expression) >espite the opinions expressed in the o-der a+thorities mentioned a,ove, the on-y c-ear point at /hich s+ch a constr+ctive tr+st co+-d ,e said to arise is on payment of the p+rchase price: Chang v %egistrar of Tit-es (199 " 1!9 C$% 199 at 176, per @ason () ;nce the consideration has ,een paid or provided e*+ity /i-- regard the assignment as comp-ete ,y virt+e of the maxim that e*+ity regards as done that /hich o+ght to ,e done)7 'hi-e e*+ity /i-- not +pho-d an assignment of a ,are right of action, it /i-- recognise an assignment of a present chose in action or of f+t+re property, s+ch as the proceeds anticipated from the prosec+tion of some chose in action, that is, the money to /hich a party /as or might ,ecome entit-ed from certain proceedings for s-ander: A-egg v Drom-ey G191&H ! JD 696) $3.31% An agreement to assign an e*+ita,-e interest constit+tes, prima facie, a disposition of a s+,sisting e*+ita,-e interest and m+st, therefore, ,e in /riting) That /as certain-y the vie/ of the 8igh Co+rt in Adamson v 8ayes (199!" 1!# C$% &9 , /hich invo-ved an ora- agreement dea-ing /ith e*+ita,-e interests in minera- c-aims in 'estern A+stra-ia) Three farmers, Adamson, 8ayes and Free,airn pegged o+t a n+m,er of c-aims on ,eha-f of themse-ves and others) The -atter t/o /anted to exp-oit the c-aims /hi-e Adamson /ished to se-- his interest) 0t /as agreed ,et/een the three to poo- their vario+s c-aims in
7

0,id, para G #9H)

24 proportions /hich gave Adamson = per cent /hi-e the other t/o he-d the ,a-ance of 66 per cent) 0n addition Adamson gave the others an option to ac*+ire his interests in certain circ+mstances) The t/o nominated a p+rchaser ,+t Adamson ref+sed to convey) 8ayes and Free,airn so+ght specific performance or, in the a-ternative, damages) Adamson arg+ed that the agreement, as it /as not in /riting, /as +nenforcea,-e) 0t /as he-d that the minerac-aims /ere -and ,y virt+e of s 9 of the @ining Act 19#6391 ('A" and that the agreement /as +nenforcea,-e for /ant of /riting ,eca+se of the provisions of s !6(1" of the 5roperty $a/ Act 19 9 ('A", /hich is identica- to s &!C(1" of the Ne/ 4o+th 'a-es Act) @enNies ( said, at &9&3!, that either the poo-ing arrangement invo-ved the s+,stit+tion of ne/ tr+sts for o-d and, th+s, s !6(1"(," app-ied or, as the transaction concerned the disposition of e*+ita,-e interests in -and, s !6(1"(c" app-ied to stri1e the transaction do/n) 0n doing so he said that s !6(1"(c" /as -imited to the disposition of e*+ita,-e interests in -and) 'a-sh ( a-so he-d that this transaction /as +nenforcea,-e ,+t said, at &99, that s !6(1" (a" app-ied to e*+ita,-e interests in -and) Ai,,s ( agreed /ith that vie/ and specifica--y stated, at !#&, that s !6(1"(c" /as not confined to dispositions of e*+ita,-e interests in -and, adopting the Cng-ish decisions of Arey v 0%C G19 #H AC 12 ;+ghtred v 0%C G19 #H AC &# and <anderve-- v 0%C G19 9H & AC &91 in /hich the e*+iva-ent provision to s !6(1"(c" had ,een he-d to app-y to dispositions of e*+ita,-e interests in shares) 4tephen ( agreed /ith the -atter t/o, ho-ding that either s !6(1"(a" or s !6(1"(," app-ied to render this transaction +nenforcea,-e) !)=! $3.32% The agreement in Adamson v 8ayes had not progressed ,eyond an exchange of promises so that it /as not open to 8ayes and Free,airn to arg+e that Adamson he-d his share as constr+ctive tr+stee for them) 4ection &!C(&" a--o/s scope for s+ch an arg+ment, ,y specifica--y excepting res+-ting and constr+ctive tr+sts from the operation of s+,:section (1") Fnder s &!C(&" proof of the existence of a constr+ctive tr+st /o+-d seem to negate the necessity for /riting other/ise re*+ired ,y s &!C(1", a-tho+gh there is a+thority /hich /o+-d s+ggest other/ise) 0n ;+ghtred v 0%C G19 #H AC &# , a parce- of &##,### shares /as he-d ,y tr+stees in favo+r of @rs ;+ghtred for -ife /ith remainder to her son, 5eter) @rs ;+ghtred a-so o/ned

25 another 9&,9## shares in her o/n name) ;n 17 (+ne 19= the mother and son agreed, ora--y, that on & (+ne @rs ;+ghtred /o+-d transfer her 9&,9## shares to 5eter and that he /o+-d ma1e her a,so-+te ,eneficia- o/ner of the &##,### shares) According-y, on & (+ne three doc+ments /ere exec+ted: (a" (," (c" A >eed of %e-ease of 5eters interest in remainder in the &##,### shares2 A transfer from @rs ;+ghtred to 5eters nominees of the 9&,9## shares2 A transfer from the tr+stees to @rs ;+ghtred of the &##,### shares)

The -ast of these doc+ments /as charged /ith ad va-orem stamp d+ty as a conveyance or transfer on sa-e /ithin the meaning of that expression in the Finance Act 1796 (FJ") The 0%C c-aimed that the agreement of 17 (+ne /as ineffective for /ant of /riting ,eca+se of s =!(1 "(c" of the $a/ of 5roperty Act 19&= (FJ", the e*+iva-ent of s &!c(1"(c", and that the transfer on & (+ne disposed of 5eters e*+ita,-e interest in remainder) 0t /as he-d, ,y FpEohn ( at first instance, G19=7H 1 Ch !7!, that the agreement of 17 (+ne gave rise to a constr+ctive tr+st in @rs ;+ghtreds favo+r of 5eters interest in remainder in the &##,### shares and that nothing remained to ,e transferred -ater) That decision /as overt+rned ,y the Co+rt of Appea-, G19=7H 1 Ch 97, on the gro+nd that the -ater ass+rance constit+ted the comp-etion of the ora- ,argain and th+s fe-- /ithin the meaning of conveyance or transfer +pon sa-e) 8o/ever, the co+rt a-so indicated that it did not accept FpEohn (s vie/ that 5eters interest had passed to @rs ;+ghtred ,efore & (+ne) The 8o+se of $ords +phe-d the decision of the Co+rt of Appea- ,y a maEority of ! to &) $ord %adc-iffe agreed /ith FpEohn ( and he-d that 5eter ,ecame a tr+stee s+, modo of his interest in favo+r of his mother on 17 (+ne as the s+,Eect matter of the agreement /as property of /hich specific performance /o+-d norma--y ,e decreed and th+s s =!(1" /as overridden ,y s =!(&") Fpon the transfer to 5eter of @rs ;+ghtreds 9&,9## shares on & (+ne she ,ecame effective o/ner of a-- o+tstanding e*+ita,-e interests in the &##,### shares) No more needed to ,e done to confirm her rights) The transfer to her from the tr+stees /as mere-y the /inding +p of the tr+st, /hich @rs ;+ghtred need not have done) $ord Cohen a-so in the minority, said that the transfer from the tr+stees to @rs ;+ghtred co+-d not have conveyed the e*+ita,-e interest to her as the tr+stees had no s+ch interest to convey) 8is $ordship spec+-ated that there might have ,een no doc+ment transferring the

26 e*+ita,-e interest and he-d that @rs ;+ghtreds a,so-+te entit-ement to the &##,### shares arose not ,eca+se of any transfer ,+t ,eca+se 5eter, having ,ecome a constr+ctive tr+stee of his interest in favo+r of his mother, co+-d not disp+te her tit-e once his nominees had received the 9&,9## shares on & (+ne) $ord >enning, in the maEority, he-d the transfer to ,e a transfer or conveyance on sa-e, as a transfer a+thorised ,y 5eter /hich -ed to @rs ;+ghtred ac*+iring the reversionary interest as effective-y as if 5eter had conveyed it direct-y to her) That might have ,een eno+gh ,+t $ord >enning a-so said that he did not thin1 the ora- agreement /as effective to transfer 5eters interest ,eca+se s =!(1" c-ear-y made /riting necessary to effect a transfer and s =!(&" did not do a/ay /ith that necessity) $ord (en1ins, /ith /hom $ord Jeith conc+rred /itho+t comment, fo+nd it +nnecessary to decide the tr+e meaning of s =!(1", -et a-one the effect +pon it of s =!(&") 0n his vie/, the mere existence of a constr+ctive tr+st in favo+r of a p+rchaser +nder a contract prior to comp-etion had never prevented a s+,se*+ent transfer, in performance of the contract, from constit+ting a conveyance or transfer on sa-e for the p+rposes of stamp d+ty) !)=6 $3.33% ;+ghtreds case is c-ear-y +nsatisfactory as a disc+ssion of the iss+es s+rro+nding s &!C and its effect on agreements to assign e*+ita,-e interests for va-+a,-e consideration) 0f it p+rports to stand as a+thority for the proposition that the re*+irement of /riting +nder s &!C(1" overrides the exception of res+-ting and constr+ctive tr+sts a--o/ed ,y s &!C(&", then it is simp-y /rong as a matter of princip-e) ;f the mem,ers of the 8o+se of $ords /ho act+a--y addressed that *+estion, there /as a maEority of & to 1 in favo+r of the vie/ that a constr+ctive tr+st arising +nder s+ch an agreement /o+-d o,viate the need for /riting in comp-iance /ith s &!c(1", a-tho+gh there /as some divergence of opinion as to /hen that tr+st arose and as to its nat+re) $ord %adc-iffe seemed /i--ing to recognise the tr+st as ear-y as the agreement of 17 (+ne /hi-e $ord Cohen concentrated on the point at /hich the consideration /as exec+ted on the part of the assignee, in other /ords, /hen the 9&,9## shares /ere transferred ,y @rs ;+ghtred to 5eters nominees) $ord >ennings vie/ that the r+-e set ,y s =!(1" governs the exception contained in s =!(&" is contrary to the r+-es of stat+tory interpretation and cannot stand as a matter of -a/ or -ogic) C+rio+s

27 tho+gh the idea might ,e, /e cannot pres+me that o+r -a/s /ere /ritten ,y $e/is Carro--) The facts of ;+ghtred are a-so +nsatisfactory in that the doc+ment /hich -ay at the heart of the disp+te, the transfer from the tr+stees to @rs ;+ghtred, need never have ,een exec+ted) The deed of re-ease of the sons interest might sti-- have ,een assessed for d+ty) That co+-d have prod+ced a more +sef+- disc+ssion of the iss+e) D+t the re-ease co+-d on-y have conveyed the ,are -ega- tit-e of the tr+stee, an interest of nomina- va-+e on-y) The iss+es /hich arose in ;+ghtreds case /ere artificia- in many respects) They /ere the prod+ct of an assessment +nder a taxing stat+te /hich imposed stamp d+ty on doc+ments effecting the transfer of va-+a,-e property) ;+ghtred /as not a disp+te ,et/een assignor and assignee as to /hich of them had tr+e tit-e) 0n s+ch a case the iss+e /o+-d not t+rn on the meaning of s &!c and the need or other/ise for /riting) The cr+cia*+estion /o+-d ,e determined ,y the doctrine of part performance or the princip-es of e*+ita,-e estoppe-)

34 7

A++#)n2&nt+ o1 E!t!r& 6ro0&rt(

$3.37% Neither the common -a/ nor e*+ity /i-- recognise any p+rported vo-+ntary disposition of property not present-y he-d ,+t /hich /i-- ,e or may ,e ac*+ired ,y the assignor in the f+t+re) 8o/ever, e*+ity /i-- recognise an assignment of s+ch f+t+re property provided it is made for va-+e) Any s+ch ,argain /i-- ,e constr+ed as an agreement to assign the thing /hen it is ac*+ired: Norman v FCT (19 !" 1#9 C$% 9 at &6, per 'indeyer () As >eane (, then in the Federa- Co+rt, p+t it in FCT v Cverett (1997" !7 F$% & at =#2 &1 A$% &= at 6!36: ))) a p+rported assignment of a mere expectancy (in the sense of the chance of ,ecoming entit-ed +nder the /i-- or intestacy of a person /ho is sti-- -iving" or of property to ,e ac*+ired in the f+t+re, is inoperative as an assignment, and has no effect +n-ess made for va-+a,-e consideration) 0f there ,e consideration, it /i-- operate as an agreement to assign the property /hen ac*+ired, or to ho-d it in tr+st (the -atter if the /ho-e of the consideration has ,een satisfied" and this agreement /i-- ,e ,inding on the parties as from its date and ,inding on the property in e*+ity (a-tho+gh not at common -a/", if and /hen it is ac*+ired ,y the assignor, if it is of s+ch a nat+re and so descri,ed as to ,e capa,-e of ,eing identified) 0n the interva- ,et/een the ma1ing of the agreement and the ac*+isition of the

28 property ,y the assignor, the interest of the assignee is not contract+a- mere-y, ,+t he has, as ,et/een himse-f and the assignor, a prospective interest in the property to ,e ac*+ired /hich has some of the incidents of a proprietary right) !)= $3.38% That princip-e is straightfor/ard eno+gh ,+t there are fo+r areas of diffic+-ty in app-ying it) The first concerns the distinction ,et/een present and f+t+re property, partic+-ar-y ,et/een present rights /hich prod+ce some ,enefit in the f+t+re and that f+t+re ,enefit) The second *+estion dea-s /ith the ,asis of this princip-e and /hether s+ch agreements are specifica--y enforcea,-e per se or /hether specific performance is on-y avai-a,-e if the s+,Eect matter of the agreement is property /hich /o+-d norma--y attract that remedy) The third is connected /ith the second and concerns the iss+e /hether these r+-es app-y to contracts for the sa-e of goods or /hether the 4a-es of Aoods Acts of the vario+s 4tates codify the -a/ governing s+ch agreements) The fo+rth examines the nat+re of the assignees rights ,efore the ac*+isition of the property ,y the assignor, especia--y in cases invo-ving the ,an1r+ptcy of the assignor) T,& #+t#n"t#on .&t-&&n 0r&+&nt *n 1!t!r& 0ro0&rt( !)=9 $3.36% 4ome things are c-ear-y f+t+re property . an interest +nder the /i-- of a person sti--iving: %e $ind G191=H & Ch !6=2 damages /hich might ,e recovered in pending -itigation: A-egg v Drom-ey G191&H ! JD 6962 f+t+re ,oo1 de,ts: Tai-,y v ;fficia- %eceiver (1777"1! App Cas =&!2 roya-ties yet to ,e earned on some -iterary or artistic /or1: %e Tryte- G19=&H & T$% !&2 and s+ch things as copyright in songs not yet /ritten, freight not yet earned, rent to ,e paid +nder a -ease, and interest to ,e paid +nder a mortgage) The -ast t/o indicate the maEor so+rce of diffic+-ty in this area of definition as each represents the prod+ct of some present right) 0n Norman v FCT (19 !" 1#9 C$% 9, a taxpayer ,y a deed p+rported to assign to his /ife certain moneys /hich other/ise /o+-d have ,een receiva,-e ,y him) The items of income covered ,y the deed inc-+ded a-- his right tit-e and interest in and to certain interest to accr+e d+e on a -oan repaya,-e ,y the ,orro/er at /i-- and a-- his right tit-e and interest in

29 and to a-- the ))) dividends /hich might ,e dec-ared on certain shares in p+,-ic companies) 0t /as he-d that ,oth the interest +nder the -oan and the dividends /ere expectancies or possi,i-ities /hich co+-d not ,e assigned /itho+t consideration) 'indeyer ( dissented on the finding as to the interest ho-ding that the assignment /as of a present right to ,e paid interest at a f+t+re date) 0n 4hepherd v FCT (19 =" 11! C$% !7=, @r 4hepherd he-d a patent for certain castors and had granted a -icence for their man+fact+re in ret+rn for the payment of roya-ties of = per cent of the gross sa-e price of the castors) 0n 19=9 he p+rported to assign ,y deed po--, a,so-+te-y and +nconditiona--y, to certain assignees, a-- his right, tit-e and interest in and to an amo+nt e*+a- to ninety per cent+m of the income /hich may accr+e d+ring a period of three years ))) from roya-ties paya,-e +nder the -icence agreement) 8e /as assessed for tax on the amo+nt he had p+rported to assign) The 8igh Co+rt, Dar/ic1 C( and Jitto (, /ith ;/en ( dissenting, he-d that the deed constit+ted an assignment of 9# per cent of 4hepherds present rights and /as therefore an effective assignment) Jitto ( dre/ an ana-ogy ,et/een the existing contract+a- right to receive roya-ties: the tree, and the fr+it: the payments /hich might accr+e to 4hepherd +nder the contract) 8is 8ono+r disting+ished Normans case on the gro+nd that the -oan there co+-d have ,een repaid at any time ma1ing the right to receive interest an expectancy /hereas, in 4hepherd, even tho+gh the man+fact+rer might not se-- or even prod+ce any castors the contract+a- re-ationship, and th+s the right to receive any roya-ties earned, /o+-d end+re for the three years covered ,y the deed po--) !)=7 $3.37% Considering the res+-ts of these t/o cases, the iss+e may simp-y t+rn on the drafting of any doc+ment in *+estion, a-tho+gh the /ording of the assignments in 4hepherd and Norman /as very simi-ar) Jitto ( disting+ished the sit+ation in Normans case from that in 4hepherds, pointing o+t that, in Norman, the contract+a- re-ationship of ,orro/er and -ender co+-d ,e terminated at any time d+ring the re-evant year ,y the ,orro/er, th+s ma1ing it an expectancy) 0n 4hepherd, on the other hand, the contract+a- -icence to man+fact+re castors /o+-d contin+e for three years, /hether any castors /ere prod+ced or not) 'ith respect, that en*+iry seems misconceived and the reasoning of 'indeyer ( in Norman m+st ,e preferred as a matter of -ogic as m+ch as of -a/) The fact that a present right might ,e terminated at any time does not

30 ma1e it any -ess a present right) Dy the same to1en, the possi,i-ity that a present right might not prod+ce any fr+it does not ma1e it an expectancy either) 'hat can it matter that some present right, s+ch as the right to ,e paid interest on money -oaned, may not prove fr+itf+-? That cannot ma1e the present right, or some fraction of it, +nassigna,-e) This m+st ,e disting+ished from a tr+e expectancy, s+ch as an OinterestP in the deceased estate of a person sti-- -iving) 0n that case there is no present right) There may never ,e any right) The p+rported assignoe may predecease the nominated testator) D+t that is entire-y different from a sit+ation in /hich there is an identifia,-e present right) 0f A gives a -ottery tic1et to D it is not an assignment of an expectancy, and th+s void if not made for va-+e, E+st ,eca+se the tic1et might not /in) As Dar/ic1 C( said in 4hepherd, at !9!:

That a promise may not ,e fr+itf+- does not ma1e it incapa,-e of assignment) The fact that a present right might prove ,arren sho+-d not a-ter its character as a present right /hi-e, at the same time, the fact that potentia- income, or some other property not yet ac*+ired ,y the assignor, is certain to come into his or her hands sho+-d not a-ter its character as f+t+re property pending its receipt)

$3.3;% This sort of reasoning /as emp-oyed ,y 8ardie Doys ( in 'i--iams v 0%C G19 =H NK$% !9= in /hich a taxpayer attempted to assign the first Q=## of the net income of a tr+st /hich cond+cted a graNing ,+siness for his ,enefit) 8is 8ono+r he-d that the first Q=## /as a mere expectancy as the tr+st might earn income and it might not) 0n @c$eay v 0%C (19 !" 9 A0T% & =, a p+rported vo-+ntary disposition of a-- the interest d+e +nder a mortgage, even tho+gh that mortgage /as repaya,-e at any time after a certain date, /as fo+nd to ,e va-id) @cCarthy ( he-d that a mortgagees right to receive interest +nder a mortgage /as a present chose in action, even tho+gh the interest /as repaya,-e at some time in the f+t+re) These t/o cases are often presented as examp-es of the diffic+-ties that exist in disting+ishing ,et/een present and f+t+re property) 8o/ever, the degree of +ncertainty /hich s+rro+nds the pro,a,-e ac*+isition of some property or income ,y the assignor cannot decide /hether it is an expectancy or not, E+st as the degree of pro,a,i-ity that some present right /i-- ,ear fr+it is a-so not the appropriate test to determine /hether the interest concerned is present or f+t+re property) The possi,i-ity that a present right

31 might ,e terminated at any time does not magica--y convert it into f+t+re property) The prospect of s+ch a s+dden end may affect the va-+e of the interest, ,+t it cannot convert a present right into after ac*+ired property)