6. Assignment

Question 1

Novation

Answer 1

1) a –> x
2) b –> x

A-X contract replaced with new contract

NOT A TRANSFER - A’s right is not handed to B (it is a NEW MATCHING RIGHT created but effect is like a transfer)

• consent of everyone required
• B must provide consideration
• B gets new rights directly against X
• new contract might impose duties on B to X

Question 2

Contract (Rights of Third Parties) Act 1999

Answer 2

1) a –> x
2) a –> x, b–> x

X makes contractual promise to A that payment will be made to B

B gets direct statutory claim against X

NO duties imposed on B

B does not need to provide consideration

Question 3

Acknowledgement

Answer 3

1) a –> x
2) b –> x

If X holds specific fund from which X’s debt to A must be satisfied, A can instruct X to pay debt due from found to B

If X agrees, B can bring direct claim against X

B GAINS NEW RIGHTS DIRECTLY AGAINST X

B doesn’t need to provide consideration

X must be involved so it is hard to do this globally

Question 4

Shamia v Joory

Answer 4

acknowledgement applied even though X didn’t hold a specific fund

BUT VERY hard to justify

Question 5

Declaration of Trust

Answer 5

A declares he holds contractual right to payment against X on trust for B

• consent of X not required
• b doesn’t need to provide consideration
• B doesn’t gain new right against X
• but B can force A to sue X by joining A as defendant

NOT A TRANSFER

Question 6

common law assignment

Answer 6

basic rule: choses in action cannot be transfered

exception:

• debt owed to the crown
• debts physically embodied by negotiable instruments
• registered company shares and debentures

Question 7

why no CL assignment

Answer 7

1) worry about 3P interfering with causes in action

2) fundamental nature of contractual rights (Chi Ho Tham)

Question 8

Re McArdle

Answer 8

B does not need to provide consideration for equitable assignment

Question 9

Brandt’s Son v Dulop Rubber (general)

Answer 9

A does not need to use the word “assignment”

Easy to express intention to make immediate transfer of benefit of right to B

Question 10

Gorringe v Irwell

Answer 10

no need for notice for valid equitable assignment

Question 11

Brandt’s Son v Dulop Rubber (acquiring rights)

Answer 11

B DOES NOT acquire a direct claim against X

B must join A to bring an action

but it was fine here (EXCEPTIONAL CASE) because no one raised this until it got to HL

Question 12

Roberts v Gill

Answer 12

Lord Collins - unless it is an exceptional case (like Brandt’s) B must join A to sue X

• requirement is NOT merely a procedural one
• it is substantive (A is a bare trustee)

Question 13

MH Smith v DL Mainwaring

Answer 13

subrogation case

• asserting A’s right so B must join A
• if A doesn’t exist anymore = no claim (A must be brought back to life)
• requirement not just procedural

Question 14

Effect of EA

Answer 14

1) B does not acquire direct claim against X
2) if X has not received notice of assignment, X will be discharged from X’s debt if X pays A
3) if A goes insolvent, A’s right against X is not available to A’s unsecured creditors (Holt v Heatherfield)

Question 15

valid SA:

Answer 15

one - assignment

two - absolute (whole of A’s right)

three - in writing signed by A

four - express notice in writing to X

Question 16

result of SA

Answer 16

from date of notice:

• B gets a claim directly against X
• A loses A’s rights against X

B is subject to prior equities affecting B’s right

Question 17

Torkington v Mcgee

Answer 17

s.136 is “merely machinery”

being able to sue = procedural benefit

Question 18

Durham Bros v Robertsom

Answer 18

assignment must be absolute for SA

ASSIGNMENT BY WAY OF MORTGAGE = fine

• entire interest of A
• when A redeems, transfer back to A from B under s.136 requires notice

ASSIGNMENT BY WAY OF CHARGE = not fine
- when B terminates right when A’s secured duty is performed, X might be unaware

ASSIGNMENT OF PART OF DEBT = NOT FINE
- X exposed to multiple actions with risk of conflicting decisions

Question 19

Curran v Newark Cinemas

Answer 19

same document can be written notice of X and writing signed by A

Question 20

Dearle v Hall

Answer 20

first in time = priority provided equities are equal

• if notice is given, equities are not equal (equity favours the vigilant)
• SA subject to this too so first in line can have priority over SA (unless SA gives notice)

CRUCIAL FACTOR = NOTICE (not whether statutory or equitable assignment)

Question 21

compaq computer

Answer 21

confirmed dearie v hall

even if 2nd assignment is SA

helps confirm SA is just EA plus mechanism

Question 22

Dawson v GN & City Railway

Answer 22

NO ADDITIONAL LIABILITY ON X

• B cannot recover for additional loss suffered as a result of trade carried out by B (but not by A)
• assignment does not increase burden on X

Question 23

Linden Gardens (HL case)

Answer 23

Staughton LJ (CA);

B cannot recover more than A could have if assignment didn’t happen and transfer didn’t happen

X cannot be in a worse position

Question 24

Offer-Hoar v Larkstone

Answer 24

X cannot rely on assignment to escape liability for breach

X taking advantage of Dawson (said A not suffering because B sold land to B)

X’s liability =measured to A on assumption of no assignment (not just A now)

Question 25

Young v Kitchen

Answer 25

if X's claim against A arises out of the same contract as assigned debt, X can rely on that claim

Question 26

Business Computers v Anglo-African

Answer 26

if X's claim arose out of different circumstances, X can rely on it against B if claim arose before notice of assignment given to X

Question 27

Noakes v Doncaster

Answer 27

can't assign employment contracts (inherently non-assignable)

Question 28

Don King v Warren (inherently non-assignable)

Answer 28

can't assign contracts involving personal confidence (e.g. managing contracts/licensing) it is inherently non-assignable

Question 29

Tohurst v Associated Portland

Answer 29

personal contract cannot be assigned X must supply A chalk for 50 years - could be assigned - can be read to be made to A or anyone (not important)

Question 30

Kemp v Baeselman

Answer 30

personal contract cannot be assigned X must supply eggs to A, A cannot buy from any other merchant - cannot be assigned - personal obligation on A

Question 31

Don King v Warren (first instance)

Answer 31

lighten J - if obligation involves personal elements, must consider if assignment is possible 1) if agreeing to do a particular thing, there is good reason to doubt A can change nature of obligation (without X's consent) 2) if personal contract it is clear this obligation cannot be discharged by someone else

Question 32

Trendex v Credit Suisse

Answer 32

roskill: "the old saying that you cannot assign a bare right to litigate is gone" MERE RIGHTS OF ACTION CAN BE ASSIGNED - genuine commercial interest - onus is on X to show it is champertous (X could show that in this case, it was assigned so that enforcement of claim could be profitable)

Question 33

Glegg v Bromley

Answer 33

assigning proceeds of action is no problem

Question 34

Liden Gardens

Answer 34

NAC are valid - yes, you can't limit property rights (e.g. freehold owner has inherent power to assign) - but choses in action are not property rights

Question 35

St Martin's Dispute

Answer 35

if NAC is valid, this affects B - B = no right to sue because of NAC - even if no NAC, only A's right is assigned so B cannot recover damages X wouldn't have been liable to A for (Offer-Haul) prohibition on assignment can protect X from claims that might be brought on B's behalf BUT it can change X's liability to A (A can recover damages for b)

Question 36

McAlpine v Panatown

Answer 36

If A enters contract with 3P, damages available to A is not restricted to those that reflect financial loss suffered by A as a result of 3P's breach - but if X confers some direct rights to B (duty of care deed) this analysis cannot apply NAC can increase liability to A (allow A to sue on B's behalf but if X confers some rights to B, that limits X's liability to A)

Question 37

Don King v Warren

Answer 37

no actual DOT but courts can find a DOT from the arrangements NAC doesn't prevent DOT arising