Equity Topic 6: Assignment of Property Rights in Equity

Equity’s Involvement in Assignments of Property Rights:
- Previous focus on recognizing and enforcing interpersonal obligations (e.g., confidence, loyalty).
- Current focus on recognizing and enforcing assignments of property rights.
- Definitions:
- Assignor: Person attempting the rights-transfer.
- Assignee: Intended recipient of the rights-transfer.
- In voluntary transfers, these roles are represented as donor and donee, respectively.

Common Ground between Equity and Common Law:
- Common law stance: Does not recognize assignment of future rights to property, whether voluntary (gift) or for value.
- Equity stance:
- Also does not recognize voluntary assignment of future property rights due to the maxim: "equity will not assist a volunteer."
- However, equity may recognize assignments of future property rights where consideration (value) is present.
What is a ‘Future’ Right to Property?
- Future rights may entail:
1. Non-existent subject property at assignment time:
  - Example: Assignment of a calf not yet born.
2. Existing subject property without assignable rights at assignment time:
  - Example: Assignment of grandma’s jewellery not yet possessed by the assignor because grandma is still alive.

Complexity with ‘Income-accruing’ Property:
- Case Example: Williams v Commissioner of Inland Revenue [1965] NZLR 395
- Mr. Williams was a beneficiary entitled to income accrued from trust funds.
- He attempted to gift $500 of income expected next year.
- Issue: Validity of the voluntary assignment.
  - Judicial Opinion: North and Turner JJ stated:
  - ‘He [Williams] did not assign part of his right to income; he assigned a right to a part of the income, a different thing.’
- Voluntary assignment expressed as a future income assignment fails in both law and equity.

Case Study: Norman v Commissioner of Taxation (Cth) (1963) 109 CLR 9
- Mr. Norman attempted to transfer:
- Rights to undeclared/unearned dividends on shares.
- Rights to interest from loans (repayable at the borrower's discretion).
Case Study: Shepherd v Commissioner of Taxation (Cth) (1965) 113 CLR 385
- Mr. Shepherd attempted to assign:
- 90% of his right to receive unearned royalties from patented furniture accessory sales.
- Judicial Interpretation: Kitto J stated:
  - ‘The tree, though not the fruit, existed at the date of the assignment as a proprietary right…’

Unlike common law, equity allows for assignments of future property rights when value is provided.
- Example scenarios include:
- Receipt of valuable consideration for the right to an unborn calf.
- Receipt of valuable consideration for the right to grandma’s jewellery.
Equitable Rule from Tailby v Official Receiver (1888) 13 AC 523:
- Assure that assignments supported by consideration of future property are binding.
- Assignor holds future property on constructive trust for assignee once it becomes identifiable.

Scenario: Van, a photographer, seeks to assign future royalties from his photography book, “Windows of the Soul”, to his girlfriend, Jose, with the intention to minimize tax liability.
Question: Did Van have an assignable right to receive royalties as of June 2020?

Types of Legal Property:
- Real property: Includes Torrens and general law land.
- Personal property:
- Choses in possession: Property enforceable by possession.
- Choses in action: Property enforceable by legal action (debts, bank accounts, shares, IP).

Handling Legally Incomplete Assignments:
- Equity can intervene to recognize or complete incomplete voluntary assignments.
- Completion depends on meeting legal requirements for various property types.

Transfer of Land under Torrens Title:
- Governed by s 45 Transfer of Land Act 1958 (Vic):
  - Allowing registered proprietors to transfer estates via an approved instrument.
  - Registration of transfer instrument confirms ownership change.
General Law Land Transfer:
- Governed by s 52 Property Law Act 1958 (Vic):
  - Requires conveyances to be executed by deed to be valid.
Choses in Possession:
- Transfer by:
  - a) Deed.
  - b) Delivery accompanied by intent to confer ownership (Refer to Re Stoneham [1919] 1 Ch 149; Thomas v Times Book Co Ltd [1966] 1 WLR 911).
Legal Transfer Rules for Choses in Action:
- Governed by s 134 Property Law Act 1958 (Vic):
  - Requires absolute assignment to be in writing, signed by assignor, and followed by express notice to the debtor.
Share Transfers:
- Companies require a ‘proper instrument of transfer’ under s 1071b Corporations Act 2001 (Cth).
- A certificate stating shares held must accompany the transfer for registration.

Case Example: Milroy v Lord (1862) 4 De GF & J 264, 45 ER 1185:
- Medley assigned shares to Lord under a deed of trust but did not execute the required transfer forms.
- Issue: Could the Chancery complete Medley’s incomplete gift?
Original Rule by Turner LJ:
- Incomplete settlements valid only if the settlor has completed all necessary steps to transfer property.
Australian High Court Interpretation:
- Griffith CJ in Anning v Anning (1907) 4 CLR 1049 opined that the completed acts by the donor (e.g., executing share transfer) suffice.

General Law Land & Choses in Possession:
- Requirement for multiple steps or third-party participation in legal transfer rule.
Modern Application:
- Shares:
- Case Reference: Re Rose [1952] 1 All ER 1217 where shares were purportedly assigned.
- Issue determined: Was the transfer complete before the registration date pertaining for taxation purposes?
Outcome by Jenkins LJ:
- Confirmed shares did not attract duty prior to the official registered date.
Torrens Land:
- Corin v Patton (1990) 169 CLR 540:
- Incomplete assignment due to lack of secured title from mortgagee.
- Court determined equity will recognize the assignment if all subsequent steps are achievable by the donee.

Case: Marchesi v Apostolou [2007] FCA 986:
- Involvement of the same solicitor for both transferor and transferee in assignment of properties.
- Judicial Insight by Jessup J:
- Deliberation on when solicitor holds the transfer as an agent for the donee versus for the donor.

Compliance needs of s 134 PLA:
- Notification to debtors is not explicitly mandated to be the donor’s responsibility.
- Judicial observations indicate that if donee has authority, equity would facilitate completion of the assignment.

Scenario: Van reattempts the assignment to Jose, declaring: "the rest was up to her" and questions the validity post-relationship end before royalty payments.
Question: Assess the success of Van’s royalty assignment to Jose after the stated events.