Notice of Assignment and Discharge by Performance Chee Ho THAM Singapore Management University, Chtham@Smu.Edu.Sg

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1-2010 Notice of assignment and discharge by performance Chee Ho THAM Singapore Management University, [email protected]

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Citation THAM, Chee Ho. Notice of assignment and discharge by performance. (2010). Lloyd's Maritime and Commercial Law Quarterly. [2010], (1), 38-80. Research Collection School Of Law. Available at: https://ink.library.smu.edu.sg/sol_research/1072

This Journal Article is brought to you for free and open access by the School of Law at Institutional Knowledge at Singapore Management University. It has been accepted for inclusion in Research Collection School Of Law by an authorized administrator of Institutional Knowledge at Singapore Management University. For more information, please email [email protected]. ©Informa null - 17/12/2018 08:43 as acontractualdebt. Notice playsanimportantroleintheequitableassignmentoflegal infra privity ofcontract,asbetweentheoriginal lessorandhislessee.Someofthesedifferences arediscussedatn 90, assignments ofthereversion.Differences inanalysisariseprimarilybecausethereisprivityofestate,aswell as Tolhurst Treitel Smith Meagher, Gummow&Lehane Marshall Judicature Act1873:SupremeCourtof1873. Halsbury Chitty Research providedaresearchgrantforthispaper. Theusualcaveatsapply. the anonymousrefereeforsomeveryhelpfulcomments.TheSingapore ManagementUniversityOf Charles RickettandProfessorAdrianBriggsfortheirsuggestionsencouragement. Iwouldalsoliketothank equitable assignment: i)theassignee (ii) 2. Thediscussion inthispapergenerallyleavesasidediscussionofassignmentsleases, particular, 1. The followingabbreviationsareused: AssociateProfessor, SchoolofLaw, SingaporeManagementUniversity. ThanksareowedtoProfessor * i shouldshepaythesumowedtohercreditor, sheisnotdischarged fromher (i) . Equity DoctrinesandRemedies these twocommonlawrules.Itmaytherefore be timetoupsetthis legislative frameworkforstatutoryassignmentprovides anybasisforabrogating is suggestedthatneitherthedoctrineunderlyingequitableassignmentnor and theautomaticdischarge ofanobligationwhenitisprecisely performed.It it contradictsthecommonlawrulesastoinvariabilityofacontractualobligation the legalrightstoadebteffectedbyeitherequitableorstatutoryassignment.Yet Smith payment again. given noticeofitsassignmenttoanassignee(C)isatriskhavingmake ‘‘ : MSmith, : : EPeel, A debtor(A)whomakespaymenttothecreditor (B)afterhavingbeen by theassignor, inorderofprecedencenotice[theruleastopriorities]; and after notice obligation butwillhavetomakepaymentagaintheassignee[the Chitty onContracts : GTolhurst, : ORMarshall, : Notice ofassignmentanddischargeby Halsbury , [7.68]. Treitel ontheLawofContract The Lawof Assignment ’ s LawsofEngland ’’ The Assignment ofContractualRights ’ rule]; s rightagainstthedebtorhasprioritysubsequentassignments ’’ The Assignment ofChosesin Action 1 Thisappearstobea , 29thedn(London,2002). As notedinarecenttreatise, : RPMeagher, JDHeydonandMJLeeming, , 4thedn(Australia,2002). , 4thedn(Reissue). performance I. INTRODUCTION (Oxford, 2007). Chee HoTham , 12thedn(Oxford,2007). settled ‘‘ 38 ’’ well settled rule. (Oxford, 2006). (London, 1950). 2 once thedebtorisgivennoticeof * ’’ aspectofthe Meagher, GummowandLehane choses ‘‘ transfer in action,such ‘‘ no discharge ‘‘ well ’’ of fi ce of ’ s ©Informa null - 17/12/2018 08:43 statutory assignment. assignment. Thepaperwillthenexaminewhetherthesamemaybetrueincaseofa to thatcontract,theequitableassignee,andevenifshehasbeennoti out inthecontract,evenifrightsunderthatcontracthavebeenassignedtoathirdparty her obligationtomakepaymentsolongasshepreciselyperformsobligationsset below mayapply, discriminate betweenobligationsto pay moneyandobligationstoperformotheracts.Sothearguments set out may beappliedinrelationtoother contractualobligations,asthedoctrineofpreciseperformancedoesnot to bedischarged bypreciseperformance ofhercontractualobligationtopaycreditor. Thesamearguments indicated otherwise. C tobe Say AowesB£1,000;but£1,000toC.Itwouldnotbeunusualforwish broadly statedandthatthetruepositionisquiteotherwise:adebtor chose thereof. Byexaminingthemechanicsandsubjectmatterofanequitableassignmenta displaced bywhatappeartobeequitabledoctrinesrelatingassignmentandnotice discharge bypreciseperformanceandtheinvariabilityofcontractualobligationsare presents acontradiction:itdoesnotexplainhowisthatthecommonlawrulesasto prompted becausetheruleasappliedincontextofequitableassignmentadebt C assigning thedebtowedtohimbyAoverC,assignmentbeinginconsiderationof 1873. Referencesto action wouldhavebeenrecoveredorenforcedbyanatlaw, priortotheenactmentofJudicature Act debt. paper willfocusonanexaminationofthe agreement whereininconsiderationforA (on anindemnityforcosts)tobringlegalproceedingsagainstAonthedebt, ifunpaid;enteringintoatripartite A, coupledwithamandatethatCneednotaccounttoBforsuchreceipts; promisingtopermitCuseB to BC,A make paymenttoC(ie,anovation);orwhere,followingrequestbyBthat Amakepaymentofthedebtowing agreement betweenthem,eg, the debt not bepaid,asastatutoryassignee,CisentitledtobringlegalproceedingsagainstAon should theintentiontomakesuchanassignmentbesuf the LawofPropertyAct1925,s136(1)arecompliedwith.Ifnot,itmaybeequitable ii thedebtorisnolongerentitledtoassertsuchequitiesasmayarisebetweenherself (iii) ’ .Foreaseofexposition, thispaperwillconcentrateonthequestionastowhetheradebtor isentitledtoclaim 5. .The 4. .Otherswouldinclude:appointingCasB 3. s releasingB Leaving asidediscussionofthesecondandthirdtheserulesforanotherday, this The assignmentofthelegal [the ruleastoequities]. and thecreditorpost-noticetoreduceherliabilityassigneebywayofset-off in action,thispaperwilldemonstratethattherulemay, perhaps,havebeentoo 5 chose ‘‘ NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE directly inhisownname.ShouldCbeanequitableassignee,similarproceedings paid ‘‘ acknowledges in actionarisingfromthedebtowedbyAtoBislegalandnotequitable, sincesuch ’’ mutatis mutandis , notdirectlybyhimself,butA.OnewaytoachievethisinvolvesB ’ choses s indebtednesstohimuponreceiptofthe£1,000fromA. II. in actionhereaftershouldbetakentoreferlegalandnotequitable ’’ ‘‘ toCthatAwillpaythesumotherwisepayableBonaccountof theloan Shamia NO DISCHARGE AFTER NOTICE , toassignmentsoflegal 4 v. chose Joory ’ s obligationtomakepaymentBbeingdischarged, Apromisesto ’ in actionmaybestatutoryifalltherequirements [1958] 1QB448. s agentorattorneyforthepurposesofacceptingpaymentfrom ‘‘ no discharge afternotice choses in actionarisingoutofcontractother than fi ciently mademanifest.ShouldC ’’ is discharged from ’’ rule.Thisis 3 fi ed ofsuch choses chose ’ , unless s name 39 ’ in s ©Informa null - 17/12/2018 08:43 526: v. and itsImpact discussion inPartVIIIquerieswhetherthisistrulythecase. notice. obligation ofpaymenthastheeffect of Roxburghe? the questionis,Was thisrightofset-off existingatthetime whenthenoticewasgivenbyDukeof diminish therightsofassigneeastheystoodattimenotice. Thatisthesoleexception.Therefore an assignmentofa and otherdefenceswhichwereavailableagainsttheassignor, subjectonlytothisexception,thatafternoticeof AC 454and authority forthisproposition.Theauthoritativenessofthesecasesonthe pointisexaminedinPartVII. to theequitableassignee(C).Thishasbeensaidbea assignor (B)atherperil. is givennoticeofanequitableassignmentthedebtmakespaymenttocreditor- of adebt, v. 2.3(1). against thedebtor of thenon-assignedpartdebtandhe,too,mustjoinassigneeinanyproceedingsbrought he co-operates,co-defendantifdoesno debtor tojudgmentwithout assignee cannotgiveagooddischarge inrespectoftheassignedpartdebtnorcanhesue inconsistently withtheassignedinterest,forinstancebymakingpaymenttoassignor: ‘‘ may beinitiated,butonlybyjoiningBaseitherco-claimant 40 Farrell with C)orasco-defendant(ifnot). he mustaccounttotheassigneeandnotassignor of noticeinequitableassignment; disregards thenotice[andpaysassignor],thenhemustpayagain[toassignee] 4. Oncenoticeofanequitableassignmentisgiventothedebtor, hecannotthereafterdeal 5 SimonBrownLJ 15. (1878)3QBD569.ThiscaseisfurtherexaminedinPartVII. 14. (1857)1DeG&J208;44ER703.ThiscaseisfurtherexaminedinPartVII. 13. [1994]2AC367(CA),381. 12. 0 OngChin-Aun, 10. Eg, 9. Thesamedilemmaisseeminglyfacedbydebtors who aregivennoticeofastatutoryassignment;butthe 8. 18. 17. [1902]1KB 527(CA). 16. 1 Following 11. 7. .Formerlytheplaintiff 6. Bank ofEngland 6. Converselyinsuchcases,theassignorlikewisecannotgiveagooddischarge eveninrespect 5. Inthecaseofanequitableassignmentconsistingpartadeb Terry Smith citesthe Within thecontextofequitableassignment, ‘‘ Walter &SullivanLtd Now anassigneeofa Ibid Smith ; 13 16 Walter &SullivanLtd , [13.22]. Brice ’’ 11 , [13.21]. to supportthepropositionthat, Walter &SullivanLtd NoauthoritywascitedbyJamesLJ fortheproposition,though,thatpreciseperformanceof ’’ LLOYD Simon BrownLJnotedin (2002)18JCL107,107.Ongcites In re SteelWing CoLtd v. .... [1996] QB292(CA),311. chose Bannister fi ‘‘ ’ ’ S MARITIME AND COMMERCIAL LAW QUARTERLY Notice inEquitableAssignmentof rst ofthesethreeparagraphs,aswell s commentshereechotheviewsofJamesLJin ’’ in actionthedebtorcannotbypaymentorotherwisedoanythingtotake awayor . 15 v. chose — 9 J Murphy&SonsLtd but theterminologyhasbeenamended:CivilProcedureRules1998,CPR fi . Which istosay, sheisatriskofhavingtomakepaymentagain 14 v. rst joiningtheassignorasapartytoproceeding in actionaccordingtomyviewofthelaw, takessubjecttoallrightsofset-off J Murphy&SonsLtd v. J Murphy&SonsLtd diminishing 10 [1921] 1Ch349. and, inthecontextofanequitableassignmentapart 7 t... Deposit Protection Board William Brandt ‘‘ [1955] 2QB584(CA),588; the rightsofassigneeastheystood atthetimeof [o]nce thedebtorhasnoticeofassignment, 8 [1955] 2QB584(CA),588, it isoftenassertedthatadebtor(A)who Choses in Action [1955] 2QB584;1AllER843(CA)as ’ s Sons&Co ‘‘ Roxburghe well settled ’’ , Brice 17 : Divergence intheCommonLaw 6 and that, v. (if Bwishestocooperate Dunlop RubberCoLtd Three RiversDistrictCouncil v. v. v. v. Dalia Bannister Cox ’’ per aspectoftherole — (1881) 17ChD520, ‘‘ Parker LJ. 12 [i]f thedebtor as co-plaintiff if that: , and t... the Jones [1905] Yates ’’ . 18 v. ©Informa null - 17/12/2018 08:43 although D. &J208and 2007), [5.93]relyon contract party totheother, intheabsenceofanyagreement,cannotconstituteavariation debtor andhercreditor. parties istohaveaunilateralpowerofvariation, Generally, unlessthecontractexpressly(orimpliedly)providesthatoneofcontracting the second.To answer assignee assignment] andpaystheassignor, heisnotdischarged andwillhavetomakeasecondpaymentthe obtain agooddischarge bypayingtheassignor. Likewise, HBeale,MBridge,LGullifer, andELomnicka, prevents thedischarge ofthedebtorbysubsequentpaymentto client [ie,thecreditor-assignor factor inhisclaimstopriorityagainstcompetingintereststhedebts, receiptofnoticebythedebtoralso Brandt works. NRuddy, SMills,NDavidson, In thepresenteditionof payment totheassignee ignores thenoticeandpaysassignorheisnotdischarged andwillhavetomakeasecond ‘‘ Smith sharestheviewssetoutin In this,incommonwithmanyotherCommonwealthauthorsonthelawofassignment, discharge afternotice in ordertocountherselfbequitofhercontractualobligations?Forthatiswhatthe But howdoesanequitabledoctrineoperateto substantive effects onthemannerinwhichdebtoristodischarge her debtobligation. if madepost-receipt.Implicitly, ithasbeenacceptedthatnoticeoftheassignment payment obligationifmadepriortoreceivingnoticeofanassignmentthatdebt,butnot in support. questions mayhavebeencon what question. it hasbeenheldthatifthedebtor[towhomnoticeofanequitableassignmentgiven] III. INVARIABILITY OF TERMS AND AUTOMATIC DISCHARGE BY 25. SeePartV(B)(ii). 24. (1883)22Ch D782,787.Thiscaseisre-examinedinPartVII. 23. [1898]1QB 765,774.ThiscaseisfurtherdiscussedinPartVII. 22. (1857)1De G&J208;44ER703. 21. 20. Eg, 19. The consensus,therefore,isthatpaymentsbyadebtortohercreditorwilldischarge the That dif Chitty Treitel the debtorisliable.Equitableassignmenthasquitealottosayinanswer ’ s Sons&Co ’’ : GHTreitel, ’’ Tolhurst 24 NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE Jones . 25 , [22.032],citing fi , 725 It isnotobviousthatequitableassignmentnecessarilyhasanythingtodowith culty hasbeenhithertooverlookedbecausetwodifferent, thoughinterrelated, Accordingly, asamatterofcommonlaw, the Brice – , [4.20]and[8.06]; 726, n95.Thevery v. v. Brice Farrell v. Dunlop RubberCoLtd The LawofContract Bannister ’’ ’’ v. ruledoes. . that Bannister Cowey , 21 Treitel Durham Bros PRECISE PERFORMANCE (1878) 3QBD569. question, welooktothetermsofcontractbinding fl ated. Theseare:(i) v. fi as authorityforthepropositionthat, Liberian OperationsLtd , rst editionofthisworkstated: Salinger onFactoring Brice Treitel ontheLawofContract Marshall (London, 1962),440,citingasauthority as authorityforthepropositionthat ’’ v. v. , 106 Bannister Robertson – 107. Similarviewsmaybefoundinmorespecialist modify The LawofPersonalProperty Security to whom ‘‘ [a] mereunilateralnoti , 4thedn(London,2006),[8.09]cites [1966] 2Lloyd is citedasauthorityforthepoint, 22 what itisthatthedebtormust and ‘‘ If [thedebtor]disregardsthenotice[of the debtorisliable;and(ii) Ex pNichols ‘‘ After notice,thedebtordoesnot ‘‘ double liability ’ 20 s Rep45. ‘‘ in additiontoassistingthe that: Jones 23 v. fi cation byone Farrell are alsocited ’’ which (1857) 1 (Oxford, William ]... fi ‘‘ for do 41 rst no 19 ’’ . ©Informa null - 17/12/2018 08:43 be requiredforthevariationofcontracts? obligations andthatestoppeloughttoplayagreaterroleinthesematters, seeCUlyatt, consideration ismerelyasuf is requiredforaneffective variationwouldhavebeenwhollyunnecessary. Foranotherview, suggestingthat elaborate analysisincasessuchas so restrained.Butitisanothermatter altogethertoenjointhedebtorfrommakingpaymenthercreditor. have taken Windeyer Jappearsinhisjudgment in If so,itfollowsthatthecreditor-assignor oughttobeenjoinedfromreceiving thedebt the debtwillholdsuchmoneyonconstructive trustforthebene that PpaytohimselfinsteadofZ?Eveninequity, Rmay detain us:seeSWilken, broader conceptsofestoppelandwaiver(whichapplytobothexecuted andexecutoryobligations)neednot and thetransactioniscomplete making thepaymenthasperformedhisdutyassoonhehandedmoneytopersonwhomitisdue, contract, butinperformanceofadutyatthepropertime,noacceptancebytakerisnecessaryall.Theparty Miller Perillo (Gened), [21.001]. Practical Bene were thereforeimposed analogous totheentrybypartiesintoanewcontract.Therequirements ofoffer, acceptanceandconsideration 2002) whereat[2.04],itisobservedthat, v. needless tosay, assenttosuchvariation. without furthervaluableconsiderationbeingfurnishedtothedebtor/obligor, whomust, unless P party whoperformsacontractinaccordancewithitstermsistherebydischarged fromhisobligationsunderit seemingly obviouspropositionhasbeenratherdif contracting partiesforthecontracttobevaried:n25, surely noequitableordercouldissueto equitably assignshislegalrightsinthedebt, will bedischarged onceitispreciselyperformed; Keeping thesetwoprinciplesinmind,itseemsindisputablethatacontractualobligation necessarily arisesoncethe 42 To similareffect: contractual obligationsoncetheyhavebeensetoutintheformofcontractterms; possible. to persuadeanycourtofEquitythatPoughtbeorderedpayanyoneotherthanZ: no betterrightthanQ,theassignor, once theyhavebeenfullyperformedincompliancewiththetermsofcontract. with thecommonlawprinciplethatcontractualobligationsaredischarged automatically 2 Thereissome authoritysuggestingthatanassignorwhoreceivesmoneyfromthedebtor aspaymentfor 32. 9 Asweareconcernedonlywiththe 29. 28. 1 SeePartsV(A) and(B), 31. Whetherexpresslyorimpliedly. 30. 7 Perhapsbecauseacontractdischarged byperformanceseldomattractslitigation,authorityforthis 27. Thisfollowslogicallyfromtheneedforanenforceable agreementofvariationbetweentheoriginal 26. Roffey Brothers Suppose, forgoodconsiderationprovidedbyQ,PpromisesQtopay£100Z.then Such anoutcomeisinconsistentwiththecommonlawprincipleofinvariability ‘‘ (1862) 32LJCP30,33,Williams Jnoted: The generalruleisthatapartytocontractmustperformexactlywhatheundertookdo ’ s contractualpromisewastopayQ L ’ Estrange fi LLOYD ts andPromissoryEstoppel:EnforcementofContractModi Corbin onContracts ’’ ‘‘ (1991)55SaskLRev393. Full performanceconsistentwiththetermsofagreementdischarges alegalduty ’ v. S MARITIME AND COMMERCIAL LAW QUARTERLY ’’ Wilken andVilliers onTheLawofWaiver, Variation and Estoppel . Ifcontractobligationsonceformed L ’ Estrange fi ’’ infra cient butnotanecessaryreasontoenforcepromisevarycontractual . Goss ‘‘ . no discharge afternotice (1850) 13Beav281tohavebeena case wherethecreditor-assignor was — Norman v. Discharge Lord Nugent 31 ’’ ‘‘ (2002)9AucklandULRev883andDHalyk, ‘‘ variation and itisdif The Courtshavehistoricallyanalysedvariationofcontractas v. fi ‘‘ Federal CommissionerofTaxation cult tolocate. 29 prevent , vol13(revedn)(Newark,2003), where moneyispaid,notinsatisfactionofapriorbreach ’’ supra (1883) 5B&Ad58,64 ofthedebtor ’ s assigns/nominees. chose fi . a debtorfrompayingthecontractually- cult toseehowQwouldhavebeenable fi 28 t oftheassignee:seediscussioninPart X, were Treitel and suchobligationsareinvariable in action,toR.CanRnowdemand ’’ ruleisappliedoughtnottobe ’ variable withoutsuchrequirements,the s executoryobligationofpayment,the , [17.001]assuresus,however, that fi cation PromisesinLightof – not 65; 110ER713,716astowhat 30 assert anysuchright, R, asassignee,takes (1963) 109CLR9,27to for hisownbene § ‘‘ 67.3.In Should consideration , 2ndedn(Oxford, ‘‘ Consideration, Chambers ’’ Williams : 26 fi Chitty t ’’ . And infra : JM and ‘‘ [a] 32 27 ’’ v. , . . ©Informa null - 17/12/2018 08:43 bene ‘ deduced fromthem,tobethetrueowners safe inpayingawaythefundtothose whoappearbytheinstrumentconstitutingtrust,ortitleproperly rightfully entitledasheisafterreceives thenotice,thoughofcourse,inabsencehewould be disregards thenotice,hedoessoathis peril.Butbeforenoticeisgivenhejustasmuchatrusteeforthepersons or not.Thenotice,nodoubt,places him underadirectresponsibilitytothepersonwhogivesnotice.If he accurate. Thetrusteeofthefundisforpersonsentitledto fund,whetherheknowstheirnames an obligationtopaymoneyanddosomethingelse. apply inrelationtoaproposedchangetheidentityofpayee,there being noprincipleddifference between likelihood thattheobligormightconsenttovariationproposedby obligee. Thatbeingso,thesameshould equitable assignmentandnoticethereofbeaninstancewheretheconverseproposition despite havingbeengivennoticethatthedebthadassignedtoanother. Might both thesecommonlawrulesareoverriddenwhenadebtormakespaymenttohercreditor instead. J obligor J had beenformed?Inthelattersituation,issueistypicallycharacterised asacontractvariationwherebythe in thecontract,orpalegreen,asKnowrequests,havingdiscussedmatter overwithhiswifeafterthecontract obligor, J,isindifferent astowhetherheshouldpaintthehouseofobligee,K,white,expresslyspeci a contractwherethedebtor, A,isindifferent astowhethersheshouldpayB,andanothercontractwherethe payment to,for, ifso,whyshouldtheprinciplestopthere?Howisonetodrawanyprincipleddistinctionbetween claimed foritincircumstanceswherethedebtorwouldhavebeenindifferent astowhomsheshouldmake equitable obligationsistoperformthoseduties. may wellhavetheeffect ofvaryingthenatureandmannerinwhichanobligorsubjectto to actinbreachofcontract? named creditorifshesowishes,becausetoinsistthatdootherwiseiscompelher contractual been thecasehadobligationsarisenatcommonlaw. Thesamecannotbetrue of manner ofrulesasmaygovernsuchobligationsbutwhichdepartfromwhatwouldhave exclusive Equityjurisdiction,inexerciseofthatthecourtsmayformulateall the commonlawruleastoinvariability. Sinceequitableobligationsfallwithinthe paper. Soastotheequitableassignmentofacontractual debt Based ontheabove,thereappearstobeacon a con This raisestwoquestions:(i)ifthereisacon equitable assignmentandtheeffect ofnotice)con discharge afternotice Yet despitethemaximthat obligations andtheautomaticdischarge ofcontractualobligationsbypreciseperformance. assignment andnoticethereof,therulesatcommonlawastoinvariabilityof converts 5 Basedonthe authoritiescitedinPartII, 35. 4 Eg, 34. 3 Itisnoanswertosaythatnoticeofequitableassignment ofadebtonlyhassucheffect asiscommonly 33. Where an fi ciary fl ict atall? ’ ‘‘ ’ thetrusteeoffundintoaforpersonwhogivesnotice. Butthat,again,ishardly s IV. purchases ’ Donaldson NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE s interestinafundheldbytrustee,LordMcNaghtencautioned: ‘‘ indifference choses equitable chose ‘‘ EQUITY FOLLOWS THE LAW ’’ areleasefromhisobligationtopaintK v. in actionlikethecontractualdebtswhicharesubjectmatterofthis Donaldson ’’ ’’ inthelattercaseplaysnosigni ruleembodiesacasewheretherulesastoEquity(inrelation ‘‘ Equity followsthelaw 33 in actionhasbeenequitablyassigned,noticetotheobligor (1854) Kay709;69ER303.Inrelationtotheequitableassignmentof a ’’ , Ward supra v. Duncombe . fl ict, whichistoprevail?And,(ii)there 34 fi fl ’ fl In suchcases,thereisnoconcernwith cant legalroleatall;itonlygoestowardsthe ’’ s housewhitebyagreeingtopaintitpalegreen ict betweentherulesastoequitable ict withtherulesofcommonlaw. , itseemstohavebeenassumed [1893] AC369,392. ’’— OR PERHAPS NOT , ‘‘ it wouldappearthe [I]t hasbeensaidthatnotice 35 ‘‘ that fi 43 no ed ©Informa null - 17/12/2018 08:43 wrought bys24, con yet beneedful,somethingthatequitywouldrequire.Ofcoursenowandagaintherehadbeen jot andeverytittleofthelawwastobeobeyed,butwhenallthishadbeendonesomethingmight this relationwasnotoneofcon existed betweenlawandequityintheyear1875.And important thatevenattheveryoutsetofourcareerweshouldformsomenotionrelationwhich upon ityouwill Act 1873]hasbeeninforcenowforoverthirtyyears,andifyouwilllookatanygoodcommentary the commonlaw, oratalleventsavariance.ButtheclausethatIhavejustread[s25(11),Judicature fancied thatatallmannerofpointstherewasacon ‘‘ to prevail applies, that 44 Practice andPresidencyofourChanceryhavedon them) asshallstandwiththeMeritandJusticeoftheirCause,former, ancientandcontinued or hereaftertobemade,suchReliefinEquity(notwithstandinganyProceedingsattheCommonLawagainst Seal fortheTime being,shallnothereafterdesisttogiveuntooursubjectsupontheirseveralComplaintsnow I inthemonthofJuly, 1616,that, secured bytheindenturedated&c,inPlt the Plt(inHMCourtof&c)asinbillmentioned,torecoveramount ofprincipal,interest,andcosts restrain theDeftT, hisattornies andagents,fromfurtherprosecutingtheactioncommenced(byDeft)against Judicature Act1873suggeststhefollowingformforsuchaninjunction: resolved onlywiththeinterventionofJamesI:seen36, 1982. Act 1981,s49. and therulesofcommonlawwithreferencetosamematter, therulesofequityshallprevail administer lawandequityonthebasisthat,whereverthereisanycon Wilmot Seton, costs, oranypartthereof,untilthehearingofthiscause,further orderofthisCourt action atlaw(ortakinganyotherproceeding)againstthePltforrecovery ofsuchprincipal,interest,and 1873 ‘‘ the SupremeCourtofJudicature(Consolidation)Act1925, common lawandequitablerules s 25(11)oftheJudicatureAct1873,effect ofwhichwastoeliminatecon virtue ofacommoninjunction rule andreplacingitforallpurposesbytheequitablerule. (Cambridge, 1936),16 confusingly) bytheSupremeCourt Act 1981,s49(3). of theSupremeCourtJudicature (Consolidation)Act1925,s41,beforebeingreplaced(albeitsomewhat Now itmaywellseemtoyouthatthoseareveryimportantwords,forperhapshave embodies, inaconcentratedform,thefundamentalobjectivesofJudicatureActs 6 Theruleisderivedfromthejurisdictionalpriority given toEquityarisingfromthedecreeissuedbyJames 36. 0 BeingtheformofinjunctionthatledtobattlewillsbetweenCokeandLordEllesmerewhichwas 40. The1925ActwasrepealedandreplacedbytheSupremeCourt1981witheffect from1January 39. 38. 37. 42. Thecommon injunctionwasabolishedbytheJudicatureAct1873,s24(5).Thisre-enacted ass41 41. 3 FWMaitland, 43. Of thatprovision,Maitlandobservedinhis That propositionnow fl icts: therewasanopencon – The WhiteBookService2009 ‘‘ Meagher, GummowandLehane 1875 Every CourtexercisingjurisdictioninEnglandandWales inanycivilcauseormattershallcontinueto ’’ ? ’’ LLOYD 36 Forms ofDecrees inEquity . ‘‘ 38 where therulesofequityandcommonlawcon fi Section 49(1)oftheSupremeCourtAct1981isare-enactments44 nd thatithasdoneverylittle 41 Equity – ’ S MARITIME AND COMMERCIAL LAW QUARTERLY 17. but byforceofs25(11) — A courseoflectures fi nds statutoryformintheSupremeCourtAct1981,s49, ‘‘ fl fl .[We] dowillandcommandthatourChancellor, orKeeperoftheGreat . . , vol2(London,2009),[9A.170]. ict, forexample,whenCokewasindictingamanwhosued ict. Equityhadcomenottodestroythelaw, buttoful 40 , [2.115]. or theproceduralinnovationsinSupremeCourtlitigation ‘‘ wheresoever arising , 3rdedn(London,1862),volII,874 ’ s billmentioned;andfromcommencing(orprosecuting)anyother (ed AHChaytorandWJWhittaker) (revised byJBrunyate) e... — ’’ it hasbeenpracticallywithouteffect . ’’ fl 42 : 1ChanRep49 Lectures onEquity ict betweentherulesofequityand supra . Onecollectionofprecedentspre-datingthe fi rst thingthatwehavetoobserveis ’’ fl by, ineffect, destroyingthelegal ict orvariancebetweentherulesofequity – 39 ‘‘ ‘‘ 50; 21ER588. fl This nowprevailednotby Let aninjunctionbeawardedto which, inturn,re-enacted ict, therulesofequityare – 875. as follows: ’’ fl : SupremeCourt icts between 43 .... fi ’’ : SirHenry l it.Every 37 which [I]t is ©Informa null - 17/12/2018 08:43 equity. it foundnocon the JudicatureActhasnotactedinthisway:itleftlawoftrustsjustwherestood,because therefore BistheownerandAhasnorightordutyofanysortkindinaboutland.Ofcourse Common lawsaysthatAistheowner, equitysaysthatBistheowner, butequityistoprevail, 1875 thetwosystemshadbeenworkingtogetherharmoniously. a con Supreme CourtAct1981,s49(2)and (3).Seealso at commonlawuponthelitigants;and thatcon ‘‘ effect onthepre-existinglawastotrusts,therebeingnorelevantcon day onaccountofs49,likeitspredecessors,thatsectionmustbetakentohavehadno came intoforceon1January1982.Sincethelawoftrustsdidnotcometoanendthat ought tobesaidofitsmodern-daysuccessor, theSupremeCourtAct1981,s49.That to holdthelandforbene the ownerofland,itsaidthattrusteewasbutaddedhebound one, itisamisleadinganddangerousstatemen Blackacre. Thatmeanscivilwarandutteranarchy. Ofcoursethestatementisanextremelycrude of co-ordinatejurisdiction seems tobecon of theland,equitysaidthat ‘‘ referring tothetrust: an injunction.Butsuchcon the legaland/orequitable property, ie,aconveyance,the subjectmatterofthe The verb A. The meaningof something verymuchlikeit. demonstrate, itismorethanarguable thatsuchassignmentsoperatebywayoftrustor the samemustbetrueofequitableassignmentdebts,for, asthenextPartwill and incapableofthistypetransfer. Rather, itisgenerallyacceptedthatatransfer ofrightsoccurs as thoseheldbythetransferor. Allpropertyrightsatacertain levelofsophisticationarepersonal on thetransferofpropertyrights.However, atransfereeneverobtainstheexactsame propertyrights In thecontextofaconveyance,law An examinerwillsometimesbetoldthatwhereasthecommonlawsaidtrusteewasowner 46. 5 Inrelationto thetrust, 45. 44. Accepting Maitland Maitland chosetoillustratethepartnershipbetweenequityandcommonlawby V. THE NUTS AND BOLTS OF EQUITABLE ASSIGNMENT OF A fl Tolhurst Ibid ’’ ict here,[s25(11),JudicatureAct1873]wouldhaveabolishedthewholelawoftrusts. , 17 NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE ‘‘ to transfer – , [3.10](referencesomitted). 18. fl fl ict enough.Thinkwhatthiswouldmeanwereitreallytrue.Therearetwocourts ict, novariance,even,betweentherulesofcommonlawand ‘‘ 44 ’’ transfer ’ hasabroadrangeofmeanings.Within thecontextoftransfers s observationsastotheJudicatureAct1873,25(11),same — fl fi one saysthatAistheowner, theothersaysthatBisownerof icts asthisbelongtoolddays,andfortwocenturiesbeforetheyear right t ofthe ‘‘ con cestui quetrust ’’ fl to thesubjectproperty. Asnoted in ict ’’ cestui quetrust laynotinthe ’ s focusisnotmerelyonthetransferoftangiblethingsbut fl ict asto DEBT Meagher, Gummow&Lehane t... was theowner. Well hereinallconsciencethere remedies Equity didnotsaythatthe rules . Therewasnocon , butintheeffect ofthoserulesin Equity and ‘‘ transfer (if any)isnowresolvedbyreference tothe ’’ ’’ is,oncloserexamination, fl , [2.115 ict here.Hadtherebeen fl Tolhurst ict. cestui quetrust 45 – 2.125]. If thatisright, : 46 was 45 ©Informa null - 17/12/2018 08:43 assignment ofanequitable to the to whomthedebtisbepaid.DrTolhurst appearstosuggest thatthischangemaybeexplainedbyreference proposition isdiscussedinPartV(C), be treatedasa hold thetrustpropertyforthirdpartiesnominatedbybene the creationandextinctionofrights.Speci appropriately appliedeventoasituationwheretherecannotbeanydisposition ofrights,butwherethereisonly These pointsaremadeinthecontextofanattempttoexplainhow it isthattheverb action totheassignee,thereisno The samepointisalsomadein Jauncey in with notice,doesnotexplaintheapparent the Revenue Commissioners an existingproprietaryright,vestedorcontingent,fromtheassignortoassignee Following Windeyer J dispositive dispositive doctrine,acceptingthat is, theseller matter inquestion. amounting toa what ishappeningbecause,eveninacaseofsalegoods, the dispositivesense.DrTolhurst suggeststhatinbothinstances infra However, forthe assignee anygreaterrightthanheorshehas: ‘‘ Dr Tolhurst accepts B. Isadebt derivative rightiscreatedandvestedinthetransferee when thetransferordisposesofaright(whichisextinguished)andwhereanequivalent 46 extended meaningof equitable assignmentdoesnotinvolveany accepted: JEPenner, being property transfer. Iftherightdidchangeitsnatureorcontentupontransferitcouldhardlybedescribedas ‘‘ been availabletothetransferor. opposed tothecreationofanewinterestthatis Ch 67of action inthedebthasbeenequitablyassignedmandatedby rule. Yet itisnosmallmattertodisregardsuchachange. the changeinidentityofpayeeeffected bynoticetothedebtorthat assignment involvesatransfer. Oneconsequenceofthisisthattheassignorcannotvestin transfer 0 GJTolhurst, 50. 49. 7 Theappropriatenessofdescribingsuchatransaction asentailinga 47. 8 Giventhatanequitableassignmentinvolvesthecreation ofanewequitableinterest 48. Although thisusageoftheword creation . Evenifitisrighttodescribewhat happensinanequitableassignmentofalegal ‘‘ Norman unconscionability Select Essaysof Anglo-American LegalHistory ’’ ’’ R ’ . Thispaperdoesnottakeissuewiththeappropriatenessofusing of abrandnew isthatthetransfereetoobtainan s rightsaredisposedof(andextinguished)andnewequivalent arevestedinthebuyer v. v. LLOYD ‘‘ v. ‘‘ Preddy ’’ ‘‘ release orsurrender transfer . Federal CommissionerofTaxation property ‘‘ The IdeaofProperty inLaw Cheques, PropertyandtheNotionofTransfer: ‘‘ ‘‘ transfer ’ no change [1996] AC815betweenthatsituationandacasewhererightsaresimply transferredin S MARITIME AND COMMERCIAL LAW QUARTERLY 50 ’’ ’’ [1960] AC1,16),whereacreditorequitablyassignshisrightsinthe ofthat ofallowingthedebtortoignore notice ofassignmentbypayinghercreditor. That equitable interest chose that: ’ s analysisthatanassignmentinvolves ’’ ’’ usedin capableof Tolhurst ‘‘ in actionasoccurswhereatrustbene chose release ‘‘ ’’ ’’ transfer and ofthebene infra 48 , eg,[3.10 Tolhurst in action,such change ’’ fi or cally, DrTolhurst wasconcernedwiththedistinctiondrawn byLord . ‘‘ ‘‘ ’’ which didnotpreviouslyexist.SeealsodiscussioninPartV(B)(i), disposition nemo dat mayoperatedifferently dependingonthenatureofsubject ‘‘ ‘‘ surrender ‘‘ : seetextton46, in thenatureofthatobligation transfer – transfer fi (Oxford, 1997),atp147;JBAmes, equivalent 3.11]. Itmaybepointedoutthat,unlikeacaseofequitable ciary nemo datquodnonhabet (1963) 109CLR9,26. ‘‘ ’’ ’ equivalent ’’ ’’ transfer ofinterestsfromonepartytoanother(adoptingthe s equitableinteresttothetrustee(see ofanyinterest vol 3(Boston,1909),atpp582 pointtohold,itseemswemustdisregard ‘‘ ’’ ’’ we ’’ isdebateable, byequitableassignment? fi . to anotherthatissimultaneouslyextinguished, ciary which,asLordRadcliffe pointsout,may fi ’’ nd thatthesamedealinginrightsoccurs, ‘‘ , suchnon-dispositivetransfer, even coupled supra transfer Parsons right tothatwhich,formerly, had fi ). Thus,equitableassignmentis ciary directshistrusteehenceforthto ‘‘ to ’’ transfer isanappropriateverbtodescribe the assigneeatall.Thereismerely ‘‘ ‘‘ v. vis-` no discharge afternotice the immediatetransferof 47 ‘‘ R transfer ’’ a-vis . Thisisthehallmarkof ’’ ofrightsisnotuniversally (1999)14JCL276,280. the keyaspectofa ‘‘ the identityofparty Disseisin ofChattels ’’ – todescribeanon- 583. ‘‘ chose transfer Grey simpliciter legal chose in actionas chose ’’ v. maybe Inland ‘‘ ’’ non- , as , in 49 ’’ ’’ in ’’ . , ©Informa null - 17/12/2018 08:43 onerous thantheyhadbeenatthetimeofcontract. making paymenttoXLtdinBaghdad,D these extremefacts,itisdif premises noranyagentslocatedinEngland that DrTolhurst hasmade?Ifitisrighttotreat noti place forpayment.LLtdequitablyassignsthedebttoXLtd,andDisgivenexpress be anequitableassignmentofapresent Law ofPropertyAct1925,s136(1),anyassignmentbyB toCofthedebtwilltherefore is thedutyofcreditortoattendat thatplacetoreceivepayment: v. ‘‘ obligations. Butwhywouldsuchchange is to literature, mandatesthattheeffect ofequitableassignmentthedebtcoupledwithnotice notice submitted, oughtnottobeignored.Butwheremightthatleavethe repaid intwoyears the transfereegetsonlywhattransferor in action(asopposedtoafuture since itarisesoutofapresentlyexistingcontract,the v. 152; assignment ofalegal Tolhurst When Aborrows£1,000fromBandpromisestorepaythatsumin60days (i) Howdoesoneeffectanequitableassignment? effects thattransfer. what istransferredwhenadebtequitablyassigned;and(iii)howequitableassignment would behelpfultore-examine:(i)howoneeffects anequitableassignmentofadebt;(ii) assignment ofthedebt.Itseemstheycannotbothberight.To resolvetheconundrum,it obligation bymakingpaymenttohercreditor, despitehavinghadnoticeofanequitable in thereceivedwisdomastoinabilityofadebtorclaimhavedischarged her First, thedebtisalegal action indebtatcommonlawagainstAandwill,all likelihood, dososuccessfully. the duedatepasswithoutpaymentofstatedsumtoB,Bwillbeentitledbringan a legalrelationshiparisesbetweenAandBupontheformationofthatcontract.Should Second, A enforced byactionatlawpriortothecomingintoforce oftheJudicatureAct1873. property 1 Atcommon law, itisthedebtor 51. 52. 53. Mascall Cox In principle,anychangeintheidentityofpayeeisfarfromtrivialand,it Suppose DowesLLtd,anEnglish-incorporatedanddomiciledcompany, £1,000tobe Equity requiresverylittleforsuchanassignmenttobecomplete. First,theequitable fi Thorn change cation oftheassignmentbeforedebtbecomesdue.ButXLtdhasneitherbusiness Kwok ChiLeungKarl Norman (1881) 17ChD520. ’’ rule?Thatproposition,seeminglysowellentrenchedinthecasesandacademic ’ (1844) 13M&W452,458;153ER 188,191.Whereaplaceofpaymentisspeci s conceptionof NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE v. ’’ ’ thatiscapableofbeing s debttoBisstilla City RiceMills v. what isrequiredforthedebtortofullydischarge herselffromhercontractual Federal Taxation Commissioner ’ time.Supposealsothatthecontractdoesnotprovideforanyspeci chose v. (1888) 40ChD357. ‘‘ Commissioner ofEstateDuty chose property fi in actionvestedtheassignorhaseffect of cult todenythat,ifDcannowdischarge thedebtonlyby ’ s dutytoseekouthiscreditorandpayhimthedebtwhendue: chose in action,beinganobligationwhichwouldhavebeen chose ’’ and ‘‘ transferred in action,althoughitispayable in action). (1963) 109CLR9,26, chose ‘‘ not transfer — ’ s obligationswillhavebecomemuchmore it operatesexclusivelyinBaghdad,Iraq.On contravene theperfectlyreasonablepoints has in action. ’’ , andthatsuch 53 ’’ [1988] 1WLR1035(PC),1040. , surelyitmustmeanthateitherDr choses iswrong,orthattheresomeerror 51 Absent theformalitiessetoutin Robey chose v. in action,suchasadebt, per is apresentorexisting Snaefell MiningCo Windeyer J.Seealso ‘‘ transfer ‘‘ no discharge after in futuro ’’ requiresthat fi (1887) 20QBD ed, however, it creating Roxburghe . 52 ’ time, chose Walton Last, 47 fi an c ©Informa null - 17/12/2018 08:43 action shouldalsopossess example, releaseorotherwiseextinguish therightsabovedescribed ‘‘ ‘‘ ‘‘ (1888) 13AppCas523. equity in action,butafutureexpectancy(suchasbookdebts).Insuchcases, theassignmentwilltakeeffect in necessary. Thepositionmay, however, beotherwise wherethethingassignedisnotapresentlyexisting controversy [7.72 Sin (which isfurtherdiscussedinPartV(C), Meagher, Gummow&Lehane AC 369,392; 711, 719;69ER303,307; [1891] 1Ch82(CA),87; & GeneralInsurance [7.29]. needed foranequitableassignmenttobevalid. of B voluntary). and assignee(subjecttothe assignee isunnecessaryfortheequitableassignmenttotakeeffect asbetweenassignor have requiredtheassignmenttobeinwriting,doesnotapply. Second,noticeto the in breachofthecontract.ThisentitlementarisesoutB ‘‘ 48 in action: ‘‘ London Borough Council to theassignment. disposition oftheassignor typically wordedcontract,Bhasatleastthree standing thatthetimeforA between AandB,BwillhavepresentlyexistingcontractualrightsagainstA,notwith- Reverting toourexampleinvolvingA,BandC, (ii) Whatdoesanequitableassignmenttransfer? indebtedness tohim)C. intention immediatelyandirrevocablytoassignthe effect betweentheassignor, B,andtheassignee,C,Bmerelyneedstomanifesthis the contract. since B privileges powers The Alienabilityof non-dispositive equitable interest 9 Foramuch more detailedanalysisoftheconcept 59. Asdistinctfrom thatpointintimewhenthecontractisbreached. 58. 7 Theneedforconsiderationinanequitableassignmentofa 57. 56. 55. 4 ApplyingLordBrowne-Wilkinson 54. First, BisentitledtosueA,ie,bringlegalproceedingsagainstAcontendthat v. – ’ 7.75]. Oei Tijong Bin Fortescue Standing s indebtednesstohim),wecanleaveasidethequestionwhetherconsiderationis if ’’ ’ the assignmentissupportedbyconsideration usedbyWHHohfeld, s equitableassignmenttoCissupportedbyvalidconsideration(being Grey ’’ ’’ isusedinpreferenceto : 55 Smith Holt LLOYD 59 v. ’’ v. Third, noticetothedebtorisalsounnecessary. v. . Thesamedoesnotappeartobetrueinrelationequitableassignmentsof Bowring Inland RevenueCommissioners Barnett , [7.78],andthereferencesatn119therein.Smith,[7.82]takes view thatitisnot v. [1976] 1NSWLR669(NSWCA),673, [2008] SGCA46(SingCA),espat[55].Seealsothediscussionof pointin Choses Heather 54 ’’ ’ S MARITIME AND COMMERCIAL LAW QUARTERLY inthat Walker [1996] AC669,706.Equitableassignmentsofa Therefore, theLawofPropertyAct1925,s53(1)(c),whichwould ‘‘ Re Way (1885) 31ChD282(CA).BeyondEnglishshores,see: certain (1834) 3My&K36,42 , [6.435]. in Action fi eld Trust Ltd ’ v. s equitableinterest,since,strictlyspeaking,hehasnone,prior ’ s Trust chose ’ ‘ s performancestillliesinthefuture.Itissubmittedthata The Bradford OldBankLtd legal immunities ‘‘ ‘‘ Some FundamentalLegalConceptions rights ’’ Cf Tolhurst (1864) 2DeGJ&Sm365,371 (1916)29HarvLRev816,819 infra ’ in actiondistinctfromthatoftheassignor. Thereisno s analysisin ’’ . ProfessorCookalsohighlightedthat the [1942] 2KB1,4.Seealso ). ’ s righttodisclaimagift,iftheassignmentwere , [4.19,4.20and8.06],whotakesaratherdifferent view ’ [1960] AC1,15 – fromthepowerofotherpersonstodo actswhichwill,for 43; 40ER14,17; when ‘‘ Westdeutsche LandesbankGirozentrale rights supra ‘‘ 57 ownership per the bookdebtsarise: (1884) 12QBD511; For theequitableassignmenttohave Glass JA,676 chose ’’ chose , upontheformationofcontract againstAupontheformation ’’ . – 16. Foradifferent view, see ’’ – in actionis, Donaldson ofa ’ 373; 46ER416,418 in actionquestion(ie,A s legal chose Smith standing 56 – ’’ 821, wheretheterminologyof chose – (1913)23Yale LJ16,and Fourth, inourexample, 679, , [7.76 Grey Tailby Ward v. in action,seeWWCook, ‘‘ per a matterofconsiderable Donaldson in actionare,therefore, – v. ‘‘ as thecontractual 7.77]; owner Samuels JA; Australian Motorists v. v. Duncombe Of – equitable choses 419; ’’ Marshall fi ofa cial Receiver (1854) Kay, v. ’ s release Re Patrick Islington Tolhurst chose Tsu Soo [1893] Smith , 103; chose 58 of ’ in s , , ©Informa null - 17/12/2018 08:43 contracts. It issuggestedthatthethreementioned inthemaintextare contract, acontractualrighttohaveany disputepertainingtothecontractsubmittedforarbitration,andsoforth. and satisfaction. are intheobligor disregarded withinthisPart. in exchangeforvalidconsideration too, isanothermatter. matter oftheassignmentisanintangible on itstrueconstruction,anobligeeobtainsatleast releasing to theobligeeisimportant:for, inelectingnottoexercisethem,theobligeeis,effect, not ‘‘ due (ie,wheretheobligeechoosestoaf to discharge thecontract,buttowaitandseewhathappenswhenactualperformanceis anticipatory repudiatorybreachbyhisobligor(thedebtor)maywellelectnotimmediately he willmake.So,incertaincases,anobligee(forexample,acreditor)facedwith Disregarding theassignmenttoC,Bhasafreehandinchoosingwhich,ifany, election bring legalproceedingsforthatbreach.Bisnot denotes thatBhasarighttoelect bring legalproceedingstobearonA,orelectexercisesomeself-helpremedy, counterparty, andisderivedfromthefactthatB and wherethereisnosigni proceedings atall(eg,wheretheobligee elect the commissionofsuchabreachdoesnotautomaticallybringaboutlegalaction.Bmay case whereAhascommittedananticipatoryrepudiatorybreachofherobligations,since contract, therebycausingBtolosesubstantiallytheentirebene breach aconditionofthecontract;or(iii)actuallyaninnominateterm elect todischarge thecontractshouldAeither(i)anticipatorilyrepudiateit;(ii)actually breach isapresentlyexistingrightarisingupontheformationofcontractdebt. B with A. ii toreleasetheobligorfromhercontractobligations. (iii) accept ’ i)toexerciseanyself-help remediesthatmaybeavailable;and (ii) 5 Apartfrom these three,thecontractmayprovideformore 65. Inothercontexts,self-helprightsmightincludetheexerciseofalienoverobligee 62. WhetherB 61. 4 Suchrelease maybegrantedvoluntarily(inwhichcaseitmustbywayofdeed),or maybegranted 64. Whetheritmayhavebeenlawfullyexercised,though,dependsonthecontingencyofbreach.Butthat, 63. 0 Foreaseofexposition,thevariedandnumerous 60. i tosuetheobligor; (i) Therefore, upontheformationofanycontract,unlesscontractprovidesotherwise Third, Bmayelect Second, Bhas s righttobringanactionagainstA,B to bringlegalproceedingsorexercisesuchself-helpremediesasmightbeavailable to discharge thecontractinfaceofsuchanticipatorybreach,andthen 61 ’’ thebreachsoastodischarge thecontract,butthentoelectnotbringanylegal NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE the obligorfromherobligationsundercontract. ’ s possession;thoughthatwouldnotbepertinentincaseslikethepresent, wherethesubject succeeds ‘‘ self-help not in suchaction,though,isanothermatter. fi to exerciseeitherofthetworightssetoutabove.B ’’ cant losscausedbytheobligor — rights,themostcommonlyavailableonebeinghisrightto in whichcaseweshallhavemoved into therealmofdischarge byaccord chose not . to takeeitherstepatall.Thisismostobviousina fi ’ ’ s rightofelectiontodischarge thecontractfor s owncounter-promises areentirelyexecutory rm thecontract).Or, theobligeemayelectto ‘‘ exceptions required 65 privy ‘‘ core the following — ’’ tothedoctrineofprivitycontractare ’’ 60 to makeeitheroftheseelections. eg, acontractualrighttoterminate the rightswhichshouldbepresentinmost ’ s non-performance).Thisright to thecontractofdebtentered 64 fi t ofthecontract. ‘‘ rights ’’ : ’ s goodswhich ’ s rightto elect 62 Like 49 63 to ©Informa null - 17/12/2018 08:43 that, ifthecontract refuse todo),incomparisonwithwhatthecontract determined bycomparingwhatAhasdoneorwilldo(orsheleftundone to CofB disposition ofproperty now amanagerinaninstitutionwhichishybridbetweenthecreationofagencyand equitable duties,andnottohiscommonlawrights,whichhavebeensubordinated.Thetrusteeis it isthatCentitledtoinsistA when Cisequitablyassigned follow thatBandCwouldhaveintendedfortoexercisesuchright of electiontorelease discharge oftheoutstandingobligationsAandBundertheircontract, itissuggestedthatdoesnotinvariably Eg, giventhattherighttoexerciseself-helpremedyofdischarge for breachreallypertainstotheissueof vehicle forthesuperiorrightsofhisbene ‘‘ and thequestionasto Having identi 50 of interests, andexpectancies,whethertheyareinrealorpersonalestate,aswelltoassignments ‘‘ assignment ofthelegal Precisely thesamethingoccurswhenacontractualobligeeeffects anequitable ‘‘ ‘‘ assigned toCwithoutA understanding thatonemayonlyassigncontractual outstanding obligationsunderthecontract § 70 explanation toapproximatelythesame ends,seeBMcFarlane, obligations bypreciseperformance. C breached thecontract,analysisissimilar Commentaries ofEquityJurisprudence In connectionwithtrustsofland,Hackneyobservedasfollows: (iii) Howdoesanequitableassignmenteffectatransfer? considering howanequitableassignmenteffects suchatransfer. of itsterms,isfoundtohavemadeprovisionotherwise.Thisconclusionreinforcedby to do 1040(referencesomitted). The trusteehasalegaltitleandaccesstocommonlawcourtsremedies,butheisdriven [Courts ofequity]giveeffect toassignmentsoftrusts,andpossibilitiescontingent transfer rights 7 Whethertheydoso,ornot,willdependonwhattheparties 67. 6 Thepositionisthesameinrelationtostatutoryassignments.SeePartVIII(B), 66. 8 InacasewhereBeffects anassignmentofhislegalrightsinthedebtsowedbyAtoC 68. 0 WEGrigsby, 70. – 9 JHackney, 69. Keeping inmindthedistinctionbetweenquestionas choses 71. under thetermsofhercontractwithB,unlessthatcontract,onatrueconstruction ’’ . ’’ 67 in action.Everysuchassignmentisconsideredequity, asinits natureamountingtoa ’ onlyaffects thequestionas s legalrightsasagainstAhasnoeffect onthe But evenifChas,insomesense,beentransferredB LLOYD fi ed whatitisthatB Understanding EquityandTrusts Story ’ ’ S MARITIME AND COMMERCIAL LAW QUARTERLY ’ s termsprovidethatAistopaythesumowing s assent. ’’ ’ s CommentariesonEquityJurisprudence . what chose the debtorisliable 66 in actiontoanassignee.The ’ s positioninsuchacaseisthus,to some extent,moresecure. B has ’ only s legalrightsinthedebtowedbyA:theseselfsame — , itbecomesclearwhatisthatC to whom do the onlydifference beingthatAmaynolongerdischarge her where todosowouldbeforC fi ciary. Helitigatesatcommonlawinresponsetohis states: bene is anotherquestionaltogether. fi (London, 1987),21 ts 70 A isliable.Itcannotaffect whatAisliable , B to do ’ s contractualobligationstoA,ifany, maynotbe ’ The Structure ofProperty Law s termsprescribe,itbecomesobvious , andgiventhatthelatterquestionis intend — First EnglishEdition fi to whom content rst Englisheditionof to passbywayoftheassignment. – 22. Forarathermorelengthy ’ s bene ’ 69 s legalrights,justwhat of thoserights.The ‘‘ fi the debtorisliable, infra t since,giventheusual to B gets 68 . ’’ (London, 1884), , inprinciple, , thetransfer itself (Oxford, 2008), after from such Story A has ’ s ©Informa null - 17/12/2018 08:43 to thedebt]forbene owner ofthe[legalrightstodebt],butaddedthathewasboundhold was theownerof[legalrightstodebt],itsaidthat[equitableassignor] agreed, inasettlementagreement,toassignthebene Grogan. Defaultjudgmentinthesumof£253,304.25wasobtainedagainst him.Thejudgmentcreditorthen action intorthadbeenbroughtagainstanumberofjointtortfeasors, of whomthethirddefendantwasone (formerlyUPUKLtd)andOrs Ltd given tothedebtor. be soevenifthepaymentsweremade notonlyaftertheassignmentbutnoticeofhadbeen to requirecreditbegivenforany sumpaidinortowardssatisfactionoftheunderlyingliability. Thiswould debtor toraisedefencesenforcement arisingoutofthesubjectmatterassignment.Thisincludesright assignor. Anassignmentofadebt,includingjudgmentissubject toequities,includingtherightof reduced orextinguishedMrGrogan under ajudgmentinrespectofjointliabilitytort.[Butp]aymentsby theotherjointtortfeasorsnecessarily does notchangethecharacterofdebt.MrGroganremainedliable after theassignmentashewasbefore, two alternativegroundsfortheirdecision,theCourtofAppealnoted(at [22])that, receipt ofthesettlementsumhadeffect ofextinguishingGrogan receipt ofasum£293,000forwardedbytheotherdefendantstoclaim, otherthanGrogan.Indecidingthat position toexercisehisstrictlegalrights to thecreditor;but,followingequitableassignment,creditorisnolongerina The betteranalysismayratherbethatthedebtoronlyeverowesaduty(atcommonlaw) result wasthattheobligationowedinlawandequitytodifferent people obligor didnothavetoconsidertheassigneeuntilnoticewasgivenand,oncegiven,doctrinal although thatpositionexistedpriortonotice(theassignmentbeingcompletewithoutnotice),the discharge. Thisresultsfromtheobligorowingitsdutyinparttobothassigneeandassignor; assignee, itmaynotbeclearwhethertheassigneeorassignorcanprovidewithavalid ‘‘ explored byDrTolhurst, leadinghimtosuggestthat: bene Yet, iftheequitable assignoristobetreatedasthe assignor, inordertorecoverthedebt,orreducepropertyintopossession declaration oftrustandtoanagreementpermittheassigneemakeusename and CisnoneofA equitable assignmentofthedebttoCisneitherherenorthere.ItamatterbetweenB position mustbethatAisdischarged fromherobligationtopayBonceshepaysB. action. Blackacre byvirtueofthetrust assignment, changethenatureof over a once theobligorreceivesnotice,then,althoughcannolongerignoreinterestof 4 ThiswasrecentlyacknowledgedtobethecasebyCourtofAppealin 74. 73. Paraphrasingtheanalysisinextractattextton44, 72. 5 SeePartVI, 75. SeePartIV, 71. But whatofnotice? This viewastowhatequitableproprietaryinterestsentailseemsnothavebeenfully Just asatrusteewhoconstitutestrustoverBlackacrecannotchangethenatureof fi Tolhurst t oftheassignee,thatdoesnotmakeassignee 71 chose To borrowMaitland NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE , [8.06]. in action.Ifso,itfollowsthatanequitableassignormaynot,byvirtueofthe ’’ supra infra . . ’ fi s concern,unlessshechoosestomakeitso. t ofthe[equitableassignee] [2009] EWCACiv283,albeitinaslightlydifferent context.Inthatcase, an ’ s liability. Theassigneecaninthisrespectbenobetterpositionthanthe ’ s words, ’ s constitution,sotoothetrusteewhoconstitutesatrust chose ‘‘ Equity didnotsaythatthe[equitableassignee] vis-` fi t ofthisjudgmentdebttotheseconddefendantupon a-vis in actionassignedeither. supra ‘‘ the debtorforhisownbene trustee 73 ’’ ’ . . s liabilityonhisjudgmentdebt,inoneof 72 ’’ ofthe ‘‘ Crooks owner chose ‘‘ the assignmentofadebt 75 v. ’’ ’’ . 74 Newdigate Properties ’’ ofthe in actionforthe . The truelegal fi chose t. 51 in ’ s ©Informa null - 17/12/2018 08:43 contractually stipulatedobligation. it hasalreadybeendischarged automaticallybyA too lateforCtoenjoinA equally truetosaythatitwouldbe where ChasagreedtotheassignmentofB Clyne decisions sincethen,eg, per somehow balanced. carrying outherwishtohonourlegalobligations.WhereA B withintenttodefraudC, traceable substitutesforthatdebt:see PartX, the debtispaid,equitableinterest inthatdebtisextinguished(althoughaclaimmightbemadefor the proprietary interest.Butitisextinguished oncepossessionislost:so,too,anequitableinterestinadebt.Once knowing assistance,giventhedebtor paid), accessoryliabilitymightconceivablybeimposedonthedebtor bywayoftheequitabledoctrine the assignee(forexample,wheredebtorknowsthatassignor-creditor willabscondwiththefunds, once cases involvesadebtarisingfrom unconscionable to effect payment,howisthissupposedunilateralchangeintheidentityofherpayeenot in thatobligation.Indeed,givenitisA merely ful equitable assignmenttoC.AcommitsnolegalwronginrenderingpaymentB,butis payment tohercontractuallystipulatedcreditor, B,afterhavingbeennoti In response,onemightmakethefollowingobservations. follow the obligorreceivesnoticeofassignment,itsconscienceisnotboundbyassignment.Italso is giventherenoassignment.Thepositionthesamewithanequitableassignmentbecause,until the assignor. Inthecaseofalegal[ie,statutory]assignmentthismustfollowbecauseuntilnotice ‘‘ assignments: Dr Tolhurst takesabroadviewoftheeffect ofnoticewithinthecontextequitable C. Noticeandunconscionability 52 1002. the unstatedrationaleunderlying decisionofEyreCJin point; So farascaseauthorityisconcerned,thereappearstobenoEnglishdirectlyon something quitedifferent, namely, payC,whenCknewverywellthatAwastoB? purchaser ofalegalestateinBlackacrewhoisseekingto resist thecountervailingclaims perform therelevantobligationforbene Generally, untiltheobligorreceivesnoticeofassignment,itcanobtainagooddischarge from 8 ThereissomeglancingAustralianauthority:see 78. 9 Itmaybethat,wherethedebtoreffects paymenttotheassignor-creditor aspartofaschemetodefraud 79. 0 Ananalogy might bedrawnwiththeunpaidvendor 80. Aspointedoutatn51, 77. 76. Second, evenifitisrighttotreatA First, itisunclearwhywouldbeunconscionableforadebtor, A,toinsistonmaking Isaacs J(thesoledissentingjudge).Thepointhasbeencitedwithapproval inafewotherAustralian v. v. Tolhurst 78 s... Deputy CommissionerofTaxation so, withrespect,itwouldseemthat,shortofanyactivecollusionbetweenAand ‘‘ fi that uponreceivingnoticeofanassignmenttheobligoris unconscionable lling herlegalobligationwhichpredatesthecreationofC , [8.06](emphasisadded). LLOYD 76 vis-` ’ S MARITIME AND COMMERCIAL LAW QUARTERLY a-vis Re DomenickTony Palumbo andSharon RosePalumbo supra A? WherethecontractofdebtprovidesthatAistopayB,and — ’’ 79 the deedisdone,andlegal , CmightnothaveanyequitableremedytopreventAfrom . ’ contractual s it maybethatthescalesofunconscionabilityareevenly ‘‘ dishonesty [1981] HCA40;(1981)150CLR1,[11].However, noneofthese 80 infra ‘‘ ’ A s ful promise ofpayment. unconscionable fi ’ s positionisutterlydistinctfromthatofthe t oftheassignee ’’ ). inmakingpaymenttotheassignor-creditor. Thismaybe fi ’ Tooth ’ s contractualdutytoseekouthercreditor lment ofhercontractualobligationasbeing s rightstothatdebt,howisitnotatleast ’ v. v. s possessorylien.Suchalienis,undoubtedly, a Legh Brisbane CityCouncil ’’ v. ’ ’’ forCtoinsistthatAisdo s preciseperformanceofher . Legh chose (1799) 1Bos&P447;126ER has in actionisnomoreas [1991] FCA241,[36];and bound inconscience (1928) 41CLR212,222, paid B,itwouldbe ’ s equitableinterest fi ed ofan to 77 ©Informa null - 17/12/2018 08:43 equitable interestinBlackacre.BymakingpaymenttoB,Apurchases although itnotedthe covenant, apolicyofinsurancewasenteredintowithColonialMutualInsuranceinMrWhittall an impliedcovenantthattheWhittallswouldinsurehouseinnameofmortgagees.Inbreach Group weresecondmortgagees.PursuanttotheNewZealandPropertyLawAct,s78,mortgagecontained Banking Group were no whether acharge operates over the as ithadcontractedtodo. 99), thatatcommonlawtheemployer inthatcasewas parties thatnosuchcommonlawaction couldbebrought. employer onthebasisofmoneyhad andreceived,notingthatithadbeenrightlyconcededbycounselfor the possibility ofrecoveryagainstthe deceased employee doubt, bothLordGreeneMRandduParcqLJ(at90104respectively) alsoproceededtodismissany himself topayit someone otherthanthepersontowhomalone,andforwhosesolebene employees, therewas, promise byanemployertomakepaymentsthewidowandchildofoneits context astowhetheratrustof second mortgageesnoti existence outsideofthepotentialityitsrealisationbywayanactioninjudicialproceedings. house wassubsequentlydestroyedby in that recover asumsuf breach direct Atomakepaymentanyoneelseapartfromhimselfsuchthatwouldbein had). Hadtherebeennoassignment,Bcouldneverhavecontractuallyentitledto whatsoever, leastofallanythingtowhichC,asequitableassignee,hasanyclaim. merely discharging hercontractualobligation,andgainsnopropertyinterestinanything to Blackacrebyatrustbene purchased thelegaltitletoBlackacre debt ‘‘ amounted toadebt,charge overadebtmerelyconfersuponthechargee therighttohavedebtenforced, to beupheld.Thisissomewhatodd,atleastbyEnglishstandards.Evenaccepting thattheproceedsofpolicy of thepolicywhichinsurershadreceivednotice,andinconsequence thedecisionofcourtbelowought In theopinionofPrivyCouncil,acharge bywayofequitableassignment hadbeencreatedovertheproceeds they weretopaythatsumagainthesecondmortgagees.TheNewZealand CourtofAppealorderedthelatter. that sumtoMrWhittall,theinsurershaddischarged theirobligationsunder thepolicyofinsurance;orwhether the secondmortgageeslookedtosumpayableoninsurancepolicy. Thequestionwaswhether, inpaying recovered tothesecondmortgagees.Evenso,thereremainedsomeNZ$73,000 outstanding,andtosatisfythis, obligation. received bytheassignorfromdebtor, inpreciseperformanceofhercontractual interest inthetraceablesubstituteofassignor there isanythingthattheassigneehasanequitableinterestin,itcanonlybe not byactionagainstthedebtor, butbyproceedingsagainstthepartywhocreatedcharge toassignthe 4 Counselfor thetrustee-in-bankruptcyhadconceded,rightly, asLuxmooreLJnoted( 84. [1944]Ch83(CA),104.LordGreeneMRalsomadesimilarobservations,at93.Puttingthepointbeyond 83. 2 ThispointwasnotbroughttotheattentionofPrivy Councilin 82. 1 Evenifitisrighttosaythatanobligeea 81. Third, C,astransferee,gainsnomorethanwhatB,theassignor, had(orcouldhave ’’ : chose Burlinson ‘‘ ‘‘ of herobligationswereshetorefusecomplywithsuchdemand(absentexpress proceeds proceeds NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE , itmustberememberedthatthe 82 [1995] 1WLR1140,orsoitseems.MrandMrsWhittallownedahouse,ofwhichANZBanking Indeed, asduParcqLJnotedin v. v. ’’ fi ’’ Hall ofthepolicy, thatis,suchsumsashadbeen cient todischarge theWhittalls , onlythe ’’ fi rst mortgagees . Thepositionwas,therefore,thesameinequityasitwaslaw. fi ed theinsurersoftheirinterest,andinterestin (1884) 12QBD347,350, ‘‘ by wayofassignment ‘‘ no instanceinwhichequitycompelsamantopaymoney chose fi ciary onthebasisthatheisEquity ’ interestin in actiononthepolicy. SeealsothediscussioninPartX, fi re. The chose chose fi ‘‘ chose rst mortgageesexercisedtheirpowerofsaleandmanagedto in actionhadbeenconstitutedoveracontractual the insurance ’’ only existsasathinginaction.The per bona atall,see ’ indebtednesstothem,turningovertheexcessamount Day J.Thisisonlylogical,sincethecharge wascreated in actionisentitledtotheperformanceofobligations Re Schebsman ’ entitled s wifeandchildrenofmoniespaid tothembythe fi ’ de s legalrightstothedebt Tolhurst ’’ to makethepaymentswidow andchild asmortgageesofthehouse.Subsequently, the received without noticeofthebene , [3.17]. , by MrWhittall.Priortoreceipt,there 83 ‘‘ Colonial MutualInsurance the insurance albeit inaslightlydifferent ’ s darling,ie,thathehad chose ’’ fi — Re Schebsman wasalsonoted.The nothing t, hehasbound has noindependent ie, themonies ’ s solename, infra fi . Sheis ciary . Asto v. v. , 84 81 ANZ ibid 53 ’ If s , ©Informa null - 17/12/2018 08:43 152 ER789( much thesameincourseofcounsel days observed in right toaf the creditor-assignor, orhisassignee. performance) isarefutationoftheclaimant assignment orofnotices in compliancewiththem.NoristhereanythingwithinEquitypertainingtoequitable that givessuchunilateraldirectivesanycoerciveforcesoastocompelthedebtoract arises outofacontractual which ineffect allegesthattheclaim nolongerexists there hasbeenpayment,thepartyagainstwhomclaimisbroughtpleads paymentoraccordandsatisfaction, precise conformitywiththecontractualrequirements and avoidance.Ifthedefendantsuccessfullyprovesnewfactpleaded directives. Without assentandconsideration, of payment.Noticesassignmentare,essentially, unilateralcommunicationsor necessarily (London, 1999),vol42,[410]. ought nottobethecase? is saidtodothedebtor Yet thisispreciselywhatthesupposedruleastonoticeofequitableassignmentadebt his contractunlessthecourtinagiveninstancethoughtitreasonabletodoso hold otherwisewouldbetointroduceanovelequitabledoctrinethatpartywasnotheld the behestofotherpartysoastodeprivehimselfbene no disabilityoneitherside.Thereisdutylaiduponapartytosubsistingcontractvaryitat the [garagecompany].Itistritethatequitywillnotrewriteanimprovidentcontractwherethere .[But]thereisnoequitywhichcanassist . . contract causinganapparentwasteoftimeandmoney ‘‘ in thesamemanneras,say, aset-off. is the ruleastoequities).WhereAhaspreciselyperformed,herpleaofsuchperformance the assigneefromequitiesasbetweenassignoranddebtorarisingpost-notice(ie, how isitthatC,asassignee,inanydifferent position? or impliedtermstothateffect). Rather, Awouldbe 54 the breach v. [I]t maybeunfortunatethatthe[garagecompany]havesaddledthemselveswithanunwanted Forbes 9 Oraconsideration substitute. 89. [1962]AC413, 445. 88. 7 Thepleaofpaymentgoesbeyondameretraversetheclaimant 87. 6 Notwithstandingthat 86. Seetextatandfollowingn50. 85. not In theslightlydifferent contextofmitigationandits(ir)relevancetoaninnocentparty On theanalysisinthispaper, beingnoti Fourth, thisisnotacasethatinvolvesapplicationoftherulewherebynoticeinoculates ’’ ( , whencloselyexamined,anequityasagainsthercreditoramountstoadefence Hewlett (1916) 140LT 483,aset-off isnotequivalenttopaymentoraccordandsatisfaction.Seealso ... fi ‘‘ rm acontractfollowingtheotherparty affect themannerinwhichdebtoristobedischarged fromherobligation LLOYD ’’ In thecaseofacovenanttopaymoney onaparticularday, payment onthatday v. v. White &Carter(Councils)Ltd ). Seealso Allen ’ [1894] AC383,389, S MARITIME AND COMMERCIAL LAW QUARTERLY Chambers ‘‘ [t]he distinctionbetweenpaymentandset-off wasoftenavery ’ per se s obligationtomakepaymentthenamedcreditor. Surelythat chose v. v. ’ s submissionsin which givethemmandatoryeffect. Insofarasthedebt Miller in action,thedebtormaychooseto per (1862) 13CB(NS)125,134 Lord HerschellLC),astheCourtofAppealheldin 86 ’’ — : ’ s causeofaction, Halsbury v. v. Rather, thepleaofpayment(ie,precise she destroysornulli 89 fi Kington McGregor ed ofanequitableassignmentdoesnot there isnothingwithinthecommonlaw ’ s breachofacondition,LordHodson , (London,1999),vol42,[410].Parke Bnoted entitled v. Kington ’ s claim.Itisapleabywayofconfession fi 85 that: t giventohimbythecontract.To — to ignoreB 87 (1843) 11M&W233,234 fi – that shehaseffected paymentin 88 135; 143ER50,53 es theclaimant whether thatclaimantbe ignore ’’ ’ . s demand.Ifso, ’ s case. such notices fi ne oneinold is adenialof – Ribblesdale 54. Halsbury ‘‘ Where – 235; ’ s ©Informa null - 17/12/2018 08:43 90, 94.Certainly, alltheelementsofpromissoryestoppelareto hand. from beingabletomakeanysuchclaimagainstA. to commonsense.Butimmediately, onecanseethatBmust,attheveryleast,beestopped on thenoticeofassignmentgiventoherbyeitherBorC(onauthorityB)iscontrary the assigneewasissuingnotice on behalfofthecreditor-assignor. her contractwithcreditor. Butitiscertainlyconceivablethat thedebtor effect onwhatisrequiredtopermitthedebtorbedischarged fromher obligationunder The pointhasalreadybeenmadethatequitableassignment,noticeorno,canhaveno A. Caseswhere thecontractprovides forunilateralvariation go beyondestoppel. may wellbeexpress her creditormayincorporatemorethanonemodeofperformance,andsuchprovisions make payment to assertthatthedebtor, A,hadfailedtopreciselyperformhercontractualobligation different riskofdoubleliability and effect paymenttotheassignee,itmightseemthatdebtorwouldbeexposeda been equitablyassignedtotheassignee,shoulddebtorchooseactuponsuchnotice therefore longbeen Law that estate.Naturallyitcouldbeassignedwithreversion could benoassignmentofachoseinaction.Arentreservedonfreeholdestatewaspartthereversion property, whichtookthemoutofthecategorymerechosesinaction,andthereforerulethatthere action, becauseitmaybegrantedover if itsuitshertodoso. (Covenants) Act1995,s3(whichappliesto 212b; 73ER469.SeealsoCoLitt151b.Thatpositionhasbeenstatutorily preservedbytheLandlordandTenant person, butinrespectoftheestat the granteeshallhaveit,forprivity ofcontractfollowstheestateland,anditisnotannexedto the with theestate,andthereforegrantorshallnothaveanyactionfordebt forrentdueafterhisassignment,but in respecttothelan But, forasmuchastherentissuesoutofland,assigneewhohath landandisprivyinestate,debtor his interest,thelessormayhaveanactionofdebtagainstassignee,with whomtherewasnocontractbydeed. a debtorwhohaspromisedtopaycertainsumondayher creditor. noti lessee, asaresultofwhichthelesseeisboundtopayrentnewlandlord. Thepositionofatenantwhois free toassignthereversion,followingwhichtherewillbeprivityofestate betweenthe tenancies otherthan general, leasesgrantedonorafter1January1996),theLawofProperty Act1925,s141(whichappliesto On theanalysisinthispaper, whereadebtorisnoti an alternativemannerbypayingtheassignee.ThisisexploredinfollowingPart. effect soastovaryherlegalobligation,therebyeffecting adischarge ofherobligationin 2 AsSirWilliam Ansonobservedin1901:WRAnson, 92. Wherethenotice isprovidedbytheequitableassignee,itseffectiveness mustsurely be onthebasisthat 91. 0 Thecaseofalessor 90. fi , volVII,2ndedn(London,1937),264 ed thatthereversionhasbeenassignedtoa VI. DISCHARGE BY PAYING THE EQUITABLE ASSIGNEE NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE to B ‘‘ d... So on ‘‘ assignable new tenancies when shehadmadepaymenttotheequitableassignee,C,inreliance or implied ’ s obligationtopayrentraisesdifferent concerns. 90 ’’ Conversely, thedebtormaychoosetogivesuchnoticeslegal inthesensethatitwould the othersideiflessorgrantsoverhisreversion,nowcontractrunneth e... ’’ ). Furthermore,unlesstheleaseprovidesotherwise,lessorisusually ’’ — ’’ : CoLitt292b.Consequently, . : this time,toheroriginalcreditor. To allowacreditor, B, Walker – ‘‘ 265 (referencesomitted).Theentitlementtobepaidrenthas new tenancies ’ s Case ‘‘ new ’’ landlordis,therefore,notthesameaspositionof (1587) 3CoRep22a,22b;76ER676, 678 ‘‘ run ‘‘ Assignment of ’’ ’’ , asde : SirWilliam Holdsworth, ’’ 92 fi withthereversion: ed byhercreditor Yet theeffect ofsuchpaymentmay fi ‘‘ ned ins1(3)ofthe1995Actbeing, [a]ll rentswereregardedasaspeciesof Choses ‘‘ [Rent] isathingnotmerelyin ‘‘ [I]f thelesseegrantsoverall in Action Read ‘‘ 91 new A HistoryofEnglish v. v. that thedebthas ’ Lawnse ’’ s contractwith ’’ landlordandthe (1901)17LQR (1562) Dy – 679. 55 ©Informa null - 17/12/2018 08:43 parties following manner: chalk atsuchpricesaswerespeci was liabletohonouritscontractualobligationsselltheassigneessuchquantitiesof to whompaymentortenderofisbemade), a To explainhowtherecanbe,ineffect, avariationofthedebtor reinforced bytheanalysisbelowastohowdefenceof tendermaybeseentooperate. terms, theHousecouldnothavecometoanyotherconclusion; andthatpropositionis of acommonlawobligationonceagreeduponandcrystallised intheformofcontractual arrived atbytheHouseofLords,leastsofarasmajority wasconcerned. principle ofequitableassignmentwasnotreliedupontoexplaintheultimatedecision terms ofthecontract,construedinexpansivemannerputforwardbycourt.The to clothetheassigneewithappropriatecharacteristicsasfallwithinscopeof Portland Cement construed asifitcontainedaninterpretationclausesayingthattheexpression individual Tolhurst [theappellant-obligor].Itseemstomethatthecontractisbereadand ‘‘ v. 56 ‘ successors andassigns North include Tolhurst andhisheirs,executors,administratorsassigns,ownersoccupiersofthe deliver hisownspeech.However, LordMacnaghtenwasdeputisedtocon Lord Macnaghten:seeesp423. him (at421).LordLindleydelivered ashortspeechwhichadoptedbroadlysimilarapproachtothattaken by doctrine ofequitableassignment therein, LordMacnaghtenreliedonalegalprinciplethathadnothingtodowiththe speci delivery ofchalkatthecontractuallystipulatedpriceandminimumquantities in holdingthattheappellantwas delivery ofchalkextractedfromamineownedandoperatedbytheappellantobligor. Yet equitable assignmentofthecontractualrightsenjoyedbyassignortosaleand plainly basedonsomethingelse.Inthatcase,therespondentcorporationhadtakenan example ofequitableassignment,theleadingspeech,deliveredbyLordMacnaghten, contract, his Something moreiscomprehendedthantheparticularcompany[theobligee-assignor]and 3 [1903]AC414 (hereafter 93. 4 With whom theEarlofHalsburyLCreluctantlyagreed:[1903]AC414,416).Lord Shandwasunableto 94. 96. [1903]AC414, 419. 95. Given theanalysisfavouredhere,highlightingcommon lawruleastoinvariability One exampleofsuchacontractwithrelevantimpliedtermmaybefoundin Therefore, thesigni Taking intoconsiderationthecommercialcontextleadingtoformationof Associated PortlandCementManufacturers (1900)Ltd ’ and fi fl Ibid ’’ eet quarries.Andtheexpression ed thereinhadnotterminatedwiththewinding-upofnamedcounterparty . 95 ‘ , 420. their Lord Macnaghtenresolvedthedif LLOYD ’ shouldhaveacorrespondingmeaning.That,Ithink,wastheplainintentionof from theoriginalobligee-assignortoassigneecorporationwasonly 96 ’ S MARITIME AND COMMERCIAL LAW QUARTERLY , ownersandoccupiersoftheNorth fi cance oftheequitableassignment ‘‘ Portland Cement per se not fi ed inhiscontractwiththeobligee-assignor entitled toclaimthathiscontractualobligationof ‘ the company . ’’ ). Foradifferent reading,see fi culty astowhethertheobligormine-owner ’ shouldincludethecompany fl eet CementWorks, andthatthewords . 93 fi rm thatLordShandconcurredwith common law ’ Although oftencitedasan s obligation(astotheparty Tolhurst chose ‘ , [6.121]. Tolhurst explanation is in action Tolhurst ’ should and its 94 is ©Informa null - 17/12/2018 08:43 Scots law):WMGloag, performed hisobligationtoputAinfunds,itisstillpossible forAandBtoagreebring insist thattheotherperformitsas-yet-executoryobligation. But,whereBhasalready 345 of thecontract,ratherthanattime ofthesubstitutioncounterparty:seeKirby(2000)31VUWLR317, novation, wheretheagreementofobligor tosuchnovationisobtainedinadvance,atthetimeofformation as mighteventuallybenominated as somefuturedatebytheobligeemightalsobetakentoaform of edn (Edinburgh, 1929),257.Indeed, suchanagreementbyobligortoperformherobligationsentity Contractual Duties:IntegratingTheoryandPractice Eastern ElectricityPlc to the to the assignment andviewthemechanismfortransferasbeingaformofnovation, wheretheconsentofobligee consent fromtheobligee,oneothercommonlawsolutionwouldbe todisregardtheliterallanguageof A andBmay obligations ofthecontractloanbetweenAandBwillstillbeexecutory. Insuchacase, So, ifthedebtisasyetnotduebecauseBhasdisbursedloanmoniestoA, release effective variation.Asimilarconcessionafterbreachconstitutesanaccordandsatisfactionor by considerationorintheformofadeedwill,subjecttoanyrequirementwriting,constitutean ‘‘ variation What ofcaseswithneitherexpressnorimpliedprovisionforsuchseeming B. Caseswithoutprovision forunilateralvariation required. Andonecommonlawexplanation discharged withoutanyactofassentbyB compliance withthetermsofhercontractualdebttoB,obligationwillbe by thedebtor/obligor. bilateral offer ofvariationthecontractthatbecomesbindingonlyuponitsacceptance with thecharacterof construe expresstermsinthecontractanexpansivemanner(toincludepartiesclothed from andgrantedbythedebtor/obligor. is notpossibletodiscernfactsconsistentwithassentthevariationhavingbeensought mention ofthem)or, perhaps,toimplysuchaterm,ifthefactsofcasemeritit,it a contractofloan,itisperfectlyconceivablethatAmightbe obligation maybedischarged. InasimplecasewhereAisindebtedtoBonthebasisof discharge byB(muchless as pertheoriginaltermsofcontract. from unilaterallyresilingitandinsistingthatAreverttohonouringherobligations cases, theproblemoftenbecomeswhetherB from herobligationtopayBsimplyby [a] concessiongrantedbyoneparty(B)tothecontractother(A)beforebreachandsupported 8 ItappearsthatthiswashowScotslawcomprehendedassignment(orassignationasitisalsotermedin 98. 99. 7 Inothercases,wherethecontractprovidesthatassignmentthereofisconditionaluponobtainingof 97. Where AisindebtedtoB,itplainthat,shouldmakepaymentBinfull It hasbeensaidthat: – 348. ‘‘ ‘‘ Halsbury ’’ assignment assignee . ’’ NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE ? Insuchcases,noticemayberelevantasconstitutingeitheraunilateralor ’’ (London, 1998),vol9(1),[1027]. vary . ThiswashowtheCourtofAppealviewedarrangementsin ’’ functionsastheobligee the termsoftheiroriginalcontractloanbymutuallyagreeing notto [1996] EWCACiv1239andisdiscussedinJKirby, The LawofContract: A treatise ontheprinciplesofcontractinlawScotland ‘‘ 99 assignees ’ s assignees).Butthisisnottheonlymodebywhich ’’ , asin ’ s assenttoanovationofthecontractualbene 98 ’ ’’ s waiverofthetermrequiringpayment.Insuch Portland Cement (2000)31VUWLR317,342 97 — ’ may lieinthecourt s waiverisbindingsoastoprecludehim there isnoquestionofany , evenifthereisnoexpress ‘‘ released ‘‘ Assignments andTransfers of ’ s willingnesseitherto – British GasTrading Ltd 343. ’’ or fi ts ‘‘ and discharged ‘‘ ‘‘ grant unilateral its burdens ’’ , 2nd of 57 v. ’’ ©Informa null - 17/12/2018 08:43 the identityofpayee. satisfaction oracontractualvariation and,absentanyexpressorimpliedtermpermittingunilateralchanges in waiver something otherthanwhatthecontractspeci obligation tomakepaymentBbypreciseperformance,sinceAhasperformed A makespaymenttoC,anequitableassigneefromB,hasnotbeendischarged fromher between thatcaseandthiswouldseemtolerablyclose. be anythingotherthanforC payment byA,itisdif given thattheentirepurposeofassignmentwouldbetoentitleB is bindingonBevenabsentanyconsiderationfromA. by variationifitisnot.And,BexecutesadeedreleasingAfromthedebt,thatrelease of discharge by so longasAprovidesfreshconsiderationto their loanagreementtoanendandreleaseAfromherobligationsunderthat 58 variation). under thecontractofdebt, general, andapartfromthecaseofapromisetopaylessersumthanisalreadyowed (whether inequityorpursuanttostatute)addsnothing. However, noticeissigni original contractofdebtwithBbypayingCat pay B,ifsheagreestoC.A obligations tobemodi because itconstitutesthe discharge oftheoriginaldebtobligationbyaccordandsatisfaction. by thedebtoratdirectionofcreditor, suchfactsmaysupportapleadingof were, thereiscertainlyauthoritytosupportthepropositionthat,whereathirdpartypaid for releaseislegallyeffective andbinding.Noneofthisshouldbecontentious.Evenifit the creditorsoastoreleasedebtorfromhavingpaycreditor, thensuchpaid- Should surely paymenttosomeone the timeorplacewhensuchdebtisdueforpaymentandthereforesimilarlyinvariable, creditor towhomtheloanedmoneysareberepaidisasmuchatermofcontract executory consideration.Ifweacceptthepropositioninthispaper, thattheidentityof applicable inrelationtoadebtobligation, variation oraccordandsatisfaction,thoughtherearesomespecialconcernsthat rights tothedebtCatanearlierpointintime. autonomy inhisdealingswiththe 0.Typically inthecontextofanequitable assignment,forconsideration,soastoamountanaccordand 105. 0.Which,from 103. See 102. See 101. 100. 0.Eg, 104. Where Acommunicatesheracceptanceofabilateraloffer ofvariationbyB,orwhere Thus, noticetoAsimplyconstitutesafreshoffer todischarge Afromherobligationto As towhatmightamountgoodconsiderationforthepurposesofdischarge by Preston 105 that Page Halsbury may weconcludethatAisrelievedfromherobligationunder thetermsof Halsbury LLOYD be thesatisfactionrequiredofanaccordorvariationbetweendebtorand v. v. Christmas ‘‘ Meek , (London,1998),vol9(1),[1045]. accord andsatisfaction Pinnel ’ (London, 1998),vol9(1),[1045](astoaccord&satisfaction)and [1023](asto S MARITIME AND COMMERCIAL LAW QUARTERLY (1862) 32LJQB4,4 ’ fi fi s Case (1759) 2Wils KB86;95ER700. ed. cult toseehowsucharrangementsenteredintobyBwithAcan 103 other offer (1602) 5CoRep117a;77ER237, is notgoodconsiderationatall. ’ s bene most otherpromiseswhenperformedwillamounttogood than thatcreditormustamounttogoodconsideration? of variationthatpresentstheopportunityforA chose ’ fi s agreement,signi t andarethereforewithinthescopeofB – ’’ 5. ifthedebtisalreadydue,oracaseofdischarge in actionifBhadequitablyassignedhislegal 101 ‘‘ the usualrulesapply. fi purchase ed. Onlybyinterpolatingthedoctrineof ’ s request.Inthis,thelawofassignment 100 ’’ fi B ed byperformingtheveryact If BhadassignedthedebttoC, ’ s releaseofthose ’ s assignee,C,todemand 102 Which istosay, in 104 The analogy — ’ ie, acase s limited fi cant ’ s ©Informa null - 17/12/2018 08:43 comply withthetermsofcourt doctrine ofmerger, thoseobligationswillhavebeensupersededbyherobligationto to performpreciselyaccordingthetermsofhercontractdebt,for, asaresultofthe with thejudgment.Thereisnolongeranyconcernastowhetherdebtorstillobliged right tobringadisputeforresolutionbeforecommonlawcourt,willhavebeen satisfaction) thatbindsAandB;and,under A. A caseof(failed)set-off: that paymenttoC,asrequested. If so,A requested inB noti Bannister. HeassignedsumsaswouldbeduefromBannistertoBrice,andwas creditor, thedebtorbecomesajudgmentdebtor, andthe should thecourt co-claimants orclaimantasthecasemaybe.Ineithercase,oncejudgmentisdelivered, the debtor, ifnot.Shouldtheactionsucceed,judgmentwillbeorderedinfavourof wishes tocooperate,orassoleclaimant,namingtheassignorco-defendantalongside assignee isentitledtonamehimselfasco-claimantalongsidetheassignor, ifthelatter proceedings againstthedebtor, albeitinthenameofassignor. As weknow, the the keyconceptisthatofmerger. that Amakepayment any paymenttoeitherparty to eitherstatutoryassignororassignee;or, whereshehasindicatedthatwillnotmake One C. Caseswhere thedebtorhaspaidneitherhercreditor northe assignee out inthecontractwithhercreditor, instead. to supported bygoodconsiderationforsuchvariation.Itremainsopen,though,thedebtor rule astoinvariabilityofcontractualobligations,unlesstherebeassentbytheobligor for A obligation remainsoutstanding,releasingAfromhavingtopayBisgoodconsideration requested ofher. Last,asallofthisoccurswhilethedebtor communicate heracceptanceofsuchoffer, butmayacceptbysimplyperformingtheact notice We startwiththecasemostcommonlyrelieduponinsupportof 0.(1878)3QBD 569. 108. 107. B 106. So muchforprinciple;whatofthecases? Where thedebtorisinactualbreach,equitableassigneeentitledtolaunchlegal reject fi fi ed oftheassignment.Fearful,however, thatGoughwouldnotbeable tocomplete ’ ’ ’’ nal permutationremains.Thatis,wherethedebtorhasnotmadeanypaymentatall, s newobligationtopayC.Soweareinperfectconformitywiththecommonlaw Halsbury s acceptancewillhavetobecommunicated toB,typicallyintheformofacounter-promise toBmake rule: ’ s offer will,typically, beunilateral.ButitisopentoBframe his offer ofdischarge asbeingbilateral. such anoffer, electingtomakepaymentinpreciseconformitywiththetermsset NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE Brice ’ (London, 2001),vol37,[1225]. s offer, fi nd thatthedebtisdueandunpaid,assigneebecomesajudgment v. Bannister 106 to B VII. THE CASES: A FRESH LOOK results intheformationofacontractvariation(oraccordand — . Further, shouldtheoffer takeaunilateralform,Aneednot ie, wherethedebtorisinactualoranticipatorybreach.Here, Brice . 108 There, Goughhadbeencontractedtobuildaboatfor ’ s judgment. v. Bannister that 107 contract, Bisboundtoinsistnolonger chose in action,beingthelegal ’ s originalcontractual ‘‘ no discharge after merged 59 ©Informa null - 17/12/2018 08:43 & Co assignee). Cotton LJinholdingthatthedefendant wasobligedtopaythesumdueonboat-builder LJJ concurred). debt, onceitbecamedue). owe Goughmoney, andwouldthenbeboundtopayme[Brice] right topayinadvance;youwereboundwaittilltheworkwas between thetwosetsofdebts(asthatprincipleisde arising fromthedefendant assignee. claimant to payundertheboat-buildingcontract,bene was notopentothedefendantdebtorrelyonstatutoryset-off todischarge hisobligation v. fell due.However, onceGough that theybesetoff againstthesumstobepaidunderboat-buildingcontractasthose were notpaidbywayofgift,theymusthavebeenmadeloanwiththeintention contract instructive. First,CottonLJnoted for thesumsthatweretohavebeenpaidoncontract,andsucceeded. in advance construction oftheboatifhewasnotkeptinfunds,BannistermadepaymentstoGough 60 payments andthesumsdueonboat-buildingcontract. there beinginsuf equitable set-off wasavailabletothe defendantdebtorowingtoalackofmutualityand be uptotheassignee,ieBrice,makethatdecision. to makethedecisionaswhetherbringproceedingsondebtornot.Itwouldthen staged paymentforworkdoneinbuildingBannister contract. Byvirtueoftheassignmentrighttobringaclaimondebt(ie, Bannister and longer beanymutualitybetweenGough due andpayableundertheboat-buildingcontractwasassignedtoBrice,therewouldno contract payment wasdistinctandseparatefromthedebtsarisingdueunderboat-building 1.See,inparticular, 115. 1.RDerham, 114. 1.(1872)LR 8ChApp254,261( 113. (1878)9ChD595,597( 112. 1.Thatistosay, BricewouldhavetheequitabletitletoGough 111. 110. 109. Samuel Nor couldtherebeanysubstantiveequitableset-off, sincethedebtowedbyGough If Bannisterhadnorighttomakeadvancesundertheboat-buildingcontract,asthey The followingpassagesofthejudgmentshandeddowninCourtAppealare Brice 112 Ibid Ibid ’’ — (1841) Cr&Ph161,178 ’ v. and . s demand. , 581. , 578 109 they wereinsuf Bannister of anysumsaccruingdueontheboat-buildingcontract.BricesuedBannister LLOYD Re ParaguassuSteamTramroad Co;Black&Co Second, BramwellLJrestatedBrice The LawofSet-off fi cient ’ S MARITIME AND COMMERCIAL LAW QUARTERLY 114 Brice ought, therefore,tobereadasacasewhereneitherstatutory nor ‘‘ There wasno ’ interconnectedness s obligationtopayGoughasrequiredundertheboat-building v. fi ciently interconnected. per Bannister ’ – s advancepaymentdidnot 180; 41ER451,458 , 3rdedn(Oxford,2003),[4.02 Jessel MR). per ’ s righttoreceivesumsfromBannisteraswouldbecome Lord SelborneLC,andwithwhomSirWMJamesGMellish (1878) 3QBD569,581, ‘‘ the advanceswereinnowaysanctionedby ’ ‘‘ s obligationtorepayanyadvancesreceivedfrom impeachment ’’ betweenthedebtsarisingoutofadvance – 459. ’ 115 fi s casetobe: ’ t ofwhichhadbeenassignedtothe fi s boat),itwasnolongeruptoGough ned incasessuchas ’ – ’’ s 4.03], drawingontheauthorityof 111 sincethedefendant chose per There wasthusnomutuality Bramwell LJ(whoultimatelyjoined ‘‘ in action(inrespectofBannister impeach ’ s Case ‘‘ fi ’’ You [Bannister] hadno nished; youwouldthen . 110 .) ’’ 113 thetitleof Accordingly, it Re Whitehouse ’ s contracttothe ’ s advance Rawson ’ s ©Informa null - 17/12/2018 08:43 It ispossibletoviewFarrell was acceptedwhenMoorepromised,atFarrell and satisfactionbyMooremakingpaymenttoJonesinstead oftoFarrell original liabilityontheaccountstatedforbuildingof Moore by preparingawrittenorderaddressedtoMooreonthefollowingterms: obtain furthercredit,Farrelleffected anequitableassignmentbywayofsecuritytoJones Moore afactory. Farrellwasalsoindebtedtothe (i) The support the Moore wastopaythesumoveragain,butthistimeJones.Althoughappears making Moore,aswellFarrell,responsibletopaythesumoverJones.Ineffect, money. Jonessuccessfullyappealedagainstthelatterpartofdecreeanditwasvaried, but notagainstMoore.Butbythattime,thepartnersinFarrellweregoodfor pay themoneytoit. its billandprayedthatMoore,Farrell,orsuchofthemasthecourtsaw hearing, MoorepaidthesumonaccountstatedtoFarrell.Inresponse,Jonesamended Farrell fromprosecutingthatactionatlawbut,beforeapplicationcameonfor 222; 44ER703,709) also tohaveacceptedthattherewas anequitableassignmentfromFarrelltoJones(at(1857)1DeG&J208, had lefttheseinstructionswithJones forconveyancetoMooreashisagent. The orderwasleftinthehandsofJones,whosubsequentlypresentedittoMoore. Bland &Cothatsumoranylessamountwhichmayfromtimetobeowingbyyouus. ‘‘ B. A caseofaccordandsatisfaction: due fromMoorefortheworkdoneon from Mooreinrespectofthebuildingtheyweremakingforhim ‘‘ Bland &CowhateverbalancemaybeduefrommetoMessrsFarrellGrif receipt, Mooreindorsedupontheorderasfollows: order. undeniably hadnoticeofsuchassignment,givenhisindorsementontheverysame In ... We desireyou[Moore]toacceptthis orderuponyouforthesumof£1,000,andpayMessrs.Jones, assignmen 2.Foundbythe architectemployedtosettletheaccountbe£472,8s. 121. (1857)1De G&J208,216and220;44ER703,707708. 120. (1857)1De G&J208,216;44ER703,706.KnightBruceLJ(withwhomTurner LJ concurred)seems 119. Admittedly, thecapacityinwhichJones didsoisunclear. Butitisnot legallyimplausiblethatFarrell 118. (1857)1DeG&J208,208 117. (1857)1DeG&J208;44ER703. 116. The amendedbillwasallowedbyLordRomillyMRat Lord CranworthLCacceptedthatFarrell Jones ’’ . 120 ‘‘ Despite theorderandnotice,however, Farrellsubsequentlysuedforthebalance voluntary NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE v. Farrell t... to ‘‘ no discharge afternotice — ’’ , 116 though ofwhat,itremainsunclear. the extentof£1,000whatshould,fromtimetotime,beduethem paymentinJones the fi ’ rm ofFarrell&Grif s – ‘‘ 209; 44ER703,704. order ’’ toMooreasamountinganoffer to discharge the ’’ v. rule,initialappearancesaredeceiving. Jones Farrell ’ s factorybuilding. v. ’ ’ s request,topayJones.Therefore, s fi fi Farrell rm ofJones,Bland&Co( ths ( ‘‘ order ‘‘ I promisetopayMessrsJones, ‘‘ Farrell ’’ fi toMooreamountedan, rst instanceasagainstFarrell, ’’ 121 ) wascontractedtobuild ’ s factoryonanaccord Jones soughttoenjoin ’’ — fi . 119 t, beorderedto 117 an offer which ‘‘ And Moore Jones fi ths ’’ 118 ’’ Jones . ). To On 61 ©Informa null - 17/12/2018 08:43 this case,uponnobetterfootingmerelyvoluntary Moore made that promise,theoriginalcauseofactionisdischarged fromthedatewhenpromiseis creditor acceptsinsatisfactionismerelyhisdebtor satisfaction, thatisamatterofconstruction.And, discharged. Untilthereissatisfaction,nodischarge. Butas towhatcountsas the majoritymusthavefoundthatoriginalobligationtopayhad is tosay, implicitinitstreatmentofMoore debt forwhichitwastohavebeeninsatisfactionhad Moore impact ontheoutcomeofcase, LC hadsuggestedthatthis have beenthatMoore stated bythearchitectappointedtosettleaccountinfavourofFarrell?Thereasonmust paid underanyformoflegalobligationtodoso.Yet howcouldthisbe,giventheaccount view, Knight-BruceLJmusthavemeantthatthesumpaidbyMooretoFarrellwasnot payment toFarrellwasasgoodvoluntary, becomesperfectlyexplicable.Intakingthat provided byMooretookexecutoryform. v. 62 be executed,bythetime make bothFarrell This alsoexplainswhyJoneswaspermittedtohavethedecreeagainstFarrellvaried, Hence, Moore Farrell, andtherebydischarged thatoriginalobligationofpaymentontheaccountstated. satisfaction soastoimmediatelymakeeffective theaccordreachedbetweenMooreand Bench in of thisdecisionat(1857)3Jur(NS)751:p753,itreportsthatKnight BruceLJ (at (1857)1DeG&J221,216;44ER703,708).Thepointismadebarely moreobviously, perhaps, in thereport 222; 44ER703,709),insteadoftheorderthattherebenocosts asproposedbyLordCranworthLC decree orderedthatcostsatlawbeinfavourofMoore,asproposedbyKnight BruceLJ((1857)1DeG&J208, The reportthenimmediatelyrecordsasfollows: say. Myimpressionis,thatMrMooreshouldhavethecostsatlaw;butmustdependupontheiropinion Moore oughttohavethecostsatlawbesetoff, subjecttowhattheLord ChancellorandtheLordJusticemay Knight-Bruce LJandnotwiththemuchlongerjudgmentofLordCranworth LCbecausethe at lawagreed at5l 708 ( it was)givenawrittenundertakingthat hewouldactuponthatnotice had providedawrittenundertakingthathewouldpayJones. accepted byParkeB.in and Trade OutlookLtd 15 M&W23;153ER745; Ex 601;154ER255. 2.Thoughearlyauthorityrequiredthatconsideration tosupportaneffective accordandsatisfactionhadto 122. 2.Arguably, theleadingjudgmentwasthatofKnightBruceLJ.We mayinferthatTurner LJagreedwith 123. 127. 126. 125. (1857)1DeG&J208,219;44ER703,709. 124. Once werecognisethis,thepointmadebyKnight-BruceLJ,thatMoore In whatshouldbetakentotheleadingjudgment, Farrell per ’’ Morris Ibid ‘‘ ’ ’ . 127 s paymentofthedisputedsumtoFarrellstood, s actualpaymenttoFarrellcouldonlybesaidnobetterthanvoluntaryifthe Mr Moorenotonlyhadnoticeoftheassignment,buthe(ifthatwere necessary, whichIdonotsay Lord CranworthLC). Cartwright . is acaseofdischarge byaccordandsatisfaction,whereinthesatisfaction LLOYD v. ’ Baron s subsequentpaymentstood, ’’ . v. ’ and Moore Good S MARITIME AND COMMERCIAL LAW QUARTERLY v. Cooke [1918] AC1,35, Jones Associated NewspapersLtd ’ Hall s promisetopayJones,albeitexecutory, wasgoodandvalid v. (1832) 3B&Ad701,703;110ER256,703. came fordecision,thatpositionhadbeenabandoned.In Cheesman v. promise Flockton responsible topaythesuminquestionoverJones.The per (1831) 2B&Ad328,335;109ER1165andbytheCourtofKing Lord Atkinson,citinginsupportthecases of 126 (1851) 16QB1039;117ER1179;and to paythesumJonesmighthavenosigni ‘‘ Sir GJTurner LJconcurred this promisetomakepaymentwascritical.For 122 ’ ‘‘ [1933] 2KB616,645,ScruttonLJnotedthatthiswas s paymentasbeingnobetterthanvoluntary, on nobetterfootingthanmerelyvoluntary ’’ ’ . s promise,andnottheperformanceof 124 ‘‘ where itcanbeshownthatwhata ‘‘ ’’ 123 It willalsoberecalledthatMoore : (1857)1DeG&J208,220;44ER 703, in theparticularcircumstancesof Knight BruceLJreasonedthat 125 otherwise discharged — Decree variedaccordingly; costs Although LordCranworth ’ s impressionwasthat, Evans British RussianGazette Sibree v. ’ already fi s subsequent Powis nal formofthe v. Tripp . Which (1847) 1 fi (1846) been cant ‘‘ Mr ’’ ’’ ’ s . . ©Informa null - 17/12/2018 08:43 The casesof C. Caseswhere there wasnopaymenttothecreditor atall Moore mighthavehad or no.Thatactualpaymentwasvoluntaryandunrelatedtoanypriorlegalrelationship of Moore satisfaction whichdischarged theoriginalpaymentobligation.Givenabove,fact obligation equitable interestover to Jones,JoneswasentitledbringtheseproceedingsagainstMooreonthebasisofhis subject mattercapableofbeingassignedtoJoneswouldhavebeenFarrell binding contract,followingdischarge oftheoriginalobligationpayment,only that Moore quently, theassignee the assignorwhereassignmenthadbeeneffected bywayofsecurityonly. Conse- reason whyMoorehadto subject matteroftheassignmentin notice oftheassignment;andthisconclusionisreinforcedwhenwetakeintoaccount factory. Giventhattheaccordandsatisfaction the balanceofaccountstatedinrelationtoFarrell the assignmenttoJonescouldnothavebeenFarrell debt obligationhavingbeendischarged byaccordandsatisfaction,thesubjectmatterof offer, therebypromisingFarrellthathewould,indeed,payJones.Second,theoriginal (ii) ThesubjectmatteroftheassignmentinJones satisfaction tookimmediateeffect onceMoorecommunicatedhisacceptanceofFarrell original debtobligationbymeansofanaccordandsatisfaction.That we havethefollowing. assignment toJones.Butofwhatprecisely?Restatingthestepsinreasoningsetoutabove, The CourtofAppealwasunanimousin p Nichols doctrine ofdischarge bypreciseperformance. in noneofthesecaseswasthecourtconcernedwithquestion oftheapplication assignee Ltd, 3.Becausethe assignmentwasconditionalandnotabsolute: 134. [1898]1QB 527(CA). 133. (1883)22Ch D782(CA). 132. [1902]1KB 527(CA). 131. [1905]AC 454. 130. [1955]2QB 584(CA). 129. [1898]1QB 765(CA). 128. First, bypromisingtopayJones,Moorehadacceptedtheoffer ofdischarge ofthe In 129 Durham Brothers William Brandt 134 NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE ’ 132 s havingmadeactualpaymenttoFarrellwasimmaterial,noticeofassignment to makepaymentJones make paymenttoJones was notentitledtobringlegalproceedingsagainstthedebtor withoutjoining are alsooftencitedasauthorityforthe Durham Brothers ’ s actionagainstthedebtorfailed,sinceamountdue from the ’ s Sons&Co Farrell vis-` v. a-vis ‘‘ Robertson pay again ’ v. s common lawrighttogiveMooreadischarge overhis Farrell. Robertson . Third,thisrighthavingthenbeeneffectively assigned v. Jones on thecontractualpromisesformingaccordand , Dunlop RubberCoLtd ’’ 133 wasnotbecausehehadpaidFarrellfollowing fi the CourtofAppealheldthatanequitable v. v. , nding thatFarrellhadeffected anequitable 128 Farrell Walter &SullivanLtd themselves v. ’ s originalrighttoreceivepaymentof . ‘‘ Farrell no discharge afternotice ibid ’ s workdoneinbuildingMoore , 769,773and774. constitute anenforceableand , 130 Yates v. v. v. J Murphy&Sons ’ Terry s righttoinsist ’’ 131 rule.Yet and Ex 63 ’ ’ s s ©Informa null - 17/12/2018 08:43 cannot betakenasauthorityinsupportofthe the assigneestowhom an actionagainstthedefendantsforsumsdueservicesrendered,withouthavingtojoin There, theCourtofAppealwasaskedwhetheranequitableassignorentitledtobring joinder oftheassignees.OnappealtoCourtAppeal,ParkerLJsaid: assigned inpartassecurity. Inthecourtbelow, theassignor receipt ofthatnoticethedebtorpaysassignorathisperil impossible contention.Thewholeobjectofthenoticetodebtorisprotectassignee.After strongly urged thatheisentitledtodosowithoutjoiningtheassignee.We thinkthatisan ‘‘ equitable assignortotheassigneecouldnotbeascertained. 64 to beenteredwhereadebtobligationhadnotbeenperformed, andwheretheequitable Therefore, judgment cannotbegiven authority topayHall&CoLdiswithdrawn,or arejoinedintheproceedings, plaintiffs whenthereis anadmittedinterestoutstandinginHall&CoLd,andunlessuntilthe by Hall&CoLd[theequitableassignees].Thecourt,however, willnotgivejudgment forthe would merge inthejudgment debt,andthataccordingly, thedefendantscouldnotthereafterbesued ‘‘ to justifythecourt Sullivan proceedings, pendingjoinder(adecisionwhichtheCourtofAppealupheld). unsuccessfully) whether assignor, fornothingofthesortwasinissue:fact,debtordisputed(ultimately obligation toeffect paymentbypreciseperformanceonaccountofitshavingpaidthe assignor. an actionbroughtbetweentheassigneeanddebtorwouldnothavebound the assignorwasnotentitledto action, butcouldonlyproceedjointlywiththeassigneeas co-claimant.Inconsequence, appellate courtmusthaveimplicitlyacceptedthattheassignor action onthedebt.Byupholdingstayofproceedingsorderedincourtbelow, the action atall,aswouldhavebeenthecasehadacompletestrangerattemptedtobringan however, isnotthesameasholdingthatassignorhadnoentitlementtobring bring theactioninitsownname,withoutjoiningassignee,isplainly bene assignment, theassignorisonlyentitledto arrived atbythecourtis,nevertheless,entirelyexplicable:since,aftereffecting the notice In thepresentcas It wasfurthersaidthatoncetheplaintiffs inthepresentproceedingsrecoveredjudgmentdebt 139. 138. [1955]2QB 584 (CA). 137. 136. 135. The assertionofthe Walter &SullivanLtd fi t oftheassignee,answertoquestionwhetherassignorwasentitled ’’ Ibid Ibid Ibid Ibid rule,andontheanalysisinthispaper, itrestsuponafalsepremise.Theresult 136 does not,therefore,provideindependentauthorityforthe , 589. , 588. . . Walter &Sullivan LLOYD The courtwas e... it is ’ S MARITIME AND COMMERCIAL LAW QUARTERLY ’ s conclusionthatthecourtbelowhadbeenrighttostay ‘‘ ’’ no discharge afternotice . any 139 v. v. the assignorwhoisseekingtorecover, andinhisownright,itis not J Murphy&SonsLtd chose sum wasduetotheassignoratall.So was concernedwithwhenthecourtwouldallowjudgment asked whetherthedebtorhadbeendischarged fromits judgment in actionagainstthedefendantshadbeenequitably on thematterinitssolename: manage ‘‘ no discharge afternotice ’’ rulein 137 his legalrightstothedebtfor was concernedwiththeconverse. ’’ . 135 Walter &Sullivan ’ s actionwasstayed,pending Further, anaccounttakenin was entitled tobringthe ‘‘ no discharge after Durham Brothers ’’ rule. 138 ‘‘ was merely no Walter & ’’ . That, ©Informa null - 17/12/2018 08:43 having preciselyperformeditsobligationunderthecontractneverarose. a debtorwasentitledtoclaimthatithaddischarged itsobligationtoeffect paymentby should bedisregarded,thereforerequiringthepayortopayagain.Soquestionwhether debt. Obviously, apaymenttoneitherthecreditornordesignatedassigneeofthatdebt paid anotherentityaltogether, Kleinwort&Co,beingtheassigneesofaprior, unrelated Brandt error ofitsemployees,theDunlopRubberCompanyhadpaidnotassignees,William given whole right tothebalancewouldstillremain against Binyetanothersetofproceedings.Obviously, A garnishee summonsinrelationtoajudgmentforthesumof£214s7dthatYhadobtained (C) thesumof£1617s8dduetohimfromdefendant.Finally, Areceivedasecond B inseparateproceedings.Next,Awasgivennoticethathadassignedtotheclaimant summons inrelationtoajudgmentforthesumof£3718s7dthatXhadobtainedagainst to payBthesumof£501s6d,forsalaryandservices.Awasthenservedwithagarnishee As executorofacompanyinliquidation,thedefendant(A)hadbeenfoundtobeliable court. Inconsequence,the accorded toeachofthem.A insuf [was] liableforthatloss obligation theassignee[had]losthismoney, andaccordingtowell-known principlesthedefendant of thejudgmentdebtor, sothatitcouldbeattached,butofanassignee. By breachofthat duty nottoletthesubsequentgarnisheeorderpasswithoutnotice thatthefundwasnotreally ‘‘ ‘‘ assignee hadnotbeenjoinedintheproceedings.Itissoundauthoritysupportof nothing morecouldberequired: They mustpaythemoneyoveragain,andittorightperson equitably assigned,andduenoticehadbeengiven. the HouseofLordsheldthatdebtowedbyDunlopRubberCompanyhadbeen that: compliance withthe been servedthesecondgarnisheesummons. had ignoredthefactthathereceivednoticeofassignmenttoCpriorhishaving garnishee summonswassatis there wasabalanceleftinthehandsofdefendant[A]bound by theassignment,anditwashis no discharge afternotice 145. 144. [1902]1KB 527(CA). 143. 142. 141. [1905]AC454. 140. As for The sameistrueof The CourtofAppealheldthatAoughtonlytohavepaid£3718s4dintocourt,in fi ’’ cient tosatisfyallofthesecompetingclaims.Theissuewashowprioritybe Ibid Ibid Ibid Ibid prior ’ (ie,inB);suchrightwascapableofassignment,itassigned, andnoticewas s Sons&Co,astheyhadbeendirectedtodoviathenoticeofassignment,but NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE , 531. , 530 , 461(emphasisadded). , 460. Yates to thedefendant – 531. v. Terry fi ’’ William Brandt rst garnisheeorder. Havingdonethat,asRomerLJnoted, , . 143 145 ’’ fi the issuebeforecourtwasoneastocompetingpriorities. ruleatall. rst garnisheesummonswassatis ’ s responsehadbeentopaytheentiresumof£501s6dinto fi ’ s receiptofthesecondgarnisheesummons.Itfollowed ed inpart,leavingtheassigneewithnothing.Ineffect, A ‘‘ Dunlop disregardthatnotice,andpaythe ’ s Sons&Co ‘‘ in thepersonwhooriginallyhadrightto v. 141 Dunlop RubberCo Lord Macnaghtenobservedthat fi ’ ed infullwhilethesecond s indebtednesstoBwas ’’ . 142 . 140 Because ofthe wrong people In thatcase, 144 the 65 . ©Informa null - 17/12/2018 08:43 that Actprovided: assigning allsums On 21March1882,thelesseesexecutedadeedofassignmentinfavourYounger &Co, a statedproportionofthegrosssumssoreceivedwithanaccounttoberenderedmonthly. railway fareandthepriceofadmissiontoPalace,thatitshouldpaylessees contract providedthattherailwaycompanywastocollectfromsuchpatronsboth Northern RailwayCompany, onwhoseraillinespatronsofthePalacewouldtravel.The lessees oftheAlexandraPalace.TheenteredintoaverbalcontractwithGreat trustee-in-bankruptcy andanequitableassignee.In Nichols hadthebetterclaim. had abetterclaimtothissumthandidNicholsastrustee.TheCourtofAppealheldthat trustee intheliquidationofpartnership.Thequestionthenarosewhetherassignees Meanwhile, on8September1882,Nicholswasappointedbythepartnershipcreditorsas share ofthegrossreceiptsfrom10Augustuntil311882cameupto£5873s8d. Nichols continuedtooperatetheAlexandraPalaceuntil31August1882,andlessees railway fareandadmissionfeescollectedbythecompanyfrom10August1882. 12 August1882andrequestedthatitforwardthelessees property andbusiness.Nicholsgavenoticeofhisappointmenttotherailwaycompanyon 10 August1882thelesseessubmittedaliquidationpetition. Notice oftheassignmentwasgiventorailwaycompanyon22March1882.But railway companyontrusttosecurepaymentofdebtsowedbythelessorsassignees. debtor asisbene applied therulethatagarnisheesummonsonlyattachessuchpropertyofjudgment defendant debtor, A,nevereffected anypaymenttohiscreditor, B.Instead, performance byvirtueofactualpaymenttotheoriginalcreditorneverarose.In Like 66 1884. of thebankruptinrespectsuchdebtexceptmannerdirected bythisAct. respect ofanydebtprovableinthebankruptcyshallhaveremedy againstthepropertyorperson ‘‘ bankruptcy cases inwhichthepropertyofabankrupthasbeenvalidly charged byhimbeforehis bene carried outbyNicholsafterthe not hisproperty of thebankruptcy. Thebankruptcannotasagainstthetrusteeassignthesepro a goodtitleagainsthistrusteetopro Where adebtorshallbeadjudicatedbankrupt,nocreditortowhom thebankruptisindebtedin 5.Emphasisadded. 150. 32&33Vict c71.TheBankruptcyAct1883, 46&47Vict c52,only cameintoforceon1January 149. 148. 147. (1883)22Ch D782,787.Thiscaseisre-examinedinPartVII. 146. The On 11August1882,Nicholswasappointedasreceiverandmanagerofthelessees Ex pNichols The lessorsweremadebankruptpursuanttotheBankruptcy Act1869. fi Durham t ofthebankrupts Ibid Ibid ratio . , 786. ’’ LLOYD of thecasewassimplythat, . 148 and 146 ’’ This ishighlysigni . fi 147 150 cially ownedbythejudgmentdebtor. ’ ‘‘ was concernedwiththecompetingprioritiesbetweenclaimsofa S MARITIME AND COMMERCIAL LAW QUARTERLY William Brandt now dueandowinghereaftertobecome Jessel MRwasoftheviewthat,onthesefacts,business hadbeen ’ estate ’’ andtherewas,therefore,noanalogytobedrawn fi ling ofthepetition ’ s fi fi , thequitedistinctissueastoeffect ofprecise cant. ts ofhisbusinessaccruingafterthecommencement ‘‘ by noassignmentorcharge canabankruptgive Ex pNichols ‘‘ ex relatione ’ shareofthegrossreceipts , apartnershipbecame by thetrusteefor But thissectionshall 149 Section 12of Yates fi ts; theyare ’’ Yates fromthe merely , the ‘‘ to ’ ’ ©Informa null - 17/12/2018 08:43 determining whetherabankrupt the 1869Act. security giventoacreditorofthebankruptwhichwouldfallwithinprovisos12 action hadpassedtohistrustee-in-bankruptcy, orwhetherthatpropertyformedpartofthe v. 1 WLR1140;butthatopinionisnot binding,andforthereasonssetoutatn82, 186 be followed. somewhat weak,andtheusualEnglishauthorities clear thatthetheoreticalunderpinningsof has receivedseemingjudicialapproval.Butbythisstage oftheargument itshouldbe unwise. bankruptcy ofhisclaimunderthecontract certain conditionsareful a contractwhicharenotdebtsatthedateofbankruptcy, butwillonlybecomedueinfutureif ‘‘ the principleof a caseofanassignmentbywaysecurity passengers (or, atbest,preciousfew).So,withinthecontextofbankruptcy, thiswas sum forbothtransportandadmissiontothePalace,therewouldhavebeennosuch done so,therailwaycompanywouldhavebeenunabletocharge itspassengersthegross far asNicholshadcontinuedtocarryonthebusinessofAlexandraPalace.Hadhenot trustee-in-bankruptcy, were The issuebeforetheCourtofAppealin or dealwiththesameifthissectionhadnotbeenpassed or otherwisedealwithsuchsecurityinthesamemannerashewouldhavebeenentitledtorealize not affectthepowerofanycreditor holdingasecurityupontheproperty ofthebankrupttorealize have occurredon10August1882whenthelessees would adebtorfacedwithnoticeof rule, atleastinrelationtoequitableassignmentsofdebts. Butthatraisesthequestion: inconclusive. Thus,thewayseemsopentoacknowledge that theremaywellbenosuch As LordEsherMRobservedin the vestingofbankrupt were, theywouldhavebeenentitledtotakestepsenforcetheirsecurity, notwithstanding the ambitofexclusionsetoutinitalicisedportions12reproducedabove.Ifthey The caseof 5.Seealso 156. 5.Thereisalso thePrivyCouncildecisionof 157. 5.[1897]1QB 17(CA),21.SeealsoRigbyLJ 155. (1888)13AppCas523. 154. 153. 152. 151. Michael FaradayandPartnersLtd The casesdiscussedabovewillhardlyexhaustallofthedecisionswhereprinciple So It wascriticalinthiscasethatthe – 187; ‘‘ Ex pNichols Ibid Ibid Ibid creditors holdingasecurityuponthepropertyofbankrupt In re Green NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE , s6(4);thereportgivesnoindicationofanyotheractbankruptcy. , s11. , s22. Ex parteNichols,Inre Jones 156 In re Davis&Co Tailby Reliance onthiscaseasauthorityforanybroaderpropositionis,perhaps, [1979] 1WLR1211,1221. should beunderstoodassettingoutaspecialruleforthepurposesof 151 fi v. lled, isnotarightwhichcanbetransferredsoastodeprivethetrusteein Of which, bythedoctrineofrelation-back, ’ (1888) 22QBD193(CA),199; fi s incorporealpropertyintheformof cial Receiver [1939] 2KB753,760; Wilmot ’ s incorporealpropertysuchasacontractual ‘‘ ’’ gross sums , seemstomeshewthattherightpaymentsunder statutory Ex pNichols . v. Colonial MutualInsurance 154 Alton ’ s judgmentat24. would apply)butsomethingelsealtogether. debts ‘‘ : assignment betreatedanydifferently? 155 no discharge afternotice ’’ inissuecouldhavearisenonlyso In re Tout &FinchLtd ’’ was, therefore,whethertheassignees In re Collins fi accruing due . led theirliquidationpetition. 157 are, oncloserexamination, [1925] 1Ch556,561 v. v. choses supra ANZ BankingGroup 152 in futuro ’’ soastofallwithin would presumably , itishopedwillnot [1954] 1WLR178, in actionthe ’’ ruleappear (as towhich – chose 563; 153 [1995] King not 67 in ©Informa null - 17/12/2018 08:43 The does he? with adischarge the pictureaslegalrightisassigned. there isno[statutory]assignmentuntilnoticeandupontheassignordropsoutof accord andsatisfactionreachedonthebasisofanagreementbetweendebtorher or impliedtermpermittingunilateralvariationofthedebtor (as amatterofdischarge byperformance) outlined above,wherethedebtormaybedischarged ifhemakespaymenttotheassignor 68 assigned, aswasheldtobethecasein Halcyon TheGreat onwards, referenceisalsomadeto in contractual paymentobligations. to considerwhethersuchpayment in preciseperformancewouldhavedischarged thedevelopersfrom their Wright Jtoconsiderwhatmight havebeenthecasehadbuildingcontractorspaidwhatwas due,and A. An assignor A. An Contract ess sso sntc a engvn ob ibet h sinr... . . ceases, assoonnoticehasbeengiven,tobeliabletheassignor between them. and statutoryassignmentwillcreateanunworkable(oratleastunhelpful)distinction inquiry. Hethereforeobservesthatadifference intreatmentbetweenequitableassignment mode ofassignmentthathasoccurred,norwillitoccurtomanydebtorsmakesuch As DrTolhurst suggests,itseemsthatmostnoticestodebtorsdonotspecifytheprecise involved astatutoryassignment(following East Africa Ry Co 152. decision, atleastonthe by thearbitrator, thatthebuilderswerenotentitledtorecoveranything(at468).Theauthoritativenessof assignment tothebuilders J wasoftheviewthatarbitralawardinfavourbuildersbad onitsfaceinlightofthestatutory non-assignable. Therefore,thebuilderswereentitledtorefermatter arbitration(at466).However, Wright Wright Jheldthatthecontractingparties under thecontractprecludedthemfromreferringmattertoarbitration toseekanawardforsuchsum.First, issue waswhetherthestatutoryassignment(bywayofmortgage)by builderstotheirbankofthesumsdue in thatcasearoseoverwhatwasduetobepaidbyapropertydeveloperfor workdonebya the assignorlosesrighttoarbitrate andtheassigneeacquiresit Rep 283,289, not Greene MRandMortonLJrespectively).In assignability ofanarbitrationclause( [1946] 1Ch323(CA).Inbothcases,itwaspointedoutthattheArbitration Act1889,s4waspredicatedonthe 6.GHTreitel, 160. 159. 158. 6.Acceptingthat 161. Cottage ClubEstatesLtd For DrTolhurst, itappearsthat,unliketheanalysisofequitableassignmentadebt so ‘‘ ‘‘ unworkable distinction Ibid Tolhurst personal VIII. , 160 . per LLOYD , [8.06]. it hasbeenobservedthat, ’’ ‘‘ astobenon-assignable.Lastly, thereare (1889) 23QBD239; 158 Staughton J,totheeffect that, NO DISCHARGE AFTER NOTICE OF A STATUTORY simply standsforthepropositionthatbene The LawofContract ‘‘ ’’ It willbeargued belowthatnosuchdistinctionoughttobemade. drops outofthepicture ’ Cottage ClubEstatesLtd . S MARITIME AND COMMERCIAL LAW QUARTERLY fi 159 rst point,issuspect: ’ bankersandthusrefusedtoupholdit.Instead,Wright Jupheldthealternativeaward v. In contrast,commencingfromthe Woodside Estates(Amersham)Ltd The HalcyonGreat ’’ thatDrTolhurst warnsusofarisesfromtheviewthat, Aspel Hughes ’ , 5thedn(London,1979),506.Authorityforthispropositionisfound righttorefertheirdisputearbitrationwas Shayler Burlinson , 152, ASSIGNMENT Shayler cf Aspell v. ‘‘ Pump HouseHotelCoLtd per v. the betterviewisthatuponalegal[ie, statutory]assignment v. ‘‘ Thus, onlytheassigneecanprovide theobligor , 324,SomervellLJalsoheldthatanarbitrationclausewas or Where theassignmentisstatutory, thedebtor Woolf Woodside EstatesCo(Amersham) Ltd v. Lord HanworthMR;and ’’ to theassignee(typically, absentanyexpress v. v. Hall followingastatutoryassignment Seymour [1984] 1Lloyd [1946] Ch320and dicta (1884) 12QBD347; ’’ ’’ fi . Inanyevent, in t ofanarbitrationclauseiscapablebeing [1928] QB463,467.Fromthe7thedition [1929] WN152(CA)and The HalcyonGreat ’ s Rep283,289. ’ [1902] 2KB190(CA)),thedispute s obligations,asamatterof fi fth editionof Shayler Aspell Cottage Estates Tancred ‘‘ , 323and324, v. personal Seymour fi Quaere v. rm ofbuilders.The ’’ [1928] 2KB463 Delagoa Bayand . [1984] 1Lloyd 161 Shayler ’’ did notrequire andtherefore Treitel on whether [1929] WN — per v. v. or Woolf Lord ‘‘ The as ’ s ©Informa null - 17/12/2018 08:43 cause ofactionisextinguished,andinitsplacewe (the debtor),infavourofthesuccessful own name.Ifhesucceeds,thecourtwillissue and owing,thestatutoryassigneeisentitledtosuedebtoronthatunpaiddebtinhis for it,whichistheverythingassigneegains.So,wheredebtassignedbecomesdue statutorily assignedtotheassignee,assignorwillhavetakenfromhimrightsue legislative precursortos136(1)),whentheassignor of s25(6).Seealso right oftheassignee)topassandtransferfromdatesuchnotice claim suchdebtorthinginaction,iseffectual inlaw(subjecttoequitieshavingpriorityoverthe given tothedebtor, trusteeorotherpersonfromwhomtheassignorwouldhavebeenentitledto of charge only)ofanydebtorotherlegalthinginaction,whichexpressnoticewritinghasbeen ‘‘ the creditor), thesamemaynotbetrueofadebtwhichhasbeenstatutorilyassignedbecause unwilling tocooperate,thentheassignee wouldbethesoleclaimant. action againstthedefaultingdebtor, theassignorandassigneewouldbeco-claimants.If is in completeagreement.Theremainingjudge,LopesLJ,expressedhisagreement withLordEsher being astatutoryassignment). and thecauseofactionismerged withthejudgmentofcourt. claimant becomesajudgmentcreditor, thedebtor/defendantbecomes ajudgmentdebtor, assignee bringsaclaimandobtainsjudgmentagainstthe debtor, the statutoryassignee/ case whereanequitableassigneeobtainsjudgmentagainst thedebtor, wherethestatutory against thedebtorwouldthenbemerged withthejudgment.Justaswouldhavebeen 1925. the same,orpaydebtotherthinginactionintocourtunderprovisionsofTrustee Act he may, ifhethinks has notice The LawofPropertyAct1925,s136(1)provides: B. What doesastatutoryassignment rather different. picture Any absoluteassignmentbywritingunderthehandofassignor(notpurportingtobeway 163. Emphasisadded. 162. 6.SeePartVI(C), 166. Inthecaseof anequitableassignment,wheretheassignoriswillingtocooperatein thebringingofan 165. 164. (b) alllegalandother (a) the (b) ofanyotheropposingorcon (a) thattheassignmentisdisputedbyassignororanypersonclaimingunderhim; Provided that,ifthedebtor, trusteeorotherpersonliableinrespectofsuchdebtthingaction (c) thepowerto As LordEsherMRexplained ‘‘ transfer ’’ Read Supra ’’ . ButacloserreadingoftheprovisionsActsuggests,perhaps,something legal right — NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE v. , n6. ’’ Brown effected bythestatutoryassignmentcausesassignorto Bovis LendLeaseLtd give (1888) 22QBD128,132(emphasisadded), fi to suchdebtorthinginaction: supra t, eithercalluponthepersonsmakingclaimtheretotointerpleadconcerning a gooddischarge forthesamewithoutconcurrenceofassignor: remedies . 165 for thesame;and fl 163 icting claimtosuchdebtorthinginaction; Accordingly, thestatutoryassignee v. in relationtotheJudicatureAct1873,s25(6)(the Saillard Fuller&Partners ‘‘ claimant transfer judgment 164 ’’ 162 ? (who mayonlybetheassignee,this per ’ fi Lord Esher, MR,withwhomFryLJwas against thedefaulting s nd newrightscreatedbythe (2001) 77ConstLR134,[113]. ‘‘ legal right — 166 ’ Consequently, the s causeofaction ’’ tothedebtis ‘‘ drop outofthe ’ s construction defendant 69 ©Informa null - 17/12/2018 08:43 Harv LRev99. 29 HarvLRev816;SWilliston, may bringtheactionsolelyinhisownname. legal right need tojointheassignorasapartyactionbecausehehashadtransferredhim certainly however, that,hadKnillbeenassignedthe the wordingofstatute,itissubmittedthatoutcomeoughttohavebeen quiteotherwise.Itshouldbenoted, Had thecourtbeengivenopportunitytoconsiderpreciselywhatitwas thathadbeenassignedtoKnill,given must, debt right tosue the assigneeisassignor other partiessuchasB terms wherebythedebtoris arrangements islegallybound modi in effecting atransferofthoserights,thereisnologicalnecessitythatrequiresany provides thatstatutoryassignmentistoeffect anyvariationofsuchright. on theconstructionofcontractwhichgivesrisetothatright,andnothinginstatute assignor wouldhavebeenlegallyentitledtoinsistthatthedebtor In thatcase,pursuanttotheJudicatureAct1873,s25(6),Knillwasstatutorily assignedBenham is thatthedebtormust judgment. Noneofthis,however, touchesuponthequitedistinctquestion,astowhatit 70 its decision,thecourtmerelystatedthattherewasan Benham instead.KnillsuedProwsefortherentsinarrearthosetwo months,andsucceeded.Incomingto Accordingly, forthemonthsofFebruaryandMarch1884,Prowsepaidrentleased premisesto the monthlyrentthatwasduefornextsevenmonths.Benhamthen asked Prowsetoceasesuchpayments. payable onpremisesthathadbeenleasedtoProwse.Noticewasdulygiven toProwse,andProwsepaidKnill with theland 104, 133; is on 15May2009,andAisgivenwrittennoticeofthatassignmentthesameday, allthat be duetorepaidon1June2009,ifBeffects astatutoryassignmentofthatdebttoC the timeofassignment.So,whereAisindebtedtoBinsum£1,000,such assignment, astatutoryassigneemayhavetransferredtoitonlywhattheassignor C, assignment isseeminglyeffected withouttheneedtocreateanyfreshequitableinterestin quit ofhercontractualobligations.Althoughthetransfereffected byastatutory legal rightscannotmodifywhatitisthatthedebtorhasboundherselftodoinorderbe modi straightforward procedureforassignmentbutdoesnotaffect itssubstance (see,eg, 7.Thereisa long standingdebateoverthis:seeWWCook, 172. 7.SeePartsV(A) and(B), 171. 170. 6.Thisdistinctionmayhavebeenoverlookedbythe CourtofAppealin 168. SeePartV(B)(ii), 167. 6.Giventheanalysisaboveastohowequitableassignmentandnoticethereofmaynoteffect such 169. 172 ‘‘ Read As with As withequitableassignmentsofadebt, transferred fi ’’ a fortiori fi cation ofcommonlawobligations,andontheviewthatstatutoryassignment merelyprovidesamore however itbemade,allthatis . Thisdistinctionispreservedbythestatute:thatwhat Read cation tothecontentofthoserights,whatitisthatobligorunder not Marchant v. have discharged hisobligationtopayKnillrentonthelease,assuch wouldhave ’’ Brown ‘‘ v. to bringanactiononthedebt(orthinginaction)thathasbeenassigned:he : seen90, for paymentofthedebt,andquestion LLOYD , follow. transfers Brown ’’ toCatthispointisB v. v. tells usthatinastatutoryassignmenttheassigneeisreleasedfrom Morton, Down&Co ’ (1888) 22QBD128. S MARITIME AND COMMERCIAL LAW QUARTERLY ’’ supra. supra inequitableassignment, ’ s assignsornominees,allCis do . ‘‘ supra in orderto Is therightofanassigneea ’ obliged s ‘‘ . to do legal reversion [1901] 2KB829,832; to makepaymentto,notjustB,but,inthealternative, ‘‘ . Unless,onitstrueconstruction,thedebtcontains right transferred fi ’ s nd herselfquitofhercontractualobligations. ‘‘ ‘‘ legal rights of thelease,Prowse to suchdebtorthinginaction absolute assignmentbyBenhamtotheplaintiff [Knill] 167 171 a distinctionremainsbetweenhavingthe ’’ 170 toCisB the However, justaswithanequitable chose ‘‘ The alienabilityof Smith ‘‘ ’’ entitled transfer inthedebt. what in actionlegalorequitable? , [10.06]; ’ ’ s paymentofrenttoBenhamwould s Knill amounts to legal rights to, istoinsistthatAmake ’’ ofastatutoryassignor v. v. Marshall do Prowse Re Westerton choses , however, depends ‘‘ ‘‘ transferred , 161and166),this (1884) 33WR163. to thedebt.So, payment ofthe ’’ 169 in action . 168 ’ s righttorents [1919] 2Ch ’’ What the (1916)30 ’’ has (1916) ’’ ‘‘ to run at ’ ’’ s . ©Informa null - 17/12/2018 08:43 Act 1873,s25(6),ortheLawofProperty Act1925,s136(1),aswouldnowbethecase). principle thatthepowerto exchange forthe a negotiatedsuminsettlementof whom obligation ofpaymenttotheassignorinpreciseconformity withthecontract assignor a gooddischarge (totheextentthat itisnowtheassigneewhomaydoso)aswell been availabletotheassignorpursuantsuchanaction,and the assignor where thatpaymentisacceptedbythecreditor. Justasitiswithequitableassignment, an obligationonthecreditortocooperate.Thus,althoughs136(1)statutorily of paymentpertainstoadefenceavailablethedebtor, suchdefencebeingpremisedon assignor that neitherpreciseperformancenortenderhasanythingtodowiththe the sumpaidtostatutoryassignorinthatcasewas by performanceinthefaceofnoticeastatutoryassignmentwasnot brought beforethecourt.Itseemsthat 1 KB488(CA).Closereadingofthejudgmentsuggeststhatpointmade aboveastotheeffect ofdischarge Dalia sanctioned is strikingabouttheprovisionsin1925Actthat,althoughtheyrefertoastatutorily Coming backtothe statutory assignor? C. Isadebtordischargedfrom herobligationunderthecontractifshepays liable, ithasnothingtosayaswhatthedebtorisliabledo. assignment, althoughstatutoryassignmentaddressesthequestiontowhomadebtoris payment ofthe£1,000dueandowing the wordsusedbySimonBrownLJinhisjudgment between thedebtorandcreditor. Thisisunsurprising,giventhe similarityinphrasingwith obligation inaccordancewiththeexpresstermsofcontractdebtasoriginallyagreed provision thatbarsdischarge oftheobligationdebtbypreciseperformancethat a gooddischarge forthedebt(s136(1)(c)),thereisnothinginexpresswordsof assignor, anything todowiththequestionof the issueofdischarge byperformancenortheavailabilityofdefencetenderhave discharge ofthedebtfollowinganequitableassignmentthatdebt.But,justasneither (s 136(1)(b))inrelationtothedebtsoassigned,aswellassignor 7.Thearguments forthisbeingfullysetoutinPartV, 176. Attextton 15, 175. [1994]2AC 367(CA). 174. 7.Onemightthinkthatthisconclusioniscontradictedbytheresultin 173. Precise performanceeffects discharge automatically, asamatteroflaw, whereastender There, SimonBrownLJsaidthattheassignorwouldnotbeableto , 174 the debtoris ’ ’ 176 s rightsandremedies s rightsandremedies. NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE discussed above. ’ so toowithastatutoryassignment.Onre ‘‘ s legalrighttobringanactiononthedebt,suchremediesaswouldhave transfer grant of agooddischarge. Soitwouldseem that supra chose liable ’’ give oftheassignor . a gooddischarge isalsotransferred tothestatutoryassignee(seeJudicature ), itissilentonthequestionofperformancecontractual in actiondebt,whichisthesubjectmatterofthispaper, what 175 dispute vis-` as towhatwasdueunderthecontract.Thatis,itapaymentin a-vis giving ’ the debtor(andthereforeitisassignee s legalrights(s136(1)(a))andremedies to B not a discharge atthediscretionofanequitable a paymentinpreciseful . Justasisthecasewithanequitable supra . fl Flower ection, itshouldalsobeobvious Deposit Protection Board was simplyacasethatappliedthe Flower 173 fi lment ofwhatwasdue,but v. v. Lyme RegisCorp ’ ’ s abilityto s powertogive transfer give ‘‘ transfers ’ s terms a good of the [1921] give 71 to v. ’’ ©Informa null - 17/12/2018 08:43 commercially unpalatable.But,weremattersotherwise,as the nextPartwillshow, equally assignments ofcontractualdebts,whetherstatutoryorequitable. Thismayseemtobe discharge ofthedebtor payment tothestatutoryassigneecannotamountpreciseperformancesoaseffect a named creditorand,onatrueconstructionofthecontract, handed downagainsther. became due,butisthencompelledtomakepaymentonaccountofjudgmenthavingbeen done so.Andtheother, wherethedebtordidnotmakeanypaymentatallwhendebt case. One,wherethedebtorhaschosentomakepaymentstatutoryassignee,and As withthecaseofanequitableassignment,weneedtodistinguishbetweentwotypes statutory assignee? D. Isadebtordischargedfrom herobligationunderthecontractifshepays been discharged. sue thedebtorinhisownname,suitmustsurelyfail to entail? ItcouldnotmeanthatLwouldbeentitled,asstatutoryassignee, toinsistthatJpaint WLR 2926,[41], appears tobeconsistentwiththedecision in J, insofarasJ of K who hassuccessfullyobtainedjudgmentinitsfavour. merger. Andtheanalysisthereapplieswithequalforcetocaseofastatutoryassignee ‘‘ make paymenttotheoriginalcreditor, andwillbeobligedtomakepaymentthe found tohaveacceptedsuchoffers, shewouldbereleasedfromheroriginalobligationto assignment asconstitutingeitherunilateralorbilateraloffers ofvariation.Ifthedebtoris the analysisaboveinrelationtoequitableassignments, to eitherstatutoryassignororassignee to acasewheredebtorelectsmakepaymentstatutoryassignee. payment tohercreditor unchanged (unlessthecontractualtermsprovideotherwise).So,ifsheshouldhavemade demand And, evenifs136(1)permitsanassigneetobringlegalproceedingsagainstthedebtor s 136(1)leavesutterlyunchangedwhat 72 the sakeofargument thatsuchanobligationisnot our earlierexample(n33, Portland Cement courts bewillingtointerpretthecontractinanexpansivemannerinstead(asoccurred from theameliorativeeffects ofestoppel,theproblemmaybecircumventedshould assignee 8.PartVI(C). 180. [1903]AC414; 179. PartVI(A)and (B). 178. 7.Thepointisevenclearerwheresomeotherlegalthinginactionhasbeenstatutorilyassigned.Revisiting 177. ‘‘ Where thecontracttermsprovideonlythatdebtoristomakepaymentaparticular It thereforeseemsthatthe The alternativecase,though,iswherethedebtorelectsnottomakeanypaymentatall, statutorily assign ’ s. SuchanassignmentcouldonlyeverentailofK that sheperformhercontractualobligation,the ’’ instead.Itissuggestedthatthesetwoformsofanalysisarejustasapplicable ’ LLOYD s performancehadfallenshortofwhat hehadagreedtodo per ’’ ). Mummery LJ,withwhomRixLJand PeterSmithJagreed. thebene ’ S MARITIME AND COMMERCIAL LAW QUARTERLY 179 supra supra Alternatively, itispossibletoconstruenoticesofequitable ’ prior , texttoandfollowingn91. s paymentobligation.But,aswiththeanalysisabove, fi ) ofthepainter, J,whohascontractedtopaintK t ofthatcontracttoL,theownerahousedownroad,whatwould that to suchdemand,althoughtheassigneewouldbe ‘‘ no discharge afternotice Offer-Hoar — amounts ie, wherethedebtorisinbreach.Here,aswith ‘‘ too personal v. Larkstore Ltd to preciseperformancebythedebtor. ’’ tobecapableofbeingassigned,ifKwere content — ’ s righttobringlegalproceedingsagainst 180 the — ’’ [2006] EWCACiv1079;1 ruleisinapplicabletoall which wastopaintK the keyconceptisthatof chose only of thatobligationremains ’ s housewhite:assumingfor to thatnamedentity, in actionwouldhave his ’ house instead s house.This entitled 178 apart 177 to ©Informa null - 17/12/2018 08:43 concurred. to accepttenderofperformanceasthe assignorwouldhavedone,hadtherebeennoassignment. Ltd if correct,createssomedif not tooperateasagooddefence;tenderoughtbemadetheassigneeinstead.This, such cases,tenderofpaymenttothecreditor, followingnoticeoftheassignment,ought There ismore.Inthesamecase,ParkeBobservedthat: what itpurportedtobe examining thegoods,ormoney, tendered,inordertoascertain thatthethingtenderedreallywas circumstances thatthepartytowhomithasbeenmade, hadareasonableopportunityof delivery orpaymentwastobemade,providedonlythatthetender hasbeenmadeundersuch having substantially, performedit, considers apartywhohasenteredintocontracttodelivergoods orpaymoneytoanother, is toreceive,theactofhimwhodeliverorpay, canamount onlytoatender. Butthelaw party towhomthedeliveryorpaymentisbemade.Without acceptanceonthe partofhimwho in factengagestodoanactwhichhecannotcompletelyperformwithouttheconcurrenceof ‘‘ principle forthedefenceoftenderanactorpaymentissame. But thatneednotdetainus.Forpresentpurposes,theimportantpointisunderlying pay thetenderedsum,andmustthatsumintocourttotakeadvantageofdefence. performance ofthetenderedact.Informer, however, thepayormustremainreadyto as opposedtoatenderofacts.Inthelatter, thedefenceoperatestoexcusefurther The difference intreatmentrelatestotheeffect ofnon-acceptancea tenderofpayment, whose bene promise topaysomething.Ineachcasetheperformanceispreventedbyactofpartyfor dissimilar intheirresults.Itisappliedtoaperformanceofpromisedosomething,and ‘‘ might beassigned. payment. Awkward distinctionsmightthenberequiredastowhencontractual unpalatable conclusionswillhavetobedrawnregardingwhoshouldreceivetenderof the doctrineofdischarge byperformancedespitethedebtor If itisrighttosaythatnoticeofassignmenthastheeffect ofprecludingtheoperation to beanyreportedEnglishauthorityonthepoint, creditor, asistheusualcasewherepaymenttobemadeincash?Theredoesnotappear to hercreditor, whatifpaymentcouldonlyhavebeeneffected withthecooperationof [I]n everycontractbywhichapartybindshimselftodelivergoods,orpaymoney, toanother, he Tender isattemptedperformance;andthewordappliedtoperformanceoftwokinds, 8.(1843)6M &G593,624;134ER1029,1042(emphasisadded). 184. (1843)6M& G593,610;134ER1029,1036(emphasisadded), 183. JBeatson, 182. 8.At[6.120], 181. Anson As RolfeBobservedin [2002] 1NZLR173,181asauthority forthepointthatassigneemustbesubjecttosameobligation IX. TENDER OF PERFORMANCE AND THE ASSIGNMENT OF ’ s LawofContract NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE fi t itistotakeplace Anson Tolhurst ’ s LawofContract ’’ . cites thecaseof fi Startup states: culties ofitsown. ’’ . if hehastenderedthegoodsormoneytopartywhom 182 , 28thedn(Oxford,2002),508. v. Bay ofPlentyElectricityLtd MacDonald BURDENS : 181 183 but itwouldseemtofollowthat,in 184 ’ v. per s actualpaymentofthedebt Natural GasCorporationEnergy Rolfe B,withwhomGurneyB burdens 73 as ©Informa null - 17/12/2018 08:43 Rhone Amalgamated CollieriesLtd to anassignee. of preventingdischarge bypreciseperformance totheoriginalobligee,indisregardofpriornoticeassignment is thatsuchelaborationunnecessary becausetheproblemarisesonlyifitistruethatassignmenthaseffect the AssigneeofaBilateralContract ‘‘ that insomecasestheburdenofacontractmightpassbyassignmentexplains nothing:Anon, burden setoutbyMegarryV-C in cannot be with thedebtor, insofarasthedebtor such adutytocooperate.AsLordUthwattnotedin payment ordeliveryisnotcomplete associated withpersonaltybutnot That beingso,wouldthepropositionthatadebtormayonly carrying outofthatthing the implicationofatermthateachagreestodoallisnecessarybedoneonhispartfor effectually bedoneunlessbothpartiesconcurinit,theproperconstructionofcontractrequires ‘‘ But howmaythisbe,unlessweacceptthatthecreditor/obligeeisunderan So thecreditor/obligeeisat so farashecould,paidordeliveredwithinthetime;and he musttenderthemsoastoallowsuf midnight forthepartytowhomtenderismade,receiveandcount;orifhedelivergoods, ‘‘ 74 Tolhurst permit thetransferof prepared tomakesuchanimplicationonthefactsofthatcase. Scotland). See matters aboutthedoctrineofassignmentareasclearrulethatonly a tenderofperformancewhichisinconformitywiththetermscontract.Andfew that thedefenceoftenderispremisedon principle isnotlimitedtowrittencontractsbutofgeneralapplication: be doneonhispartforthecarryingoutofthatthing,thoughtheremay noexpresswordstothateffect unless bothconcurindoingit,theconstructionofcontractisthateach agreestodoallthatisnecessary contract itappearsthatbothpartieshaveagreedsomethingshallbe done, whichcannoteffectually bedone Cooper assignment ofthecreditor/obligee following noticeofanassignment,notalsoinvolvethepropositionthattherehadbeen debtor/obligor tocompletetheperformanceofherobligations? cooperate withthedebtor/obligorinsofarassuchcooperationisrequiredtoenable discharge afternotice such performancetothecreditor. 1 AC219,231. take theburdenswithbene in anycontractwhateveritsnature,itisageneralrulethat,ifthethingagreedtobedonecannot [I]f he[thedebtororobligor]istopayasumofmoney, hemusttenderitasuf 188. 8.DrTolhurst hasalsorecognisedthatthereisaproblemwiththeassignment analysisifitdoesnotalso 187. (1881)6AppCas251(HL,onappealfromajudgment oftheFirstDivisionCourtSession, 185. 186. To saythatthecombinedeffect ofassignmentandnoticegivesrisetoarule Indeed, theprincipleof v. Linden Gardens Trust Ltd Ibid [1941] AC108,148 , [6.120].To resolvethisdif Stephens (Executrix) , 231.Admittedly, suchimplicationarisesinfactandnotlaw. Eg,in ‘‘ ibid LLOYD assigned , 263, ’ S MARITIME AND COMMERCIAL LAW QUARTERLY per ‘‘ ’’ ’’ burden totheassignee,atleastinsensethatassignorisbe – ’’ wouldbealsotodenythepossibilitythatadebtormight Lord Blackburn: [1940] AC1014,1019 149, althoughLordWright recognisedtheprinciplein . [1994] 2AC310,316. fi Mackay ts ’’ Tito v. ’’ ’’ thatanassignee fault fi (1929)42HarvLRev941,943.Inanyevent,thepropositioninthispaper , andbuildsonboththeconditionalpureprincipleofbene culty, DrTolhurst reliesandexpandsonthemaximthat anassigneemust Lenesta SludgeDisposalsLtd v. 187 ’’ Waddell for wrongfullyrefusingtoacceptaconformingtender. . ’ burdens s obligationtocooperatewiththedebtor? fi v. But thisseemstositawkwardlywiththeproposition cient timeforexaminationandreceipt.Thisdone,hehas, ‘‘ I thinkmaysafelysay, asageneralrule,thatwhereinwritten Dick ’ s preciseperformancerequiressuchcooperation, [1977] Ch106,289 – 1020. Thepointwasalsoacceptedby LordTempleman in ‘‘ 185 may beassigned. must acceptatenderofconforminggoodsorservices obligation would seemtomandatetheimplicationof it isbythefaultofother McCarrick [1994] 1AC85,103; – 311; of thecreditor/obligeetoaccept MacCarrick 188 Tolhurst That v. tender Mackay , [6.103 Liverpool Corp Luxor (Eastbourne)Ltd burden v. Liverpool Corp fi to theassignee, Nokes – cient timebefore v. 6.135]. Butsaying Dick to co-operate obligation ‘‘ only, thatthe Obligations of v. , hewasnot Doncaster bene tender : 186 [1947] ’’ fi . The t and ‘‘ fi no to ’’ ts v. : ©Informa null - 17/12/2018 08:43 not beroomforCtobringanydirectactionagainstAonthat payment? as todischarge byperformance in circumstanceswherenosuchinjunctionhasbeengrantedprior to creditor-assignor, whereinliesthejurisdictionofcourttodisregard theoperationofcommonlawrules principle soastoentitletheassignee toseekaninjunction another person discharge ittotheoriginalcontractee [ equitable principlethatitwouldbeagainstconscienceonthepartof persononwhomtheobligationlayto Lord CollinsMRsaid, 1999. set outbyLindleyLJ,deliveringthejudgmentofCourtAppealin circumstances, Bis Certainly hemay. the limitsof Templeman. Mindfulofthe dramaticupheavalinsettledpracticewereittoup-endtheunderstandingof land, theHouseofLordsrefusedtodoso: run withtheland.Whengivenopportunitytoextendthatrulepermit positivecovenantstorunwiththe v. title. AndeveninEquity, therulein law, whenrealtyistransferred,nocovenantmayrunwiththelandsoastobindcovenantor stop? And, ifthisruleisweakenedinrelationtotheobligationofcooperation,wheredowe That representsaweakeningoftherulethatburdenscontractmaynotbeassigned. the doctrineoftendermustalsohavepassedfromcreditor-assignor totheassignee. matters wereotherwise,logicdictatesthattheobligationofcooperationwhichunderlies action thebene having beennoti extension. repugnant, ifnotmoreso.Nordoesthereappeartobemuchjudicialappetiteforsuchan perceived statusquocarrieswithinitasigni debtor (forthatwouldrequireprivityofcontract).Socontinuedadherencetothe conforming tenderofpayment),orfortheassigneetobecomecontractuallyobliged least, assentbythedebtortoreleasecreditorfromhisobligationaccepta released v Parliament (see v. extinguished byforceofthecommonlaw. right tobringlegalproceedingsagainstAfor by B,regardlessofA If itweretruethatpaymentbyAtoBdischarges A i s-` Brunswick PermanentBene Stephens (Executrix) 9.Inhisjudgmentin 190. 8.Leavingasidethepositionasbetweenlandlordsandtenants(astowhichseen90, 189. On theonehand,thereissomejudicialauthoritysupportingpropositionthatinsuch On theanalysisinthispaper, ifthedebtorelectstopayheroriginalcreditordespite a-vis X. THE ASSIGNEE the from hisobligationstothedebtor(forthatwouldrequirenovationor, atthevery NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE 189 ‘‘ ’’ assignment . ThepointwasnottakenbytheHouse ofLords;but,acceptingthatthereissuchanequitable Rhone Tulk fi t ofwhichhasbeenassigned.Thisseemscommerciallyshocking.But,if v. fi ed ofthenotice,anassigneemayloseadvantage ’’ v. Moxhay ‘‘ [1994]Conv477,481),theHouseofLordsdesisted,preferringtoleave thematterto personally liable The right[toassignthebene Stephens ’’ ’ Tolhurst s havingbeennoti ofburdenswiththeenactmentContracts(RightsThirdParties) Act fi t BuildingSoc doctrine (astowhich,seeJSnape, ’ S POSITION FOLLOWING PAYMENT TO THE [1994] 2AC310,321).Further, Parliamentmayhavealready v. Tulk Associated PortlandCementManufacturers sic ] afterhehadnoticethatthelatter had assignedthebene v. Moxhay Rhone (1881) 8QBD403,onlyappliestopermit to accountCforthesumsreceived.Thisisplainly ASSIGNOR fi ed oftheequitableassignmenttoC,therewould v. (1848) 3Ph774;41ER1143,readinlightof fi 190 Stephens (Executrix) t ofacontractinequity]seem fi cant riskthatmaybejustascommercially non-payment But canCbringproceedingsagainstB? enjoin ’ s debtoncethatpaymentisaccepted ‘‘ The BurdenofPositiveCovenants the debtorfromtenderingpaymentto the of thedebtwouldhavebeen [1994] 2AC310,318, chose [1902] 2KB660(CA),668, s... to be in action,sincethe restrictive Re Patrick,Bills supra ’ s successorsin ), atcommon fi based onthe covenants to lled thegap chose fi Haywood per — t ofitto Rhone Lord 75 in ©Informa null - 17/12/2018 08:43 Lindley LJseemstohavethoughtnot: what ifitwasnot?Couldthetrusteesassertaproprietaryremedyinalternative? This wouldbeaperfectlyadequateremedysolongasthesettlor of thesettlementforamounthesogotin.Thiswasdecidedin incomplete, itfollowsthatthesettlor, havinggotinthedebtshimself,isaccountabletotrustees ‘‘ principle of v. 76 did notreallyarise.Second,althoughthereceiptof moniesowedbythesettlor clearly Lindley LJ proposition thattheassigneesinsuchacasemayalsohaveproprietaryremedy. First, as creditorsagainsttheestateofdeceasedforamountdebtshegoti ‘‘ personal representativewould,ontheanalysisinthispaper, discharge the interest tosuchtraceablesubstitute,haditbeennecessary todoso.Last,ifitwere therefore, thatthetrusteesin been subjecttothetrustees not amounttothetraceablesubstituteof it isdif of settlementprovided certain specialtydebtssecuredbybillsofsalethatwereowedtohim.Thevoluntarydeed the amountreceivedbyhim. having beengiventothedebtors)wasliablemakegoodtrusteesofsettlement having himselfreceivedpaymentofthesumsowed(nonoticeassignmentever from thesettlor;and(ii)whethersettlor(informofhispersonalrepresentative) been abletorecoverthosedebtsfromthevariousdebtorswithoutanyfurtherassistance completely assignedbythesettlementsuchthattrustees,asassignees,wouldhave ultimately paidtothesettlor sale tothetrusteesandbeforeanyofthesedebtswererepaid:sumsdue of trustandnotabsolutely. Thesettlordiedintestatewithoutdeliveringanyofthebills of This was,inthecircumstances,anequitableassignmentofdebtstotrusteesbyway trustees forthebene become duethereon,andalltheestateinterestofsettlorthereinwastovestin If oncetheconclusionisarrivedatthatassignmentofdebtswascomplete,andnot There isnoquestionhereoffollowingtrustmoney, andtherightofplaintiffs isonly torank 9.[1890]1Ch 82,87. 196. (1834)3My &K36,40. 195. [1890]1Ch 82,87. 194. (1851)1De GM&176;42ER519. 193. 192. [1890]1Ch82. 191. Having foundthattherehadbeenacompleteassignmentofthedebtswithin Despite this,itissubmittedthatareasonablecasemaybemadeinsupportofthe The questionsbeforetheCourtofAppealwere:(i)whetherdebtshadbeen Tatham Ibid fi obiter cult toseehowthosemoneysinthepersonalrepresentative , 86. . 191 ’ s refusaltorecognisethepossibilityofaproprietaryremedyin LLOYD Kekewich : sincetheestatewassolvent(thereisnoindicationthatit not),theissue In thatcase,asettlorcreatedtrustinfavourofcertainbene ’ S MARITIME AND COMMERCIAL LAW QUARTERLY fi t ofthesettlor v. inter alia Manning ’ ’ equitableinterestarisingfromtheassignment.Itfollows, 192 s legalpersonalrepresentative. Re Patrick , 193 that theprincipalsumsowed,allinterestdueorto ’ s wife,hersisters,aswellthesettlor as to(ii),LindleyLJsaid: 196 would havebeenentitledtoassertanequitable chose in action(thespecialtydebts)thathad Fortescue ’ s estatewassolvent.But 194 ’ s handswouldever v. v. Barnett chose n... ’ Re Patrick fi s ownsister. ciaries over in action, [195] ’’ . ’’ . ’ is s ©Informa null - 17/12/2018 08:43 386 (CA),391.Seealsothediscussion of Patrick equitable assignmentasbetweenassignor andassignee. and theequitableassigneein entitled tothesumrepresentedbybankaccountinnamesof terms ofhercontract. the so astoentitleitsomeformofjudicialassistancerecoverthetraceablesubstitutefor to performance thereof, suchthatdischarge ofsuch contractualperformancemightoccuronlyby promised byanobligormayneverthelessbe sceptical viewofunilaterallyimposedvariationstocontractual obligations,requiringthat terms ofthecontract.With regardtoemploymentcontracts,the courts havetakena common lawunlessthecontractprovidesotherwise, automatically discharged byprecise performanceandsuchobligationsareinvariableat Most commentatorsseemtoacceptthat,althoughallcontractual obligationsmaybe supra the CourtofAppealin necessary toprovideauthorityfortheproposition,onemightconsiderordermadeby traceable substituteofthe as made,acceptedthatHeilbut,equitableassignee, India RubberandGuttaPerchaWorks Ltd( account. Appeal grantedadeclarationthatHeilbutwasentitledtothesumpaidintojoint assignment wasgivenafterthecommencementofIrwell of theequitableassignmentonlyafterpetitionhadbeen ( equitably assignedtoHeilbut£425whichwasdueIrwellfromM/sCayzer, Irvine&Co account butIrwellwasunabletomakepaymentinfull.To meetthebalance,Irwell effective inring-fencingthesumpayablebyCayzerdespite a bankaccountheldjointlybyIrwell petition towindIrwellupwaspresentedon2February1885.Cayzerpaidthe£425into assignment toHeilbuton5February1885.However, priortoreceiptofthatnotice,a distributed bytheof arose whetherthe£425duefromCayzerformedpartofassetsIrwellsoastobe ‘‘ 9.Norwas 199. 0.Following 200. Astotheimmateriality ofnoticetothedebtorwhereoneisonlyconcernedwith 198. (1887)LR34ChD128(CA). 197. Cayzer In thatcase,Heilbut,Symons&Co( Leaving asidethepointforwhich the originalcreditor, thepointremains chose . [1891] 1Ch82,87;and ’’ NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE ) forgoodssuppliedtothembyIrwell.Cayzerwasnoti in actiondischarged bythedebtor ‘‘ Gorringe to Re Schebsman ’’ theassigneeasopposedtoperformanceinaccordancewith theoriginal fi 199 an isolatedinstance;see,eg, cial liquidator, orwhethertheequitableassignmenttoHeilbutwas Gorringe chose Barclays BankPlc [1944] Ch83,Equitymadenorule otherwise. Gorringe. in actionthathadbeenassignedtoit.Thus,Heilbutwas XI. CONCLUSION v. L ’ Estrange Irwell IndiaRubberandGuttaPercha Works Gorringe ’ s of ‘‘ Even thoughpaymentin — Heilbut fi v. cial liquidatorandHeilbut.Theissuetherefore the equitableassigneeretainsanright Willowbrook InternationalLtdand Anor v. Bence ’ L ‘‘ is usuallycited, s paymentinpreciseconformitywiththe ‘‘ ’ ’’ Irwell Estrange varied ) suppliedgoodsonaccounttotheIrwell v. Shearman ’’ did ’’ ). £66014s11dwasdueonthe (1850) 13Beav281;51ER108,at n32 throughassignment,andnotice 200 have abene ’ the contractualperformance fi s winding-up,theCourtof [1898] 2Ch582,587and588; led. Althoughnoticeofthe 198 it isplainthattheorder, Gorringe ’ s havingbeennoti fi ed oftheequitable fi cial interestinthe ‘‘ completeness fi cial liquidator was notmade [1987] 1FTLR . 197 ’’ ofan fi 77 ed Re ©Informa null - 17/12/2018 08:43 additional burden. to acertainlevelofperformance,thereisnofearanyunilateralimposition what itmeanstohaveacontractualobligation,thecertaintythat,onceonebindsoneself require thedismantlingofrulethatburdensarenottobeassigned. yet anothercanofworms. obligation, isnotmerelyanexerciseinintellectualtidying-up. C, the powertodosomustbeexpressedclearlyandunequivocally. 78 Leicester CityCouncil foot. Hitherto,thishasbeen context, andparticularlyinrelationtodebtobligations,theshoeseemsbeonother to itbyD: domiciled, whoassignstoanassigneeX,withoperationsonlyinBaghdad,adebtowed assignment willhavesuchaneffect. Butbywhatprincipledreasonmightthatbeso? discharge thedebt,suchdelimitation functions asshorthandtoindicatepartoftheparameterswhatisrequiredbedone at thetimeofcontract.So,toextentthatidentitypayeeinacontractdebt payment toX,D be observedmostobviouslyin requisite terms.Itmaywellbethatingeneralthecourtswillwillingtodoso,as to theminsteadofthecreditorwilldependonwillingnesscourtimply payment, theabilityofassigneestoinsistunilaterallythatdebtormakesuchpayment provision forunilateralvariationoftheidentitypartytowhomdebtoriseffect fragility oftheirinterestinthatdebt:that,wherethecontractdebtfailstomakeexpress implication. Indeed,theinclusionofanexpressanti-assignment clausewithinthecontract on theindividualfactsofcase,andthere implication, ifitoccurs,appearstobeanimplicationoffact.Muchwillthereforedepend proposition thatsuchatermistobeimpliedinlaw equally, inlarge part,tothem. creditor. the possibilityofassignmenthas of payment.Butthatisnotthesortcaseweareconcernedwithhere. Our concerniswiththosecaseswhere be argued thatsuchagreementimpliedlyencapsulatesto potentialenhancementoftheburdens amount toa obligation. Evenifnotional,theadditionaltroubleinvolvedinmakingpayment totheassigneemaybeseen without some 0.See,eg, 201. 0.Thisexamplealsoexplainshowitisthatpayment 203. 202. 0.[1903]AC414. 209. 0.Or, forthat matter, anylegal 208. Thatis,assignees whotakepursuanttotheLawofPropertyAct1925,s136(1). 207. 0.SeePartIX, 206. Certainly, ifadebtorexpresslyagreestothepossibilityofanassignmentthatdebt,itmightplausibly 205. Worthy asthat,initself,is. 204. Equitable orstatutory The needtore-examinethesourceofsupposedrulethatwarnsagainstD Reverting toourearlierexampleofacreditor, LLtd,English-incorporatedand despite Supra 202 detriment the noticeofequitableassignmenttoX,forfearitsnotdischarging thedebt , attextton51. LLOYD as notedpreviously, itisplainthatifDexpectedtoseekXoutandmake Wandsworth LondonBorough Council quid pro quo ’ supra s obligationswillhavebecomemuchmoreonerousthantheyhadbeen 205 incurred bythedebtor ’ [1999] ICR1182,1189;EWCACiv3115,[26]. S MARITIME AND COMMERCIAL LAW QUARTERLY . Further, thestatusquointroducesinstabilitiesofitsownasitmay 207 . 203 not assignees ofdebt chose ‘‘ explained been expresslyaddressedatthetimeofcontractbetweendebtorand Portland Cement in actionarisingoutofcontract,forthe arguments inthispaperapply at thecreditor is of bene ’’ bysayingsimplythatnoticeofanequitable will v. 208 to fi Da Silva t tothedebtorandisnotbecastaway the assigneeeffects adischarge oftheoriginaldebt ’ be caseswherethefactsgoagainstsuch s request ought tobemoreconsciousasthe . 209 But thereisnoauthorityforthe [1998] IRLR193(CA),[31]; . all contracts ofdebt.Anysuch 204 It goestotherootof 201 206 Yet outside that If so,weopen ’ Newbold s paying v. ©Informa null - 17/12/2018 08:43 is duetobepaidthereforedefused. direct actionagainstthedebtor. be be foundinthecaseswherecourtshaveconstrued obligations bymakingpaymenttohercontractuallystipulatedcreditor. thus havesomeprotectionagainstinsolvencyrisk. knowing assistance. defraud theassignee,accessoryliabilitymightbeimposedondebtorbasisof the creditor-assignor haveactivelycolludedtoeffect paymenttothecreditor-assignor to ‘‘ debtor directly. Nowadays,itmayalsobepossibletoviewsuchanassigneeasbeingathird partywhois (Rights ofThirdParties)Act1999,itwouldhavebeendif through someformofagencyorthejoint-promiseedoctrine),prior totheenactmentofContracts of implyingsuchaterm. fi would bethatthesearecaseswhere,absentanyassentbytheobligoras tothevariation,courtisunable Pitel (eds), ‘‘ equitable mechanismsthatunderlieit.Itshouldthusbecleartoconcludethe assignment, theimpossibilityofsuchmodi logic oftransferprecludesmodi be saidtoinvolvea and thestatutessay(andtowhattheydonotsay).Althoughbothformsofassignmentmay given theopportunity minded totakeasbroadaviewofthemattertheyhavedonein The systemhasworkedthusfar, andonemightreasonablyassumethatcourtswillbe heightened risk.Buttheriskisnot,perhaps,solarge astoderailthewheelsofcommerce. reckoned. Futureacquisitionsofsuchdebtmayneedtobere-pricedre might wellamounttoamatterthatwouldhavesuchaneffect. for suchreceiptstohisassignee: retains sometraceablesubstituteforthe assignee alsohasaproprietaryremedyasagainsthim,solongthecreditor-assignor the debtor, bindshertoperforminaccordancewiththetermsof assignment asconstitutingsomeformofoffer ofvariationwhich,uponitsacceptanceby assignees willhavetorelyonthewillingnessofcourtsconstruenotice communications, assigned toastrangernolongerbearstheriskofinvestigatingveracitysuch the othersideoftransaction,adebtorwhohasbeen purported The NatureofEquitableAssignmentandAnti-AssignmentClauses nd anyexpresstermpermittingunilateralvariationofthecontractandwhere itisnotsatis 215. Itisadifferent matterifshefailstodoeventhatandbreachesthecontract. 214. Thedilemma facedbyadebtorwhoisgivennoticeofanassignmentattheeleventhhour beforethedebt 213. 216. 218. Thoughnotthe riskoftheassignor-creditor 217. 1.Nodoubt,unlesssuchoffer istakentoemanatefromthecreditor-assignor 212. Ontheanalysisinthispaper, amoretransparent descriptionofthereasoningunderlyingsuchlabels 211. 210. Whether equitableorstatutory, weshouldpaymuchcloserattentiontowhatthecases Accordingly, assigneesofdebtsmaybeexposedtomorelegalriskthantheymighthave ‘‘ personal Supra Supra Supra fLindenGardens Trust Ltd Cf ’’ NOTICE OF ASSIGNMENT AND DISCHARGE BY PERFORMANCE Exploring ContractLaw tohavebeenbene , attexttonn191 , attexttonn195 , atn77. ’’ totheassignor, andtherefore 213 218 ‘‘ so longassheperformspreciselyinaccordancewithhercontractual . transfer Further, thecreditor-assignor isnotjustpersonallyliabletoaccount fi – – ted bysuchpromises,andwhomaythereforerelyonthe1999Acttobring a 195. 198. ’’ (Oxford, 2009). v. ofthecreditor-assignor fi Lenesta SludgeDisposalsLtd cation ofthedebtor 215 there isastrongcaseforthepropositionthat chose ’ s abscondingafterreceiptofpayment fromthedebtor. fi cation isreinforcedbythelimitationsof ‘‘ fi incapable cult fortheassigneetobringproceedingsagainst in actionofsuf 217 ’ s obligation.Inthecaseofequitable Exceptionally, wherethedebtorand ’ ’’ s legalrightstothedebt, , ch12ofJNeyers,RBronaughandSAG ’’ ‘‘ [1994] 1AC85,103.ButseeCHTham, ofassignment. noti choses fi fi ed 210 cient value. ’’ in actionquestionto thatherdebthasbeen Other examplesmight ‘‘ new and Portland Cement 214 211 ’’ the assignees(either fi contract. ed astothemerits Alternatively, 216 Assignees fl ect such 212 On , if 79 ©Informa null - 17/12/2018 08:43 to suchmodi of thedebtor required: perhaps,eitheranexpressorimpliedtermprovidingforsuchunilateralvariation debtor, followingassignment,isnow ought, therefore,beconsignedtohistory. 80 LLOYD fi ’ s contractualobligation,ora cation tohercontractualobligation.Theruleof ’ S MARITIME AND COMMERCIAL LAW QUARTERLY obliged fi nding ofsomeformassentbythedebtor to makepaymenttheassignee,moreis ‘‘ no discharge afternotice ’’