Burrell Solicitors Pty Limited (In Liquidation) v Reavill Farm Pty Limited

Supreme Court of NSW|2018-02-02|Before: Garling J

BS Legal Pty Ltd (Applicant on the Motion) Burrell Solicitors Pty Ltd (Respondent on the Motion) Representation: Counsel: N Simpson (P) M Jaireth (D1-D4) L Livingston (Applicant on the Motion)

Solicitors: Piper Alderman (P) Resolve Litigation Lawyers (D1-D4) BS Legal Pty Ltd (Applicant on the Motion) File Number(s): 2013/255030, 2013/255045 Publication restriction: Not Applicable

Introduction

The background and context of these proceedings is somewhat complex. However, in order to understand this judgment it is necessary to set out some part of that background.

Parties

Before the Court are two Notices of Motion in identical terms brought in separate proceedings in which the parties are identical. Both Notices of Motion raise the same issue. They were heard together. There is no need in this judgment to deal with them separately, they can be determined together. The plaintiff in each of the proceedings is Burrell Solicitors Pty Ltd ("Burrells").
The defendants in each of the proceedings are Reavill Farm Pty Ltd, Champions Quarry Pty Ltd, Jeffrey Francis Champion and Diana Christine Champion, all of whom are in the same interest and can conveniently be called the "Champion parties".
The applicant on each Notice of Motion is a company called BS Legal Pty Ltd ("BS Legal") which claims to be entitled to relief affecting two judgments of which Burrells is the judgment creditor.
Although not a party, Mr John Burrell, a solicitor, was the principal and director of Burrells, which was by order of the Court placed into liquidation on 29 September 2017. He is also the current principal of BS Legal.

Litigation History

The Champion parties were the unsuccessful applicants in a development application seeking consent to the expansion of their existing sandstone quarry located in the area governed by the Lismore City Council (the "Quarry DA").
In 2010, the Champion parties approached Mr Burrell with a view to instructing Burrells to commence and conduct proceedings in the Land and Environment Court with respect to the unsuccessful Quarry DA. As well, the Champion parties instructed Burrells to assist, as was necessary, with further negotiations with the Lismore Council and with the NSW Department of Planning.
Mr Burrell gave the Champion parties an estimate of the professional fees likely to be incurred in the discharge of the proposed retainer. Burrells was retained and commenced proceedings in the Land and Environment Court in respect of the expansion of the Quarry.
There were further disputes between the Lismore Council and the Champion parties with respect to the construction of a number of earth mounds in the vicinity of the Quarry. The Council issued a Cease Work Order with respect to the construction of those earth mounds.
In March 2010, the Champion parties retained Burrells to commence and conduct a separate appeal in the Land and Environment Court with respect to the Cease Work Orders and the earth mounds.
It is unnecessary to detail the course of either of the two proceedings in the Land and Environment Court. It is sufficient to note that neither of those proceedings ended happily for the Champion parties.
Burrells commenced proceedings against the Champion parties claiming their outstanding legal fees and disbursements arising from acting for the Champion parties in the proceedings in the Land and Environment Court.
The Champion parties filed a cross-claim against Burrells claiming damages in respect of contraventions by it of the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (the "Champion damages litigation"). In essence, the Champion parties alleged that Burrells acted in breach of its retainer, and that statements made by Mr Burrell with respect to the total costs likely to be incurred in the proceedings were misleading and deceptive, or else likely to mislead or deceive contrary to the relevant legislation.
The Champion damages litigation was determined by White J (as his Honour then was) in a lengthy judgment delivered on 24 March 2016. For the reasons which he then delivered, White J gave judgment for the Champion parties against Burrells in the sum of $20, and otherwise dismissed the proceedings: see Burrell Solicitors Pty Ltd & Anor v Reavill Farm Pty Ltd & Ors [2016] NSWSC 303. His Honour adjourned the question of costs of those proceedings for later argument. It is unnecessary to explore that further.
By the time that White J delivered judgment in the Champion damages litigation, a Costs Assessor had determined that the Champion parties were obliged to pay Burrells the sum of $185,400.86 for counsel's fees and $345,832.37 for professional costs and other disbursements in connection with the Land and Environment Court proceedings. That determination of the Costs Assessor was confirmed on an appeal by the Costs Review Panel.
On 22 August 2013, in consequence of the determination of the Costs Review Panel, two judgments were entered against the Champion parties in favour of Burrells in this Court in the amounts of $188,005.11 and $349,302.42 ("the costs judgments"), respectively.
The Champion parties appealed against the decision of White J and from the costs determination made by the Costs Review Panel. Although that appeal was originally brought in the District Court, it was, by consent, removed into the Court of Appeal in order to ensure that all issues between the same parties were resolved as efficiently as possible.
On 28 June 2017, for the reason which it then gave, the Court of Appeal dismissed the appeal against the judgment of White J and ordered the Champion parties to pay Burrells' costs of that appeal. The Court of Appeal declined to grant an extension of time to file the Summons initiating the costs appeal, and again ordered the Champion parties to pay Burrells' costs: see Reavill Farm Pty Ltd v Burrell Solicitors Pty Ltd [2017] NSWCA 156.
Each of the two proceedings with which these reasons for judgment deal, were the proceedings in which Burrells lodged the Costs Certificate and obtained the costs judgments.
After the conclusion of the proceedings in the Court of Appeal, the Champion parties filed Notices of Motion making application to pay the costs judgments by instalments. On 5 September 2017, an Assistant Registrar of the Court refused those applications to pay the judgment debts by instalments. The following day, the Champion parties filed a Notice of Motion objecting to the order refusing the instalment application, seeking that this Court set aside that order and seeking an order that the debt based on the costs judgments be paid by instalments. That Motion was fixed for hearing on 2 February 2018.
A six month adjournment was sought for the hearing of that Motion. For the reasons which I delivered in an ex tempore judgment on 2 February 2018, that application was refused and each of the Notices of Motion filed by the Champion parties was dismissed: see Burrell Solicitors Pty Ltd v Reavill Farm Pty Ltd [2018] NSWSC 107.

Current Notices of Motion

A Notice of Motion in each of the proceedings, in identical terms, has been filed by the applicant, BS Legal. It seeks the following orders: "1. Pursuant to the Uniform Civil Procedure Rules 2005 (NSW) r 6.24 and 6.27, BS Legal Pty Ltd … be joined as second plaintiff in these proceedings. 2. The Writ for levy of property issued on 21 August 2017 be discharged, or alternatively stayed, and a new writ be issued with identifies BS Legal Pty Ltd … as judgment creditor in substitution for Burrell Solicitors Pty Ltd … 3. Declare that Burrell Solicitors Pty Ltd … has assigned and transferred to BS Legal Pty Ltd … at law or alternatively in equity, all of its right, title and interest in the judgment entered against the defendants on 22 August 2013 and any monies presently or in the future owed or becoming owed by the defendants pursuant to that judgment's costs."
This judgment deals with the issues raised by these Notices of Motion.

Relevant Facts

Mr John Burrell gave unchallenged evidence about a series of facts. It was not suggested that I should not accept his evidence.
Mr Burrell was the sole director of Burrells, and is also the sole director of BS Legal. He was the principal solicitor of the law practice conducted by Burrells between 2003 and 30 June 2014. That law practice ceased to operate on 30 June 2014. Mr Burrell has been the principal of the law practice conducted by BS Legal which commenced to operate on 1 July 2014, and has continued since that time.
Burrells was placed into liquidation on 29 September 2017.
On 30 June 2014, each of Burrells and BS Legal made resolutions in identical terms. Those resolutions were recorded in a document of that date and signed by Mr Burrell in his capacity as a director of each company.
That document is as follows: "2. [BS Legal] will take over the legal practice of [Burrell Solicitors] on and from 1 July 2014 (the Changeover Date) and [Burrell Solicitors] will cease to trade. 3. [BS Legal] will have the use and benefit of all the property of [Burrell Solicitors] relating to the legal practice and all contract and license agreements for nil consideration. 4. [BS Legal] will be solely responsible for and indemnifies [Burrell Solicitors] in respect of rent, license fees and other outgoings of the business from the Changeover Date. 5. [BS Legal] will have the benefit of all unbilled work in progress undertaken by [Burrell Solicitors] prior to the Changeover Date except if otherwise specifically agreed on a file by file basis. 6. [BS Legal] will not be liable for any statutory or regulatory liabilities of [Burrell Solicitors] including tax except as follows. 7. In respect of the litigation between [Burrell Solicitors] and the Champion Parties (….) arising from Land & Environment Proceedings #10-10069 and 10191 and related disputes (the Champion Matters): i) [Burrell Solicitors] assigns and transfers to [BS Legal] all of its right title and interest in all moneys presently or in the future owed or becoming owed to [Burrell Solicitors] by the Champion Parties (or any of them) including but not limited to its interest in the Costs Certificates and consequential Judgments obtained 22 August 2013 and costs orders in proceedings (whether completed, on-going or new) - the Champion Money - on the following basis; ii) [BS Legal] will take over the conduct of these matters and act for [Burrell Solicitors] and pay for all outlays including filing fees, barrister and witness expenses as reasonably required (in so far as [BS Legal] is financially able) on the understanding that these costs and its fees will be carried to be paid in the future from the Champion Money; iii) [BS Legal] will be entitled to receive in its own name and as of right the Champion Money and to draw on the Champion Money to cover all of its costs and outlays and up to 50% of its fees (billed on the usual time/cost basis) before the following applies: iv) [BS Legal] will pay for and on behalf of [Burrell Solicitors] (in discharge of its debts or as much thereof as is possible in the following order of priority) when and as soon as [BS Legal] is able from the Champion Money: a) tax owed by [Burrell Solicitors]; b) fees owing to Tim Robertson SC (from the LEC proceedings); c) sums owing to Leewon Kwon including staff entitlements and loans; d) the same in respect of John Burrell. v) Next in priority [BS Legal] will apply any amount remaining of the Champion Money to pay any loans it makes or liabilities it incurs for or relating to the conduct of the Champion [Matters] vi) After payment of the above [BS Legal] is entitled to take whatever is remaining. 8. [Burrell Solicitors] will do whatever is reasonable and necessary to give effect to the above."
Mr Burrell deposed that he caused the companies to make those resolutions (in what he described as "an agreement") on the advice of his accountant, so as to ensure that any legal practice carried on by him would be more easily manageable as it progressed. Clearly at that time the old practice, Burrells, was in a precarious financial position. Mr Burrell, personally, was also in a precarious financial position.
At the time that these resolutions were entered into, the litigation between the Champion parties and Burrells was ongoing. The conduct of that litigation required the application of Mr Burrell's time and energy. It also required the injection of funds to pay barrister's fees.
Mr Burrell deposed that it was a material consideration for him: "… in entering into the assignment, that the assignment provided a 50% stream of revenue of monies recovered from the Champion parties towards the payment of the debts of [Burrells] owed to the ATO, Tim Robertson SC and Lee Won Kwon (thus protecting and assuring their position) at the same time as a 50% payment to [BS Legal] to defray and recoup its costs (funded by my salary sacrifices and loans)."
Mr Burrell went on to depose that BS Legal had given valuable consideration for the assignment amongst other things by way of the provision of legal services for and on behalf of Burrells, in successfully defending the Champion parties litigation.
It is the case for BS Legal that on 1 August 2017, based on the evidence of Mr Burrell in his unchallenged affidavit of 1 February 2018, written notice of the assignment was given to the Champion parties. I accept that evidence and I am satisfied that written notice of the assignment was given at that time.
Mr Burrell deposed that notice of the assignment was not given earlier because he did not think it was material to any of the issues in dispute with the Champion parties and: "… I thought it prudent not to disclose the assignment for fear it would be seized upon by the Champion parties for any reason, no matter how flimsy, as a distraction and to cause unnecessary delay and costs to be incurred."

Leave to Commence or Continue Proceedings

Section 471B of the Corporations Act 2001 (Cth) requires a person who wishes to begin or proceed with a proceeding in a court against a company in liquidation, and in relation to property of the company, to obtain leave of the Court.
The definition of property in s 9 of the Corporations Act includes a legal or equitable interest in real or personal property, and also any chose-in-action. The interest can be present or future and vested or contingent.
The Notices of Motion would constitute proceedings against the company, Burrells, which is in liquidation. The subject matter of the orders sought require, in substance, the transfer to BS Legal of the judgments standing in the name of Burrells. These judgments, and the right to receive any payments in discharge of them, are clearly property within the meaning of the Corporations Act.
The liquidators of Burrells, did not oppose a grant of leave to BS Legal, nunc pro tunc, to commence proceedings, and continue them against the company.
By counsel, they simply left it to the Court to be satisfied that the proceedings were such that leave was necessary and, if necessary, that the Court's discretion ought to be exercised.
Before exercising this discretion, the Court first needs to be satisfied that, in the interlocutory sense, there is a serious question to be tried: Vagrand Pty Ltd (In liq) v Fielding (1993) 41 FCR 550 at 556. Here it is readily apparent that this is so.
Other considerations, which cannot be exhaustively defined, may be relevant. Here, the liquidators did not suggest any prejudice or disadvantage to the creditors from the continuation of the proceedings. As well, it is clearly desirable for the company in liquidation to have a court determine its rights so that it can be bound, rather than for the liquidator to be confronted with the claim and have to deal with it. The nature of the issue in dispute is most readily resolved at the lowest possible cost by the Court determining these Notices of Motion.
In all of those circumstances, it is appropriate that in each matter, BS Legal has leave, nunc pro tunc, to commence these proceedings and to continue them. A formal order to that effect will be made at the end of these reasons for judgment.

Submissions of BS Legal

BS Legal submitted that the Resolutions of each company constituted an assignment by Burrells to BS Legal of all of its right, title and interest in the two costs judgments and any monies which might become due pursuant to those judgments and any existing costs orders. It submitted that the document containing the two Resolutions evidenced the whole of the agreement between the Companies of which that assignment was one part.
BS Legal submitted that, pursuant to its obligations in paragraph 7 of the Agreement, it in fact provided legal services to Burrells in defending the claim brought by the Champion parties against Burrells with substantial success, and in resisting the unsuccessful appeal by the Champion parties.
BS Legal noted that Mr Burrell, as the director and principal solicitor of BS Legal, was on the record for Burrell Solicitors and that he was assisted in the provision of services by a solicitor employed by BS Legal and a paralegal from time to time.
The submissions noted the contention of BS Legal that on 1 August 2017, a Notice of Assignment was served on the Champion parties. BS Legal submitted that there had been a valid legal assignment by reason of the giving of the Notice. Alternatively, it submitted that there has been a valid assignment in equity which the Court would enforce having regard to the fact that BS Legal has done all that it was required to do under the assignment. It submitted that an equitable assignment of a chose in action is effective and enforceable between assignee and assignor without notice to the third party debtor: Thomas v National Australia Bank Ltd [1999] QCA 525; [2000] 2 Qd R 448 at [18]; ABB Australia Pty Ltd v Federal Commissioner of Taxation [2007] FCA 1063; (2007) 162 FCR 189 at [59].
Further, BS Legal submitted that declaratory relief is appropriate in order to vindicate the effectiveness of the assignment. It drew attention to the fact that BS Legal has a real interest in resolving the question addressed to the proposed declaration and that such a question is neither abstract nor hypothetical. It submitted that declaratory relief in this case would be directed to the determination of a legal controversy which would produce real consequences for the party and would have utility. It submitted that in those circumstances, once the assignment is recognised, either at law or in equity, then the consequential relief which it seeks gives effect in the most efficient manner to that assignment.

Submissions of Burrell

The liquidator of Burrells, through counsel, contested the validity of the assignment on a number of bases.
Burrells, first, submitted that the purported Agreement contained in the Resolutions provides for the assignment only of future property which either has no present existence or else is property in which the intending assignor has not present title. On that basis, it submitted that there was no valid assignment. It submitted that what is clearly intended from the assignment clause in the Agreement was an attempt to confer a future right to claim such things that at the time of the assignment did not exist. It pointed to the expressed "all monies presently or in the future owed or becoming owed …" as demonstrating that the rights in the purported assignment did not relate to present property but rather to future property.
Secondly, Burrells submitted that by reason of the contents of paragraph 7 of the Agreement, the purported assignment was not absolute but rather was an assignment subject to a series of conditions and therefore was of no effect at law: Austino Wentworthville Pty Ltd v Metroland Australia Ltd [2013] NSWCA 59; (2013) 93 ACSR 297.
Thirdly, Burrells draws attention to the terms in which notice of the assignment was purportedly given and submitted that it does not comply with s 12 of the Conveyancing Act 1919 because, even assuming service which is not conceded, the Notice was not consistent with, and differed from. the terms of the assignment in the Agreement. It submitted that the Notice of Assignment did not extend to the future property purportedly included in the agreement for the assignment and that the notice of assignment is incorrect, because it does not adequately reflect the fact that the Champion parties had paid some monies to reduce those outstanding.
Finally, Burrells submitted that the purported assignment was not supported by consideration and that accordingly, as at either 30 June 2014 or 1 August 2017, it constituted a voidable transaction under either s 588FDA or else 588FFE of the Corporations Act. In particular, Burrells drew attention to the use of the words "nil consideration" at the end of clause 3 of the agreement.
The Champion parties took a neutral stance on the questions raised between Burrells and BS Legal, and did not make any submission about what course the Court should follow.

Discernment

The first issue to which it is convenient to turn is whether the resolution of the companies in the terms set out at [28] above (which amounted to an agreement between Burrells and BS Legal) contained a valid assignment.
The details set out above constitute the entirety of the terms of the Agreement. In my view, that document is evidence of an agreement reached between Burrells and BS Legal in the terms set out in each of the identical resolutions of each of the two companies.
I accept the submission of BS Legal that it manifests in clear terms a consensus achieved between the two corporate entities. I am satisfied that their minds were as one with respect to the terms which are written down.
Whilst it would have been preferable if there had been prepared and executed a Deed of Assignment or some other formal agreement, the material contained in the identical resolutions nevertheless is sufficient evidence to constitute the terms of the agreement between the companies. In coming to this conclusion, I note that although Mr Burrell swore an affidavit in the proceedings in which he deposed, in terms, to this document as evidencing the recording of the agreement reached between the parties, he was not cross-examined or challenged by counsel for the liquidators to suggest that this was not correct.
Without repeating each of the terms of the Agreement, it is clear that there was "give and take" for both companies. On the one hand, BS Legal would take over the existing legal practice of Burrells and have the use of its property and equipment, whilst at the same time being solely responsible for, and indemnifying Burrells with respect to, its existing obligations by way of rent, license fees and outgoings. As well, with respect to the ongoing litigation with the Champion parties, which was the principal source of a significant potential benefit, namely recovery of outstanding legal costs and disbursements, or a potentially significant financial detriment, namely an order for costs being made against it, or else damages being assessed against it, BS Legal agreed to provide Burrells without immediate payment, and by expending monies on behalf of Burrells, the legal services necessary for the conduct of the litigation.
The outstanding benefit which might be received from the Champion partners was agreed to be split between the parties generally on a 50/50 basis, up to the total of legal costs and outlays and fees billed, and thereafter to be divided in accordance with a particular formula which provided benefits to both Burrells and BS Legal.
In my assessment of this Agreement, real value is to be found in the arrangements which have occurred. There is both advantage and disadvantage to each of the parties to the Agreement. In that way, consideration flowed from BS Legal to Burrells by way of the provision of legal services without immediate payment, and an indemnity with respect to ongoing expenses which was more than adequate to support the Agreement. There is no suggestion that BS Legal did not provide that consideration. It paid the ongoing expenses and acted for Burrells in the ongoing litigation.
Putting it differently, I would conclude from a reading of that Agreement, and having regard to the unchallenged evidence of Mr Burrell as to the respective financial positions of Burrells and the financial position surrounding the Champion litigation, that this Agreement represented a commercial resolution to the benefit of both parties.
Whilst the terms in which the Agreement was expressed, in particular the words "nil consideration" in clause 3 could have been clearer, I am not persuaded, in light of my understanding of the various obligations set out above, that a sensible interpretation of those words has the effect contended for by Burrells.
In my view, those words do not suggest that there is no consideration for the whole agreement including the assignment, but rather that BS Legal will not have to pay Burrells any money specifically for using the practice property of Burrells, or having the benefit of their contracts or lease agreements. A clearer expression would have used the words "no additional consideration". However, in my view, the words are sufficiently clear for this meaning to be given to them.
The foregoing discussion and analysis leads me to the conclusion that there was ample consideration travelling from BS Legal to Burrells for the agreement and the assignment which was a part of that agreement. Put differently, Burrells received good consideration for its property which was transferred by agreement or assignment to BS Legal.
It was submitted on behalf of Burrells, that this Agreement was not enforceable because the agreement reached on 30 June 2014 contravened s 588FDA of the Corporations Act. It was submitted that this transaction constituted "an unreasonable director-related transaction of the company" and was thereby also in breach of s 588FE of the Corporations Act.
The essence of a transaction of the kind prohibited by s 588FDA is that, accepting the relationship required by the section between the parties to a transaction, a reasonable person in Burrells' circumstances would not have entered into the transaction having regard to the benefits and detriments which it encompassed.
Counsel for the Liquidators in his submissions accepted that a breach of s 588FDA would only be proved if the Court was satisfied that there was no consideration for the transaction as he had earlier contended. As I am satisfied that consideration exists for the agreement and the assignment, I am not satisfied that the transaction was in breach of s 588FDA or was voidable as a consequence of s 588Fe.
A central argument with respect to the assignment was that: 1. the assignment was not absolute; and 2. the assignment was of future property.
The submission that the assignment was not absolute and was only of future property and therefore invalid, depends upon a careful analysis of the terms of the Agreement. It is apparent from the Agreement that the subject matter of the assignment arises in respect of identified Land and Environment Court proceedings. These are the proceedings earlier referred to with respect to the quarry DA and the bund. As is apparent from the recitation of facts in the judgment of White J in Burrell Solicitors Pty Ltd & Anor v Reavill Farm Pty Ltd & Ors [2016] NSWSC 303 at [1], the Land and Environment Court proceedings had concluded well before the assignment was entered into. As well, by August 2013 when judgments were entered on the Costs Certificates, it was clear that all of the costs assessment processes, including the appeal to the Appeal Panel, had been considered and finalised. This was also clearly before the Agreement was reached between the respective companies.
The litigation which was outstanding at that point in time was the Champion damages litigation. In terms of anything which may accrue in the future arising out of that ongoing litigation, all that was possible was the benefit of an order for costs in those proceedings, if they resolved in favour of Burrells or of any order made on an interlocutory basis. It is beyond argument that the costs judgments had been entered and amounted to valuable present property. Whether that value could be fully realised was unknown, as was the cost and extent of any enforcement proceedings. But that uncertainty did not convert the costs judgment into future property.
Accordingly, I conclude that a significant part of the assigned property was present property, namely, at the least, the judgments deriving from the Costs Certificates which had at that point in time been entered. As well, any costs orders which had been made in the Champion damages proceedings by that time would also be property which Burrells was entitled to assign.
There may be some doubt as to whether any costs order which might be made in the future in the course of either the Champion damages litigation, or else proceedings to enforce the costs judgment, constituted future property of a kind which could not be assigned at law. In the event that such a conclusion was reached, the benefit of such costs order was capable of being assigned at law. But it was only an expectancy. However, in those circumstances, equity would regard the assignment as effective when consideration was paid or executed. This is not more than an example of the equitable principle that equity regards as done that which ought to be done: Holroyd v Marshall (1862) 10 HLC 191; as Bowen CJ said in Federal Commissioner of Taxation v Betro Harrison Constructions Pty Ltd (1978) 78 ATC 4431; (1978) 20 ALR 647 at 650, 651: "Where the property which is said to have been assigned is a chose in action assignable at law, and where as here the assignment is not made in accordance with the statutory requirements for a legal assignment of that chose, the assignment may be effective in equity if made for valuable consideration. In such a case equity will regard a purported assignment as a contract to assign and the contemplated assignee will hold the equitable title for the property pursuant to the maxim that equity regards as done that which ought to be done. If the assignment is voluntary, it will be effective if the assignor has done all that according to the nature of property is required to be done to transfer the property."
An alternative view is that, what in fact was being assigned was the whole of the chose in action which was constituted by Burrells' interest in the litigation between it and the Champion parties. Acceptance of this view would lead to the same conclusion.
In my view, the assignment was for valuable consideration. That consideration has been paid and executed. There is no reason to think that there is any invalidity in the assignment on account of any conclusion as to it being of future property.
Even if I were wrong in that respect, there is no reason to doubt the validity of the assignment insofar as it relates to the existing judgments which are, after all, the subject matter of the relief sought in this application, and the existing costs orders.
It was also contended that the assignment was not absolute, but rather was a conditional one and therefore the assignment was unenforceable: s 12 Conveyancing Act 1919.
A similar issue was considered by the Court of Appeal in Austino. After a lengthy and detailed review of past authorities, Barrett JA (with whom Beazley P and Meagher JA agreed) at [62], said: "62 Relevant principles emerging from the cases are these: 1. An "absolute" assignment is one that is unconditional and does not attempt to affect part only of the chose in action. 2. The fact that an assignment otherwise absolute is accompanied by an express proviso for redemption, an implied right of redemption or the creation of a trust in respect of future proceeds does not deprive it of its absolute character. 3. An assignment by way of charge is one the effect of which is to give a right of payment out of the subject matter assigned without outright transfer of that subject matter. Such an assignment occurs when, for example, there is a transfer of a right to be paid out of a particular fund or of so much of a debt as is sufficient to satisfy a future indebtedness. 4. The character of the assignment must be ascertained from the terms and effect of the instrument, according to the construction of it as a whole."
Approaching the assignment in this way, I have concluded that this submission of Burrells cannot be accepted. The obligations imposed by clauses 7(ii) through to and including 7(vi), do not affect the subject matter of the assignment. Rather, they are nothing more than the reflection of a contractual agreement as to how any monies actually recovered by BS Legal will be disbursed. There is no suggestion that these obligations condition the entitlement of BS Legal to the present property which is assigned. There was no certainty as to what in fact BS Legal would recover from the Champion parties, nor was there any certainty as to when those sums might be recovered.
The clauses to which reference has been made, deal with the obligations of BS Legal in the event that monies are recovered from the Champion parties. What is assigned to BS Legal by Burrells is the benefit of the judgments under which the monies may be due and payable by the Champion parties.
In my view, it is not correct to regard the assignment as being in any way conditional. The assignment is an absolute one.
For these reasons, I am satisfied that Burrells assigned to BS Legal all of its right, title and interest in the two judgments the subject of this application, including any existing costs orders in the Champion damages litigation.
The final basis upon which Burrells relied was that the Notice of the Assignment given to the Champion parties was inadequate because it was not consistent with the assignment described in clause 7(i) and following in the Agreement.
The Notice was in the following form: NOTICE OF ASSIGNMENT OF DEBT Reavill Farm Pty Limited ACN 001 817 492 Champions Quarry Pty Limited ACN 127 774 949 TO: Jeffrey Francis Champion Diana Christine Champion (collectively, the Debtors) ADDRESS: All of 64 Hazlemount Lane Tucki NSW 2480 FROM: Burrell Solicitors Pty Limited ACN 106 513 044 DEBT: Judgment in NSWSC 2013/255045 dated 22 August 2013 for $349,302.42 & Judgment in NSWSC 2013/255032 dated 22 August 2013 for $188,005.11 (the Debt) NOTICE: 1) The Creditor has assigned the Debt to BS Legal Pty Limited CAN 600 436 986 (the Assignee) 2) The Debtors are irrevocably directed by the Creditor to all money due or which may become due under the Debt to BS Legal Pty Limited CAN 600 436 986 DATED: 1 August 2017 For and on behalf of Burrell Solicitors Pty Limited SIGNED: John Llewellyn Burrell Director

On its face, the Notice records that what was assigned was the judgment debts which included all moneys due or which may become due. No reference is made to the assignment of "… costs orders in proceedings (whether completed, ongoing or new) …".
However, that does not seem to me to invalidate the assignment or its consequences. As a general proposition, notice is given to the debtor of the assignment so that the benefit of s 12 of the Conveyancing Act can be taken - the assignment thereby becoming "… effectual in law…" against the debtor. If s 12 is not engaged, the assignment remains an equitable one, which can be enforced as a matter of equity.
The mere fact that notice to a debtor has not been given of all property which is the subject of the assignment does not have any effect on the assignment as between the assignor and assignee. It is a feature only relevant to the enforcement of the (legal or equitable) rights or property subject to the assignment against the debtor. Here, the Champion parties do not contest the effectiveness or enforceability of the assignment. They make no submissions on any of these issues.
In my view, if there is a failure to give written notice of a part of the assigned property, such failure cannot be relied upon as a stand-alone ground to support a submission of invalidity of the assignment as Burrells does.
This basis for not granting relief is entirely unpersuasive.

Relief

In considering what ought flow from this conclusion and what orders ought be made, it is necessary to pay careful attention to the provisions of s 56 and Division 1 more generally, of Pt 6 of the Civil Procedure Act 2005.
When exercising any power given to the Court by the Civil Procedure Act, the Court is obliged to facilitate the just, quick and cheap resolution of the real issues in proceedings. The effect of the finding of a legitimate assignment is that BS Legal is wholly entitled to the judgments which are the subject of each of these proceedings, and Burrells do not have any residual title to them.
Writs for Levy of Property were issued by the Court on 21 August 2017. The judgment creditor's name on those Writs was Burrells. By that time, because notice of the Assignment had been served on the Champion parties on 1 August 2017, the assignment had been completed.
The Writs have not been carried into effect because of the various steps taken by the Champion parties. However, by reason of the effluxion of time, those Writs have expired. It is necessary for new Writs to be issued.
Accordingly, the appropriate relief for each of the matters before the Court, and which are being determined by these Motions, is to order that BS Legal be substituted for Burrells Solicitors as the plaintiff in each proceeding with effect from the date of the filing of the Notice of Motion on 8 November 2017. It will be necessary also to make Declarations.

Orders

I make the following orders in each of the proceedings 2013/255030 and 2013/255045: 1. Pursuant to s 471B of the Corporations Act 2001 (Cth), grant leave, nunc pro tunc, to the applicant BS Legal Pty Ltd to commence the proceedings constituted by the Notice of Motion filed on 8 November 2017 in each of the proceedings, 2013/255030 and 2013/255045, and to continue those proceedings. 2. Declare that Burrell Solicitors Pty Ltd has assigned and transferred to BS Legal Pty Ltd all of its right, title and interest in the judgments entered against the defendants on 22 August 2013, and any money presently owing or in the future becoming owed by the defendants pursuant to the judgment. 3. Order, pursuant to s 6.27 of the Uniform Civil Procedure Rules 2005, that BS Legal Pty Ltd be joined as a plaintiff to the proceedings. 4. Order that BS Legal Pty Ltd be substituted for Burrells Solicitors Pty Ltd as the judgment creditor with respect to the judgment dated 22 August 2013, with effect from 1 August 2017. 5. Order that Burrells Solicitors Pty Ltd be removed from the proceedings as a party, and as the judgment creditor with respect to the judgment dated 22 August 2013. 6. Order that the name of the proceedings be changed so that the proceedings be referred to as BS Legal Pty Ltd v Reavill Farms Pty Ltd. 7. Order that Burrells Solicitors Pty Ltd pay the costs of BS Legal Pty Ltd of the Notices of Motion. 8. Order the defendants to pay their own costs.

Amendments 15 February 2019 - Typographical errors [13], [72] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 February 2019

Trade Practices Act 1974(Cth)

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