Cennzeal Pty Ltd v Dawson Property Ventures Pty Ltd

Reasons for judgment

1. The background to these proceedings is that, in October 2010, a joint venture was formed for the purchase and development of properties in Bellbird and Dubbo New South Wales ("the Bellbird and Dubbo Projects"), of which Dawson Properties (Ventures) Pty Ltd ("DV"), Dawson Properties Pty Ltd, Mr Jeffrey Dawson ("Mr Dawson") and First Debenture Limited ("FDL") were parties. For present purposes, DV, Dawson Properties Pty Ltd and Mr Dawson can be treated collectively and described as "Dawson". There were two trust deeds pertaining to the Bellbird and Dubbo Projects, which I shall refer to as the "Trust Deeds" and there was also an agreement described as a Project Management Agreement ("PMA") entered into by Dawson, FDL and another company, 1Group Pty Ltd.
2. Cennzeal Pty Ltd ("Cennzeal"), relying on two documents, one dated 14 July 2014 ("the July Deed") and one dated 15 August 2014 ("the August Deed"), asserts that it is the assignee of FDL's rights against Dawson. Mr Leonardus Smits ("Mr Smits") is or was, as at July 2014, a director and shareholder in Cennzeal.
3. FDL was placed in liquidation in September 2015 and was deregistered on 10 December 2017: see Exhibit A2, Tab 28, p 437.
4. Cennzeal claims that Dawson, in connection with the joint venture, acted against the interests of FDL in breach of Dawson's fiduciary obligations, and that the transfer of property and issue of new units by Dawson should be declared null and void. Originally, Mr Smits himself, as an assignee under another purported assignment (see Exhibit C), was the Second Plaintiff and FDL was the Third Plaintiff but Mr Smits was declared bankrupt on 20 January 2016 and the Official Trustee in Bankruptcy, by letter of 29 September 2016, elected to discontinue the proceedings. Further, the liquidator of FDL did not wish to maintain the proceedings on behalf of FDL. In these proceedings, Mr Smits, who is no longer a bankrupt, acts as solicitor for Cennzeal and appeared for Cennzeal at the hearing before me. Mr D. Cook SC, with Mr B. Green, appeared for Dawson.
5. On 20 September 2017, Sackar J ordered that there be a separate determination of the following questions: 1. whether or to what extent the former Third Plaintiff (FDL) has effectively and validly assigned to the Plaintiff the rights, rights of action, estate, interests and/or claims (which are the subject of these proceedings and pleaded in paragraph 1(b) of the Further Amended Statement of Claim of 9 April 2015) FDL may have against the First to Fourth Defendants; and 2. whether or to what extent the assignments pleaded in paragraph 1(b) of the Further Amended Statement of Claim were: 1. duly authorised by or for and on behalf of FDL; 2. duly executed by or for and on behalf of FDL; or 3. ratified by FDL; or 4. otherwise binding upon or enforceable against FDL or any of the Defendants.
6. Those questions were themselves part of a wider set of questions that it was agreed should be determined as separate questions. Pursuant to an order made on 9 March 2018, a document was filed, entitled "Agreed Statement of Consequences of Determination of the Separate Question", setting out the wider questions of which the current questions, set out in [5] above, form a part and the agreed consequences of the determination of those questions.
7. The July Deed is found as Annexure G to the Affidavit of Mr Peter Mahommed of 25 January 2017. The August Deed is Annexure H to that Affidavit: see Exhibit A2, Tabs 21 and 22.
8. The August Deed seems to proceed on the basis that the July Deed was not effective. It is also more comprehensive than the July Deed.
9. A number of issues were identified by Mr Cook in his Outline of Submissions received before the hearing but the issues advanced at the hearing on behalf of Dawson in respect of both Deeds were: 1. That FDL is not shown to have executed the Deeds ("the Authority Point"); 2. That the assignment is precluded by the terms of both Trust Deeds ("the Prohibition Point"); 3. That the Deeds, as a matter of construction, did not assign the rights which Cennzeal asserts in the Further Amended Statement of Claim ("FASTOCL") ("the Construction Point"); and 4. That the Deeds assign a bare right of action and should be struck down on public policy grounds ("the Bare Right of Action Point").
10. Mr Cook contended, and Mr Smits did not assert otherwise, that acceptance of any one of these arguments would mean that Cennzeal cannot succeed, and that the separate questions should be determined adversely to Cennzeal.
11. I shall in the balance of these reasons focus on the August Deed unless specifically noted otherwise.

The Authority Point

1. The Constitution of FDL ("the FDL Constitution") is found at Exhibit A1 (Tab 12, p 166). It contains, relevantly, the following clauses: 23.4 Agent or attorney The Directors may at any time appoint any person or persons to be an agent or attorney of the Company for any purposes and with any powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under this Constitution) and for any period and subject to any conditions as the Directors think fit. Any appointment may be made in favour of any company or the members, directors, nominees or managers of any company or firm or in favour of any fluctuating body of persons (whether nominated by the Directors or otherwise) and any document appointing an agent or power of attorney may contain provisions for the protection or convenience of the agent or attorney and of persons dealing with the agent or attorney as the Directors may think fit. 24.1 Managing director The Directors may at any time appoint 1 or more members of the Board to the office of managing director or to any other executive office for any period and on any terms they think fit and, subject to the terms of any agreement entered into in any particular case, may revoke any appointment. Any appointment is automatically determined if the person ceases to be a Director. 24.2 Directors may confer powers on executive directors The Directors may confer upon a managing director or other executive director any of the powers exercisable by the Directors upon those terms and conditions and with any restrictions as they think fit. Any powers so conferred may be concurrent with or to the exclusion of their own powers. The Directors may at any time revoke, withdraw, alter or vary all or any of those powers. 25.8 Meeting competent to exercise all powers A meeting of the Directors at which a quorum is present will be competent to exercise all or any of the powers and discretions vested in or exercisable by the Directors generally. 28.1 Use of common seal If the Company has a seal: (a) the Directors must provide for the safe custody of the Seal; (b) the Seal must be used only with the authority of the Directors or a committee of the Directors with authority from the Directors to authorise the use of the Seal; (c) every document to which the Seal is affixed must be signed by a Director and countersigned by another Director, a Secretary, an assistant Secretary or another person appointed by the Directors to countersign that document or a class of documents which includes that document.
2. The July and August Deeds contain the signature of Mr James Photios ("Mr Photios") on the line where the signature or seal of FDL is required. Mr Photios's signature is witnessed by Mr Richard Licardy ("Mr Licardy"). Mr Photios, it is agreed, was not a director of FDL at the time (although he later became a director). There is no evidence that Mr Photios was appointed as an executive director of FDL, a position recognised in the FDL Constitution. He does not state in his signature the capacity in which he purports to sign on behalf of FDL. There is no power of attorney from FDL appointing Mr Photios as agent of FDL and no resolution of FDL passed authorising him to execute documents on behalf of FDL. No seal of FDL is affixed to the July and August Deeds. Nor is there any resolution of FDL authorising the assignment of its rights to Cennzeal. Mr Licardy was at the time a director of FDL (see Exhibit A2, Tab 28, p 443); however, he did not sign in that capacity, but rather as a witness to Mr Photios's signature.
3. In these circumstances, Dawson claims that the July and August Deeds are not shown to have been authorised by FDL and that they are ineffective documents.
4. Given the complete absence of any execution of the July and August Deeds by any director of FDL and of any resolution of FDL authorising either assignment, Mr Smits at the hearing put Cennzeal's case as being that FDL had authorised Mr Photios to execute the Deeds on two grounds, the first being that, by virtue of clause 23.4 of the FDL Constitution, FDL could appoint Mr Photios as its agent to execute the July and August Deeds. The answer to that, however, is: 1. The FDL Constitution did not permit execution of documents by any other means than that specified in clause 28 of its Constitution; s 127 of the Corporations Act 2001 (Cth) does permit a document to be signed without a seal but, in that case, it must be signed by two directors or a director and a company secretary. 2. There is no evidence that FDL did appoint Mr Photios to execute the July and August Deeds, nor is there evidence that the Board of FDL resolved to assign its rights to Cennzeal or to enter into the July and August Deeds. 3. There is no evidence of any power of attorney being granted to Mr Photios. 4. If the FDL Constitution did permit execution of a deed by a person acting under a power of attorney, that power of attorney may itself need to be executed as a deed by the company: see MYT Engineering Pty Limited and Others v Mulcon Pty Limited (1999) 195 CLR 636 at 643 (per Gleeson CJ, Gaudron, Gummow and Hayne JJ), referring to the decision of Powell JA in the Court of Appeal in MYT Engineering Pty Ltd and Others v Mulcon Pty Ltd (1997) 140 FLR 247 at 267-268. Whether that is so or not is not necessary to determine because the effect of section 51A(3) of the Conveyancing Act 1919 (NSW) is that there must be a power of attorney and the person exercising the power must sign "…his or her name in such way as to show that the person does so as attorney of the corporation…", a requirement described by Seddon on Deeds (Seddon, The Federation Press, 2015) as "essential": see [2.11], p 66. Mr Photios did not state that he was signing the July and August Deeds under a power of attorney and he has not said that he signed or intended to sign in that capacity. 5. Relevant to the August Deed are two resolutions of FDL (Exhibit A1, Tab 16, pp 301 - 302) in which, at a board meeting of 16 July 2014, the FDL Board, constituted by Mr Victor Wan ("Mr Wan") and Mr John Foley ("Mr Foley"), resolved that no legal contract was to be entered into by FDL without the prior notification and approval of the FDL Board in writing (see p 302). The documents calling the meeting and containing the resolutions were produced by the liquidator of FDL in answer to a subpoena issued by Dawson's solicitor. Mr Smits challenged the authenticity of these documents, relying on In the Matter of Maiden Civil Pty Ltd [2012] NSWSC 1618, a decision of Brereton J. In that case, it was held that MYOB documents were not admissible as a business record of a company as they were produced by a third party. In a subsequent case, In the matter of Wollongong Coal Limited (formerly known as Gujarat NRE Coking Coal Limited) [2014] NSWSC 1952, Brereton J summarised his conclusions in Maiden Civil (supra) at [11]: "11 After reviewing those authorities and the judgment of Needham J in Re Marra Developments Pty Ltd and the Companies Act [1979] 2 NSWLR 193, which was endorsed in Albrighton v Royal Prince Alfred Hospital [1980] 2 NSWLR 542, I concluded in Maiden Civil that while the mere production of a document cannot authenticate it, Marra Developments establishes, though Rusu [National Australia Bank Ltd v Rusu [1999] NSWSC 539; (1999) 47 NSWLR 309] might contradict, that production on subpoena from an identified source might suffice to show that it was produced from the custody of the entity whose business it is, which would facilitate an inference that it was a business record, and Rusu should not be taken to limit the way in which authenticity of the document can be proved."
5. In relation to [15(d)] above, as the documents were produced by the liquidator of FDL, the Court can, in the absence of any evidence to the contrary, be satisfied that the minutes are authentic. I do not accept Mr Smits' contention that the rule in Jones v Dunkel and Another (1959) 101 CLR 298 has any application here or that Dawson should have called Mr Michael Unicomb ("Mr Unicomb"), a former secretary of FDL. Mr Unicomb could not be considered to be in Dawson's "camp": see Manly Council v Byrne and Anor [2004] NSWCA 123. The Plaintiffs plead the assignment of rights and, therefore, in accordance with the general rule reflected in the maxim "ei incumbit probatio qui dicit, non quo negat" ("he who avers must prove"), had the onus of establishing that the deeds of assignment were effective: see paragraph 1(b) of the FASTOCL, which was denied in Dawson's Further Amended Defence 1(b): see The Glendarroch [1894] P 226 at p 234 per Lopes LJ and at p 231 per Lord Esher MR and see also, in relation to authorities to sign, Rowe v B & R Nominees Pty Ltd [1964] VR 477 per Gillard J at p 481.40 and McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243 at 276 per Griffiths J (for the Court).
6. Mr Smits' second argument was that FDL has represented to Cennzeal that Mr Photios was authorised to execute the July and August Deeds on behalf of FDL.
7. In connection with the second argument, Mr Smits drew attention to s 129(3) of the Corporations Act 2001 (Cth), which is in the following terms: Officer or agent (3) A person may assume that anyone who is held out by the company to be an officer or agent of the company: (a) has been duly appointed; and (b) has authority to exercise the powers and perform the duties customarily exercised or performed by that kind of officer or agent of a similar company.
8. He also made reference to the rule in Turquand's Case, often referred to as the "indoor management rule": see The Royal British Bank v. Turquand (1856) 6 El & Bl 327; 119 ER 886. That rule was described by the High Court in Northside Developments Pty Ltd v Registrar-General and Others (1990) 170 CLR 146 at pp 154 - 155 per Mason CJ as being: "… persons dealing with a company in good faith may assume that acts within its constitution and powers have been duly performed and are not bound to inquire whether acts of internal management have been regular…".
9. Mr Smits' arguments might be applicable to a case against FDL that it had represented to Cennzeal that Mr Photios had authority to execute documents but do not assist Cennzeal in establishing that FDL had in fact authorised Mr Photios to execute an assignment. Cennzeal might have a claim against FDL in such circumstances but it cannot use that as a basis for a claim to resist Dawson's claim that the assignment was ineffective. It is the company that is precluded from "denying against an outsider that things were in order": see Ford, Austin and Ramsay's Principles of Corporations Law (Austin and Ramsay, LexisNexis Butterworths, 16th ed, 2015) at [13.160]. In any event, Mr Photios' evidence (see Exhibit A1, Tab 11, p 81 at paragraph 18) was that he and Mr Licardy informed Mr Smits (then a director of Cennzeal) that the proposed assignment would have to be put to other members of the FDL Board. Thus, even if it were relevant, Cennzeal could not assert that it believed Mr Photios was authorised to execute documents on behalf of FDL.
10. There was a suggestion by Cennzeal that, by joining in these proceedings as a Plaintiff prior to its deregistration, FDL had ratified the assignments. Mr Cook objected to any consideration of such a contention given that ratification was not pleaded by Cennzeal, either by way of Statement of Claim or Reply. The separate question posed does refer to the question of ratification, so I do not think Dawson can rely on the lack of pleading. However, no evidence was led explaining how FDL came to be named as a Plaintiff or that FDL had, at a meeting of directors, authorised the commencement of proceedings in its name.
11. It follows that it has not been established that Mr Photios was authorised to execute the July and August Deeds on behalf of FDL and, hence, it has not been established by Cennzeal that the July and August Deeds were effective assignments of any property.
12. The conclusion which I have come to on the Authority point leads to a conclusion adverse to Cennzeal on the separate questions. Strictly, therefore, it is not necessary to consider the other points raised. I shall, however, express my opinion on these points as well.

The Prohibition Point

1. Clause 30.1 of the Trust Deeds is in the following terms (see Exhibit A1, Tabs 18-19): 30.1 Assignment The rights and obligations of each party under this Deed are personal and cannot be assigned, charged or otherwise dealt with, without the prior written consent of all parties.
2. I also set out clause 30.9 of the Trust Deeds as it was relied on by Mr Smits: 30.9 Preservation of rights All rights under this Deed are in addition to and do not abrogate, limit or reduce any other rights that party may have.
3. In my view, Clause 30.1 is clear in its terms. It prohibits any party to the Trust Deeds from assigning its interest without prior written approval of the other parties and no such approval was obtained or sought. Unit holders are made parties to the Trust Deeds by the combined effect of the declarations made by them when applying for units: see Exhibit A1, Tab 18, p 355 (which, it was accepted, FDL must have signed) and clause 7.9 of the Trust Deeds which states: 7.9 Each person who becomes registered as a Member or Special Unitholder will be deemed to: 7.9.1 have agreed to become a party to this Deed; and 7.9.2 will be entitled to the benefit of and will be bound by the terms and conditions of this Deed.
4. Mr Smits contended that: 1. Clause 30.1 was inconsistent with 30.9 and, therefore, of no effect; and 2. Clause 30.1 was void because it infringed the rule that land could not be inalienable, relying on Hall v Busst (1960) 104 CLR 206.
5. I am unable to accept Mr Smits' contention that clause 30.9 is inconsistent with clause 30.1. Clause 30.9 merely acknowledges that rights held outside the Trust Deeds are not affected by the terms of those Deeds.
6. In Hall v Busst (supra), the High Court held (per Dixon CJ, Fullagar and Menzies JJ) that the principles applicable to a condition against alienation of land are applicable to a contractual restraint on alienation as well. In that case, the contract entered into a few days after the contract for the sale of land contained a condition that the purchaser would not transfer, assign or lease the land previously transferred without obtaining the prior approval of the vendor.
7. Mr Cook submitted that the precise impact of Hall v Busst (supra) is difficult to determine, and in Bondi Beach Astra Retirement Village Pty Ltd v Gora [2011] NSWCA 396, Campbell JA spent a deal of effort at [193] - [315] examining Hall v Busst and summarising the cases following that decision. I note that the Court of Appeal in Reuthlinger v MacDonald (20 October 1976, unreported) approved the analysis of Hall v Busst (supra) by Needham J in Reuthlinger v MacDonald and Others; MacDonald and Others v Reuthlinger [1976] 1 NSWLR 88 at 97-101, and I therefore proceed for present purposes on the basis that: 1. Restraints on alienation of interests in land may be void as against public policy, even if imposed by contract rather than as part of the conveyance of land or as encumbrance on land. 2. Restraints which relate to property, other than real estate or interests in land, may also be struck down. 3. A restraint imposed for the protection of a valid collateral object is not invalid: see p 101D of Reuthlinger v MacDonald and Others; MacDonald and Others v Reuthlinger [1976] 1 NSWLR 88 and see also p 100 thereof, where Needham J gave examples of restrictions on alienation which are valid; and see Moraitis Fresh Packaging (NSW) Pty Ltd v Fresh Express (Australia) Pty Ltd [2008] NSWCA 327 at [79] - [81], per Giles JA and [143] - [144] per Hodgson JA. 4. The restriction on alienation is an issue of public policy, and there may be competing issues of public policy, such as that a party who agrees to a contractual restriction should be held to his agreement. The nature of the property concerned may be significant as well: see Moraitis (supra) at [79] per Giles JA and at [143] per Hodgson JA.
8. Into this crowded space comes another line of authority, the most authoritative of which is Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85. In the matter of Idoport Pty Ltd ACN 075 318 106; In the matter of Idoport Pty Ltd (In Liq) (Receivers Appointed) [2012] NSWSC 524, Ball J helpfully summarised, at [47] - [48], the state of authorities as follows: "47 Generally speaking, a purported assignment of a contractual right in breach of a provision of the contract prohibiting assignment is ineffective. That was the conclusion reached by the House of Lords in Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85. In that case, Lord Browne-Wilkinson (with whom the other members of the House of Lords agreed) accepted that the question was one of construction of the relevant contract and that there may be cases where, properly construed, the term does not invalidate a purported assignment but only gives rise to a right to damages, although his Lordship expressed the view that cases of that type "are very unlikely to occur": at 104. Exceptional cases of that type aside, his Lordship said (at 108): [T]he existing authorities establish that an attempted assignment of contractual rights in breach of a contractual prohibition is ineffective to transfer such contractual rights. I regard the law as being satisfactorily settled in that sense. If the law were otherwise, it would defeat the legitimate commercial reason for inserting the contractual prohibition, viz., to ensure that the original parties to the contract are not brought into direct contractual relations with third parties. Lord Browne-Wilkinson also rejected the proposition that a prohibition on the assignment of contractual rights was void as being contrary to the public policy in favour of the alienability of property. As his Lordship pointed out that proposition was contrary to a long line of cases in which courts have given effect to prohibitions in leases on assignments without the consent of the landlord: at 107. 48 Linden Gardens has been referred to with apparent approval by the High Court in Broadcast Australia Pty Ltd v Minister Assisting the Minister for Natural Resources (Lands) [2004] HCA 4; 221 CLR 178 at 183 n 10; and has also been followed by a number of other Australian cases including Minister for Land & Water Conservation v NTL Australia Pty Ltd [2002] NSWCA 149 at [8] per Mason P, [19]-[22] per Sheller JA (reversed on another point in Broadcast Australia Pty Ltd v Minister Assisting the Minister for Natural Resources (Lands) [2004] HCA 4; 221 CLR 178); Australian Olympic Committee Inc v The Big Fights Inc [1999] FCA 1042 at [119]-[120] and Westgold Resources NL v St George Bank Ltd (1998) 29 ACSR 396 at 415. For further discussion, see G Tolhurst, The Assignment of Contractual Rights, Hart Publishing, 2006 at [6.84]. There is no reason why a different approach should be taken where the prohibition relates to the creation of a charge over the relevant rights rather than simply an assignment of those rights."
9. Interesting questions arise about the intersection of Hall v Busst and Linden Gardens (supra) (see The Assignment of Contractual Rights (Tolhurst, Hart Publishing, 2nd ed, 2016) at [6.83]) but I do not need to attempt the task of answering those questions because, in my view, it was not inappropriate for the Trust Deeds to require that unit holders were not permitted to assign their interest without the prior approval of other unit holders. This is because the holding was in the context of what was, effectively, a joint venture and it was intended that FDL would provide certain services (see Recital G) and a debt that FDL owed to Dawson was to be satisfied out of the net proceeds of the development.
10. In my view, clause 30.1 is a valid clause and effective to prevent FDL assigning its rights to a third party without the consent of the other unit holders.
11. As Mr Smits pointed out, the PMA does not contain a similar provision to clause 30.1 of the Trusts Deeds. FDL was not precluded from assigning its rights under the PMA to Cennzeal. The question, however, is did it do so as a matter of construction of the July and August Deeds, i.e. assuming (contrary to my conclusion above) that FDL did effectively assign its rights. This leads to the third issue.

The Construction Point

1. The July and August Deeds are not models of plain drafting. By the August Deed, FDL assigned: "... all of its right, title, interest, claims and estate of in, to and in respect of: (a) All Debts, Securities and Other Assets; (b) All associated, ancillary, incidental and related rights, powers, privileges, benefits, costs entitlements and damages…"
2. "Debts" are defined in the Recitals but by reference to a schedule. None of the debts in the schedule to the August Deed relate to the Bellbird and Dubbo Projects, but rather to "GHS" (which apparently stands for "Green Hills Security") and "MUS" (which apparently stands for Michael Unicomb and Associates) as defined. There is no schedule of debts in the July Deeds. No connection has been established between GHS or MUS, on the one hand, and Dawson, or the Bellbird and Dubbo Projects, on the other. "Securities" are defined by reference to debtors nominated in the schedule so it can have no relevance to the present matter. This leaves, as the potential source of assigned rights, "Other Assets".
3. "Other Assets" are defined as: "any trust, beneficial and/or other estate, interest and rights held in, to and in respect of the real estate ("Property") referred to in the Schedule hereto …" (emphasis added)
4. The schedule to the August Deed refers to the Bellbird and Dubbo properties.
5. Cennzeal asserts that FDL did have such an interest and I think that it would only be possible to say that it did not if the Court could conclude that, by the time of the appointment, any beneficial interest had been lost. That is, however, yet to be determined.
6. In relation to FDL's rights under the PMA, it is entitled to a distribution of 50% of profits of the Bellbird and Dubbo Projects (this is not expressly stated and can only be derived from the Recitals and clause (f)), but only after all costs are deducted, the repayment by FDL of an unrelated debt and payment of interest and other costs to Dawson and another entity. That right to a distribution seems to me to be an interest "in respect of" the real estate, even though it is not an interest in the real estate itself. The words "in respect of" have been held to be words of the widest import: see McDowell v Baker (1979) 144 CLR 413 at 419 per Gibbs J.
7. I have referred to the fact that the July Deed and the August Deed are not identical in terms. The July Deed has no schedule relating to "property" and no rights relating to the PMA or the Trust Deeds were, therefore, assigned by the July Deed by FDL to Cennzeal.

The Bare Right of Action Point

1. Mr Cook contends that what was assigned by FDL to Cennzeal was "a bare right of action", which, whether legal or equitable, cannot be assigned at law or in equity, referring to On Equity (Young, Croft and Smith, 2009) at [10.60].
2. The rule against such assignments was considered in Trendtex Trading Corporation and Another v Credit Suisse [1982] AC 679 at 702-703 per Lord Roskill. There is discussion of Trendtex (supra) in Campbells Cash and Carry Pty Limited v Fostif Pty Limited (2006) 229 CLR 386. As the learned authors of On Equity (supra) point out at [10.60]: "Assignment of a cause of action is, however, permitted if the right of action is ancillary or incidental to, or an attribute of, a proprietary right or interest that is being assigned [footnote omitted]. In such cases, the cause of action is "sufficiently connected with the enjoyment of the property to escape" being a bare right to litigation: Ellis v Torrington [[1920] 1 KB 399 at 408 (CA)]."
3. In Trendtex (supra), at 703, Lord Roskill said: "If the assignment is of a property right or interest and the cause of action is ancillary to that right or interest, or if the assignee had a genuine commercial interest in taking the assignment and in enforcing it for his own benefit, I see no reason why the assignment should be struck down as an assignment of a bare cause of action or as savouring of maintenance."
4. It has been held that a party will not be found to have a genuine commercial interest for the purposes of the exception if the interest he obtains arises from the assignment itself: see Project 28 Pty Ltd (Formerly Narui Gold Coast Pty Ltd) v Barr; Project 28 Pty Ltd (Formerly Narui Gold Coast Pty Ltd ) v Tim Barr Pty Ltd & Ors [2005] NSWCA 240 at [41], per Ipp JA (with whom Hodgson JA and Campbell AJA agreed) and National Mutual Property Services (Australia) Pty Ltd and Others v Citibank Savings Ltd and Others (1995) 132 ALR 514, at 540; see also Tolhurst (supra) at [6.62], p 203.
5. No interest in Cennzeal, other than the assignment itself, has been identified. The second basis of exception identified in Trendtex (supra) is not, therefore, available to Cennzeal. In relation to the first basis identified by Lord Roskill, that is, in my view, made out. FDL had an interest in the property that was the subject of the Trust Deeds and the PMA.
6. Even if it is true that Cennzeal put no money whatsoever into the Bellbird and Dubbo Projects or for the units, as Mr Cook contends, Dawson agreed to give FDL an interest in the Bellbird and Dubbo Projects as a means, thereby, to repay a debt to Dawson owed by FDL. By the PMA and Trust Deeds, FDL was entitled to an interest in the Dubbo and Bellbird Projects, i.e. 50% of the net profits of those Projects. If, as FDL claims, FDL was wrongfully deprived of its interest in the trusts then that "is a right of property" which FDL was entitled to pursue and to assign and the claims which it seeks to pursue would be rights ancillary to a right of property.

Conclusion

1. It follows that, in my view, FDL has not shown to have executed the July and August Deeds and that, therefore, Cennzeal is not entitled to pursue any of the rights or interests of FDL by reason of those documents. Further, none of the rights of FDL which Cennzeal seeks to pursue were assigned by the July Deed, and no rights of FDL pursuant to the Trust Deeds were capable of assignment. Rights acquired by FDL pursuant to the PMA could be assigned, would not have been an assignment of a bare right of action, and would have been assigned if the August Deed had been effectively executed by FDL.
2. I therefore answer the questions posed by the separate questions as follows: 1. FDL has not effectively and validly assigned any rights to Cennzeal; and 2. Does not arise.
3. The agreed consequences of that determination are set out in paragraph 3.1 of the Agreed Statement of Consequences of Determination of the Separate Question and I propose to make orders in accordance therewith.

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