Plaintiff v Defendant

Plaintiff v Defendant - [2010] VSC 548 - VSC 2010 case summary — Zoe

[29]

'I said that the receivers "purported" to assign the causes of action for there is a general rule that a personal right to litigate cannot be assigned either at law or in equity, but an impersonal right in the nature of a proprietary right can be assigned provided the circumstances warrant it. Thus, it has been said that causes of action in tort, which are regarded as personal rights, cannot be assigned: Poulton v Commonwealth (1953) 89 CLR 540 at 571 and 602 ; [1954] ALR 1 at 7-8. The bar on assignments of personal actions would include actions in equity that are of a personal kind: Glegg v Bromley [1912] 3 KB 474 at 489-92. An action for breach of confidential information is a personal action.

There is in England an exception to the bar on the assignment of personal rights. In Trendtex Trading Corporation v Credit Suisse [1982] AC 679 at 703 ; [1981] 3 All ER 520 at 530 (Trendtex) Lord Roskill (with the concurrence of the other Law Lords) said: "[I]n English law an assignee who can show that he has a genuine commercial interest in enforcement of the claim of another and to that extent takes a assignment of that claim to himself is entitled to enforce the assignment unless by the terms of the assignment he falls foul of our law of champerty, which, as has often been said, is a branch of our law of maintenance ... The court should look at the totality of the transaction. If the assignment is of a property right or interest and the cause of action is ancillary to that property right or interest, or, if the assignee has 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.

In Australia there is a debate whether the Trendtex principle should be adopted. The cases for and against (the latter all being decisions of the Federal Court) are collected in Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd (2004) 188 FLR 278 ; 220 ALR 267 ; [2004] NSWSC 1041. It may be that the debate is now over for the High Court in Campbell's Cash and Carry Ltd v Fostif Pty Ltd (2006) 229 ALR 58 ; [2006] HCA 41 seems to have approved Trendtex. In any event, my own view is that the logic of Lord Roskill's view is inescapable. This is especially so when, as here, the cause of action is connected with, or relates to, rights or interests owned, or that will fall into the ownership, of the assignee.'[18]

[61]

"[129] Australian courts have predominantly accepted Professor Birks' view that 'after discharge of a contract, the recoverability of any payment made before the completion of the contract is dependent on whether the "state of affairs contemplated as the basis or reason for the payment has failed to materialise or, if it did exist, has failed to sustain itself"'.[51] In that context, consideration is the benefit the claimant bargained for under the contract or purported contract.[52] While the traditional requirement that the consideration for the payment must have totally failed is frequently, if not universally restated, where the contract is ineffective, the payer's only remedy may be in restitution. In such a case, courts have tended to adopt a more liberal approach to total failure of consideration. Where the payer has received some benefits, the expected consideration or bargain may be so construed that the received benefits do not constitute even a partial satisfaction. Alternatively, the transaction and the consideration may be held to be divisible, leaving a discrete element of the bargain in relation to which consideration wholly failed, despite the claimant's receipt of some payments or benefits relating only to a different component of the transaction. English courts have analysed payments made under a void contract as an absence, rather than a total or partial failure, of consideration.[53]

...

[189] It does not follow that a payment which lacks juristic justification cannot constitute consideration for which the payer bargained. As recognised in Ovidio Carrideo, consideration in this context is 'the matter considered in forming the decision to make the payment'.[54] As in Baltic Shipping and Ovidio Carrideo, Rural, prior to the curial determination of unenforceability, received to a significant extent, benefits which were the substance of the contractual promise, and which a lender would typically have in view in return for making an advance. In such circumstances, even if the loan contracts and associated securities are considered in isolation from the other transactions of the schemes, the fact that the benefits received were retrospectively held to lack a legally enforceable character does not render them analogous to the short term use of a car to which the claimant in Rowland v Divall[55] had sought legal title. In Rowland v Divall, the character of legally enforceable rights and title was clearly crucial to the bargain. Further, in the present case, Equus did not advance a basis of severance. The ground of distinction between repayments of capital and interest relied on in Goss v Chillcott[56] was not open."

[82]

"[2904] Pleading mere 'unjust enrichment'. A pleading that asserts in the abstract that P was unjustly enriched at D's expense will usually be struck out. The authorities require the basis of such an allegation to be explained in the pleading.

In the light of general statements in David Securities Pty Ltd v Commonwealth Bank of Australia, courts have been averse to pleadings which simply appeal to 'idiosyncratic notions of what is fair and just', or which plead generalised claims based on unjust enrichment.

...

[2908] General. The shift from implied contract to unjust enrichment as the conceptual basis of most restitutionary causes of action means that the general structure of a pleading in such a claim for restitution of money paid should be:

(1) the payment (benefit) by the plaintiff (at the plaintiff's expense);

(2) the basis for the claim, that is, the operative unjust factor (for example, mistake); and

(3) the causal link between (1) and (2).

In David Securities Pty Ltd v Commonwealth Bank of Australia the High Court rejected the proposition that a plaintiff who relies on a cause of action falling within an accepted category, such as restitution for mistaken payments, need show superadded injustice of retention or unfairness.

...

[2912] Recovery of money previously paid under contract. Where the payment was equal to or less than the amount required under a contractual obligation, it is not sufficient to plead the payment under the contract and a causative unjust factor such as mistaken or duress. The ineffective nature of the contract itself must also be identified. This means that there are three elements in such claims:

(1) the payment;

(2) the ineffective nature of the contract; and

(3) the basis upon which restitution is claimed.

The first element requires no explanation. Pleading the second element requires a statement of the facts why the contract is ineffective. Reference must be made to the character of the ineffectiveness: that the contract was void when the payment was made, or discharged or rescinded after the payment was made. Of course, this requires reference to the facts relied upon that lead to the conclusion of law that the contract was ineffective. Particulars must be given. The third element looks to matters such as a total failure of the agreed return, or the presence of mistake, improper pressure, fraud or illegality, or the exercise of a judicial (usually statutory) discretion in favour of the plaintiff, such as the basis for relief against forfeiture."

[Footnotes omitted].

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