Purdon v Purdon & Anor

Purdon v Purdon & Anor - [2007] NSWSC 141 - NSWSC 2007 case summary — Zoe

[186]

and at 435: "I … have held that this sub-section is merely machinery; that it enables an action to be brought by the assignee in his own name in cases where previously he would have sued in the assignor's name, but only where he could so sue." 116 In Starke at para 53 it is stated that under s 12 (based upon s 25 of the English Judicature Act 1873) three principal conditions must be complied with: "(1) The assignment must be in writing under the hand of the assignor; and (2) The assignment must be absolute, not purporting to be by way of charge only, and (3) Express notice in writing of the assignment must be given to the debtor, trustee or other person liable." 117 The assignment provides that on the Effective Date (4 March 2004) JP will deliver the Assignment Notice to Span and SP (cl 1.4). The Assignment Notice means a notice substantially in the form of the Annexure. The evidence suggests that no Assignment Notice was delivered by JP to Span or SP on the Effective Date or any date close to 4 March 2004. In his affidavit of 1 February 2006 JP stated in para 12 that in or about June 2005 he caused to be served upon Span and SP a Notice of Assignment. This statement lacks specificity. The form used suggests that JP believes someone attended to this matter. The method of service is not stated. No objection was raised to para 12 nor the Assignment Notice. The Assignment Notice is undated. It is addressed to Span and SP and reads: "Re: Assignment of Debts Owed to Citibank NA I refer to the Guarantee and Indemnity dated 23 March 2000 given by both Steven Purdon and John Purdon in favour of Citibank NA (Guarantee and Indemnity) and the Facility (as defined in the Guarantee and Indemnity). I now give notice that pursuant to an agreement for assignment of debt between Citibank NA (Citibank) and John Purdon ('Assignee') dated 4 March 2004, Citibank have assigned absolutely to the Assignee all its rights, title and interest in the Guarantee and Indemnity and the Facility Agreement (as defined in the Guarantee and Indemnity)." 118 The Assignment Notice purports to be and is signed by John Purdon, with a copy to Bruce Wassell, Citibank. It follows the form set out in the Instrument of Assignment made about 4 March 2004.

[261]

195 SP submitted that if the Court found that there was no relevant fiduciary duty the Court must still consider whether the reliance by JP upon the assignment was a legal right which equity would permit to be enforced against SP. SP relied upon Blomley v Ryan (1954-1956) 99 CLR 362. There the plaintiff sought specific performance of a contract for the sale of a valuable rural property. The trial judge found that at the time of making the contract the faculties of the aged defendant (78) were gravely impaired by prolonged and excessive consumption of alcohol, that it must have been apparent that he was in no fit state to transact business and that the sale was at a substantial under-value. Fullagar J, when speaking generally at 401 held that relief could only be obtained by the defendant in equity. It was not a case of non est factum as it could not be said that he did not really know what he was doing. Fullagar J continued at 401-402: "And, when we look for the principle on which equity did grant relief in such cases, we find as so often in equity, only very wide general expressions to guide us. There was, I think, a typical difference in approach between equity and the common law. To the common law the transaction in question might be void or voidable, but the primary question was as to the reality of the assent of the person resisting enforcement of the contract. Equity traditionally looked at the matter rather from the point of view of the party seeking to enforce the contract and was minded to inquire whether, having regard to all the circumstances, it was consistent with equity and good conscience that he should be allowed to enforce it. " 196 This last stated principle was applied by Burt J in Re Caratti Holding Co Pty Limited (1975) 1 ACLR 87. That case involved an article of association of a company which, in substance, amounted to the grant to the founder of a company of a power of compulsory acquisition of shares. The judge held that the founder attempted to exercise that power so as to compulsorily acquire certain shares at a gross undervalue and contrary to a clear understanding between the founder and the shareholder and that equity would not assist the founder to become the owner of such shares at equity. Burt J remarked "It would seem … inconsistent with equity and good conscience that [the founder] should be allowed to enforce [the compulsory acquisition]."

[266]

201 During his submissions counsel for JP relied on Tanwar Enterprises Pty Limited v Cauchi (2003) 77 ALJR 1853. While acknowledging that this decision dealt with a markedly different factual situation counsel submitted that it contained a principle of general application, namely, that in considering factual situations the Court does not apply general considerations of fairness but the application of equitable principles. Consequently, it was not permissible to approach the present case asking what might be a fair result - SP has to point to some equitable remedy (or defence) which warrants such a course being taken. At [20] the joint judgment of five of the Justices pointed out that the terms "unconscientious" and "unconscionable" are: " … used across a broad range of the equity jurisdiction. They describe in their various applications the formation and instruction of conscience by reference to well developed principles. Thus, it may be said that breaches of trust and abuses of fiduciary position manifest unconscientious conduct; but whether a particular case amounts to a breach of trust or abuse of fiduciary duty is determined by reference to well developed principles, both specific and flexible in character. It is to those principles that the court has first regard rather than entering into the case at that higher level of abstraction involved in notions of unconscientious conduct in some loose sense where all principles are at large. " 202 At [24] the joint judgment pointed out that there was no distinct cause of action, akin to an equitable tort wherever a plaintiff points to conduct that merits the epithet "unconscionable" and it is erroneous to suggest that there is an equitable defence to the assertion of any legal right, whether by action to recover a debt or damages in tort or for breach of contract, where in the circumstances it has become unconscionable for the plaintiff to rely on that legal right. It was also pointed out that it was erroneous to suggest that sufficient foundation for the existence of the necessary "equity" to interfere in relationships established by, for example, the law of contract, is supplied by an element of hardship or unfairness in the terms of the transaction in question or in the manner of performance (at [26]).

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