Redman v Permanent Trustee Company of NSW Ltd [1916] HCA 47;

[17]

The present appellant, Etela Redman, claims as equitable assignee from Mrs. Hage by virtue of a document under seal dated 6th February 1901, which was prepared by the same Mr. Davis. By this document, which is expressed to be made by her of the one part and Etela and his sister Mrs. Bernadetta Johnstone of the other part, and recites that she had agreed with each of them to sell to each of them a one-third share of her expectant share under William Redman's will and in and under and by virtue of any will of Mrs. Falstedt for the sum of £25, she covenanted to sell to each of them the said one-third share of her expectant share in and under the will and codicil of William Redman and the will and codicil or codicils of Mrs. Falstedt. It may be noted that Mrs. Falstedt's will and codicil are spoken of as existing documents although no such documents are shown to have been then in existence. The land was at this time worth about £10,000. Mrs. Johnstone is now dead, and her rights are represented in this suit by the appellant Etela, who appeals on behalf of her estate as well as on his own behalf. The covenant was executed by all three parties. The only evidence we have as to the circumstances attending the execution of this document is that of Etela, who said that he was aware at the beginning of 1901, that is, before the date of the covenant, that Mrs. Falstedt was going to appoint the property to Mrs. Hage. He said also that he paid the whole of the £25, and that the document was prepared on his instructions. He further said that he did not tell Mrs. Hage before the document was executed that Mrs. Falstedt was going to appoint the property to her. Without referring in detail to the evidence, it is sufficient to say that, so far as his title is based upon the assumption that he is a purchaser bonâ fide and for valuable consideration it fails. Mrs. Johnstone's title fails for the same reason, and also because upon the evidence she appears to have been a mere volunteer. The interest dealt with by the document was a mere spes successionis, and operated, if at all, as a contract only, and did not create any present proprietary right in the land (Meek v. Kettlewell[1]).

[23]

Even, therefore, if the document of February 1901 is treated as a contract for valuable consideration which on Mrs. Falstedt's death operated in equity as a conveyance (In re Lind[2]) - in which view the deed poll of 1907 would not add anything to its effect - still Etela's interest could not be put higher than that of an assignee of an equitable interest. Such an assignee is a proper, and may be a necessary, party to a suit against the assignor impeaching the assignor's title. But the reason is that he is interested in resisting the plaintiff's claim to impeach that title, not that the plaintiff is called upon to maintain a separate case against him. In a suit to set aside the execution of a power the appointee is a necessary party, and the matter cannot be litigated in his absence in a Court of Equity, whose jurisdiction is personal. It has never, so far as we know, been suggested that in a suit to impeach the title of a defendant who has attempted to assign an equitable interest a plaintiff who succeeds in establishing his case as against the assignor by admissible evidence may nevertheless fail as against the assignee. If it were otherwise the assignee would be in a better position than his assignor. There is no rule of evidence with which we are acquainted that can exclude the operation of the paramount rule that the assignee takes subject to the infirmities of his assignor's title. If any ordinary rule of evidence comes into conflict with it we think it must give way. In our opinion the sole right of the equitable assignee is to support his assignor's title, on the strength or weakness of which his own depends, unless he can set up the defence that he is a bonâ fide purchaser for value without notice, a defence which is not available to a purchaser of an equitable interest. In the absence of that shelter the curious consequence which sometimes results in the Divorce Court of apparently contradictory judgments as to the same fact in the same suit cannot occur in a suit to declare the title to property.

[32]

The case of Mrs. Johnstone's estate stands in a different position. Of course she could take no better title than Mrs. Hage had. But, as against her, it must be proved what the defect in that title was. The question here arising is one of evidence only. There is no direct evidence whatever in the case to show that the appointor had any sinister or unauthorized purpose in appointing to Mrs. Hage. There is evidence of her having expressed her preference for Mrs. Hage over the other objects of the power, by reason of Mrs. Hage, alone among those objects, not resisting Mrs. Falstedt's desire to have the property sold. That tells in favour of the appointment so far as it goes. But the invalidating evidence consists purely in admissions by Redman and Mrs. Hage, which, however cogent against them personally were not in any way admissible against another person unless brought within some recognized exception from the general rule that all evidence must be direct and on oath (Spargo v. Brown[6], per Bayley J.). One exception, and the only one that could have relevance to this case, is that admissions made against interest by a predecessor in title are admitted against a defendant on the ground of privity of estate (Woolway v. Rowe[7]; and see also Llanover v. Homfray[8]). But Mrs. Hage is not proved to have made the admissions when she had any interest in the property. The only date of her admission fixed with anything approaching definiteness is 1901, that is three years before Mrs. Falstedt's will was made and eleven years before it took effect. When the admission was made, and, indeed, when the so-called assignment to Bernadetta Johnstone was executed, Mrs. Hage had only an expectancy. That expectancy constituted no interest whatever in the property (In re Parsons[9]). Consequently the case does not fall within the exception of privity. Further, it is established beyond question that where there is an assignment in equity of a purely equitable interest, the assignee, and the assignee alone, is regarded in the eye of a Court of Equity as having any interest whatever in the property assigned. So clear is this that the assignor in such circumstances is not only not a necessary, but not even a proper, plaintiff and his joinder as such was at one time, and before the later procedure provisions as to misjoinder, fatal to the suit (Fulham v. McCarthy[10], per Cottenham L.C.).

Redman v Permanent Trustee Company of NSW Ltd [1916] HCA 47; - HCA 1916 case summary — Zoe

At a glance

Court

Decision date

Before

Source

Judgment (47 paragraphs)

Redman v Permanent Trustee Company of NSW Ltd [1916] HCA 47; (1916) 22 CLR 84 (1 September 1916)

Parties

Cases Cited (1)