Equus v. Glengallan - [1994] QCA 157

IN THE COURT OF APPEAL [1994] QCA 157

SUPREME COURT OF QUEENSLAND
Appeal No. 262 of 1993

Before Fitzgerald P.
McPherson JA.
Derrington J.

[Equus v. Glengallan]

BETWEEN:

EQUUS FINANCIAL SERVICES LIMITED
(Plaintiff) Appellant

AND:
GLENGALLAN INVESTMENTS PTY. LTD.
(Defendant) Respondent

REASONS FOR JUDGMENT - FITZGERALD P.

Judgment delivered 19/05/94

This is an appeal from an order in the Trial Division on 10 December 1993 that the appellant's action "stand dismissed". The sole basis for that decision was a finding that an essential element was missing from the appellant's cause of action; namely, that another company, Rural Finance Pty. Ltd., had assigned to the appellant Rural's rights against the respondent pursuant to a Loan Agreement dated 30 June 1989 between Rural and the respondent.
The appellant's case against the respondent rests entirely upon the proposition that an assignment was effected by either or both (i) a Deed dated 7 January 1991 between Rural and the appellant and (ii) a document on Rural's letterhead signed by Rural, headed "Notice of Assignment", which was forwarded by the appellant to the respondent under cover of a letter dated 27 March 1991.That document (the "Notice") was in the following terms:
"NOTICE OF ASSIGNMENT

Loan Agreement

To:
Glengallan Investments Pty. Ltd.
  14th floor
  GWA House
  10 Market Street
  BRISBANE QLD.   4000

RURAL FINANCE PTY. LIMITED HEREBY GIVES YOU NOTICE that on the day of January 1991 it assigned to Equus Financial Services Limited of Level 1, 2 Clarke Street, South Melbourne its interest under the Loan Agreement it has with you dated the 30th day of June 1989 including its right to monies and you are hereby directed to make all payments of monies due under the loan agreement to Equus Financial Services Limited."

Both its heading and the tense and context in which reference is made to assignment suggest that the Notice assumed that an assignment had earlier been effected, inferentially by the Deed dated 7 January 1991.
It is unnecessary to decide whether either, or both, the Deed and the Notice constituted an absolute assignment within the meaning of section 199 of the Property Law Act 1974 (as amended). It is sufficient if either, or both, constituted an equitable assignment. Indeed, in that event, the respondent did not really contest that the order made below dismissing the appellant's action should be set aside. If there has been an equitable assignment, the only possible defect in the proceeding commenced by the appellant is the absence of Rural as a party, which does not justify the dismissal of the action: R.S.C. O.3 r.11; William Brandt's Sons and Co. v. Dunlop Rubber Company Limited (1905) AC 454.
It was not disputed that the appellant and Rural's respective promises in the Deed provided consideration for each other. In these circumstances, no more (and no less) is needed for an equitable assignment than a clearly manifested intention to divest the assignor of property or an interest and vest it in the assignee: Meagher, Gummow and Lehane…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Equus v. Glengallan

Details

AGLC: Equus v Glengallan [1994] QCA 157
Case: [1994] QCA 157
Decision Date: 19 May 1994

CaseChat Overview and Summary

The Court of Appeal considered an appeal by Equus Financial Services Limited against an order dismissing their action against Glengallan Investments Pty Ltd. The central issue was whether there had been a valid assignment of Rural Finance Pty Ltd's rights against Glengallan under a Loan Agreement dated 30 June 1989. Equus argued that an assignment was effected by a Deed dated 7 January 1991 and a "Notice of Assignment" dated January 1991. The trial judge found that an essential element was missing from Equus's cause of action, namely the assignment, and dismissed the action.

The Court of Appeal found that there was sufficient evidence to suggest an equitable assignment had occurred. The Deed and the Notice, when read together, indicated an intention to assign Rural's rights to Equus. The Court held that if there was an equitable assignment, the absence of Rural as a party did not justify the dismissal of the action. The Court further held that the Deed and the Notice indicated an intention to assign the rights to Equus immediately, despite the requirement for payment of consideration. The Court concluded that the appeal should be allowed, and the order dismissing Equus's action should be set aside. Glengallan was ordered to pay Equus's costs of the appeal.

The Court of Appeal judges agreed that the appeal should be allowed and the orders made below set aside. The reasoning varied slightly among the judges, but all agreed on the outcome. The Court emphasized that the absence of an assignor as a party does not justify dismissing an action if an equitable assignment has occurred. The Court also highlighted the importance of ensuring that the assignor is bound by the outcome of the proceedings to avoid any risk that payment by the debtor to the assignee would not discharge the debt. The Court allowed the appeal with costs and set aside the orders made below.

Orders