Case: Trendtex Trading Corporation v Credit Suisse [1982] AC 679
Outcome: cited
referred to cl 10 at [18] above. Clause 10 was as follows: The Licensor or their agent shall sell the seed or product delivered to it by the grower (or otherwise subject to this agreement) via the payment schedule as per attachment. Clause 10 appears to be a promise by AAC to ICM that AAC or Namoi will sell seed and product delivered to "it" by ICM "via the payment schedule as per attached". It is common ground that at least the form of the Commercial Crop Contract was attached. There is a sort of payment schedule in cl 4 of the Commercial Crop Contract. That clause listed "Guaranteed Minimum Prices" promised to ICM as the grower. It appears that either AAC was, through its agent Namoi, a party to the Commercial Crop Contract as a principal whose existence and identity were not disclosed on the face of that document, or at least the agent Namoi entered into the Commercial Crop Contract in its own right but AAC approved of its doing so as the necessary and contemplated means of implementing the Grower's Licence. Even on the latter basis, it is arguable that AAC was bound by Mr Young's conduct on behalf of Namoi in the discussion on 29 May 2003. The date fixed for completion of the Commercial Crop Contract, 30 June 2003, was not intended to be of the essence of that contract. I mean that ICM was not entitled immediately following 30 June to terminate the contractual relationship for Namoi's failure to pay on that date. This is demonstrated by the second and last sentences of cl 3(c). The whole of cl 3(c) is as follows: Subject to normal seasonal conditions, delivery and payment under this contract is to be completed prior to 30 June 2003. If due to extraneous circumstances by either party that this contract is not completed by this date then mediation with regards to settlement terms must occur. A suggestion is that if the Grower is deemed to be at fault they would not charge the Licensor carry (storage) from this date and the credit limit in place would be renegotiated. If the Licensor is deemed to be at fault then a negotiated percentage of the balance of the products to be paid at this date. The present case concerns an assignment of a bare cause of action for unliquidated damages for breach of contract, not of a property right to which a cause of action is ancillary. The parties accepted that in these circumstances the assignment could be sustained only if Mr Young had a genuine commercial interest in taking the assignment and enforcing it for his own benefit: see Trendtex Trading Corporation v Credit Suisse [1982] AC 679 at 703, which has been followed in many cases in Australia including, but not limited to, Re Timothy's Pty Ltd and the Companies Act [1981] 2 NSWLR 706; Commonwealth v Ling (1993) 44 FCR 397 ; National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 ; and see G Tolhurst, The Assignment of Contractual Rights (Hart Publishing, 2006) at [6.59]ff . The circumstances of the present case are analogous to those in Monk in which the assignee's interest was that of obtaining a set-off against a judgment debt. In that case, Cohen J said (at 153): The plaintiff's only apparent interest is in the possibility of his becoming a creditor of the Bank. That is, his interest is in using the debt which might arise from the cause of action for his personal benefit. That no doubt is the interest of any assignee. The using of the debt as a set-off against the judgment debt is merely an example of obtaining some personal benefit. In that regard the plaintiff is in no stronger position than he would be if he had obtained an assignment of a cause of action for negligence by a customer of the Bank who claimed to have suffered injuries arising from unsafe premises. In the authorities where the Trendtex test has been applied, the commercial interest has gone beyond a mere personal interest in profiting from the outcome of the proceedings and has required an interest by the assignee in the assignor or its business affairs or activities which the assignment may in some way protect. These observations are applicable, mutatis mutandis , to the present case.