Case: Trendtex Trading Corporation v Credit Suisse [1982] AC 679 
Outcome: applied
This area of the law is controversial. Choses in action in general are assignable (eg s 12 Conveyancing Act 1919 (NSW)). However, a bare right to litigate requires special consideration. Although maintenance was referred to in this context, no submissions were directed to the effect of the Maintenance, Champerty and Barratry Abolition Act 1993 (NSW) (cf Campbell J in Mid-City Skin Cancer and Laser Centre Pty Ltd v Zahedi-Anarak (2006) 67 NSWLR 569 at [194]). It is convenient to discuss the cause of action in negligence first. In 1953 the High Court, in Poulton v Commonwealth (1953) 89 CLR 540 at 602, in relation to a claim in conversion, baldly said: "... according to well-established principle, the right was incapable of assignment either at law or in equity". Lord Roskill said in Trendtex Trading Corporation v Credit Suisse [1982] AC 679 at 702C: "Though in general choses in action were assignable, yet causes of action which were essentially personal in their character, such as claims for defamation or personal injury, were incapable of assignment..." 30 One well established category where an assignment is valid (recognised by the authorities cited in Poulton 89 CLR 540 at 602) is an assignment of property, even though the property may be incapable of being recovered without litigation or, as it was put by Lord Roskill in Trendtex [1982] AC 679 at 703, where the cause of action is incidental to a right of property that has been acquired. There is no reason why such a cause of action could not include tort in an appropriate case eg detinue or conversion. However, based upon the submissions in this case, examples of the practical application of the principle are sparse. Re Daley; Ex parte National Australia Bank Ltd (1992) 37 FCR 390 was cited but the decision turned on what was held to be the assignment of a debt (37 FCR at 394 395). In Monk v Australian and New Zealand Banking Group Ltd (1994) 34 NSWLR 148 there had been no assignment of the cheques that would have constituted the necessary property. In that case, Cohen J referred to the decision of Gault J in First City Corporation Ltd v Downsview Nominees Ltd [1989] 3 NZLR 710 where it was held (at 757) that the assignment of a debenture by a parent company to a subsidiary included an assignment of causes of action in tort against a receiver of the company that issued the debenture and that the causes of action in tort were ancillary to the assignment of the debenture and so valid. The effect of that decision is somewhat clouded by the subsequent appellate history of the case ( First City Corporation Ltd v Downsview Nominees Ltd [1990] 3 NZLR 265; Downsview Nominees Ltd v First City Corporation Ltd [1993] AC 295) although the appeals did not turn upon the point in issue here. 31 The decision of Finkelstein J in TS &amp; B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444 may be seen as an example of the category of connection with property. There, the assignment of a cause of action for breach of confidential information, connected with or relating to rights of property that were assigned, was upheld (see particularly 158 FCR 444 at [79] [81]). However, that decision, and others since 1982, have been influenced by dicta of Lord Wilberforce and Lord Roskill in Trendtex [1982] AC 679 indicating another basis for exception from the general rule whether the assignee has a "genuine and substantial interest in the success of the ... litigation" (per Lord Wilberforce at 694D) or has a "genuine commercial interest in the enforcement of the claim of another" (per Lord Roskill at 703D). 33 Finkelstein J took the wider view in TS &amp; B Retail Systems Pty Ltd 158 FCR 444 and suggested that the High Court in Campbell's Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41 ; (2006) 229 CLR 386 had approved the effect of the statements by Lords Wilberforce and Roskill in Trendtex [1982] AC 679. The precise point that arises here did not arise in Campbell's Cash and Carry Pty Ltd [2006] HCA 41 ; 229 CLR 386. However, the reasoning of Gummow, Hayne and Crennan JJ at [68] [82] and Callinan and Heydon JJ at [258] [261] supports the opinion of Finkelstein J. In my opinion, the principle enunciated in Trendtex [1982] AC 679 can be taken to be established for Australia. It needs to be borne in mind that the statement in Poulton 89 CLR 540 was not the centre of controversy in that case. 34 Did All Saints have a genuine commercial interest in the enforcement of Tosich's claim? There is no direct evidence concerning the position of All Saints prior to the transaction. The inescapable inference from all the circumstances, including the structure of the transaction, is that All Saints was under the control of the Warne interests and that the transaction was to ensure that this proceeding continued notwithstanding a reluctance to pursue it on the part of Tosich. In particular, it seems to be aimed at removing or minimising Tosich's risk as to costs. It may be inferred that the purpose was to provide a vehicle for the defendants to pursue their cross-claims with the benefit of a claim proved by a plaintiff. That would remove the kind of problem exemplified by CGU Insurance Ltd v AMP Financial Planning Pty Ltd [2007] HCA 36 ; (2007) 237 ALR 420 ; (2007) 81 ALJR 1551 ; (2007) 62 ACSR 609. Indeed, as much was made clear by counsel for the plaintiffs and for the defendants on various occasions. I do not see anything objectionable about that purpose or about the structure of the transaction. All Saints could not profit from the arrangement. It is not "trafficking" in causes of actions in any real sense. Facilitation of cross-claims to be determined on their merits is not objectionable as such. However, it seems to me that the dicta in Trendtex [1982] AC 679 would have to be extended to include these circumstances within the permissible categories of assignment. The assignee is not shown to have had any interest in the claim prior to, or regardless of, the assignment. In view of the controversy surrounding the topic, an extension of the categories is not the province of a single judge. 35 What, then, of the connection with property? Austin J found that there were property interests created by the scheme. The deed purports to assign those interests and causes of action, including the present. In one sense, there is a clear connection. The intention is to recover the loss of property invested. However, the claim in negligence is not to recover the property that existed at the time of the transaction it is to recover the loss by way of damages. In my opinion, that is not the kind of claim connected with property that is covered by the traditional exception to the rule against assignment of causes of action, assuming, as I do, that the exception can include claims in tort where appropriate. The assignment of the cause of action in tort is not effective. 36 In the course of argument, counsel for the plaintiffs referred to a claim for money had and received. The Third Amended Originating Process claims, inter alia: "Orders in the nature of restitutionary orders for the refund to the Plaintiffs of the moneys originally invested in the Queen Victoria Project by the First Plaintiff and interest." The Third Amended Statement of Claim does not include pleading to support that claim and no amendment has been sought. Such a claim can be ignored for present purposes.