Case: Poulton v Commonwealth (1953) 89 CLR 540
Outcome: distinguished
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. 32 There have been varied opinions as to whether that basis can be applied by Australian courts without the High Court qualifying Poulton 89 CLR 540. As it happens, most negative opinions have been expressed by judges of this Court, eg Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd [1994] FCA 814 ; National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 ; Chapman v Luminis Pty Ltd (No 4) [2001] FCA 1106 ; (2001) 123 FCR 62 ; Deloitte Touche Tohmatsu v Cridlands Pty Ltd [2003] FCA 1413 ; (2003) 134 FCR 474 ; and Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 ; (2006) 70 IPR 146. A number of those and other authorities are analysed by McDougall J, who took the wider view, in Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 1041 ; (2004) 220 ALR 267. 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.