FEDERAL COURT OF AUSTRALIA Wakeling v Wade [2011] FCA 1292 Citation: Wakeling v Wade [2011] FCA 1292 Parties: DONALD WILLIAM WAKELING v DAWN FLORENCE WADE and PAUL ANDREW LEROY SOUAD CLARKE and MATTHEW TRNKA v PAUL ANDREW LEROY, DONALD WILLIAM WAKELING and DAWN FLORENCE WADE File number(s): NSD 212 of 2010 NSD 986 of 2010 Judge: NICHOLAS J Date of judgment: 15 November 2011 Catchwords: BANKRUPTCY – whether various causes of action vested in trustee in bankruptcy – where former bankrupt has relied upon causes of action in proceedings commenced by her in New South Wales Supreme Court after discharge from bankruptcy – whether defendant to Supreme Court proceedings is entitled to declarations that causes of action vested in former bankrupt's trustee in bankruptcy – whether purported assignments to bankrupt of various companies' causes of action are enforceable – purported assignments of companies' causes of action not enforceable – where companies deregistered – companies' causes of action vest in Australian Securities and Investments Commission EQUITY – deeds of assignment – whether deeds of assignment enforceable – assignments of bare causes of action – purported assignee having no genuine commercial interest in causes of action – deeds of assignment unenforceable either as assignment of bare causes of action in tort or as assignment of bare causes of action in which assignee has no genuine commercial interest TRUSTS AND TRUSTEES – whether causes of action were held on trust by bankrupt for her son so as not to constitute property of the bankrupt vested in her trustee in bankruptcy – evidence not establishing existence of trust – causes of action vested in bankrupt's trustee in bankruptcy Legislation: Bankruptcy Act 1966 (Cth) ss 5(1), 27(1), 31(1)(f), 33(1)(c), 58(1), 82(2), 116(1), 116(2)(a), 117, 133(1), 133(2), 178 Conveyancing Act 1919 (NSW) s 12 Corporations Act 2001 (Cth) s 601(A1)(2) Civil Procedure Act 2005 (NSW) ss 64, 65 Judicature Act 1873 (UK) s 25(6) Limitation Act 1969 (NSW) Cases cited: Bahr v Nicolay (No 2) (1988) 164 CLR 604 Citicorp Australia Ltd v Official Trustee in Bankruptcy (1996) 71 FCR 550 Ellis v Torrington [1920] 1 KB 399 Freeman v National Australia Bank Limited [2004] FCAFC 318 Glegg v Blomley [1912] 3 KB 474 Greater Lithgow City Council v Wolfenden [2007] NSWCA 180 Haq v Singh [2001] 1 WLR 1594 (CA) Hawkins v Clayton (1988) 164 CLR 539 McGee v Yeomans [1977] 1 NSWLR 273 Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380 New Cap Reinsurance Ltd (in liq) v Reaseguros Alianza SA (2004) 186 FLR 175 Poulton v The Commonwealth (1953) 89 CLR 540 Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166 Ramsey v Hartley [1977] 1 WLR 686 (CA) Re Harry Simpson & Co Pty Ltd (in liq) [1966] 2 NSWR 445) Re Harry Simpson & Company Pty Ltd and the Companies Act 1936 [1964-5] NSWR 603 Scott v Bagshaw (2000) 99 FCR 573 Stein v Blake [1996] AC 243 Trendtex Trading Corporation v Credit Suisse [1982] AC 679 O.R. Marshall, The Assignment of Choses in Action (Sir Isaac Pitman & Sons, Ltd, 1950) R Meagher, D Heydon and M Leeming, Meagher, Gummow & Lehanne's Equity Doctrines and Remedies (4th ed, Butterworths, 2002) Date of hearing: 28, 29 March, 9, 10 and 11 April 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 125 Counsel for Donald William Wakeling: Mr J Kelly SC Solicitor for Donald William Wakeling: Colin Biggers & Paisley Counsel for Souad Clarke and Matthew Trnka: Ms P Gormly Solicitor for Souad Clarke and Matthew Trnka: Oliveri Lawyers Counsel for Dawn Florence Wade: Ms Wade appeared in person Counsel for Paul Andrew Leroy: Mr J Johnson Solicitor for Paul Andrew Leroy: Yates Beaggi Lawyers IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 212 of 2010 BETWEEN: DONALD WILLIAM WAKELING Applicant AND: DAWN FLORENCE WADE First Respondent PAUL ANDREW LEROY Second Respondent JUDGE: NICHOLAS J DATE OF ORDER: 15 NOVEMBER 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Within 7 days of today Mr Wakeling is to file and serve proposed short minutes of orders (including as to costs) together with a written submission in support thereof limited to 4 pages in length. 2. Within 14 days of today each other party is to file and serve any written submission in reply also limited to 4 pages in length. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 986 of 2010 BETWEEN: SOUAD CLARKE First Applicant MATTHEW TRNKA Second Applicant AND: PAUL ANDREW LEROY First Respondent DONALD WILLIAM WAKELING Second Respondent DAWN FLORENCE WADE Third Respondent JUDGE: NICHOLAS J DATE OF ORDER: 15 NOVEMBER 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Within 7 days of today Mr Wakeling is to file and serve proposed short minutes of orders (including as to costs) together with a written submission in support thereof limited to 4 pages in length. 2. Within 14 days of today each other party is to file and serve any written submission in reply also limited to 4 pages in length. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 212 of 2010 BETWEEN: DONALD WILLIAM WAKELING Applicant AND: DAWN FLORENCE WADE First Respondent PAUL ANDREW LEROY Second Respondent IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 986 of 2010 BETWEEN: SOUAD CLARKE First Applicant MATTHEW TRNKA Second Applicant AND: PAUL ANDREW LEROY First Respondent DONALD WILLIAM WAKELING Second Respondent DAWN FLORENCE WADE Third Respondent JUDGE: NICHOLAS J DATE: 15 NOVEMBER 2011 PLACE: SYDNEY REASONS FOR JUDGMENT 1 There are two proceedings before me and a number of related notices of motion. The issues arising in the proceedings relate to the ownership of various choses in action the subject of two separate proceedings presently before the Supreme Court of New South Wales (the Supreme Court) and require a consideration of various provisions of the Bankruptcy Act 1966 (Cth) (the Act). How those issues come to be before me is a matter which I will explain. In the first place, I need to identify the various proceedings that are before me and those which are before the Supreme Court, including the parties, the subject matter and the relief claimed. PROCEEDING 212 of 2010 2 The first proceeding before me (Proceeding 212) was commenced in this Court on 3 March 2010 by Donald William Wakeling (Mr Wakeling), the applicant, against Dawn Florence Wade (Ms Wade) and Paul Andrew Leroy (Mr Leroy). Ms Wade was made bankrupt voluntarily on 3 January 2003 and discharged by operation of law on 4 January 2006. Upon being made bankrupt, Mr Leroy was appointed as her trustee in bankruptcy. 3 Mr Wakeling was, at relevant times, a solicitor who is alleged to have provided advice to Ms Wade and companies with which she was associated. Ms Wade and Mr Wakeling were apparently in a personal relationship from about August 2001 to about August 2002. During that period Mr Wakeling is alleged to have performed certain legal services for Ms Wade which formed the basis of various complaints made by her in the two proceedings (Supreme Court proceedings) presently before the Supreme Court. The first Supreme Court proceeding (Gloucester proceeding), about which I will say more shortly, primarily concerns events arising out of the sale of land at Gloucester. The second Supreme Court proceeding (family law proceeding) arises out of long running family law disputes involving Ms Wade going back as far as 1973. The Gloucester proceeding and the family law proceeding were both commenced by Ms Wade against Mr Wakeling and allege professional negligence and breach of fiduciary duty on his part. Ms Wade is the sole plaintiff in each of the Supreme Court proceedings. 4 Although Proceeding 212 is brought in Mr Wakeling's name, it is clear that the proceeding is brought in his name by his professional indemnity insurer (Law Cover) which, according to the evidence, provided professional indemnity insurance to Mr Wakeling at relevant times. Law Cover is defending the Supreme Court proceedings in Mr Wakeling's name. 5 Mr Wakeling was made bankrupt on 27 March 2007 and discharged by operation of law on 28 March 2010. Among other things, Ms Wade contends that Proceeding 212 was commenced, and is being maintained, in Mr Wakeling's name without his authority and without the authority of Mr Wakeling's trustee in bankruptcy. In particular, she contends that Proceeding 212 could not properly be maintained in Mr Wakeling's name without the authority of Mr Wakeling's trustee in bankruptcy. 6 It is common ground between the parties that the question whether any of the causes of action the subject of the Supreme Court proceedings was property which vested in Mr Leroy in his capacity as Ms Wade's trustee in bankruptcy was a matter within the exclusive jurisdiction of the Federal Court and the Federal Magistrates Court (subject to some presently irrelevant exceptions provided for in s 27(1) of the Act). While the point was not argued before me in any detail, the position of the parties on this issue seems to be justified having regard to s 27(1) and s 31(1)(f) of the Act and the effect of the language used to confer the exclusive jurisdiction. This is because the question of the trustee's title to the relevant causes of action (or, in the language of s 31(1)(f), the question whether "… to declare for or against the title of the trustee to any property") arises "in bankruptcy" within the meaning of s 27(1) of the Act: see Scott v Bagshaw (2000) 99 FCR 573 (Drummond, RD Nicholson and Katz JJ) at [17]-[18]; Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380 (Branson, Greenwood and Perram JJ) at [81], [111]-[114] per Greenwood J and [194]-[196], [209] per Perram J. 7 I invited the parties to apply to have the whole of their "justiciable controversy" transferred to this Court but none of them showed any inclination to do so. The Gloucester proceeding 8 On 6 February 2008, Ms Wade commenced the Gloucester proceeding against Mr Wakeling and Mr Brian Muir by statement of claim. Ms Wade has apparently filed an application in the Gloucester proceeding seeking leave to amend the original statement of claim (GSOC). That motion had not been heard or determined. Mr Wakeling opposes Ms Wade's application to amend the GSOC. 9 The background to the Gloucester proceeding is as follows: (a) In July 2001, Glass Slipper Racing Pty Ltd (GSR) entered into a contract for the purchase of 164 Bucketts Road, Gloucester (the Gloucester property) for $348,000 (GSOC paras 11 and 12). The property was purchased from Mr Dallas Tindale. A deposit of $17,400 was paid and released to Mr Tindale. (b) On 8 February 2002, the day appointed for settlement, a title search identified a writ lodged over the property by Case Credit Australia Limited (Case Credit) in relation to Mr Tindale's debts of $25,000 (GSOC para 24). (c) On the same day GSR and Ms Wade entered into a deed with Case Credit whereby Ms Wade guaranteed the payment of $25,000 by GSR to Case Credit within 3 months so that Case Credit would cancel the writ to allow the sale to proceed. It appears that Case Credit was authorised to lodge a caveat under the terms of the deed (GSOC para 29). (d) The settlement of GSR's purchase of the Gloucester property took place in the afternoon of 8 February 2002. (e) Ms Wade alleges that she sought Mr Wakeling's advice prior to agreeing to sign the deed and that she advised him that if GSR was to enter into the deed it would place GSR under financial strain (GSOC para 27). She further alleges that Mr Wakeling advised that she should sign the deed and thereafter apply to the court to have it set aside on the basis that she had entered into the deed under financial duress (GSOC para 28). (f) Ms Wade alleges that in June 2002 Mr Wakeling advised her to commence proceedings in the Supreme Court seeking to set aside the deed and that he prepared a statement of claim by which such proceedings were commenced (GSOC para 31). (g) In July 2002, Ancient Earth Pty Limited (AE) advanced funds to GSR with the Gloucester property as security and these funds were used by GSR to meet legal costs and mortgage repayments (GSOC para 34). (h) In November 2002, GSR sold the Gloucester property for $380,000 (GSOC para 39). The proceeds of sale were used to satisfy obligations to mortgagees, including AE. Case Credit withdrew its caveat in return for GSR or Ms Wade paying $17,500 into court (GSOC paras 37 and 38). (i) In March 2003, GSR and Ms Wade received advice that the prospects of succeeding in the claim against Case Credit were poor (GSOC para 38). 10 It is alleged that on 8 February 2003 GSR shareholders passed a resolution to have GSR assign all existing and contingent causes of action to Ms Wade by deed and that a deed to that effect was executed on that date (GSOC para 43). It is also alleged that on 20 September 2004 it was resolved by a meeting of AE directors and shareholders to have AE assign all existing and contingent causes of action to Ms Wade by deed and that a deed to that effect was executed on that date (see GSOC para 44). 11 It is further alleged by Ms Wade in the Gloucester proceeding that she was at all materials times a director or acting director of GSR (GSOC para 1) and a director of AE (GSOC para 20). Her complaints against Mr Wakeling in the Gloucester proceeding all arise out of advice he allegedly provided to her concerning her own affairs and the affairs of GSR and AE. 12 First, it is alleged that Mr Wakeling advised Ms Wade to enter into the deed with Case Credit. Secondly, it is alleged that Mr Wakeling advised Ms Wade, following execution of the deed with Case Credit, that she should allege that she entered into the deed under duress and commence a proceeding against Case Credit to have the deed set aside. Thirdly, it is alleged that Mr Wakeling advised Ms Wade to cause AE to advance funds to GSR on the security of the Gloucester property on the basis that success in obtaining damages against Case Credit was assured. Fourthly, it is alleged that Mr Wakeling advised Ms Wade to sell the Gloucester property to satisfy AE's mortgage and ongoing legal fees. 13 Ms Wade alleges that all such advice provided to her by Mr Wakeling was provided negligently. She claims that Mr Wakeling is therefore liable to her for both negligent advice and breach of fiduciary duty. 14 The GSOC is somewhat unclear as to whether the causes of action relied upon are causes of action that are and have always been personal to Ms Wade or whether they are causes of action that once belonged to GSR or AE which were assigned to her by those companies. The fact that it is alleged that Ms Wade was at all material times a director or acting director of GSR (GSOC para 1) and that GSR and AE are alleged to have assigned their causes of action to Ms Wade (GSOC paras 43-44) tends to suggest that the causes of action relied upon include causes of action which Ms Wade purported to acquire by way of assignment. This is reinforced by the claims for relief (GSOC paras 53-58) which identify various heads of damage which one might reasonably expect to be loss and damage suffered by GSR and AE rather than Ms Wade. I shall proceed on the basis that the causes of action asserted in the Gloucester proceeding consist of a combination of causes of action some of which have always belonged to Ms Wade (the personal causes of action) and some of which are alleged to have been acquired by her by way of assignment (the assigned causes of action). The family law proceeding 15 The family law proceeding was commenced by Ms Wade against Mr Wakeling on 26 May 2008. She alleges that between February 2002 and February 2003 Mr Wakeling provided legal services to her in connection with the proceedings she brought, allegedly on his advice, against another solicitor, Mr John Lord, in respect of what Ms Wade alleged was professional negligence on the part of Mr Lord at a time when he acted for her in relation to a long running property dispute between Ms Wade and her former husband, Gunter Trnka (Mr Trnka Snr). 16 Although it is alleged that the proceeding against Mr Lord was commenced by Ms Wade following advice first provided to her by Mr Wakeling in February 2002, it appears Mr Wakeling was no longer acting for Ms Wade by February 2003 and that she thereafter received advice from different solicitors and counsel. It also appears that Ms Wade settled the proceeding she brought against Mr Lord in July 2006 for $68,000 alleged to be made up of $38,000 representing a percentage of costs thrown away between 1995 and 1996 in maintaining the proceeding in the Family Law Court (which were eventually dismissed for want of prosecution) and a further $30,000 representing a small percentage of costs incurred by her in the proceeding against Mr Lord. 17 There are numerous acts of negligence pleaded against Mr Wakeling in the family law proceeding. Most of these relate to what is alleged to constitute a failure to provide advice concerning what are said to have been available claims for professional negligence against other solicitors apart from Mr Lord all of whom are alleged to have acted for Ms Wade at some time or another during the period from 1980 to 1996 in relation to her property dispute. 18 The advice allegedly given by these solicitors appears to relate to various unsuccessful attempts by Ms Wade to enforce a property settlement she entered into with her husband in 1973 at about the time of their separation. Under the terms of that settlement Ms Wade was to receive land in Brisbane and cash. 19 Ms Wade's property settlement was the subject of various applications made by her under the now repealed Matrimonial Causes Act 1959 (Cth) and the Family Law Act 1975 (Cth). She commenced a proceeding in 1974 in the Supreme Court of New South Wales Family Law Division which was transferred in 1981 to the Family Law Court. The proceeding was dismissed by the Family Court in 1996 for want of prosecution. It appears that between the time Ms Wade entered into her agreement with Mr Trnka Snr and the date upon which her proceeding in the Family Court was dismissed, Mr Trnka Snr sold the land in Brisbane which he had previously agreed to transfer to her. 20 In 2006 Ms Wade commenced a proceeding in the Equity Division of the Supreme Court claiming (inter alia) equitable compensation from Mr Trnka Snr. That proceeding was heard by Lloyd AJ on 16 October 2006. Mr Trnka Snr did not appear to defend the proceeding. His Honour made an order in favour of Ms Wade against Mr Trnka Snr for the payment of compensation in the amount of $595,000 (exclusive of interest) in respect of a breach of fiduciary duty by Mr Trnka Snr arising out of the sale of land the subject of the property settlement. His Honour also gave judgment in her favour for the sum of $5,000 (plus a substantial amount of interest) in respect of the cash component of the property settlement. Relief claimed in Proceeding 212 21 In Proceeding 212, Mr Wakeling contends that Ms Wade had no entitlement to commence the Gloucester proceeding or the family law proceeding against him in the Supreme Court on the grounds that: upon Ms Wade's bankruptcy, any existing causes of action against him in connection with both the Gloucester proceeding or the family law proceeding vested in her bankruptcy trustee pursuant to s 58(1)(a) of the Act; any causes of action against him in connection with the Gloucester proceeding or family law proceeding which arose in the 3 years after the commencement of Ms Wade's bankruptcy vested in her bankruptcy trustee as after acquired property pursuant to s 58(1)(b) of the Act; such causes of action did not revest in Ms Wade upon her bankruptcy ending and Ms Wade's bankruptcy trustee has not assigned any such causes of action to Ms Wade. 22 Various claims for relief were included in the application filed in Proceeding 212. However, the only relief now claimed by Mr Wakeling is: A declaration that any causes of action against Mr Wakeling upon which Ms Wade purports to sue in the Gloucester proceeding vested in Mr Leroy in his capacity as her trustee in bankruptcy pursuant to s 58(1) of the Act and did not re-vest in her upon her discharge from bankruptcy on 4 January 2006. A declaration that any causes of action against Mr Wakeling upon which Ms Wade purports to sue in the family law proceeding vested in Mr Leroy in his capacity as her trustee in bankruptcy pursuant to s 58(1) of the Act and did not re-vest in her upon her discharge from bankruptcy on 4 January 2006. Alternatively, a declaration that Ms Wade is precluded from bringing the Gloucester proceeding against Mr Wakeling by operation of s 58(3) and s 82(2) of the Act. An injunction restraining Ms Wade by herself her servants and agents from taking any further step to prosecute the Gloucester proceeding or the family law proceeding. The notices of motion filed in Proceeding 212 23 The following notices of motion have been filed by or on behalf of Ms Wade in Proceedings 212: A notice of motion filed on 16 April 2010 seeking leave to file a cross-claim in Proceeding 212. Although Emmett J ordered on 2 July 2010 that this notice of motion be heard separately from and after the issues in the main proceeding, Ms Wade nevertheless pressed for an order that she be given leave to file her cross-claim (see MFI-3) at the hearing before me. Having regard to the conclusions set out below, it is desirable that I proceed to determine Ms Wade's application for leave to file the proposed cross-claim notwithstanding the order made by Emmett J. A notice of motion filed on 10 January 2011 seeking the following declarations and order: - A declaration that Mr Leroy has been aware since at least May 2009 of the proceedings (20026/08 and 20194/08) bought by Ms Wade in 2008 in the Supreme Court against Mr Wakeling. - A declaration that Mr Leroy "is deemed to have adopted the choses of action [sic] by operation of s 133 of the Bankruptcy Act" and that he is liable for all legal and associated costs incurred with respect thereto since May 2009. - An order that Mr Leroy pay all legal and associated costs incurred in relation to the Gloucester proceeding and the family law proceedings. An amended notice of motion filed in court on 28 March 2011 seeking various orders including, most relevantly, an order that Proceeding 212 be dismissed on the basis that Law Cover commenced it in Mr Wakeling's name without the authority of Mr Wakeling or his trustee in bankruptcy. Law Cover's authority to commence Proceeding 212 in Mr Wakeling's name 24 It is convenient to consider Ms Wade's amended notice of motion at the outset. It is not disputed that the benefit of Mr Wakeling's professional indemnity insurance policy vested in his trustee upon Mr Wakeling being made bankrupt. However, the relevant policy includes cl 11 which expressly provides that Law Cover shall have the conduct of any claim against Mr Wakeling including its investigation, defence, avoidance or reduction and that Lawcover "may do so" – that is to say, conduct such defence – in Mr Wakeling's name. In my opinion Proceeding 212 was brought in Mr Wakeling's name in "defence" of Ms Wade's claims in the broad sense that word is used in cl 11 of the policy. Hence, cl 11 (which binds Mr Wakeling's trustee as much as Mr Wakeling) authorised Law Cover to commence and maintain Proceeding 212. PROCEEDING 986 OF 2010 25 The second proceeding before me was commenced in this Court on 5 August 2010 by Souad Clarke (Ms Clarke) and Matthew Trnka (Mr Trnka) against Mr Leroy, Mr Wakeling and Ms Wade. Ms Clarke is a friend of Ms Wade and Mr Trnka is Ms Wade's son. The application by which the proceeding was commenced is a muddled document which appears to have been prepared without the assistance of a properly qualified legal practitioner. Ms Gormly of counsel, who appeared for Ms Clarke and Mr Trnka at the hearing, provided me with another document (MFI-2) that sought to address some of the problems with the form of application and which specified the relief now claimed by them. 26 In substance, Ms Clarke and Mr Trnka seek declarations to the following effect: All causes of action owned by GSR that vest in Ms Wade are held by her on trust for Ms Clarke and Mr Trnka. Alternatively, all causes of action owned by GSR vest in Ms Clarke and Mr Trnka. All causes of action owned by AE vest in Ms Wade in trust for Mr Trnka. Alternatively, all causes of action owned by AE vest in Mr Trnka. Any right Mr Wakeling has to indemnity under any contract of insurance against liabilities to third parties arising out of the causes of action the subject of the Gloucester proceeding or the family law proceeding vests in his trustee in bankruptcy and that any amount that is received by the said trustee from such insurer must be paid to the third parties concerned. The following orders are also sought: Leave be given to Ms Wade to continue to prosecute the Gloucester proceeding and the family law proceeding against Mr Wakeling. Mr Leroy assign any such interest he has in the causes of action the subject of the Gloucester proceeding to Ms Wade "in return for one third of any net damages awarded therein". Mr Leroy assign any such interest he has in the causes of action the subject of the family law proceeding to Ms Wade "in return for one third of any net damages awarded therein". Mr Leroy disclaim any interest he has in the Gloucester proceeding and the family law proceeding. Any damages awarded in the family law proceeding be charged in favour of Mr Trnka. The Proposed Cross-Claim in Proceeding 212 27 The relief which Ms Wade claims in her proposed cross-claim in Proceeding 212 is generally encompassed within that sought by Ms Clarke and Mr Trnka in Proceeding 986 and that sought by Ms Wade in her notice of motion filed 10 January 2011. In addition, however, she also sought, but not until the last day of the hearing before me (see MFI-3), a declaration that the validity of the deeds of assignment referred to in the GSOC are to be determined in the Gloucester proceeding. THE RELEVANT PROVISIONS OF THE ACT 28 Section 58(1) of the Act provides: Subject to this Act, where a debtor becomes a bankrupt: (a) the property of the bankrupt, not being after acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and (b) after acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee. … 29 Section 58(3) of the Act provides: Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor: (a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or (b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding. 30 Section 116(1) of the Act specifies what is deemed to be property divisible amongst the creditors of the bankrupt. By virtue of s 116(2)(a), that does not include property held by the bankrupt in trust for another person. Section 5(1) of the Act defines "property" to mean: real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property. Section 5(1) of the Act also defines "the property of the bankrupt" as follows: the property of the bankrupt, in relation to a bankrupt, means: (a) except in subsections 58(3) and (4): (i) the property divisible among the bankrupt's creditors; and (ii) any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt; and (b) in subsections 58(3) and (4): (i) the property, rights and powers referred to in paragraph (a) of this definition; and (ii) any other property of the bankrupt. 31 Section 117 of the Act provides: (1) Where: (a) a bankrupt is or was insured under a contract of insurance against liabilities to third parties; and (b) a liability against which he or she is or was so insured has been incurred (whether before or after he or she became a bankrupt); the right of the bankrupt to indemnity under the policy vests in the trustee and any amount received by the trustee from the insurer under the policy in respect of the liability shall, if the liability has not already been satisfied, be paid in full forthwith to the third party to whom it has been incurred. (2) Subsection (1) does not limit the rights of the third party in respect of any balance due to him or her after the payment referred to in that subsection has been made. (3) This section applies notwithstanding any agreement to the contrary, whether entered into before or after the commencement of this Act. 32 Section 133 of the Act relevantly provides: (1AA) Where any part of the property of the bankrupt consists of: (a) land of any tenure burdened with onerous covenants; or (b) property (including land) that is unsaleable or is not readily saleable; subsection (1) applies. (1AB) Where: (a) any part of the property of the bankrupt consists of property, being neither land nor an interest in land; and (b) it may reasonably be expected that the costs, charges and expenses that the trustee would incur in realising the property would exceed the proceeds of realising the property; subsection (1) applies. (1) Subject to this section, the trustee may, notwithstanding that he or she has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation to it and notwithstanding, in the case of property the transfer of which is required by a law of the Commonwealth or of a State or Territory of the Commonwealth to be registered, that he or she has not become the registered owner of that property, by writing signed by him or her, at any time disclaim the property. (1A) Subject to this section, the trustee may at any time, by writing signed by him or her, disclaim any contract that forms part of the property of the bankrupt whether or not the trustee has endeavoured to assign the property or exercised any rights in relation to it. (2) A disclaimer under subsection (1) or (1A) operates to determine forthwith the rights, interests and liabilities of the bankrupt and his or her property in or in respect of the property disclaimed, and discharges the trustee from all personal liability in respect of the property disclaimed as from the date when the property vested in him or her, but does not, except so far as is necessary for the purpose of releasing the bankrupt and his or her property and the trustee from liability, affect the rights or liabilities of any other person. …. (9) The Court may, on application by a person either claiming an interest in, or being under a liability not discharged by this Act in respect of, disclaimed property, and after hearing such persons as it thinks fit, make an order, on such terms as the Court considers just and equitable, for the vesting of the property in, or delivery of the property to, a person entitled to it or a person in whom, or to whom, it seems to the Court to be just and equitable that it should be vested or delivered, or a trustee for that person. (10) Subject to subsection (11), where an order vesting property in a person is made under subsection (9), the property to which it relates vests forthwith in the person named in the order for that purpose without any conveyance, transfer or assignment. … 33 Section 178 of the Act provides: (1) If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he or she may apply to the Court, and the Court may make such order in the matter as it thinks just and equitable. (2) The application must be made not later than 60 days after the day on which the person became aware of the trustee's act, omission or decision. 34 Section 33(1)(c) of the Act allows the Court to extend the time specified in s 178(2). GSR 35 According to ASIC records in evidence, Mr Trnka was the only director of GSR in the period 20 December 2002 to 20 July 2003. According to the same records Ms Wade, who was appointed a director on 9 November 2001, resigned as a director on 20 December 2002. The ASIC records also indicate that, as at February 2003, GSR had issued three $1.00 shares, two of which were held by Mr Trnka and one of which was held by Ms Clarke. On the basis of this evidence, I am satisfied that, as at February 2003, Mr Trnka and Ms Clarke were the only shareholders of GSR and Mr Trnka was the sole director of GSR. 36 On 26 October 2001 the Deputy Commissioner of Taxation (the DCT) wrote to Ms Wade, who was then still a director of GSR, informing Ms Wade and GSR of the outcome of the DCT review of GSR's Business Activity Statement for the period 1 July 2000 to 30 September 2001. The letter indicated that, as a result of the review, refunds paid to GSR between September 2000 and June 2001 totalling $16,519.00 would need to be repaid. In essence, it was the DCT's position that GSR had received refunds consisting of credits for capital and other acquisitions in circumstances where, according to the DCT, GSR was not carrying on a business. 37 GSR was placed in liquidation in July 2003 on the application of the DCT. It is not clear when the debt to the DCT first became due and payable. The DCT issued a running balance account dated 25 April 2003 which discloses an opening balance as at 30 March 2003 of $20,577.48. There was a statutory demand dated 12 June 2003 served by the DCT on GSR that formed the basis for the DCT's application. The statutory demand was for the amount of $21,080.43. The proof of debt eventually submitted to GSR's liquidators by the DCT was for the amount of $24,654.38. 38 Ms Clarke gave evidence that she invested approximately $30,000 in GSR in 2002. Mr Trnka gave evidence that he advanced some hundreds of thousands of dollars to GSR. The only record produced to substantiate Mr Trnka's claim was a single deposit slip recording the issue on 3 December 1999 of a bank cheque in favour of GSR in the amount of $132,000. There was no evidence to establish the terms upon which either Ms Clarke or Mr Trnka made these funds available to GSR. THE FEBRUARY 2003 ASSIGNMENT 39 It was not suggested by any party that the alleged assignments are enforceable under s 12 of the Conveyancing Act 1919 (NSW). If the alleged assignments are enforceable it is because they are enforceable in equity. 40 There are two executed versions of the deed dated 8 February 2003 which are in slightly different forms. Neither of them is an original document. Both are photocopies. There was evidence given by Ms Wade and Mr Trnka suggesting that the originals were destroyed in a house fire which occurred in 2006. There was no evidence explaining how or when the photocopies came to be made. 41 Both versions of the deed appear to have been signed by Ms Wade, Mr Trnka, Ms Clarke and another person identified in the evidence as Charles Firns. Mr Firns was another son of Ms Wade. Mr Firns appears to have witnessed the signatures of each of the parties to the deed. He was not called to give evidence. 42 The first version of the deed is in the following terms: THIS DEED OF ASSIGNMENT made the 8th February, Two Thousand and Three. Between (THE ASSIGNORS) SOUAD CLARKE and MATTHEW TRNKA as shareholders of GLASS SLIPPER RACING PTY LTD And (THE ASSIGNEE) DAWN WADE NOW THIS DEED WITNESSES AS FOLLOWS On the 8th February, Two Thousand and Three, the following was resolved at the company meeting. 1. That all causes of action (choses of action) including all contingent causes of action held by GLASS SLIPPER RACING PTY LTD past, present and future be assigned to DAWN WADE for consideration of one dollar. 2. In the event of the death or mental incapacity of DAWN WADE or if for any other reason DAWN WADE is unable to prosecute such claims or continue to prosecute such claims referred to in clause 1, then all causes of action will automatically revert to SOUAD CLARKE and MATTHEW TRNKA jointly or severally. GOVERNING LAW This deed shall be governed and construed in accordance with the laws of New South Wales. This is followed by the signatures of Ms Clarke, Mr Trnka, Ms Wade and Mr Firns. 43 I am satisfied that the first version of the deed was signed by Ms Clarke, Mr Trnka and Ms Wade on or about 8 February 2003. 44 The second version of the deed is also dated 8 February 2003 and is in the same terms save that the parties are now identified as follows: Between (THE ASSIGNORS) GLASS SLIPPER RACING PTY LTD ("GSR P/L") SOUAD CLARKE as shareholder of GSR P/L MATTHEW TRNKA as shareholder and director of GSR P/L And (THE ASSIGNEE) DAWN WADE as trustee/creditor 45 The second version of the deed was signed after the first, but I cannot say when it was signed. I am satisfied that it was not signed on or about 8 February 2003. Leaving aside the question of when the second version of the deed was executed by Ms Wade, Ms Clarke and Mr Trnka, the only material difference between it and the first version is in the description of the parties. In the first version, the assignors are identified as Ms Clarke and Mr Trnka as shareholders of GSR. In the second version, the "assignors" are identified as GSR, Ms Clarke as a shareholder and Mr Trnka as a director and shareholder of GSR. 46 Both versions of the deed are unusual in that the operative provisions record what is expressed to be a resolution of the shareholders of GSR. Nevertheless, I am satisfied that, when read as a whole, both the first version and the second version of the deed are to be understood as recording a purported assignment by GSR to Ms Wade of all causes of action held by GSR. 47 The second and more significant difference between the two versions is in the way in which Ms Wade is described. In the first version she is identified simply as Dawn Wade but in the second version she is identified as Dawn Wade "as trustee/creditor". 48 There was some evidence from Ms Wade, Ms Clarke and Mr Trnka, though mostly from Ms Wade, to suggest that it was their intention that Ms Wade would receive the assignment of GSR's causes of action for her to hold on behalf of Ms Clarke and Mr Trnka. 49 In his first affidavit Mr Trnka said that in about February 2003 he entered into a deed assigning any causes of action that GSR held to Ms Wade to hold on trust for the benefit of Ms Clarke and himself. He also said that it was agreed at the time that the outstanding wages owed by GSR to Ms Wade in respect of the period 1998 to 2002 of $25,000 per annum would be paid to her from net damages that would be received. 50 However, Mr Trnka gave evidence, which I accept, that he suffered a serious head injury in November 2003 which affected his ability to recall much of what was said and done in February 2003. Neither of the affidavits made by him referred to his injury or any problem with his memory. It is therefore necessary to treat his affidavit evidence cautiously. I can say at once that I do not accept the very brief and rolled up account he gave in his first affidavit of what occurred at the meeting held on or about 8 February 2003. Significantly, there was no reference made in Mr Trnka's oral evidence to the establishment of any trust in favour of Ms Clarke or himself. 51 Mr Trnka gave oral evidence that he was not aware whether his mother was bankrupt as at the date of the meeting. I do not think that evidence is correct. I am satisfied that Mr Trnka knew at the time that his mother was a bankrupt and that she could not lawfully act as a director of GSR. 52 It is also necessary to refer to oral evidence given by Mr Trnka concerning the financial position of GSR at about this time. During cross-examination he gave the following evidence: MR KELLY: It's the case isn't it, Mr Trnka, that as at February 2003, you believed that the company, Glass Slipper Racing Proprietary Limited, owed you hundreds of thousands of dollars. Would that be fair?---That would be fair. HIS HONOUR: And what did you understand was happening to the moneys that were owed to you by that company as a result of you signing this document?---Well, GSR wasn't making any money, all right? And we lost, I lost everything that I had including my house. And I went back to PNG. And if anything in future came up, well, I was trying to get my money back. MR KELLY: And it was, the purpose of this document when it was made to help yourself and your mother to get something valuable back out of Glass Slipper Racing Proprietary Limited, even though that company was no longer carrying on a business. Correct?---Well, that was, if I remember right, that was debatable because we were having a case against the ATO. I don't know the dates but the Australian Tax Office, Taxation Office What I would like to suggest to you is that as at February 2003, it was clear to you that the company, Glass Slipper Racing Proprietary Limited, was broke. Well and truly?---Well, you could say that, yes. 53 One important matter to emerge from Mr Trnka's evidence was that he was, as at February 2003, proposing to leave Australia to live in Papua New Guinea (PNG) which he did a few months later. He understood that he would not be able to continue to act as the sole director of GSR while living in PNG. 54 I now come to Ms Clarke's evidence. Her oral evidence in chief included the following account of the meeting of 8 February 2003: MS GORMLY: Could I take you to 8 February 2003 and a company meeting? Do you remember that meeting?---Yes. Who was – can you tell the court about that meeting?---Well, on that meeting in 2003 it was early in the year when Dawn and myself and Matthew was the shareholder at that time, we had a meeting because Dawn apparently had a problem with the ATO, and we just – we wanted to do a deed of – sign a deed of assignment for Dawn to be the trustee of Glass Slipper Racing. Did anything at all – what else was discussed at that meeting?---At that meeting Do you remember?---I'm trying to remember, sorry. No, that's all right. HIS HONOUR: Who was present at the meeting?---There was Dawn and myself and I think Matthew and I think Charlie at that time was the witness because he was leaving – at that time he was leaving [sic] Dawn Wade with his mum. Where was it?---I think if I remember it was over at Dawn's house or in my house because we only lived around the corner at that time. Ms Gormly. MS GORMLY: Do you remember what was the purpose of that meeting?---The deed of assignment? No, of the meeting that caused the deed of assignment to be made?---I think because Matthew was going to go and live in Port Moresby, so I think he was not going to be able to a director, I think, and I was going to France so – and we just did that so Dawn if she has to go to court she'll be able to be the one in – I don't know the word – the one in charge. This evidence is significant for two reasons. First, it makes no reference at all to any trust or arrangement under which Ms Wade would hold the causes of action on behalf of Ms Clarke and Mr Trnka. Secondly, Ms Clarke seemingly perceived the transaction as one which would make Ms Wade a trustee for GSR and which would ensure that Ms Wade was put in charge of any court action brought against (it may be inferred) Mr Muir and Mr Wakeling. 55 Ms Clarke also gave the following evidence during cross-examination by Mr Kelly SC for Mr Wakeling concerning the second version of the deed: Now, on some later occasion, there came a time when Ms Wade asked you to sign another document; is that right?---That's correct. And doing the best you can that was at least a week later?---That's possible. Or it could have been even longer than a week?---I can't recall. I'm sorry. I can't recall the dates. It could have happened later, yes. It happened later?---Yes probably. And is this right: what happened later as best you can recall is that Ms Wade came to you with another document which had already been typed up. Is that right?---Yes, that's right. And she asked you to sign the second document?---Yes because she said that there was some information that she needs to put there that wasn't right in the first place. Now turn to page 2 of exhibit C [ie. a copy of the second version of the deed]. That document bears your signature?---Yes. And you signed it in front of the same witness?---Yes, that's correct. Do you say that you were present when the other persons signed before the same witness?---I beg your pardon. Were you present when the others signed, Matthew and Ms Wade?---I honestly can't recall if Matthew was there or not. I can only recall Dawn and – I can't recall if Matthew was there or not. All right. Is this right: when you signed the document at page 2 you were not given a copy of it?---I can't recall that. Can you recall whether in fact you were given a copy of it when you signed it?---I could have been given a copy of it, yes. And that's a copy of this one which is in front of you with that number 2 on it, the one identified by the number 2, correct?---I know that I've been given a copy of the deed of assignment, but which one I can't remember, and the date, yes, but I did have a copy of the deed of assignment. That's all I can say. If I've been given it on that day or the next door or a week later I can't recall that, but I did have one. Isn't it the case that you had a copy of the first one, the one with page number 1 in purple on it?---That's possible, yes. And that's the one that you found a number of years later. Is that not correct?---It's one or the other. I mean, I can't really say which one, but all I'm saying I did have a deed of assignment. If it's the first one or the second one I can't really recall that. 56 Thus, Ms Clarke could not say when the second version of the deed was signed or who was present when it was signed or whether she ever received a copy of it. But the most significant point to emerge from the passage of evidence I have referred to was that Ms Wade said to her at the time of proffering the second version for signature that there was some information that Ms Wade needed to include in the second version which was omitted from the first version. Ms Clarke's oral evidence did not reveal whether she had any understanding at the time of the information Ms Wade was talking about. However, in her affidavit she stated that shortly after 8 February 2003 Ms Wade presented her with another version of the deed for signing after telling Ms Clarke that she thought it better that it state that Ms Wade was holding the causes of action on trust. 57 My overall impression of Ms Clarke was that she felt a strong sense of loyalty to Ms Wade and that she was anxious to assist Ms Wade in her efforts to recover damages from Mr Muir and Mr Wakeling. I think this may have coloured Ms Clarke's evidence, including, in particular, her affidavit evidence as to the circumstances in which the second version of the deed came to be signed. 58 Ms Wade claimed to have a good recall of what occurred. She gave evidence that a meeting was held on 8 February 2003 attended by herself, Ms Clarke and Mr Trnka. Asked in examination in chief what was said at this meeting Ms Wade replied: I said to Matthew and Souad, we can't collect GST any more. The horses, Matthew has taken over because we can't keep running 70 thoroughbred horses in a drought unless we can collect GST. Just the feed bills alone, the GST on feed bills is I mean unbelievable. And so I don't want to get it into debt. Let's stop trading and we're going to do the taxation review because I'd had advice that there was no way that the Taxation could win, that it was not a company because it had turned over --- When Ms Wade said "we can't collect GST any more" I understood her to mean that GSR would no longer be able to obtain refunds of GST which it paid its suppliers. 59 Ms Wade also gave evidence that she said to Ms Clarke and Mr Trnka: I also advised them that Don Wakeling had advised me that he believed there was a claim against Brian Muir, the solicitor who caused the company to have to take the writ over when they bought the last property. There was – I told them that the company had had to pay security for costs into the court, which was in the court. That we had to pay the money into the court for the caveat. So there was a lot of money tied up in the Supreme Court and the litigation surrounding Glass Slipper Racing suing Case Credit. I said I don't want to get it into debt, it's best to stop trading it. And Matthew and Souad agreed, as the director, and he said, well look, you know, is the company going to assign – sue Brian Muir? And I said, well, not right now because we've got no money for legal advice. And he said, well, why don't you take the causes of action over and stop trading it and maybe we can wind it up if the Taxation – if we don't get the right ruling from the Taxation. It was solvent. It did not have any creditors other than the Taxation. 60 Ms Wade went on to say that she told Ms Clarke and Mr Trnka that because she was a bankrupt, she could only hold the causes of action on trust. She gave the following evidence: And I also said to Matthew, well, you know you don't have to pay me my wages. And he said, no, you can get paid that if we win against any of the causes of action. And I said, well, I'd be agreeable to that. And the other thing was that I said I know, for a deed to be valid, I have to have a commercial interest in it. And I said I think, because I'm owed wages, so if everything goes out of the company, I mean, I guess I was giving them a bit of legal advice that I knew from my youth of litigation. 61 I have considerable doubt about whether any of this was said at the meeting. I think Ms Wade embellished her evidence considerably. I do not consider her to be a reliable witness. 62 I am not satisfied that there was discussion at a meeting held on or about 8 February 2003 attended by Ms Wade, Ms Clarke and Mr Trnka to the effect that Ms Wade would receive the causes of action on behalf of Ms Clarke and Mr Trnka and that they would be held in Ms Wade's name for their benefit. 63 I find that Ms Wade was anxious to be able to assert control of the various causes of action which she believed GSR had against Mr Muir and Mr Wakeling notwithstanding that she could not be a director of GSR by reason of her bankruptcy and that Mr Trnka would not be able to continue to act as the sole director of GSR once he took up residence in PNG. 64 I find that Ms Wade was also aware that there was a serious possibility that GSR would be placed into liquidation in the near future and that control of the company would then pass to a liquidator. I find that as at 8 February 2003 GSR was in financial difficulties and was either insolvent or nearing insolvency. 65 The reference to Ms Wade as "creditor/trustee" in the second version of the deed is cryptic to say the least. I do not regard it as evidence of any intention to create a trust in favour of Mr Trnka and Ms Clarke. Certainly the resolution of GSR of 8 February 2003 (as recorded in the deed) says nothing about any intention that the causes of action to be assigned to Ms Wade were to be held by her on trust. In saying this I am not to be taken as suggesting that a trust could not have come into existence in the absence of an instrument or discussion in which that word was used. There is no reason why an intention to create a trust might not be inferred in the absence of an explicit statement of such an intention: see Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 618 per Mason CJ and Dawson J. In the present case, however, I do not think the evidence establishes the existence of any intention to establish a trust. 66 I also find that Ms Wade was mindful at the time of signing the deed that she was bankrupt and that she understood that she might not be able to take an assignment of the causes of action for her own benefit. She may well have understood that if she was to be able to exercise control of GSR's causes of action, she would need to be able to tell Mr Leroy that she held them on trust for a third party. This might explain why the second version of the deed refers to her as "trustee/creditor". Even so, I am not satisfied that Ms Wade intended at the time that either the first or the second versions of the deed of assignment was executed that she would hold any of the causes of action referred to on behalf of Ms Clarke and Mr Trnka. Had that been her intention I expect that she would have taken steps to ensure that the first version of the deed said so quite explicitly. Similarly, had that been her intention at the time the second version of the deed was executed I would have expected that she would have done the same. 67 My view of what occurred on or about 8 February 2003 is as follows. Ms Wade wanted to retain control of GSR's causes of action. Until that time she had been able to do so in her capacity as a director of GSR and, subsequently, with the assistance of her son who became its sole director. She knew that, by reason of her bankruptcy, she could not lawfully act as a director of GSR. She also knew that Mr Trnka was proposing to leave Australia for PNG and would no longer be able to continue acting as GSR's sole director. 68 I do not think the document prepared by Ms Wade was intended to create or evidence the creation of any trust in Mr Trnka's or Ms Clarke's favour. Rather, I think the document was in reality an ill advised attempt by Ms Wade to take an assignment of the causes of action for her own benefit on terms which would also allow the causes of action to vest in Mr Trnka and Ms Clarke if Ms Wade should for any reason be unable to prosecute or to continue to prosecute the causes of action. 69 I do not accept that there was any discussion concerning the creation of a trust or any other discussion from which I might infer that it was the intention of Ms Wade, Mr Trnka or Ms Clarke to establish a trust for Ms Clarke's and Mr Trnka's benefit. If there was, then it was more likely to have concerned a trust in favour of GSR whereby Ms Wade would purport to hold the causes of action on trust for the company. Even then, in circumstances where neither Ms Wade nor Mr Trnka suggested in their evidence that the causes of action had been assigned on that basis, I do not think there is sufficient justification for holding that any such trust was established. 70 I should add that I am not satisfied that there was any discussion at the meeting on or about 8 February 2003 concerning wages owed to Ms Wade by GSR. Nor am I satisfied that there were any wages owed. Ms Wade's evidence that she was owned wages is inconsistent with other evidence given by her to the effect that GSR was able to pay its debts. The only other evidence given in relation to this matter is that found in Mr Trnka's affidavit which, if accepted, suggested that Ms Wade was owed in excess of $100,000 in unpaid wages. The resolution of GSR of 8 February 2003 (as it is recorded in the deed) says nothing about any unpaid wages owing to Ms Wade. The legal effect of the 8 February 2003 assignment 71 The purported assignment of 8 February 2003 was of bare causes of action. To the extent that they might conceivably include causes of action arising out of any of the factual allegations made in the Gloucester proceeding then they would most likely encompass the same kinds of causes of action asserted by Ms Wade against Mr Muir and Mr Wakeling. They would certainly have included any available causes of action in tort for negligence and causes of action for breach of contract and breach of fiduciary duty. 72 The legal position with respect to the purported assignment of a bare cause of action is complicated by a divergence of authority between Australia and England. In Poulton v The Commonwealth (1953) 89 CLR 540 at 602 the High Court (Williams, Webb and Kitto JJ) referred to the "well established principle" that an assignment of a right of action for tort was incapable of assignment either at law or in equity. However, in Trendtex Trading Corporation v Credit Suisse [1982] AC 679 the House of Lords held that the assignment of a cause of action is valid if there has been an assignment of a property right and the cause of action is attached to it or if the assignee has a genuine commercial interest in taking the assignment and enforcing it for his or her own benefit. Lord Roskill (with whom Lord Keith, Lord Edmund-Davies and Lord Fraser agreed) said (at 703): … it is today true to say that in English law an assignee who can show that he has a genuine commercial interest in the enforcement of the claim of another and to that extent takes an assignment of that claim to himself is entitled to enforce that assignment unless by the terms of that assignment he falls foul of our law of champerty, which, as has often been said, is a branch of our law of maintenance. … If the assignment is of a property right or interest and the cause of action is ancillary to that right or interest, or if the assignee has a genuine commercial interest in taking the assignment and in enforcing it for his own benefit, I see no reason why the assignment should be struck down as an assignment of a bare cause of action or as savouring of maintenance. 73 Applying the decision of the High Court in Poulton, leads to the conclusion that the purported assignment by GSR of bare causes of action in tort was ineffective. The position with respect to the assignment of bare choses in action for breach of contract or choses in equity for breach of fiduciary duty was not referred to in Poulton but is in any event covered by Lord Roskill's exposition of the relevant principles in Trendtex. His Lordship did not draw any distinction between the different types of claims. This is consistent with the broader principle that equity does not enforce assignments of either choses in action or choses in equity which savour of, or are likely to lead to, maintenance: see, for example, Glegg v Blomley [1912] 3 KB 474 at 489-490, Ellis v Torrington [1920] 1 KB 399. Thus, subject to a number of irrelevant exceptions, equity would not enforce an assignment of a bare chose in action for breach of contract or a bare chose in equity for breach of fiduciary duty unless it was for a "debt" or perhaps a "liquidated claim" of some description. 74 Leaving aside irrelevant exceptions, where causes of action for breach of contract or fiduciary duty the subject of an assignment are not ancillary to any property right or interest also assigned or where the purported assignee has no genuine commercial interest in taking the assignment then the position is no different to one involving a purported assignment of a cause of action in tort and the assignment will be invalid and unenforceable. 75 This presents an insuperable hurdle for any argument that the 8 February 2003 assignment was effective to assign causes of action belonging to GSR to Ms Wade or, indeed, to Mr Leroy in his capacity as her trustee in bankruptcy. This is because the causes of action which GSR purported to assign to Ms Wade were bare causes of action in which neither Ms Wade nor Mr Leroy had any genuine commercial interest. 76 So far as Mr Leroy is concerned, I do not think he had any genuine commercial interest in the relevant causes of action. Aside from the fact that he most likely knew nothing at all about the purported assignment at the time it occurred, I think the terms upon which GSR was proposing to assign the causes of action to Ms Wade would have, in the circumstances, caused him disquiet because they involved GSR assigning what Ms Wade claimed to be valuable property of GSR to Ms Wade for nominal consideration at a time when GSR was insolvent or nearing insolvency. It is well established that the directors of a company that is insolvent, or nearing insolvency, have a duty to avoid taking action that is contrary to the interests of creditors. Whatever one may say about the role of Ms Wade and Ms Clarke in the transaction, it was a transaction that was entered into by Mr Trnka, its sole director, in breach of his fiduciary duty to GSR. 77 Accordingly, I am satisfied that none of the causes of action the subject of the purported assignment by GSR to Ms Wade was enforceable by either Ms Wade or Mr Leroy. THE SEPTEMBER 2004 ASSIGNMENT 78 There are two documents described as "this deed of assignment" dated 20 September 2004. Again, both documents are photocopies. The first of these was said to have been signed by Mr Claudio Grizonic in his capacity as a director of AE on or about that date. It is in the following terms: THIS DEED OF ASSIGNMENT made on 20th September, Two Thousand and Four Between ANCIENT EARTH PTY LTD And DAWN WADE NOW THIS DEED WITNESSES AS FOLLOWS On the 20th September 2004, it was resolved at a company meeting by directors and shareholders of Ancient Earth Pty Ltd the following: 1. That all existing and contingent causes of actions held by Ancient Earth Pty Ltd be assigned to Dawn Wade by this deed and to take effect from this date. 2. That in the event of the death or mental incapacity of Dawn Wade, all causes of action referred to in term 1, pass to Matthew Trnka. 3. In the event that Dawn Wade lacks the financial capacity to pursue the claim's referred to in term 1, as a result of her insolvency the causes of action shall pass to Matthew Trnka. 4. Matthew Trnka reserves the right to nominate other person/s or entity to hold the causes of action referred to in term 1. 5. GOVERNING LAW This deed shall be governed and constructed in accordance with the laws of New South Wales, Queensland, Australian Capital Territory and Northern Territory. At the bottom of the document Mr Grizonic's signature appears along with that of Mr Firns who is once again shown to have acted as a witness. 79 The second document dated 20 September 2004 appears to have been signed by Mr Grizonic, Mr Trnka and Ms Wade. The signature of Mr Firns also appears as the sole witness. The assignor is stated to be AE. The assignees are stated to be Dawn Wade "as trustee/creditor" and Matthew Trnka "as shareholder/creditor". The document states: On the 20th September, Two Thousand and Four, the following was resolved at the company meeting. 1. That all causes of action (choses of action) including all contingent causes of action held by the Assignor past, present and future be assigned to DAWN WADE to hold in trust for MATTHEW TRNKA. 2. In the event of the death or mental incapacity of DAWN WADE or if for any other reason DAWN WADE is unable to prosecute such claims or continue to prosecute such claims referred to in clause 1, then all causes of action will automatically revert to MATTHEW TNKA. 3. The Assignor acknowledges that DAWN WADE is owed unpaid wages from 1998 to the date of the making of this deed by the Assignor. 4. MATTHEW TRNKA agrees to take over and assume full obligation of all bona fide liabilities of the Assignor in consideration for all or any assets of the Assignor. 5. The Assignor hereby agrees to do all such things and execute all such documents necessary to perfect all such assignments and the Assignees hereby accept such assignments. 80 The evidence did not disclose whether or not there were any causes of action that might have been assigned by AE (assuming the validity of the alleged assignment) except for those arising out of the matters pleaded, or proposed to be pleaded, in the GSOC in the Gloucester proceeding. However, I think it is fair to say that the case proceeded on the basis that the only cause of actions in existence as at 20 September 2004 which AE might have assigned to Ms Wade were those which it may have had against Mr Muir and Mr Wakeling. Neither the GSOC nor the proposed amendments thereto suggest that Mr Wakeling was retained by AE. 81 In the circumstances, I infer that the causes of action assigned by AE in so far as they relate to any acts or omissions on the part of Mr Muir or Mr Wakeling could only have been founded in tort. That being so, I am satisfied that the purported assignment of any causes of action by AE to Ms Wade arising out of any acts or omissions on the part of Mr Muir or Mr Wakeling were bare causes of action in tort and were not assignable to her irrespective of whether or not they were intended to be held by her on trust for Mr Trnka. 82 As to the latter question, the evidence is confused and unsatisfactory. The first version of the deed dated 20 September 2004 says nothing about any of the causes of action the subject of the purported assignment being held by Ms Wade on trust for Mr Trnka. As with the first version of the 8 February document, there is a purported assignment to Ms Wade (cl 1) subject to various conditions, in this instance, that they are to pass to Mr Trnka in the event of Ms Wade's death or mental incapacity (cl 2) or if Ms Wade lacks the financial capacity to pursue the causes of action as a result of her insolvency (cl 3). On the other hand, there is another provision (cl 4) which by its terms permits Mr Trnka to nominate another person or entity to hold the causes of action being assigned to Ms Wade. This may suggest that the causes of action were to be held by Ms Wade on behalf of Mr Trnka. 83 The second version of the deed, also dated 20 September 2004, includes a number of significant changes relevant to the question now being considered. First, it contains an explicit statement that the causes of action purportedly assigned by the deed were assigned to Ms Wade to hold on trust for Mr Trnka (cl 1). And it also records that Mr Trnka agreed to "take over and assume full obligation [sic] of all bona fide liabilities of the Assignor in consideration of all or any assets of the Assignor" (cl 4). 84 The second version of the deed includes an acknowledgement that Ms Wade is owed unpaid wages "from 1998 to the date of the making of this deed by the Assignor" (cl 3). This is something not found in the first version of the deed. Given my previous conclusion that the causes of action purportedly assigned were bare causes of action and that the purported assignment was for that reason unenforceable, nothing turns on this acknowledgement but it is desirable that I say more about it. 85 The evidence from Mr Grizonic, whose evidence was not entirely satisfactory but which, on this point at least, I accept, was that Ms Wade was never owed wages by AE. His evidence was that Ms Wade was only ever to be paid wages if AE made money and that, because it never did so, she never became entitled to receive wages from AE. In light of Mr Grizonic's evidence I do not accept Ms Wade's evidence that she was owed unpaid wages by AE. Nor do I accept that the acknowledgement included in the second version of the deed dated 20 September 2004 was accurate. Had that been the case then Ms Wade would have been entitled to call upon Mr Trnka to pay them to her. There was no suggestion that Mr Trnka had ever been asked to pay any unpaid wages to Ms Wade. 86 The evidence of Mr Grizonic also establishes that Mr Trnka was not owed any money by AE. Indeed, there was no evidence from Mr Trnka to suggest that he was. To the extent it might be relevant to ask whether Mr Trnka had any genuine commercial interest in taking an assignment of AE's causes of action against Mr Muir and Mr Wakeling, there is no basis for finding that he had such an interest as a creditor of AE. The only other possibility is that he had a genuine commercial interest in taking an assignment of such causes of action as a shareholder of AE. In my view, however, Mr Trnka was less interested in taking an interest in the causes of action for his own benefit than in taking such an interest for his mother's benefit. In my view Mr Trnka was most likely intent on transferring AE's causes of action to Ms Wade so that she might do so with them what she wished. In those circumstances, I am not prepared to find that Mr Trnka had any genuine commercial interest in the causes of action the subject of AE's purported assignment. WERE THE CAUSES OF ACTION THE SUBJECT OF THE FAMILY LAW PROCEEDING HELD IN TRUST FOR MR TRNKA? 87 It is accepted by Mr Trnka that the causes of action the subject of Ms Wade's family law proceeding vested in Mr Leroy upon his appointment as her trustee in bankruptcy unless, as Ms Wade and Mr Trnka contend, those causes of action were held in trust by Ms Wade for Mr Trnka: see s 116(2)(a) of the Act. 88 Ms Wade's position is somewhat different because she does not accept that the causes of action the subject of the family law proceeding could have ever vested in her trustee. Her argument is that those causes of action did not accrue until "[she] could have discovered the negligence." I do not accept this argument. The general rule is that a cause of action in negligence is complete when the damage caused by the breach of duty is suffered: Hawkins v Clayton (1988) 164 CLR 539 at 587-588 per Deane J, 561-562 per Brennan J, 599-602 per Gaudron J. None of the mooted exceptions which were discussed in that case could apply here. 89 Ms Wade's causes of action against the various lawyers who she says she would have sued in addition to Mr Lloyd if it were not for what she alleges was Mr Wakeling's negligent advice were all statute barred by no later than 2002 or 2003, some six years or more after her proceeding in the Family Law Court was dismissed. Hence, her causes of action against Mr Wakeling accrued no later than 2002 or 2003, that is to say, about the time that he provided his advice which was close, if not already after, the time at which proceedings needed to be brought against the other lawyers if they were to have any prospect of being commenced within time. Leaving aside the question of whether those causes of action were held on trust for Mr Trnka, it is clear that they vested in Mr Leroy as her trustee in bankruptcy. 90 The argument for finding that the relevant causes of action were held by Ms Wade in trust for Mr Trnka are founded upon the proposition that Mr Trnka paid substantial amounts of money to Ms Wade to enable her to fund litigation relating to her dispute with Mr Trnka Snr. The evidence of when, in what amounts, and upon what terms, Mr Trnka is said to have advanced money to Ms Wade is extremely vague. Mr Trnka's evidence in chief in the matter was as follows: MS GORMLY: Your mother was involved in family law property settlements – family law property proceedings to do with property – sorry, child maintenance and that spousal maintenance. Do you remember that?---Yes, that's correct. And did you advance proceedings – advance money to her in relation to those proceedings?---Yes. And are you able to estimate how much or remember how much that was?---Not quite the exact number but roughly about 150, yes, I think. About 150. 250, 150. And do you have …?---I lent some money to my mother to help her out. She's my mother, you know. Money's not everything, you can't take it with you. No. And so when you say 150,000, that's an estimate is it?---That's an estimate. And how have you come to that estimate?---Well, that's, you know, five grand here, 10 grand here, 20, 30, 40. Added it up over the years. Logged in the brain here. 150. 150 or thereabouts. Maybe a bit more. And did you intend to – did you make arrangements with your mother about her returning that?---She was to repay me one day when she got settled and, you know, pay me back. And how was she going to do that?---Well, through the family law proceedings. Did you discuss where she …?---I didn't discuss specifics, you know. Did you say you did not discuss specifics or you did?---I just did my mum the major help there. Right?---Right. But did you intend to get it back or had you discussed…?---Definitely. … THE WITNESS: Definitely going to get it back. Hopefully, she's going to pay me back. If she got settled, she'll pay me back, give me some interest on top. MS GORMLY: Right. And was there any discussion on what interest that was going to be?---It was 40 per cent a year or something like that. How much? HIS HONOUR: He said 40 per cent a year. THE WITNESS: 40 per cent. 91 Assuming that Mr Trnka did advance money to Ms Wade for purposes associated with her litigation against Mr Trnka Snr, I am satisfied that this was by way of loan. I am not satisfied that the arrangements made between Ms Wade and Mr Trnka, whatever be their precise terms, gave rise to any trust in favour of Mr Trnka of the relevant causes of action or that they were such as to give him any equitable interest in the relevant causes of action or any damages that might ultimately be obtained from Mr Wakeling. 92 In my opinion the causes of action the subject of the family law proceeding vested in Mr Leroy upon his appointment. There is nothing to suggest that they were ever assigned by Mr Leroy to Ms Wade or that they otherwise revested in her for any other reason whether before or after her discharge from bankruptcy. INITIAL CONCLUSIONS 93 I can now state my conclusions in relation to the assignments relied upon by Ms Wade, Mr Trnka and Ms Clarke. 94 First, the deed dated 8 February 2003, at least in so far as it is said to have effected an assignment of causes of action owned by GSR against Mr Muir and Mr Wakeling, was ineffective to do so. Each of the relevant causes of action was a bare cause of action in tort and not a cause of action in which Ms Wade or Mr Leroy had any genuine commercial interest. 95 Secondly, the deed dated 20 September 2004, at least in so far as it is said to have assigned causes of action owned by AE against Mr Muir and Mr Wakeling, was also ineffective to do so. The assignment which is said to have been effected by the 20 September 2004 deed involved bare causes of action in tort. 96 In Proceeding 986 Mr Trnka and Ms Clarke sought declarations that the causes of action owned by GSR that vested in Ms Wade were held by her on trust for Mr Trnka and Ms Clarke or, alternatively, that all causes of action owned by GSR vested in Ms Clarke and Mr Trnka. I am satisfied, in light of my previous findings, that it would not be appropriate to make any such declaration. Ms Clarke and Mr Trnka sought similar declarations in relation to any causes of action previously owned by AE which they alleged to have been assigned to Ms Wade on trust for Mr Trnka. Again, I am satisfied that it would not be appropriate to make any such declaration. 97 As to the Gloucester proceeding, so far as the personal causes of action are concerned, there is no doubt that they vested in Mr Leroy either at the time of his appointment as Ms Wade's trustee in bankruptcy (if they had already accrued) or, though this seems unlikely, at some time shortly thereafter (if they accrued afterwards). Either way, title to the personal causes of action came to vest in Mr Leroy and, despite Ms Wade's subsequent discharge from bankruptcy, continue to vest in him. So far as the assigned causes of action are concerned, for reasons I have explained, they never were the subject of any valid or enforceable assignment to Ms Wade or Mr Leroy. Hence, those causes of action continued to vest in GSR and AE until those companies' eventual deregistration upon which event they vested in ASIC: see s 601(A1)(2) Corporations Act 2001 (Cth). Further, assuming that the relevant causes of action accrued by no later than early February 2003 (though it is likely that they accrued earlier than that) then they became statute barred by no later than February 2009. 98 As to the family law proceeding, I am satisfied that the relevant causes of action were never held by Ms Wade on trust for Mr Trnka, they vested in Mr Leroy upon his appointment and they have continued to vest in him ever since. It is appropriate to make a declaration to that effect. POSSIBLE ASSIGNMENT OF CAUSES OF ACTION BY TRUSTEE 99 The relief claimed by Ms Wade, Mr Trnka and Ms Clarke includes orders requiring Mr Leroy to execute assignments of the causes of action the subject of the Supreme Court proceedings. 100 A trustee in bankruptcy is in a special position when it comes to the assignment of causes of action. In particular, a trustee in bankruptcy is ordinarily able to assign a bare cause of action on the basis that he is given the power to do so by statute: Ramsey v Hartley [1977] 1 WLR 686 ; Stein v Blake [1996] AC 243 at 258. 101 In Freeman v National Australia Bank Limited [2004] FCAFC 318 a Full Court (Lee, Merkel and Hely JJ) observed (at para [35]) that it would not be proper for a trustee in bankruptcy to assign a cause of action which demonstrably had no prospects of success. In support of that proposition the Full Court cited the Full Court decision in Citicorp Australia Ltd v Official Trustee in Bankruptcy (1996) 71 FCR 550 (Foster, von Doussa and Sundberg JJ). In that case the Full Court said (at 558-559): Counsel for the appellants contended that the duties which rest on a trustee in bankruptcy require the trustee, before selling or assigning a cause of action, to be satisfied that the cause of action can be identified as one vested in the trustee and its value estimated so that the trustee can, and then does, consider whether it can and should be pursued for the benefit of the estate. Comprehended in the performance of this duty is the need, once the cause of action is identified, to assess the prospects of success of the cause of action. There is a twofold purpose in this requirement; one purpose goes to the assessment of the adequacy of the consideration being offered, and the other to the question whether the proposed assignment would visit a mischief or injustice on the community, including creditors in the bankrupt estate. A mischief or injustice would relevantly arise, so it is contended, if the alleged cause of action had no reasonable prospect of success or is not at least arguable. It would be vexatious or oppressive to the proposed defendant if an attempt were made by the proposed assignee to enforce such a cause of action. The alternative notions that a cause of action has no reasonable prospect of success and that it is not arguable convey the same meaning, and we shall treat the contention as being simply that the cause of action proposed to be assigned must have a reasonable prospect of success. 102 Because the power of the trustee to assign a cause of action extends to the assignment of a bare cause of action, it would be open to Mr Leroy to assign any interest he has in the causes of action the subject of the Supreme Court proceedings to Ms Wade unless he is satisfied that those causes of action had no reasonable prospect of success. 103 As previously explained, the relevant causes of action were statute barred by no later than February 2009 and would not be maintainable in any fresh proceedings commenced by either Mr Leroy or Ms Wade. 104 A question that arises is whether, following an assignment of the relevant causes of action by Mr Leroy to Ms Wade, it might be possible for the statement of claim in the Gloucester proceeding and statement of claim in the family law proceeding to be amended in a manner that would make the relevant causes of action maintainable by Ms Wade. 105 The position with respect to amendments in such situations is governed by ss 64 and 65 of the Civil Procedure Act 2005 (NSW) (CPA). They relevantly provide: 64. (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. … (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. … 65. (1) This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings. (2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64(1)(b), amend the originating process so as: (a) to enable the plaintiff to maintain the proceedings in a capacity in which he or she has, since the proceedings were commenced, become entitled to bring and maintain the proceedings, or (b) to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court's opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, or (c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court's opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process. (3) Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced. (4) This section does not limit the powers of the court under section 64. (5) This section has effect despite anything to the contrary in the Limitation Act 1969. (6) In this section, "originating process", in relation to any proceedings, includes any pleading subsequently filed in the proceedings. 106 Section 65 of the CPA is specifically concerned with the amendment of originating process after expiry of a relevant limitation period. However, it is established that amendments to allow a statute barred cause of action may be allowed under s 64 in cases which are not covered by s 65 including amendments which "relate back" in the sense that they take effect not from the date when they are made, but from the date of filing of the originating process. The New South Wales Court of Appeal so held in Greater Lithgow City Council v Wolfenden [2007] NSWCA 180 after considering various first instance decisions concerning s 64 and s 65 as well as some of its previous decisions concerning Pt 20, r 1 and r 4 of the Supreme Court Rules including, in particular, McGee v Yeomans [1977] 1 NSWLR 273 and Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166. 107 Greater Lithgow City Council was concerned with a cause of action that had accrued before the filing of the originating process, not with a cause of action that accrued after the originating process was filed. It is in the latter situation that s 64(3) comes into play. If the proposed amendments are to take effect from the date the originating process was filed, they must fall within s 65(2). This is significant in the present matter because the fact that Ms Wade had taken an assignment would form part of her cause of action (the combination of facts which give rise to her right to sue) which could not accrue before the assignment took place. 108 It is therefore necessary to examine s 65(2) to determine whether, in the event that Ms Wade took an assignment from Mr Leroy, she might be able to make relevant amendments that took effect from the date each of her originating processes was filed. 109 Plainly, s 65(2)(b) would not apply. But the position with respect to s 65(2)(a) and s 65(2)(c) is less clear. As to s 65(2)(a), any amendment aimed at allowing Ms Wade to rely upon an assignment from Mr Leroy would be difficult to justify on the basis that it reflected a change of capacity for the purposes of s 65(2)(a). The argument against the applicability of s 65(2)(a) would be that Ms Wade, even if she were to bring the proceeding in reliance upon the trustee's assignment, would not be doing so otherwise than in her own name and on her own behalf. If that argument is correct, the amendment would be made not to alter the capacity in which Ms Wade sues, but to rely upon subsequent events that give her title to do so: Haq v Singh [2001] 1 WLR 1594 (CA). 110 The fact that Ms Wade's title to the relevant causes of action would depend upon an assignment effected after the relevant proceeding was commenced may also preclude reliance upon s 65(2)(c) if the new cause of action could not be said to arise from the same or substantially the same facts. Whether the new causes of action sought to be introduced by Ms Wade following an assignment to her could be said to arise out of substantially the same facts as those already pleaded is a difficult question that involves questions of degree and impression: see New Cap Reinsurance Ltd (in liq) v Reaseguros Alianza SA (2004) 186 FLR 175 at para [93] per White J. 111 It is enough to say that I am not satisfied that Ms Wade could not be given leave under with s 65 to make any necessary amendments to her pleadings in the Supreme Court proceedings after she took an assignment. Of course, if the power to grant such amendments exists, it would be for the Supreme Court to determine, in the exercise of its discretion, how that power ought to be exercised in all the circumstances. 112 However, that is not the end of the matter. Any assignment provided by Mr Leroy to Ms Wade would presumably be a legal assignment under s 12 of the Conveyancing Act 1919 (NSW) though, in saying this, I am not suggesting that the position would be any different if the relevant assignment was merely equitable. Section 12 relevantly provides: Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal chose in action, of which express notice in writing has been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim such debt or chose in action, shall be, and be deemed to have been effectual in law (subject to all equities which would have been entitled to priority over the right of the assignee if this Act had not passed) to pass and transfer the legal right to such debt or chose in action from the date of such notice, and all legal and other remedies for the same, and the power to give a good discharge for the same without the concurrence of the assignor… 113 Under s 12, the assignee takes "subject to all equities which would have been entitled to priority over the right of the assignee …". The word "equities" has been given a wide meaning in this context: Re Harry Simpson & Company Pty Ltd and the Companies Act 1936 [1964-5] NSWR 603 at 605 per Jacobs J (reversed on other grounds sub. nom. Re Harry Simpson & Co Pty Ltd (in liq) [1966] 2 NSWR 445). I do not think Ms Wade could be in any better position than Mr Leroy as a result of taking an assignment of the relevant causes of action. 114 The position is explained in O.R. Marshall, The Assignment of Choses in Action (Sir Isaac Pitman & Sons, Ltd, 1950). The learned author, discussing s 25(6) of the Judicature Act 1873 (UK) (from which s 12 of the Conveyancing Act derives), states: An assignee, whether statutory or equitable, takes subject to equities. This was the rule in equity before the Judicature Act, and it was expressly reserved in Sect. 25 (6). The phrase itself is misleading, because the assignee takes subject to claims, which, strictly speaking, are not "equities" at all but legal claims. However, the phrase is now too well rooted in our law to be eradicated, and in any case it would be difficult to find a single phrase which could adequately convey the wealth of meaning which is inherent in the idea "subject to equities". It is difficult to state briefly and with exactitude all that the phrase means, but the writer believes that the following propositions, which are based on the decisions, are true. The phrase means in general terms that the assignee takes subject to any defences which the debtor could have raised against his assignor, and also subject to cross-claims available to the debtor against the assignor. See also R Meagher, D Heydon and M Leeming, Meagher, Gummow & Lehanne's Equity Doctrines and Remedies (4th ed, Butterworths, 2002) at para [6-500] where the learned authors state: A chose in action is, after all, the benefit of an obligation; and "equity" means in this context a defence, set-off or counter-claim which the person subject to the obligation is entitled to oppose to the claim of the person entitled to the benefit. The effect of the rule is that the defence, set-off or counter-claim is equally available against the assignee. 115 Ms Wade could only acquire the relevant causes of action from Mr Leroy "subject to all equities" which would in my opinion include Mr Wakeling's and Ms Muir's right to rely upon any defence (including under the Limitation Act 1969 (NSW)) that would be available to them if they were to be sued by Mr Leroy. Accordingly, there is nothing to be gained by requiring Mr Leroy to assign the relevant causes of action to Ms Wade or anyone else. DISPOSITION 116 I now return to the relief claimed by the various parties with a view to indicating what orders should be made. 117 First, it would be inappropriate to require Mr Leroy to execute any assignment of the causes of action the subject of the Supreme Court proceedings to Ms Wade. I therefore decline to make any order to that effect. 118 Secondly, the relief claimed by Ms Clarke and Mr Trnka must be refused. The reasons for refusing such relief will be apparent from what I have already said concerning the assignments upon which Ms Clarke and Mr Trnka relied and the failure of Mr Trnka and Ms Wade to persuade me that Mr Trnka has any equitable interest in the causes of action underpinning the family law proceedings. The appropriate order is that Ms Clarke's and Mr Trnka's application be dismissed. 119 Thirdly, it follows from the findings I have made in connection with Ms Clarke's and Mr Trnka's claims that Ms Wade's proposed cross-claim cannot succeed. The appropriate order is that the notice of motion seeking leave to file her proposed cross-claim be dismissed. 120 Fourthly, as to Ms Wade's notice of motion filed 10 January 2011, in my view it is also misconceived. There is no evidence to show that Mr Leroy ratified or adopted either of the Supreme Court proceedings. Nor is there any evidence to suggest that Mr Leroy made any disclaimer of any cause of action the subject of either of the Supreme Court proceedings in accordance with s 133(1) of the Act. Moreover, any such disclaimer would have operated to determine any right or interest of Ms Wade in respect of the relevant causes of action: see s 133(2). The notice of motion filed 10 January 2011 should also be dismissed. 121 Fifthly, I am satisfied that at least some of the declarations sought by Mr Wakeling should be made, but in slightly modified form. In addition to declaring that any of the causes of action which are the subject of either of the Supreme Court proceedings vest in Mr Leroy rather than Ms Wade, it may also be appropriate to declare that none of the purported assignments relied upon by Ms Wade, Ms Clarke and Mr Trnka were effective to assign, whether at law or in equity, any of the causes of action which GSR and AE may have had against Mr Wakeling or Mr Muir to either Ms Wade or Mr Leroy. 122 Sixthly, I refuse to grant Mr Wakeling an injunction restraining Ms Wade from taking any further step to prosecute the Supreme Court proceedings. If the Supreme Court proceedings are not terminated by mutual consent of the parties it will be a matter for the Supreme Court to determine whether and, if so, upon what terms, the Supreme Court proceedings should be terminated. 123 Seventhly, I am satisfied that Law Cover was duly authorised to commence and maintain Proceeding 212 in Mr Wakeling's name. The amended notice of motion filed in court on 28 March 2011 should be dismissed. 124 The only orders I propose to make at this stage is for the filing of written submissions in relation to the form of orders that should be made having regard to these reasons for judgment. 125 I shall make orders accordingly. I certify that the preceding one hundred and twenty-five (125) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas. Associate: Dated: 15 November 2011