Trusting the signs to assign: assigning causes of action of trustee companies

Liquidators generally have the power to assign causes of action belonging to a company, or claims conferred on the liquidator by the Corporations Act 2001 (Cth) (Act). However, a liquidator’s power to sell or assign causes of action has certain limitations which were considered in Anderson v Canaccord Genuity Financial Limited [2022] NSWSC 58 (Anderson Judgment). In particular, limitations may arise in circumstances where the company acted in a capacity as trustee of a trust, which highlights the complexities that generally arise when a corporate trustee is placed in liquidation.
In the Anderson Judgment, the Court found that where the causes of action arose from breaches of duty owed to a company in its capacity as a trustee of a trust, and the company in liquidation ceased to act as trustee (as is often the case), the proper plaintiff was the new trustee of the trust. Contrary to some previous cases, the Court also seems to suggest that liquidators can assign rights which are proprietary in nature (such as, for example, judgment debts) and personal rights (such as, for example, claims for misleading and deceptive conduct).
The Anderson Judgment creates some uncertainty about whether personal rights to sue which are held by a company are also capable of assignment, and if so what rights can be assigned. In circumstances where there are conflicting judgments, practitioners should seek legal advice prior to negotiating the assignment of claims which might be considered 'personal' to the company. In addition and in general, when considering whether to assign any claims or rights to sue, practitioners should carefully consider the nature and merits of the claims sought to be assigned.
Read the original article:
Trusting the signs to assign: assigning causes of action of trustee companies
Read more articles from The Annual Return: 2022 in Review.
Keep up to date with our legal insights and events
Sign upRecent articles

New point of law: What can be considered as a protected document?
By Patrick Ibbotson, Susanne Rakoczy
A look at Environment Protection Authority v Sydney Water Corporation [2023] NSWLEC 119.

Applications to replace trustees in bankruptcy: Insights for trustees from the bankrupt estate of Salim Mehajer
By Marelda Hibberd & Michael Wells
The Court’s judgment and insights to assist trustees navigate difficult estates and deal with recalcitrant bankrupts.

Australian Modern Slavery Act Review: what you need to know and how you can prepare
By Sonia Sharma, Chloe Tutt, Javvad Jaffry, Colin Yuan
Our anti-modern slavery compliance experts outline some of the key recommendations from the Report.

Stormy weather delays Microsoft’s acquisition of Activision Blizzard
Global regulators out of sync on Microsoft's $69 billion purchase of video game giant.
Partner
Melbourne