As an assignee or transferee of a debt, how can you ensure
complete assignment and maximise the remedies available to recover
the debt (or monies representing it)?
A recent High Court decision has brought this question sharply
into focus, with the Court holding that the assignment of
non-contractual remedies in respect of a debt is not effective
unless expressly provided for.
How does this affect you?
raises potential concerns for assignees or transferees of debt
– whose right to non-contractual restitutionary remedies
in respect of the debt may have been lost; and
shows the willingness of the High Court to read down broad but
unspecific language – providing a reminder of the
importance of express and specific drafting.
In Equuscorp Pty Limited v Haxton HCA 7, the
respondents invested in tax driven blueberry farming schemes. In
breach of the Companies Code of each respondent's home
state, a prospectus with respect to the schemes was not
Each of the respondents entered into a loan agreement with Rural
Finance Pty Limited (Rural) to meet ongoing
expenses arising from their investment in the schemes. Rural
entered into an asset sale agreement and deed of assignment (the
Deed) with Equuscorp Pty Limited (the
Appellant) assigning the loan agreements and
amounts owing under them. The Deed was expressed to effect an
"absolute assignment" of the debt and "all legal
and other remedies" (emphasis added) under the loan
Due to the scheme's breach of the Companies Code
the loan agreements were unenforceable. As an alternative to
claiming under the loan agreements, the Appellant sought
restitution of the funds advanced to the respondents as "money
had and received". This left two issues for the Court to
whether the remedy of restitution is capable of assignment;
if the remedy was assignable, had it been effectively assigned
by the Deed?
At first instance, the Court accepted both that restitution
could be and was effectively assigned to the Appellant. The Court
of Appeal overturned this decision, holding that restitution had
not been available to Rural (as the assignor) and therefore was not
available to the Appellant (as the assignee) and that in any event,
it had not been effectively assigned by the Deed.
The Court's decision
In dismissing the appeal, the High Court made the following
rulings by majority1:
the remedy of restitution, where the debt in question is
unenforceable, is capable of assignment2; and
the assignment by the Deed of the loan agreements and "all
legal and other remedies" under them, only transferred to the
Appellant the legal right to the debt together with legal remedies
for the enforcement of the loan agreements. The alternative action
of restitution was not seeking to enforce the loan agreements, but
rather to utilise a separate restitutionary remedy arising from the
money had and received by the respondents. This right to
restitution was not assigned to the Appellant under the
In reaching its decision, the High Court referred to an 1888
English decision4 on the interpretation of s25(6) of the
Judicature Act 1873, a precursor and equivalent section to
s199 of the Property Law Act 1974 (QLD). In the immediate
case, the Court noted that such legislative provisions were the
source of the "all legal and other remedies" language in
the Deed. The High Court followed the treatment of this language
set down by the 1888 English decision, noting the "inherent
limitations" of the language and that it was "not apt to
encompass non-contractual claims for restitutionary
In a commercially minded but unfortunately dissenting decision,
Heydon J's more practical approach, provided that the
commercial intent behind the words "all legal and other
remedies" was, in the context of an assignment of debt, to
convey all means by which it might have been necessary for the
Appellant to recover the economic equivalent of the debt, including
through a claim for restitution for money had and
How can you protect yourself?
To ensure you are protected as an assignee of debt in the event
the assigned loan contract turns out at a later date to be
unenforceable, assignment clauses must provide for the express
assignment of non-contractual rights (including for restitutionary
relief) in respect of money had and received.
1Majority judgment by French CJ, Crennan J and
Kiefel J. 2Equuscorp Pty Limited v Haxton  HCA 7 at
53. 3Equuscorp Pty Limited v Haxton  HCA 7 at
63-64. 4Read v Brown (1888) 22 QBD 128 at
132. 5Equuscorp Pty Limited v Haxton  HCA 7 at
This publication is intended to provide a general
information only and should not be relied upon as giving legal
advice. For legal advice on a specific issue, please contact one of
the lawyers at Gilbert & Tobin
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