Landco Group Middleton Grange Pty Ltd atf LGMG Unit Trust v Australian Agrivision Pty Ltd [2026] NSWSC 1153 — Assignment Of Choses In Action & Assignment — Barrister AI
Landco Group Middleton Grange Pty Ltd atf LGMG Unit Trust v Australian Agrivision Pty Ltd
PERSONAL PROPERTY — Assignment of choses in action — Of debts and causes of action — Where plaintiff obtained a loan from a lender, which was secured over its assets by a general security agreement — Where lender entered into deed of assignment to first defendant, an associated entity, with respect to the loan and general security agreement — Where first defendant issued a letter of demand after maturity of the loan for the entire balance owing — Where letter of demand referred to plaintiff being ‘previously notified’ of assignment of loan and security — Where first defendant appointed receivers to plaintiff pursuant to general security agreement after failure to repay — Whether appointment of receivers valid — Whether assignment effective at law — Whether letter of demand satisfied requirement in s 12 Conveyancing Act 1919 (NSW) to give written notice of assignment
EQUITY — Assignment — Of legal interests — In personal property — Where first defendant would be an equitable assignee of general security agreement if assignment is not effective at law — Whether first defendant as equitable assignee can exercise right under general security agreement to appoint receivers out of court
EQUITY — Fraud on a power — Ulterior purpose — Where sole director of first defendant was involved in separate property development project with sole director of plaintiff, unrelated to the loan — Where dispute had arisen amongst parties to the project — Whether power to appoint receivers to plaintiff under general security agreement was invalidly exercised because it was done in bad faith for an improper purpose — Whether receivers were appointed to plaintiff by first defendant in order for sole director of first defendant to gain a collateral benefit in relation to the project — Whether any improper purpose was the substantial object of the exercise of power
Quick Take
1A letter of demand that erroneously states that notice of assignment was 'previously' given can nonetheless itself constitute 'express notice in writing' of the assignment for the purposes of s 12 of the Conveyancing Act 1919 (NSW), provided that, read as a whole, it makes clear to the debtor that the assignee claims entitlement to exercise rights under the assigned agreements; the erroneous reference to prior notice is treated as inaccurate surplusage.
2An equitable assignee of a charge who has not given notice sufficient to perfect a legal assignment cannot exercise a contractual power to appoint receivers out of court, because the equitable assignee's rights lie against the assignor rather than the debtor; the contrary authority of Harpur v Ariadne Australia Ltd should not be followed.
3Where a mortgagee or chargee exercises a power to appoint receivers with mixed purposes — one proper (recovering the debt) and one improper (placing pressure on the borrower's director in an unrelated commercial dispute) — the exercise is not invalidated if the substantial object forming the real ground of the action was the proper purpose; the donee's collateral motivation in timing the exercise does not convert a proper exercise into a fraud on the power, particularly where the default was genuine and not contrived.
