Assignment of debts

Sally is a successful entrepreneur, focusing most of her attention on buying defaulted debts from financial institutions.

It’s lucrative if done right, but sometimes it can be a headache – as she recently found out.

Back in October 2011, Sally purchased $15k in debt from Westpac, for only $500.

The debt was owed by Mark to Westpac, from back in 2005.

This ‘purchase’ was in effect an assignment of Westpac’s “chose in action” to Sally; meaning Sally had the right to collect against Mark.

In September 2014 Sally made Mark a bankrupt.

Some 2.5 years later, Mark decided that the assignment was unfair and applies to the Federal Court (“FC”).

He claims that the notice of assignment wasn’t received and the bankruptcy should be annulled/cancelled (s153B(1) Bankruptcy Act).

Under the equivalent Property Act in most States and Territories (eg s199 in QLD), it is a requirement that an assignment be effected by giving “express notice” to Mark. 

The FC held that because Westpac had posted notice to Mark’s home, and it had not been returned to sender, the Court was satisfied that Mark had express notice of the assignment (per s160(1) Evidence Act (Cth)).

Now Mark has to pay costs, but Sally has still wasted her time and money.

… something light for a Monday morning.

#SVVoidables

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