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It has long been settled that future property, possibilities and expectancies are assignable in equity for value

In Tailby v Official Receiver (1888) 13 App Cas 523, 543, Lord Macnaghten stated: ‘It has long been settled that future property, possibilities and expectancies are assignable in equity for value’.

However, a present right to receive property in the future (a chose in action) may be assigned in equity voluntarily (Shepherd v Commissioner of Taxation (Cth) (1965) 113 CLR 385; Norman v Federal Commissioner of Taxation (1963) 109 CLR 9). Further, a mere expectancy cannot be assigned for value or voluntarily at law or in equity.

Discuss the principles relating to the assignment of future property, expectancies and mere expectancies.

How far do these principles reflect the history and nature of equity?



Consideration of the precise legal and conceptual principles relating to the assignment of future property, expectancies and mere expectancies demands the discussion of both the history and nature of equity law. In order to answer this question, I will first begin my essay by examining precisely what assignment is and, second, discussing voluntary assignments of equitable property, assignments of future property, and the distinction between present and future property. What will be seen is that the principles of the law in relation to the aforementioned laws have remained stable and have not changed that much since the principles were themselves established.  As a prepatory exercise, I will commence with a background on what assignment is.


Under the law in Australia, an assignment is referred to, according to Windeyer J in Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 26 as being the instant reallocation of an already existing proprietary right from one party to another, whether it was vested or contingent. On the other hand, an assignment in equity roughly refers to the acceptance in equity of the transfer of the property.  It is perhaps a subtle recognition that despite the fact that, in particular instances, a prescriptive procedure of an assignment at law is incomplete. If for example, the court of equity is willing to neglect in drawing attention to a failure in meeting any statutory requirements, assuming that the principles and rules in equity are satisfied.[1] In determining if a property has been assigned in equity, it is necessary to ask oneself if the assignment is for the purposes of valuable consideration or, in the alternative, a voluntary act.[2] The next question to determine, once the previous has been answered satisfactorily, is if the property itself was able to be constituted as an assignment in law. Upon my study of the above principles, and principles I will discuss later, I have concluded that the the rules and principles prevailing in the recog­nition of assignments in equity clear reflect the long historical existence of certain maxims of equity.

Of significant note, however, is the fact that equity regards as done that which ought to be done; that equity will not perfect an imperfect gift; and that equity will not assist a volunteer. It is crucial to determine the kind any given transaction is—meaning, exactly how, and sometimes when, the donor meant the gift to take effect. What is most important is the intention of the apparent donor as regards to, first, whether a gift actually exists and, second, how the gift is supposed to take effect: Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148. In this case, Higgins J explained the principle at 167, to wit: ‘I do not know how there can be any assignment of property—putting aside an assignment by operation of law … without the intention of the assignor to assign—to pass the property out of himself into someone else.’ The donor’s intention concerning when and how a gift is to be affected is important. Once the intended form of the transactions is determined, ascertaining the applicable test to resolve whether the assignment has taken place will be possible. For example, the conveyance of a binding direction to a trustee is a requirement for the voluntary assignment of equitable property to the said trustee by way of direction. Assigning the same interest through declaration of trust (formation of a sub-trust) can be carried out sans communication to the trustee.

Assignments of Future Property

Both common law and equity will not acknowledge any ostensible voluntary alienation of property not presently held but is intended to be subsequently acquired by the assignor. Nevertheless, equity will consider an assignment of such ‘future property’ as long as it is made for value. A transaction such as this will be understood to be an agreement to assign the property at the time of its acquisition: Norman v FCT (1963) 109 CLR 9 at 24, per Windeyer J. According to Deane J, then in the Federal Court, in FCT v Everett (1978) 38 FLR 26 at 50; 21 ALR 625 at 643—4:

That law is straightforward enough but there are four areas of difficulty in applying it. The first concerns the distinction between present and future property, particularly between present rights which create some advantage in the future and that future benefit. The second question deals with the basis of this principle and whether such agreements are specifically enforceable per se or whether specific performance is only available if the subject matter of the agreement is property which would nor­mally attract that remedy. The third is connected with the second and concerns the issue whether these rules apply to contracts for the sale of goods or whether the Sales of Goods Acts of the various States codify the law governing such agreements. The fourth examines the nature of the assignee’s rights before the acquisition of the prop­erty by the assignor, especially in cases involving the bankruptcy of the assignor.

The Distinction Between Present and Future Property

[3.36] Certain things are obviously future property—a share of the estate (under a will) of one still living: Re Lind [1915] 2 Ch 345; recoverable damages in a pending case: Glegg v Bromley [1912] 3 KB 474; future book debts: Tailby v Official Receiver (1888) 13 App Cas 523; future royalties arising from some creative or storybook work: Re Trytel [1952] 2 TLR 32; and other things such as payable interest under a mortgage, payable rent under a lease, unearned freight, and copyright in songs that have yet to be written. The first two demonstrate the prime source of complications in this context since both are the results of some present right.

In the case of Norman v FCT (1963) 109 CLR 9, a taxpayer intended to assign to his wife—through a deed—a sum of money which he was otherwise meant to collect. The deed included certain items of income such as ‘all his right title and interest in and to certain interest to accrue due on a loan repayable by the borrower at will’ and ‘all his right title and interest in and to all the … dividends’  which could possibly be declared by public companies on certain stocks. The court decided that both the dividends and the interest under the loan were contingencies which were not permitted to be assigned without consideration. Windeyer J dissented on the ground that the assigned interest arose from a present right and was to be paid at a date in the future.

In Shepherd v FCT (1965) 113 CLR 385, Mr Shepherd had a patent under his name and a licence for their mass production was given in exchange for royalties in the amount of 5 per cent of the gross selling price. It appears that, in 1957, he assigned by deed poll to some assignees, ‘absolutely and unconditionally,’ all his ‘right, title and interest in and to an amount equal to ninety per centum of the income which may accrue during a period of three years …’ from royalties arising from the licence agreement. A tax on his alleged assignment was charged against him. It was held by the High Court, Barwick CJ and Kitto J, with Owen J dissenting, that the deed was understood to include an assignment of 90 per cent of Shepherd’s present rights and, hence, was to be taken as an effective assignment. An analogy was made by Kitto J between the current contractual right to be paid royalties: the tree, and the fruit, which constituted the payments to which Shepherd was entitled under the agreement. His Honour differentiated Shepherd’s case from Norman’s, stating that the loan could be paid back at any time, hence, the right to receive becomes an expectancy. In Shepherd, on the other hand, the relationship between the contracting parties, together with the right to be paid earned royalties, would last for three years, as stated in the deed poll. This is true even if the manufacturer fails to sell or produce any castors.

Bearing in mind the outcome of both cases, the question involved relates to the drafting of the deed, although Shepherd and Norman used similar wordings in their assignments. When Kitto J contrasted the facts in Norman from that in Shepherd, he noted that the relationship between the contracting parties (borrower and lender) in Norman could be concluded at any time during the year by the borrower, hence, it was made into an expectancy. However, in Shepherd, the licence agreement allowing the manufacture of castors was to continue for three years, whether or not any castors were turned out. With all due respect, that interpretation appears misconceived and the analysis made by Windeyer J in Norman should be given greater weight on the grounds of law and logic. Even though a present right may be terminated at a moment’s notice, it does not mean it is less of a present right. By the same logic, the fact that a present right may not yield any ‘fruit’ does not convert it into an expectancy either. What does it matter that a present right, or a small part of it, cannot be assigned? This should be differentiated from a true expectancy, like an “interest” in the estate of a living person. There is no present right in this case. A right may never actually come to exist. The supposed assignee may die before the nominated testor. But that is a whole different scenario from that in which a present right is identifiable. As an example, if A hands a lottery ticket to B, it is not an assignment of an expectancy, and hence, void if no consideration was given, only because the ticket has a chance of not winning. According to Barwick CJ in Shepherd, at 393:

That a promise may not be fruitful does not make it incapable of assignment’. The fact that a present right might prove barren should not alter its character as a present right while, at the same time, the fact that potential income, or some other property not yet acquired by the assignor, is certain to come into his or her hands should not alter its character as future property pending its receipt.

This interpretation was applied in Williams v IRC [1965] NZLR 395 by Hardie Boys J wherein a taxpayer tried to assign the first £500 of the net income of a trust engaged in a grazing business for his own gain. It was held by His Honour that the first £500 was merely an expectancy since the trust has the possibility of earning income or not. In McLeay v IRC (1963) 9 AITR 265, an alleged voluntary disposition of the entire interest payable under a mortgage was found to be valid, although the said mortgage was due at any time after a certain date. McCarthy J noted that the right of a mortgagee to receive under a mortgage was a present chose in action, although the interest was due and demandable at some future time. Both these cases are generally taken as examples of the hardships that can be found in differentiating between the present and future property. Nevertheless, the level of unpredictability accompanying the probable acquisition of some income or property by the assignor cannot determine whether it is an expectancy or not, the same was that the level of probability that some present right will give rise to fruit is not the suitable assessment to resolve whether the interest involved is present or future property. The likelihood that a present right may be cut short at any time does not miraculously transform it into future property. The chance of such a termination may have an effect on the value of the interest, but it does not necessarily transform a present right into an after acquired one.


It is thus clear that a present right to be the beneficiary in receiving certain property is able in being assigned in equity voluntarily. The phrase ‘future property’ refers to property that might move in the direction of being in existence at a certain future date. The phrase ‘expectancy’ is also used to express this idea. Thus, for example, it can be seen that dividends, prior to being realised and becoming payable as debts by the company to shareholders, are an example of future property or an expectancy. It was stated in Ansett Australia Limited v Travel Software Solutions Pty Ltd [2007] VSC 326 at [51] by Hargrave J stated that ‘[i]t is not strictly possible to assign a mere expectancy or possibility, because it is not an existing chose in action’. The future question remains as to how such future property will legally defined given the broad-reaching impact of technologly.



Ansett Australia Limited v Travel Software Solutions Pty Ltd [2007] VSC 326.

FCT v Everett (1978) 38 FLR 26.

Glegg v Bromley [1912] 3 KB 474

McLeay v IRC (1963) 9 AITR 265,

Norman v Federal Commissioner of Taxation (1963) 109 CLR 9

Re Trytel [1952] 2 TLR 32

Shepherd v FCT (1965) 113 CLR 385

Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148

Tailby v Official Receiver (1888) 13 App Cas

Williams v IRC [1965] NZLR 395


Journal Articles

James McConvill, ‘Do Shares Constitute Property? Reconsidering a Fundamental, yet Unresolved, Question’ (2005) 79 Australian Law Journal 251.


Gray K and Gray S 1998, ‘The Idea of Property in Land’ in Bright S and Dewar J (eds), Land Law; Themes and Perspectives, Oxford University Press, Oxford.

James Penner, The Idea of Property in Law, Oxford University Press, Oxford, 2000

[1] Holroyd v Marshall (1862) 11 ER 999.

[2] Ibid, 1007.

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