Dearle Vs Hall Case: The Rule Of Dearle V Hall

The rule of Dearle v Hall further provides that a notice must be given to a debtor, trustee or any other holder of the fund according to the circumstances of the fund. Therefore the performance to the legal or equitable obligation that has been subjected to the assignment lies with the person who receives the notice as the assignor and the person who gives the notice as the assignee. In the circumstances where there are more than one trustees, a notice to one of them becomes effective whether such trustee notifies the other trustees or not. The rule also applies even when circumstantially the trustee who receives the initial notice ceases the capacity as a trustee through death or retirement without having communicated to the co-trustees the …show more content…
From this perspective the awareness of a preceding assignment by the assignee makes it difficult for the assignee to attain priority over the preceding assignment even where the debtor has been notified by the subsequent assignee. In a situation where the receivable had been assigned and notification for the assignment received by the debtor prior to the commencement of insolvency proceedings, the law provides that the assignee has priority over the rights to the assignment held by the insolvency administrator. This position of the law thus may be argued to be rigorous and cumbersome prima facie in that the potential assignee or assignees of the receivable would have to enquire from the debt holder with high level of accuracy and timeliness in response from such debtor whether there are any assignments to the receivables prior to their assignment. The said debtor is expected to know and give with accuracy the receivables that have already been …show more content…
In such a situation the potential assignee or assignees will find it difficult to identify the debtors. The system of requiring the assignees to first gather information whether the receivables have been assigned therefore becomes a costly exercise for the assignees causing inefficiency and losses in the business of receivables. In the area of assignment of receivables, the English law has been fragmented to cater for assignments by companies and individuals where it provides that the assignments by a company is registrable only if such assignment is by way of security over book debts. Under the English law, an assignment by way of sale is not registrable. However the law does not restrict the registration of assignments by individuals irrespective of the type. In the effort to harmonise the registration of assignments, the Law commission has given recommendations in its report in support for the registration of assignments by companies as well. This position has serious implications while viewed in the perspective of charge over receivable which is practically similar to the sale of receivables. Just like the charge over receivables is registrable, the sale of receivables should also be allowed and implemented to avoid the ensuing implication of non-registration. Failure to register the sale of receivables results to reliance by the assignee on representations of the