Reliance Rail Pty Limited v Permanent Custodians Limited [2017] NSWSC 1111

Reliance Rail Pty Limited v Permanent Custodians Limited [2017] NSWSC 1111

Clause 7.4 of the Senior Intercreditor Deed conferred a separate right to raise Financial Indebtedness to refinance all Senior Debt or all Debt without creditor approval if its stated conditions were met. The words requiring satisfaction or waiver of any restriction upon redemption referred only to positive restrictions imposed by express language of a relevant Debt Financing Document, not to a negative restriction arising from the general law or the absence of an early redemption right. The amounts required for creditors to be Finally Paid included amounts payable, contingently owing, or reasonably likely to become owing under the indemnity in cl 8.2 of the Common Terms Deed. The same...

Jurisdiction
Australia
Judgment Date
23 August 2017
Procedural Posture
Equity Commercial List / Principal Judgment on Construction Issues and Declaratory Relief; Parties to Bring in Draft Orders
Outcome
The plaintiffs succeeded to the extent indicated; the declaration concerning the proposed amendments was not made; the sixth, seventh and eighth issues were not pressed; parties were directed to bring in short minutes of order.
Legal Topics
['construction of Commercial Contracts' 'refinancing of Debt' 'redemption of Bonds' 'intercreditor Deed' 'bond Trust Deed' 'indemnity' 'declaratory Relief']
['contract Law' 'commercial Law' 'finance and Securities'] ['construction of Commercial Contracts' 'refinancing of Debt' 'redemption of Bonds' 'intercreditor Deed' 'bond Trust Deed' 'indemnity' 'declaratory Relief']

Case Brief

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Procedural Posture

Equity Commercial List / Principal Judgment on Construction Issues and Declaratory Relief; Parties to Bring in Draft Orders

Legal Issues

  1. 1 ['Whether, on the proper construction of the Senior Intercreditor Deed and Senior Bond Trust Deed, the second plaintiff could redeem Senior Bonds before maturity under cl 7.4 without approval of Senior Bondholders or any other Creditor.' 'What conditions had to be satisfied for redemption or refinancing under cl 7.4 of the Senior Intercreditor Deed.' 'Whether the amount payable on redemption of Senior Bonds and Junior Bonds was limited to principal, accrued interest and redemption amounts, or also included amounts due under the indemnity in cl 8.2 of the Common Terms Deed.' 'Whether the same construction applied to redemption of Junior Bonds under the Senior Intercreditor Deed and Junior Bond Trust Deed.' 'Whether proposed amendments to cl 8.2 of the Common Terms Deed required a Unanimous Decision and whether declaratory relief should be granted.']

Ratio Decidendi

Clause 7.4 of the Senior Intercreditor Deed conferred a separate right to raise Financial Indebtedness to refinance all Senior Debt or all Debt without creditor approval if its stated conditions were met. The words requiring satisfaction or waiver of any restriction upon redemption referred only to positive restrictions imposed by express language of a relevant Debt Financing Document, not to a negative restriction arising from the general law or the absence of an early redemption right. The amounts required for creditors to be Finally Paid included amounts payable, contingently owing, or reasonably likely to become owing under the indemnity in cl 8.2 of the Common Terms Deed. The same...

Court Disposition

The plaintiffs succeeded to the extent indicated; the declaration concerning the proposed amendments was not made; the sixth, seventh and eighth issues were not pressed; parties were directed to bring in short minutes of order.

Orders

  • ['Parties to bring in draft orders.' 'The parties are directed to bring in short minutes of order to give effect to the reasons.' 'The proceedings are stood over to Monday 28 August at 10:00am before McDougall J for the making of orders.' 'If the parties are able to agree before then on the form of orders to be...