RHG Mortgage Securities Pty Limited & Ors v Elektra Purchase No. 19 Limited [2009] NSWSC 258

RHG Mortgage Securities Pty Limited & Ors v Elektra Purchase No. 19 Limited [2009] NSWSC 258

The parties’ true common intention was that the rights under the Subscription Agreement, including indemnity for currency exchange and basis swap costs, were to be transferrable with an assignment of all the notes, and clause 14.30(b) fails to reflect this intention. Rectification is warranted to delete clause 14.30(b). Elektra, as assignee, is entitled to claim under the assigned rights. The amounts claimed, though containing some admitted calculation errors, did not exceed what Elektra was entitled to; calculation was in good faith and commercially reasonable manner. Restitution is not available to the plaintiffs as they were not disadvantaged beyond contractual entitlement.

Parties
First Plaintiff: RHG Mortgage Securities Pty Limited; Second Plaintiff: RHG Home Loans Pty Limited; Third Plaintiff: RHG Treasury Services Pty Limited; Fourth Plaintiff: Receivables Servicing Pty Limited; Defendant: Elektra Purchase No. 19 Limited
Jurisdiction
Australia
Judgment Date
08 April 2009
Procedural Posture
Commercial List Proceeding / Principal Judgment
Outcome
Rectification granted; parties to bring in short minutes of order; claims for restitution dismissed.
Legal Topics
Rectification, Assignment of Contractual Rights, Good Faith in Contract Performance, Interpretation of Commercial Agreements, Restitution for Mistake
Contract Law Equity Rectification Assignment of Contractual Rights Good Faith in Contract Performance Interpretation of Commercial Agreements Restitution for Mistake

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Parties

RHG Mortgage Securities Pty Limited

First Plaintiff

RHG Home Loans Pty Limited

Second Plaintiff

RHG Treasury Services Pty Limited

Third Plaintiff

Receivables Servicing Pty Limited

Fourth Plaintiff

Elektra Purchase No. 19 Limited

Defendant

Procedural Posture

Commercial List Proceeding / Principal Judgment

Legal Issues

  1. 1 Whether clause 14.30(b) of the Subscription Agreement terminates the plaintiffs’ obligations upon assignment of all notes
  2. 2 Whether rectification of the Subscription Agreement is available and who may seek it
  3. 3 Whether Elektra as assignee is entitled to indemnity and interest under assigned rights

Ratio Decidendi

The parties’ true common intention was that the rights under the Subscription Agreement, including indemnity for currency exchange and basis swap costs, were to be transferrable with an assignment of all the notes, and clause 14.30(b) fails to reflect this intention. Rectification is warranted to delete clause 14.30(b). Elektra, as assignee, is entitled to claim under the assigned rights. The amounts claimed, though containing some admitted calculation errors, did not exceed what Elektra was entitled to; calculation was in good faith and commercially reasonable manner. Restitution is not available to the plaintiffs as they were not disadvantaged beyond contractual entitlement.

Court Disposition

Rectification granted; parties to bring in short minutes of order; claims for restitution dismissed.