KBL Mining Limited v Kidman Resources Limited & Ors [2015] NSWSC 515

KBL Mining Limited v Kidman Resources Limited & Ors [2015] NSWSC 515

The difference between the subscription and redemption values of the notes constituted interest on the Secured Money under the Note Issuance Deed and General Security Agreement. No further interest was payable; all relevant RIKID notices were invalid as RIKID did not consider in good faith that default events existed. The General Security Agreement should for abundant caution be rectified to reflect the parties' common intention (no further interest). RIKID's improper conduct in issuing default notices and demands disentitled it to enforcement costs under the agreement; KBL was entitled to damages and costs.

Jurisdiction
Australia
Judgment Date
07 May 2015
Procedural Posture
Principal Judgment / Final Judgment and Orders
Outcome
Judgment for plaintiff; cross-summons dismissed
Legal Topics
['contract Interpretation' 'rectification' 'interest' 'costs Entitlement' 'contractual Indemnity' 'notice of Default' 'enforcement of Security']
['contract' 'equity' 'mortgages'] ['contract Interpretation' 'rectification' 'interest' 'costs Entitlement' 'contractual Indemnity' 'notice of Default' 'enforcement of Security']

Case Brief

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Procedural Posture

Principal Judgment / Final Judgment and Orders

Legal Issues

  1. 1 ["Whether the difference between subscription and redemption values of promissory notes is 'interest' under the related contract" 'Whether interest was payable under the General Security Agreement beyond redemption value' 'Whether RIKID validly considered that Events of Default had occurred to issue enforcement notices' 'Rectification of the General Security Agreement for common intention/mistake' 'Whether RIKID is entitled to contractual enforcement costs/indemnity in the circumstances']

Ratio Decidendi

The difference between the subscription and redemption values of the notes constituted interest on the Secured Money under the Note Issuance Deed and General Security Agreement. No further interest was payable; all relevant RIKID notices were invalid as RIKID did not consider in good faith that default events existed. The General Security Agreement should for abundant caution be rectified to reflect the parties' common intention (no further interest). RIKID's improper conduct in issuing default notices and demands disentitled it to enforcement costs under the agreement; KBL was entitled to damages and costs.

Court Disposition

Judgment for plaintiff; cross-summons dismissed

Orders

  • ['All eight RIKID notices declared invalid and of no effect' 'No interest became payable by KBL to RIKID under clause 4 of the General Security Agreement; RIKID was obliged to discharge security on payment of $12,600,000' 'General Security Agreement rectified to insert clause clarifying no interest payable if repaid...