RIL Aviation HL 7740 and HL 7741 Pty Ltd v Alliance & Leicester plc & Ors [2011] NSWCA 423

RIL Aviation HL 7740 and HL 7741 Pty Ltd v Alliance & Leicester plc & Ors [2011] NSWCA 423

Clause 8.10 of the RILA Financing Deed obliges RILA to pay the management fee to the duly appointed Manager, including any replacement Manager, such as Ladbroke, consistent with the deed's substitution provisions. Further, RILA's direction that funds be paid into a third-party account did not breach the negative pledge clause, as it was given to the Security Trustee (requiring its consent) and any funds would have been held on trust for RILA. Thus, there was no event of default, and the appeals on both issues should be dismissed.

Parties
Appellant: RIL Aviation HL 7740 and HL 7741 Pty Limited; First Respondent: Alliance & Leicester plc; Second Respondent: Allco JS Pty Limited; Third Respondent: Ladbroke Management Pty Limited
Jurisdiction
Australia
Judgment Date
22 December 2011
Procedural Posture
Appeal / Judgment on Appeal and Cross Appeal
Outcome
Appeal and cross-appeal dismissed with costs.
Legal Topics
Construction of Contract, Remuneration of Manager, Appointment of Replacement Manager, Negative Pledge Clause, Trust Intention, Event of Default, Costs Orders
Contract Law Securities Law Trusts Law Construction of Contract Remuneration of Manager Appointment of Replacement Manager Negative Pledge Clause Trust Intention +2 more

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Parties

RIL Aviation HL 7740 and HL 7741 Pty Limited

Appellant

Alliance & Leicester plc

First Respondent

Allco JS Pty Limited

Second Respondent

Ladbroke Management Pty Limited

Third Respondent

Procedural Posture

Appeal / Judgment on Appeal and Cross Appeal

Legal Issues

  1. 1 Whether RILA is obliged to pay the monthly management fee to Ladbroke as replacement Manager under the RILA Financing Deed
  2. 2 Whether RILA's conduct in relation to funds constituted a breach of the negative pledge and an event of default
  3. 3 Whether costs orders should be disturbed

Ratio Decidendi

Clause 8.10 of the RILA Financing Deed obliges RILA to pay the management fee to the duly appointed Manager, including any replacement Manager, such as Ladbroke, consistent with the deed's substitution provisions. Further, RILA's direction that funds be paid into a third-party account did not breach the negative pledge clause, as it was given to the Security Trustee (requiring its consent) and any funds would have been held on trust for RILA. Thus, there was no event of default, and the appeals on both issues should be dismissed.

Court Disposition

Appeal and cross-appeal dismissed with costs.

Orders

  • Appeal and cross appeal dismissed.
  • Appellant to pay the respondents' costs of the appeal.