Canary Wharf Finance II Plc v Deutsche Trustee Company Ltd & Ors

Canary Wharf Finance II Plc v Deutsche Trustee Company Ltd & Ors

A prepayment under clause 17.20(a)(ii) of the ICLA is voluntary, not mandatory. Therefore, redemption of Fixed Rate Notes using such proceeds is an optional redemption under condition 5(c), requiring payment of a premium.

Parties
Claimant: Canary Wharf Finance II PLC; First Defendant: Deutsche Trustee Company Limited; Second Defendant: Aviva Life & Pensions UK Limited; Third Defendant: Aviva Annuity UK Limited; Fourth Defendant: Friends Life Limited; Fifth Defendant: Legal & General Assurance (Pensions Management) Limited; Sixth Defendant: The Prudential Assurance Company Limited; Seventh Defendant: Prudential Retirement Income Limited; Eighth Defendant: Scottish Widows Investment Partnership Property Trust; Ninth Defendant: Scottish Widows Investment Partnership Investment Funds UK ICVC – Corporate Bond Plus Fund; Tenth Defendant: Scottish Widows Investment Partnership Investment Fund UK ICVC – Sterling Bond Plus Fund
Jurisdiction
England and Wales
Judgment Date
28 January 2016
Procedural Posture
Commercial Court Part 8 Claim / Judgment After Trial of Preliminary Issue
Outcome
Claim dismissed; counterclaim for declaration allowed
Legal Topics
Interpretation of Commercial Contracts, Securitisation, Redemption of Notes, Premium on Early Redemption, Trust Deeds
Banking and Finance Law Contract Law Interpretation of Commercial Contracts Securitisation Redemption of Notes Premium on Early Redemption Trust Deeds

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Parties

Canary Wharf Finance II PLC

Claimant

Deutsche Trustee Company Limited

First Defendant

Aviva Life & Pensions UK Limited

Second Defendant

Aviva Annuity UK Limited

Third Defendant

Friends Life Limited

Fourth Defendant

Legal & General Assurance (Pensions Management) Limited

Fifth Defendant

The Prudential Assurance Company Limited

Sixth Defendant

Prudential Retirement Income Limited

Seventh Defendant

Scottish Widows Investment Partnership Property Trust

Eighth Defendant

Scottish Widows Investment Partnership Investment Funds UK ICVC – Corporate Bond Plus Fund

Ninth Defendant

Scottish Widows Investment Partnership Investment Fund UK ICVC – Sterling Bond Plus Fund

Tenth Defendant

Procedural Posture

Commercial Court Part 8 Claim / Judgment After Trial of Preliminary Issue

Legal Issues

  1. 1 Whether redemption of Fixed Rate Notes following prepayment under clause 17.20(a)(ii) of the ICLA is a mandatory or optional redemption under the Conditions
  2. 2 Whether a premium is payable on such redemption

Ratio Decidendi

A prepayment under clause 17.20(a)(ii) of the ICLA is voluntary, not mandatory. Therefore, redemption of Fixed Rate Notes using such proceeds is an optional redemption under condition 5(c), requiring payment of a premium.

Court Disposition

Claim dismissed; counterclaim for declaration allowed

Orders

  • Declaration that redemption of Fixed Rate Notes using proceeds of prepayment under clause 17.20(a)(ii) of the ICLA is an optional redemption under condition 5(c), requiring payment of a premium.
  • Declaration that, in relation to the sale of HQ5, the amount of £168,746,800 plus accrued interest is payable to the holders of the Class A1 Notes.