Canary Wharf Finance II Plc v Deutsche Trustee Company Ltd & Ors [2016] EWHC 100 (Comm) (28 January 2016)

Canary Wharf Finance II Plc v Deutsche Trustee Company Ltd & Ors [2016] EWHC 100 (Comm) (28 January 2016)

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

Citation
[2016] EWHC 100 (Comm)
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
Part 8 Claim (construction of Contract) / First Instance Judgment
Outcome
Claim dismissed; declarations granted in favour of Representative Noteholders and Trustee.
Legal Topics
Interpretation of Contractual Terms, Redemption of Notes, Premium on Early Redemption, Securitisation Structure
Commercial Law Contract Law Securitisation Interpretation of Contractual Terms Redemption of Notes Premium on Early Redemption Securitisation Structure

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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

Part 8 Claim (construction of Contract) / First Instance Judgment

Legal Issues

  1. 1 Whether redemption of Fixed Rate Notes following prepayment under clause 17.20(a)(ii) of the ICLA is 'mandatory' or 'optional' 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 a voluntary prepayment, not a mandatory one. 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; declarations granted in favour of Representative Noteholders and Trustee.

Orders

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