PK Airfinance SARL & Anor v Alpstream AG & Ors

PK Airfinance SARL & Anor v Alpstream AG & Ors

PK Airfinance did not owe a duty in equity or otherwise to Alphastream as junior lender or ultimate beneficiary under the cross-collateralisation structure, as Alphastream had no proprietary or equitable interest in the mortgaged aircraft or their proceeds. Even if a duty were owed, Alphastream suffered no ascertainable loss, as any loss was contingent on future events (sale of Caelus aircraft) and not actionable. The auction price paid by PK exceeded what could have been obtained from a third party at auction or by private sale at the relevant time. The 'special purchaser' analysis adopted by the trial judge was incorrect. There was no actionable breach, wilful misconduct, or conspiracy....

Parties
Appellant/cross Respondent: PK Airfinance SARL; Appellant/cross Respondent: GE Capital Aviation Services Limited; Respondent/cross Appellant: Alpstream AG; Respondent/cross Appellant: Alpstream Aviation Malta Limited; Respondent/cross Appellant: CIS Interfincom AG; Respondent/cross Appellant: Alphastream Limited
Jurisdiction
England and Wales
Judgment Date
21 December 2015
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeals allowed; claims by Alphastream dismissed.
Legal Topics
Mortgagee's Duties, Power of Sale, Breach of Duty, Remedies for Breach, Priority of Creditors, Special Purchaser Analysis, Wilful Misconduct, Conspiracy to Injure, Procurement of Breach
Banking and Finance Law Equity and Trusts Property Law Mortgagee's Duties Power of Sale Breach of Duty Remedies for Breach Priority of Creditors +4 more

Case Brief

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Parties

PK Airfinance SARL

Appellant/cross Respondent

GE Capital Aviation Services Limited

Appellant/cross Respondent

Alpstream AG

Respondent/cross Appellant

Alpstream Aviation Malta Limited

Respondent/cross Appellant

CIS Interfincom AG

Respondent/cross Appellant

Alphastream Limited

Respondent/cross Appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether PK Airfinance owed a duty to Alphastream as junior lender or ultimate beneficiary under the cross-collateralisation structure when exercising its power of sale over mortgaged aircraft.
  2. 2 Whether PK breached its duty as mortgagee to obtain the best price reasonably obtainable for the mortgaged aircraft.
  3. 3 Whether Alphastream suffered actionable loss as a result of any breach.

Ratio Decidendi

PK Airfinance did not owe a duty in equity or otherwise to Alphastream as junior lender or ultimate beneficiary under the cross-collateralisation structure, as Alphastream had no proprietary or equitable interest in the mortgaged aircraft or their proceeds. Even if a duty were owed, Alphastream suffered no ascertainable loss, as any loss was contingent on future events (sale of Caelus aircraft) and not actionable. The auction price paid by PK exceeded what could have been obtained from a third party at auction or by private sale at the relevant time. The 'special purchaser' analysis adopted by the trial judge was incorrect. There was no actionable breach, wilful misconduct, or conspiracy....

Court Disposition

Appeals allowed; claims by Alphastream dismissed.

Orders

  • Appeals by PK Airfinance and GECAS allowed.
  • Judgment of the High Court set aside.