Mayfair Capital Residential 2 LLP v Reim Katch Securities Ltd [2024] EWHC 1920 (Ch) (18 June 2024)

Mayfair Capital Residential 2 LLP v Reim Katch Securities Ltd [2024] EWHC 1920 (Ch) (18 June 2024)

Clause 5 of the ICD, which entitles the junior lender to 50% of the net sale proceeds from each flat up to a total of £1.5 million, continues to operate after the appointment of a receiver and is not displaced by enforcement or receivership. The ICD's language is clear, and the permitted payments carve-out remains effective until the £1.5 million threshold is reached. The pleadings do not support an immediate order for payment or equitable compensation, but a declaration as to the continuing effect of clause 5 is appropriate.

Citation
[2024] EWHC 1920 (Ch)
Parties
Claimant: Mayfair Capital Residential 2 LLP; Defendant: Reim Katch Securities Ltd
Jurisdiction
England and Wales
Judgment Date
18 June 2024
Procedural Posture
Commercial Summary Judgment Application / Summary Judgment Determination
Outcome
Summary judgment granted in part; declaration granted as to the continuing effect of clause 5; no order for payment or equitable compensation at this stage.
Legal Topics
Intercreditor Deeds, Contractual Interpretation, Summary Judgment, Declaratory Relief, Equitable Remedies
Commercial Law Banking and Finance Law Contract Law Intercreditor Deeds Contractual Interpretation Summary Judgment Declaratory Relief Equitable Remedies

Case Brief

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Parties

Mayfair Capital Residential 2 LLP

Claimant

Reim Katch Securities Ltd

Defendant

Procedural Posture

Commercial Summary Judgment Application / Summary Judgment Determination

Legal Issues

  1. 1 Whether clause 5 of the Intercreditor Deed (ICD) continues to apply after the appointment of a receiver, entitling the junior lender to permitted payments from net sale proceeds up to £1.5 million.
  2. 2 Whether the senior lender is obliged to account to the junior lender for 50% of the net proceeds of Flat 15 under the ICD.
  3. 3 Whether the pleadings support an order for equitable compensation or an account.

Ratio Decidendi

Clause 5 of the ICD, which entitles the junior lender to 50% of the net sale proceeds from each flat up to a total of £1.5 million, continues to operate after the appointment of a receiver and is not displaced by enforcement or receivership. The ICD's language is clear, and the permitted payments carve-out remains effective until the £1.5 million threshold is reached. The pleadings do not support an immediate order for payment or equitable compensation, but a declaration as to the continuing effect of clause 5 is appropriate.

Court Disposition

Summary judgment granted in part; declaration granted as to the continuing effect of clause 5; no order for payment or equitable compensation at this stage.

Orders

  • Declaration that clause 5 of the ICD continues to apply after the appointment of a receiver, entitling the junior lender to permitted payments up to £1.5 million.
  • No order for payment or equitable compensation due to deficiencies in the pleadings.