Mayfair Capital Residential 2 LLP v Reim Katch Securities Ltd

Mayfair Capital Residential 2 LLP v Reim Katch Securities Ltd

Clause 5 of the Intercreditor Deed continues to apply after the appointment of a Receiver and after enforcement, entitling the junior lender to 50% of the net proceeds of each flat sold up to £1.5 million, as the clause is not limited by reference to enforcement or default, and the ICD contains no wording to the contrary. The construction advanced by the defendant is fanciful and unsupported by the text or context of the ICD.

Parties
Claimant: Mayfair Capital Residential 2 LLP; Defendant: Reim Katch Securities Ltd
Jurisdiction
England and Wales
Judgment Date
08 May 2024
Procedural Posture
Civil (commercial) / Summary Judgment Application
Outcome
Summary judgment granted in part; declaration granted; no order for payment/account at this stage
Legal Topics
Intercreditor Deeds, Contractual Interpretation, Summary Judgment, Declaratory Relief
Contract Law Banking and Finance Intercreditor Deeds Contractual Interpretation Summary Judgment Declaratory Relief

Case Brief

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Parties

Mayfair Capital Residential 2 LLP

Claimant

Reim Katch Securities Ltd

Defendant

Procedural Posture

Civil (commercial) / Summary Judgment Application

Legal Issues

  1. 1 Whether clause 5 (permitted payments) of the Intercreditor Deed continues to apply after the appointment of a Receiver/enforcement event
  2. 2 Proper construction of the Intercreditor Deed, specifically the interaction between clauses 5 and 13
  3. 3 Whether the junior lender is entitled to 50% of the net proceeds of sale of Flat 15 post-receivership

Ratio Decidendi

Clause 5 of the Intercreditor Deed continues to apply after the appointment of a Receiver and after enforcement, entitling the junior lender to 50% of the net proceeds of each flat sold up to £1.5 million, as the clause is not limited by reference to enforcement or default, and the ICD contains no wording to the contrary. The construction advanced by the defendant is fanciful and unsupported by the text or context of the ICD.

Court Disposition

Summary judgment granted in part; declaration granted; no order for payment/account at this stage

Orders

  • Declaration that clause 5 of the Intercreditor Deed continues in full force and effect after the appointment of a Receiver/enforcement event
  • No order for payment or account in relation to Flat 15 proceeds at this stage; parties may amend pleadings if necessary