PGC may take Torchlight case to Supreme Court

Wednesday 3rd May 2017

By Rebecca Howard

May 3 (BusinessDesk) - Pyne Gould Corp said it will consider taking a case involving its Torchlight Fund No 1 LP unit to the Supreme Court after the Court of Appeal ordered it to pay a late payment fee to Wilaci.

The case concerns a loan to TLF1 from Wilaci, an entity connected with Australian businessman John Grill. Wilaci loaned the funds in August 2012 to help the Pyne Gould entity through what managing director George Kerr described as "a very tight liquidity situation" when Bank of Scotland International was leaving Australasia and calling for repayment from its debtors, including Torchlight's Australian real estate investment, RCL Group. A high-profile dispute with the Financial Markets Authority made it more difficult for Kerr to recapitalise Torchlight.

The loan was due to be repaid by Oct. 26, a deadline that was missed, although Wilaci didn't immediately call on the loan. Rather it managed the repayment through seven tranches between October 2013 and May 2014. TLF1 was placed in receivership in 2014.

In October 2015, the High Court ruled that a late payment fee claimed by Wilaci was a “penalty fee” and was unenforceable. Wilaci then appealed this ruling. The Court of Appeal yesterday delivered its judgment and overturned the High Court ruling. It has ordered the TLF1 to pay A$31.5 million in late payment fees to Wilaci.

“This ruling will be considered carefully and then there will be a decision as to whether it will be appealed to the Supreme Court,” said Kerr. PGC will also consider the judgment and determine whether the ruling is likely to have a material impact on PGC, and report to the market.

Pyne Gould shares last traded down 6 percent at 42 cents but are up 42 percent over the last 12 months.

(BusinessDesk)

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