Uitspraak
judgment
AMSTERDAM DISTRICT COURT
Netherlands Commercial Court
NCC District Court
Case reference number: NCC 22/016 (C/13/722226 NC ZA 22-4)
Judgment
19 April 2023
In the matter of:
the company with limited liability (Aktiengesellschaft)
organised and existing under the laws of Switzerland,
ILKA A.G.,
having its principal place of business in Aesch, Switzerland,
claimant in the original action, defendant in the counterclaim,
lawyers: A.A.H.J. Huizing, M.P.R. Sardjoe and A.N. Minnema,
versus
the private company with limited liability
BENELUX WONEN B.V.,
having its registered office in Breda, the Netherlands,
defendant in the original action, claimant in the counterclaim,
lawyers: E.H.M. Bieleveld and F.F.W. Verbeek.
The parties are referred to below as "Ilka" and "Benelux Wonen" respectively.
1.Procedural history
1.1.
Ilka submitted a writ of summons on 1 September 2022. The exhibits referred to in the writ of summons were submitted separately on 6 September 2022.
1.2.
On 1 November 2022, Benelux Wonen filed its statement of defence, including a defence against the motion based on Article 843a of the Dutch Code of Civil Procedure (DCCP), and counterclaim. The exhibits were submitted separately on the same date.
1.3.
Ilka filed its statement of defence in the counterclaim on 13 December 2022.
The exhibits were submitted separately on the same date.
1.4.
Benelux Wonen submitted additional exhibits on 24 January 2023. Ilka submitted a claim increase and additional exhibits on 27 January 2023. On 7 February 2023, Ilka also submitted an amendment and clarification of claim.
1.5.
The hearing was held on 8 February 2023. The lawyers pleaded their cases and submitted their pleading notes. A court record of the hearing was made.
1.6.
On request, the Court stayed the proceedings for two weeks. By letters of
17 February 2023 and 20 February 2023 the parties requested the Court to render judgment.
1.7.
Subsequently, the date for judgment of the case was set for today.
2.The facts
2.1.
Ilka is a company limited by shares under Swiss law and is active in the business of consulting, investment, financial management and lending services. Ilka's managing directors are Mr [naam 1] (" [naam 1] ") and Mr [naam 2] (" [naam 2] ").
2.2.
Ilka belongs to the Cofilux Group, headed by Cofilux Invest S.A. ("Cofilux"), a public liability company incorporated and existing under Luxembourg law. Cofilux is a holding company that is active in the business of,
inter alia, financing and holding shares in other companies. One of the companies within the Cofilux Group of companies is Cofilux Investments 2 S.A. Cofilux holds 100% of the shares in Cofilux Investments 2 S.A., which latter company in its turn has a 100% share interest in Ilka. As a result, Cofilux is an indirect 100% shareholder in Ilka. The day-to-day management of Cofilux is conducted by,
inter alia, [naam 2] and Ms [naam 3] (" [naam 3] ").
inter alia, financing and holding shares in other companies. One of the companies within the Cofilux Group of companies is Cofilux Investments 2 S.A. Cofilux holds 100% of the shares in Cofilux Investments 2 S.A., which latter company in its turn has a 100% share interest in Ilka. As a result, Cofilux is an indirect 100% shareholder in Ilka. The day-to-day management of Cofilux is conducted by,
inter alia, [naam 2] and Ms [naam 3] (" [naam 3] ").
2.3.
Benelux Wonen is a private limited liability company under Dutch law, the business activities of which include the acquisition, management and leasing of real estate, more specifically residential property. Benelux Wonen is managed by Hemo Beheer B.V. ("Hemo Beheer"). The managing director of Hemo Beheer is Mr [naam 4] (" [naam 4] ").
2.4.
Benelux Wonen was incorporated on 2 November 2016 by Cofilux and House Delta B.V.B.A., a limited liability company under Belgian law ("House Delta"), both of which held 50% of the shares (1,500 shares each) in Benelux Wonen at the time of the incorporation. House Delta's managing directors are Mr [naam 5] (" [naam 5] ") and Mr [naam 6] (" [naam 6] "). At the same date, Cofilux and House Delta transferred some of their shares to Hemo Beheer. After the share transfer Cofilux and Hemo Beheer each held 35% of the shares in Benelux Wonen and House Delta 30% of the shares.
2.5.
Prior to the incorporation of Benelux Wonen, Hemo Beheer, on 1 November 2016, Cofilux and House Delta signed a letter of intent ("LOI"). According to this LOI, the parties involved agreed that Hemo Beheer, on behalf of Benelux Wonen, would take care of the purchase and sale of real estate assets (apartments) in the Netherlands. The parties also agreed that Cofilux and House Delta would take care of any bank financing required by Benelux Wonen. Furthermore, the parties agreed that all of them would be managing directors of Benelux Wonen, Hemo Beheer represented by [naam 4] , Cofilux represented by [naam 2] and House Delta represented by [naam 6] .
2.6.
On 23 December 2016, the accountant of Benelux Wonen, Mr [naam 7] (" [naam 7] ") sent an e-mail to the managing directors of Benelux Wonen (
inter alia[naam 2] ) regarding the manner in which the real estate portfolio would be financed. The e-mail shows that it was Benelux Wonen's intention to acquire real estate for an average purchase price of around EUR 100,000.00. Furthermore, the e-mail shows that the real estate would be financed for 70% by means of a bank loan and for 30% by loans provided by Cofilux or any of its group companies. With respect to the loans that Cofilux would provide, [naam 7] wrote as follows:
inter alia[naam 2] ) regarding the manner in which the real estate portfolio would be financed. The e-mail shows that it was Benelux Wonen's intention to acquire real estate for an average purchase price of around EUR 100,000.00. Furthermore, the e-mail shows that the real estate would be financed for 70% by means of a bank loan and for 30% by loans provided by Cofilux or any of its group companies. With respect to the loans that Cofilux would provide, [naam 7] wrote as follows:
"(…)
Verder dient [naam 2] te bezien of achterstelling van de leningen via Cofilux Invest S.A. acceptabel is voor de betreffende financiers.
(…)."
2.7.
One of the group companies of Cofilux that would be involved in the financing of the acquisition of the Dutch apartments was Ilka. The loan agreement between Ilka as lender and Benelux Wonen as borrower was entered into on 15 February 2017, which agreement was amended by addendum on 18 April 2017 (together the "Loan Agreement"). The Loan Agreement was concluded for a principal loan amount of EUR 2,300,000.00. The term of the Loan Agreement was five years, with an expiry date of 14 February 2022. Furthermore, the parties agreed that Benelux Wonen would pay Ilka:
(i) a fixed interest of 5% per year, which interest would be due and payable quarterly;
(ii) a variable interest of 30% of the net capital gain (after taxes and costs) prorent to the lent amount, which interest would be due at realisation of the borrower's investment, which realisation would take place after 5 years; and
(iii) in case of a delayed or failed payment:
“a delay interest for the rate of what referred to in 3.
[the Court: concerns the fixed interest of 5%]increased of 2% (two percent)”.
[the Court: concerns the fixed interest of 5%]increased of 2% (two percent)”.
2.8.
The (amendment to the) Loan Agreement also contains the following provisions:
"(…)
The variable interest is equal to 30% (…) of the net capital gain (after taxes and costs) prorent to the lent amount. (…).
The Lender will be remunerated according to the following principle for the variable part of the interest.
The principle is based upon the LTV
[the Court: loan to value ratio].When a property of 100 is bought and valued by the bank at 100, the Borrower will receive a 70% loan from the bank. This ratio is then used as the basis for the variable interest being in this scenario 30% of the net capital gain (after taxes and costs).
[the Court: loan to value ratio].When a property of 100 is bought and valued by the bank at 100, the Borrower will receive a 70% loan from the bank. This ratio is then used as the basis for the variable interest being in this scenario 30% of the net capital gain (after taxes and costs).
The parameter to indicate the variable is the LTV e.g. if the price of the property has been valued at a higher price than the purchase price, the Borrower will use this advantage to have higher LTV and the variable interest rate will be adapted according to this.
For example, the Borrower buys a property at 100 and the bank evaluates this at 120, the Borrower is thus able to have a lower need of equity and is enabled to buy more properties. This will be reflected in the variable interest that will go to the Lender.
(…)."
2.9.
On 21 February 2017, Ilka provided an amount of EUR 1,250,000.00 to Benelux Wonen under the Loan Agreement and on 3 July 2017 an amount of EUR 750,000.00. Benelux Wonen also received a loan from Warando S.A. ("Warando"), another subsidiary of Cofilux. The total amount provided jointly by Ilka and Warando amounted to EUR 3,000,000.00.
2.10.
On 10 April 2017, ABN AMRO Bank N.V. ("ABN AMRO") sent Benelux Wonen an offer for financing. One of the conditions in ABN AMRO’s loan offer was that Ilka's loan of EUR 2.3 million would be subordinated to its loan. Furthermore, the loan offer from ABN AMRO provided that if Benelux Wonen wished to make any payments regarding the Ilka loan - both repayment of the loan itself and any interest payments - Benelux Wonen should obtain ABN AMRO's prior permission to do so. ABN AMRO’s loan offer also provided that the debt service capacity ratio (DSCR) was to be at least 1.1. The offer was subsequently accepted by Benelux Wonen. Accordingly, Ilka, Benelux Wonen and ABN AMRO entered into a subordination agreement on 13 April 2017 (the "Subordination Agreement"), in which the loan granted by Ilka was declared subordinated to the loan granted by ABN AMRO, as follows:
“De Schuldeiser [
the Court: Ilka] en de Kredietnemer [
the Court: Benelux wonen] verbinden zich bij deze tegenover de Bank en jegens elkaar om zolang de Kredietnemer bij de Bank kredietfaciliteiten geniet of aan de Bank iets schuldig is uit welken hoofde ook, zo in als buiten rekening-courant en al of niet in het gewone bankverkeer, met betrekking tot voormelde vordering van de Schuldeiser op de Kredietnemer geen (rechts)handelingen te verrichten of na te laten waardoor de vordering:
the Court: Ilka] en de Kredietnemer [
the Court: Benelux wonen] verbinden zich bij deze tegenover de Bank en jegens elkaar om zolang de Kredietnemer bij de Bank kredietfaciliteiten geniet of aan de Bank iets schuldig is uit welken hoofde ook, zo in als buiten rekening-courant en al of niet in het gewone bankverkeer, met betrekking tot voormelde vordering van de Schuldeiser op de Kredietnemer geen (rechts)handelingen te verrichten of na te laten waardoor de vordering:
- i) geheel of gedeeltelijk teniet gaat dan wel geheel of gedeeltelijk het vermogen van de Schuldeiser verlaat; ofwel
- ii) met een beperkt recht wordt bezwaard;
tenzij de Bank hiervoor schriftelijk toestemming geeft en met inachtneming van door de Bank alsdan te stellen voorwaarden.”
2.11.
The aforementioned loan by ABN AMRO was a loan in the amount of
EUR 1,270,500.00. On 4 May 2017, ABN AMRO replied to Benelux Wonen about a request that Benelux Wonen had submitted regarding additional financing by ABN AMRO.
According to Benelux Wonen's request, the set-up of this additional financing would be equal to the financing already received, in other words, 70% by way of a bank loan and 30% through other (subordinated) loans. By e-mail dated 4 May 2017, Mr [naam 8] (" [naam 8] ") from ABN AMRO replied to [naam 7] as follows:
"(…)
Zoals nu gestructureerd komt geld vanuit buitenlandse entiteit in Benelux Wonen en moet worden achtergesteld. Betekent dat we met buitenlands recht te maken krijgen en legal opinion iedere keer in het buitenland (per achterstelling) moet worden opgevraagd.
Als structuur gewijzigd wordt:
Onder benelux wonen een nieuwe werkmaatschappij. Zou dit sterk vereenvoudigd kunnen worden en kosten kunnen besparen.
1) Buitenlandse geldverstrekkers lenen aan nieuwe holding
2) Holding leent door op basis van NL recht aan werkmaatschappij
3) Wij financieren werkmaatschappij en stellen lening holding achter. Hebben dan niks te maken met buitenlandse partijen.
(…)."
2.12.
On 6 June 2017, Benelux Wonen obtained an offer for financing from ABN AMRO that, in essence, was a continuation of the loan agreement of 10 April 2017. This new offer pertained to an additional loan of EUR 2,675,000.00. The requirements in this new offer were essentially identical to the offer of 10 April 2017. Benelux Wonen accepted the new offer on 7 June 2017.
2.13.
On 16 August 2017, Benelux Wonen II B.V. ("Benelux Wonen II") was incorporated by Benelux Wonen as a subsidiary.
2.14.
On 11 January 2018, Benelux Wonen received a third loan offer from ABN AMRO. It concerned a loan offer in the amount of EUR 470,000.00.
2.15.
By e-mail dated 8 February 2019, [naam 8] from ABN AMRO wrote to [naam 7] as follows:
"(…)
Ik heb zojuist contact gehad met de kredietafdeling. Men heeft paar zaken geconstateerd die ik over het hoofd heb gezien.
1) Lening Ilka is volgens leningsovereenkomst en achterstellingsakte EUR 2.300.000,- groot. In jaarcijfers is dit echter 2.000.000,-. Dit zal gerepareerd moeten worden.
2) In laatste kredietovereenkomst is DSCR 1,1 weggevallen (eerdere offertes wel opgenomen).
Bank heeft er geen probleem mee dat rente wordt betaald op de achtergestelde lening mits bovenstaande zaken worden gerepareerd.
(…)."
2.16.
By e-mail dated 14 February 2019, [naam 3] wrote to [naam 7] as follows:
"(…)
Regarding point 1, there is nothing to be resolved or changed. The loan agreement was indeed signed for 2.3Mio but only 2Mio were transferred to Benelux Wonen, as at the end only 2Mio were needed.
Those are the facts and we can't change one or the other. We can't amend the loan agreement as it's part of the subordination agreement, and we can't change the yearly figures as they reflect what as been really transferred.
That point was not raised for last year interests payment, so why it is a concern this year?
(…)."
2.17.
On the same day, [naam 7] responded as follows:
"(…)
Last year's interest payments were carried out without permission of ABN-AMRO.
When they found out, they said that they would accept it for one time, but not for the future.
(…)
To carry out the interest payments of 2018 we had a meeting with ABN-AMRO to obtain their permission.
(…)
As I see it, they require reparation of the discrepancy amounting to Euro 300.000 of the subordinated loan of Ilka AG.
(…) I do understand that Ilka AG is not going to pay Euro 300.000 on their loan.
Maybe it is a solution not to pay the interest of 2018 and 2019 amounting to Euro 150.000 per year but to add the interest to the loan.
(…)
In case this is not acceptable to any party or in case no one else comes up with a good solution, I suppose the status quo of not-paying interest unfortunately will remain.
(…)."
2.18.
[naam 3] answered [naam 7] the same day that [naam 7] 's proposal was not acceptable for Ilka. The matter regarding the DSCR on the other hand was resolved in an amendment agreement between Benelux Wonen and ABN AMRO.
2.19.
On 14 June 2019, [naam 3] discussed the matter regarding the difference in the loan amount provided and the loan amount included in the Loan Agreement in a conference call with [naam 8] of ABN AMRO. ABN AMRO was not in favour of the solution to amend the Loan Agreement.
2.20.
On 31 December 2020, Cofilux sold all of its shares in Benelux Wonen to [naam 5] , [naam 6] and Ms [naam 9] . Therefore, as of 31 December 2020, Cofilux was no longer a shareholder in Benelux Wonen and as a consequence resigned as director of Benelux Wonen on that same day. On 28 January 2022, House Delta resigned as director of Benelux Wonen and sold and transferred its shares in Benelux Wonen to Hemo Beheer.
2.21.
On 31 January 2022, Benelux Wonen repaid Ilka the loan amount of EUR 2,000,000.00 as well as variable interest on that loan in the amount of EUR 148,000.00. Furthermore, Benelux Wonen paid Ilka an amount totalling EUR 480,488.00 in fixed interest over the relevant years.
2.22.
On 21 February 2022, [naam 3] sent a letter on behalf of Ilka stating that it did not agree with the calculation of the variable interest on the Ilka loan. According to Ilka it was entitled to a variable interest in the amount of EUR 519,208.00. Therefore, an amount of EUR 371,208.00 still had to be paid. Also, Ilka stated that fixed interest due under the Loan Agreement was still outstanding for an amount of EUR 125,237.77. Furthermore, Ilka stated that the outstanding amount would also have to be increased by 5% plus 2% penalty interest, as provided for in Article 7 of the Loan Agreement.
2.23.
Benelux Wonen replied by letter of 10 March 2022 that Ilka's calculations were incorrect. With regard to the variable interest, Benelux Wonen wrote that: (i) Ilka had not deducted certain costs from the gross capital gain, and (ii) Ilka had not included all capital loans in its calculations (omitting the loan granted by ABN AMRO). With regard to the fixed interest, Benelux Wonen wrote that it was not allowed to pay the fixed interest as a result of the Subordination Agreement. Even after further correspondence, the parties did not reach an agreement with regard to the interest calculations.
2.24.
By letter of 21 April 2022, Benelux Wonen wrote to Ilka that it had paid too much variable interest to Ilka because its calculation was not only based on the value of the real estate portfolio of Benelux Wonen, but also on the value of the real estate portfolio of Benelux Wonen II. Therefore, Benelux Wonen, in its letter of 21 April 2022, demanded that Ilka pay back an amount of EUR 67,804.00 for undue payment. Also, Benelux Wonen demanded payment of an amount of EUR 228,699.00 in damages because of Ilka's default under the Loan Agreement to pay the missing EUR 300,000.00.
2.25.
On 1 June 2022, Ilka submitted a request for leave to levy prejudgment attachments with the preliminary relief judge in the District Court of Zeeland-West-Brabant, who granted the request on 2 June 2022.
3.The claim
3.1.
Ilka requests the Court, after amendment of its claim, by means of a judgment that insofar as possible is provisionally enforceable, to rule that:
Primarily:
a. Benelux Wonen is ordered to pay Ilka an amount of EUR 38,296.25;
b. Benelux Wonen is ordered to pay Ilka an amount of EUR 378,632.16;
c. Benelux Wonen is ordered to pay Ilka an amount of EUR 86,941.53;
d. Benelux Wonen is ordered to pay Ilka an amount of EUR 25,984.56;
all such payments to be increased by statutory commercial interest as of 15 February 2022, or as of a date to be determined by the Court in the fair administration of justice until the date of full payment.
e. Benelux Wonen is ordered to pay to Ilka an amount of EUR 33,229.04 for the costs made by Ilka to enforce compliance of the Loan Agreement by Benelux Wonen, to be increased by statutory commercial interest as of the date of service of the judgment or as of a date to be determined by the Court in the fair administration of justice until the date of full payment;
Alternatively:
f. Benelux Wonen is ordered to provide Ilka with insight into and a copy of the information listed under paragraph 4.6 of the writ of summons, including the underlying valuation information/reports of the real estate properties of Benelux Wonen and Benelux Wonen II;
g. Benelux Wonen is ordered to pay Ilka a judicially imposed penalty of EUR 5,000.00 per day or an amount to be determined by the Court in the fair administration of justice for each day that Benelux Wonen does not comply with the order under paragraph f;
h. Benelux Wonen is ordered to pay damages suffered by Ilka to be assessed in separate damages assessment proceedings, to be increased by statutory interest as of the date of service of the judgment or as of a date to be determined by the Court in the fair administration of justice until the date of full payment;
Primarily and alternatively:
i. Benelux Wonen is ordered to pay Ilka the costs of these proceedings, including but not limited to the costs of serving judgment in this matter and the post-salary attorney's fees, as well as the costs incurred by Ilka for the prejudgment attachments as mentioned in paragraph 3.37 of the writ of summons.
3.2.
Summarised, Benelux Wonen opposes the claim and requests that Ilka be ordered to pay Benelux Wonen the costs of these proceedings, including but not limited to all costs of serving judgment in this matter and the post-salary attorney's fees.
3.3.
Insofar as relevant, the parties' arguments will be discussed in more detail below.
4.The counterclaim
4.1.
Benelux Wonen requests the Court, by means of a judgment that insofar as possible is provisionally enforceable, to rule that:
a. Ilka is ordered to pay Benelux Wonen an amount of EUR 67,804.00 for undue payment; plus statutory commercial interest;
b. Ilka is ordered to pay Benelux Wonen an amount of EUR 228,699.00 in damages, plus statutory commercial interest;
c. Ilka is ordered to pay the costs of these proceedings, including but not limited to all costs of serving judgment in this matter and the post-salary attorney's fees.
4.2.
Ilka opposes the counterclaim and requests the Court to order Benelux Wonen to pay the costs of the proceedings, including but not limited to the costs of the proceedings and the lawyers' fees, all to be increased by statutory interest from the date of judgment until the date of full payment.
4.3.
Insofar as relevant, the parties' arguments will be discussed in more detail below.
5.Discussion
5.1.
Given the close connection between Ilka’s claim and Benelux Wonen’s counterclaim, the Court will discuss and assess both claims simultaneously.
Jurisdiction of the NCC and applicable law
5.2.
Both parties have agreed in writing - in correspondence between Ilka's and Benelux Wonen's lawyers - that Ilka would initiate the proceedings before the Netherlands Commercial Court in Amsterdam. The parties have also agreed to conduct the proceedings in English. In this regard, both parties have deviated from the dispute resolution clause included in Clause 17 of the Loan Agreement. Pursuant to calls and correspondence between the parties' lawyers, Ilka and Benelux Wonen both designated the Amsterdam District Court as the forum to hear their case (choice of forum clause). This means that the Amsterdam District Court has jurisdiction under Article 25(1) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast). All other requirements for the NCC to have jurisdiction in this case, mentioned in Article 30r of the DCCP and in Article 1.3.1 of the NCC Rules of Procedure (NCCR), are equally met.
5.3.
Clause 17 of the Loan Agreement stipulates that the terms and conditions of the Loan Agreement and the loan shall be made and interpreted in accordance with and governed by the laws of the Netherlands. Furthermore, it is clear from the parties' arguments in these proceedings that they consider Dutch law to be applicable. Hence, Dutch law will be applied.
Amendment of claim
5.4.
Benelux Wonen has not raised objections against the amendment of claim by Ilka, but has requested the Court to dismiss Ilka's claims on substantive grounds. Also, it follows from Benelux Wonen's pleading notes that it was able to respond to the last amendment of claim (and clarification thereof), submitted by Ilka on 7 February 2023. For that reason, the Court finds that the amendment of claim by Ilka does not violate the principles of due process of law. Therefore, the Court will give judgment based on the amended claim. In this regard, the Court finds as follows.
Does Ilka have an entitlement to more fixed interest?
5.5.
It is not in dispute that Ilka received a total of three payments for fixed interest. On 18 January 2018 it received an amount of EUR 72,155.00, on 31 December 2021 an amount of EUR 400,000.00 and on 31 January 2022 an amount of EUR 8,333.00. All payments add up to an amount of EUR 480,888.00 in total.
5.6.
According to Ilka, Benelux Wonen wrongfully discontinued making annual payments of fixed interest between 2018 and 2021. Therefore, Benelux Wonen has to pay the penalty interest of 2% of the total outstanding amount for the period that no interest was paid. This amounts to EUR 86,941.53.Furthermore Ilka argues that Benelux Wonen not only paid the interest from 2018 onwards late, but that Benelux Wonen also paid in any event less than it was obligated to pay, since the total amount of fixed interest payments due by it over the years is EUR 518,784.25. According to Ilka, Benelux Wonen still has to pay EUR 518,784.25 minus EUR 480,488.00 = EUR 38,296.25 in fixed interest. Ilka states that the difference between Ilka's calculations and those of Benelux Wonen with regard to the amount of EUR 38,296.25 fixed interest can be explained by Ilka applying compound interest versus Benelux Wonen applying simple interest. In this regard, Ilka argues that Article 6:119a of the Dutch Civil Code ("DCC") provides that each time after the end of a year the amount on which the statutory interest is calculated is increased by the interest due over that year. Ilka argues that this principle of compound interest is in accordance with Dutch law and must be followed.
5.7.
According to Benelux Wonen, it has paid all fixed interest due, since only the 5% fixed interest rate should be taken into account in the calculation of the fixed interest. In this regard, Benelux Wonen argues that it has always paid its fixed interest on time. That is, until ABN AMRO put a halt to it. In its e-mail of 8 February 2019, ABN AMRO made it quite clear that Benelux Wonen was not to pay Ilka any fixed interest until Ilka's default under the Loan Agreement had been repaired (Ilka's loan amounted to EUR 2 million instead of
EUR 2.3 million) and the DSCR was brought to the agreed 1.1. According to Benelux Wonen, it was obvious for all the parties involved that the loan provided by Ilka was to be subordinated to the loan that was to be provided by ABN AMRO. Based on the Subordination Agreement in connection with the loan agreements entered into with ABN AMRO, Benelux Wonen was not to make any payment whatsoever, unless it had obtained ABN AMRO's prior permission. Benelux Wonen argues that it is undisputed that ABN AMRO did not give its permission to make any payments to Ilka in its e-mail of 8 February 2019, as long as the conditions set by ABN AMRO had not been met. According to Benelux Wonen, Ilka has not resolved its own default under the Loan Agreement. Therefore, Benelux Wonen states that Ilka was in creditor's default and Benelux Wonen could not and did not have to pay the yearly fixed interest. For that reason, Benelux Wonen concludes, Ilka's claim to penalty interest should be rejected. Furthermore, Benelux Wonen argues that the interest rate of 2% the parties agreed to in the Loan Agreement applies instead of any other interest rate, such as the statutory commercial interest laid down in Article 6:119a DCC.
5.8.
The Court will dismiss Ilka's claims regarding payment of the outstanding fixed interest and regarding payment of penalty interest for the following reasons.
It follows from the loan offer of ABN AMRO, dated 10 April 2017, which led to the first loan agreement between ABN AMRO and Benelux Wonen, that the loan provided by Ilka to Benelux Wonen was to be subordinated to the loan that was to be provided by ABN AMRO. Also the ABN AMRO loan offer (and the following loan agreement) provided that if Benelux Wonen wished to make any payments and/or repayments regarding the Ilka loan, including any interest payments thereon, Benelux Wonen should obtain ABN AMRO's prior permission to do so. Subsequently, the subordination was included in the Subordination Agreement between Ilka, Benelux Wonen and ABN AMRO, in which the loan provided by Ilka was declared subordinated to the loan provided by ABN AMRO. The agreement between ABN AMRO and Benelux Wonen regarding its approval for any interest payments that Benelux Wonen wished to make to Ilka also applies to the subsequent loans provided to Benelux Wonen by ABN AMRO.
The Subordination Agreement provides for Benelux Wonen not to do anything that causes the claim of Ilka to be partly or wholly extinguished. It does not explicitly state that Benelux Wonen is not allowed to pay interest under the Loan Agreement without the prior approval of ABN AMRO. However, the phrasing about not causing the Ilka claim to be extinguished is not far from an explicit statement along those lines, and considering the close connection between (a) the loan agreements between ABN AMRO and Benelux Wonen and (b) the Subordination Agreement, the Court finds that the abovementioned clause in the Subordination Agreement must be interpreted such that Benelux Wonen is not allowed to make any interest payments to Ilka without ABN AMRO’s prior permission.
In this regard, the Court also deems it important that [naam 2] , as managing director of Ilka and former managing director of Benelux Wonen, knew the contents of the ABN AMRO loan agreements and therefore had to be aware that if Benelux Wonen wished to make any payments regarding the Ilka loan - both repayment of the loan itself and any interest payments - Benelux Wonen had to obtain ABN AMRO's prior permission. Consequently, Benelux Wonen could not pay the fixed interest to Ilka from 2018 onwards, unless ABN AMRO had granted its prior permission to Benelux Wonen.
5.9.
It follows from ABN AMRO’s e-mail dated 8 February 2019 that Benelux Wonen did not have ABN AMRO's permission to pay interest to Ilka, unless and until both issues mentioned in the e-mail were resolved. It is not in dispute that the first issue, regarding the difference between the loan amount mentioned in the Loan Agreement and the amount Ilka paid, had not been resolved. Although [naam 3] had contact with [naam 8] from ABN AMRO to discuss this matter, it is undisputed that they did not reach a solution.
The conclusion of the conference call between [naam 3] and [naam 8] (see para 2.19) was that an amendment of the Loan Agreement to EUR 2,000,000.00 would require an amendment of the Subordination Agreement, which was considered to be too much of an administrative hassle. Thereafter, [naam 3] left it at that. As a consequence, the issue remained unresolved. This leads to the conclusion that Benelux Wonen was not in a position to pay the fixed interest annually to Ilka between 2018 and 2021. Therefore, the Court finds that Benelux Wonen has paid the fixed interest to Ilka on time and that Ilka is not entitled to compound interest either. The Court rules that the agreed interest rate of 2% applies as opposed to the statutory commercial interest laid down in Article 6:119a DCC, as stated by Ilka. For that reason, Ilka's claims under (a) and (c) will be dismissed.
Is Ilka entitled to additional amounts of variable interest? Or has Benelux Wonen paid too much interest?
5.10.
According to Ilka, the correct calculation of the variable interest (in euros) is:
Asset valuation (*) 21,837,262.00
Purchase price (*) - 15,598,044.00
Gross capital gain 6,239,281.00
Costs (**) 470,245.00
Taxes (25%) - 1,442,243.00
Net capital gain 4,326,730.00
Variable interest (30%) 1,298,019.00
Ilka (prorent loan) 519,208.00
Warando (prorent loan) 778,811.00
* as per Benelux Wonen
** based on Benelux Wonen's calculations, after deduction of 8% transfer tax charge
Therefore, Ilka argues that, after deduction of the amount already paid of EUR 148,000.00, an amount of EUR 371,208.00 is still outstanding, plus (penalty) interest. Ilka claims an amount of EUR 378,632.16 which apparently already includes penalty interest. [1]
5.11.
According to Benelux Wonen, the correct calculation of the variable interest (in euros) is:
Asset valuation 9,121,393.00
Purchase price - 6,515,281.00
Gross capital gain 2,606,112.00
Costs - 928,139.00
Taxes (25%) - 419,493.00
Net capital gain 1,258,480.00
Variable interest (30%) 377,544.00
Ilka (prorent loan) 80,196.00 (loan amount: 2,000,000.00)
Warando (prorent loan) 120,294.00 (loan amount: 3,000,000.00)
ABN AMRO (prorent loan) 177,053.00 (loan amount: 4,415,500.00)
Therefore, Benelux Wonen argues that, after deduction of the amount already paid of EUR 148,000.00, it made an undue payment of EUR 67,804.00 to Ilka.
5.12.
It is,
inter alia, in debate between the parties whether (i) the variable interest is to be calculated in respect of the joint real estate portfolios of Benelux Wonen and Benelux Wonen II, and also whether (ii) the clause "
prorent to the lent amount" in the amendment to the Loan Agreement refers to two lenders (Ilka and Warando) or three lenders (ABN AMRO as well). With regard to these issues in dispute, the Court’s reasoning is set out below.
inter alia, in debate between the parties whether (i) the variable interest is to be calculated in respect of the joint real estate portfolios of Benelux Wonen and Benelux Wonen II, and also whether (ii) the clause "
prorent to the lent amount" in the amendment to the Loan Agreement refers to two lenders (Ilka and Warando) or three lenders (ABN AMRO as well). With regard to these issues in dispute, the Court’s reasoning is set out below.
Should the real estate portfolio of Benelux Wonen II be taken into account?
5.13.
According to Benelux Wonen, Benelux Wonen II was incorporated at the request of ABN AMRO and was not a party to the Loan Agreement. The definitions in the Loan Agreement of "Lender" and "Borrower", in Benelux Wonen’s view, only refer to Ilka and Benelux Wonen respectively. Benelux Wonen argues that, based on the Loan Agreement, Ilka was to receive 30% variable interest, which was due once at realisation of the Borrower's investments after 5 years. In other words, reference is only made to the investments made by Benelux Wonen, not (also) to Benelux Wonen II. The total value of the real estate acquired by Benelux Wonen was EUR 9,121,394.00. According to Benelux Wonen, Benelux Wonen II has always acted independently from Benelux Wonen and purchased its properties independently by means of its own.
5.14.
Ilka argues that the incorporation of a separate subsidiary of Benelux Wonen was exclusively motivated by ABN AMRO’s desire to avoid requirements for legal opinions under foreign law. According to Ilka, Benelux Wonen is now using this change in legal structure to deprive Ilka of its full right to variable interest. In this regard, Ilka states that the loans provided by Ilka and Warando were used by both Benelux Wonen and Benelux Wonen II for the purchase of real estate assets, so that these must be taken into account in calculating the variable interest. Again according to Ilka, the intercompany loan agreement between Benelux Wonen and Benelux Wonen II (submitted by Benelux Wonen) confirms that the loans have been transferred from Benelux Wonen to Benelux Wonen II, which the latter used to acquire additional real estate properties within the context of the investment project.
5.15.
The Court’s reasoning is the following. Initially Benelux Wonen calculated the variable interest on the basis of the joint portfolios of Benelux Wonen and Benelux Wonen II.
In its e-mail, dated 4 May 2017, ABN AMRO requested that a new company be incorporated, which company would have to receive the 30% subordinated loans via Dutch lenders, rather than foreign lenders such as Ilka. As a result of this e-mail, Benelux Wonen II was incorporated on 16 August 2017. This was after the Loan Agreement was signed. A reference to Benelux Wonen II could therefore not be included in the Loan Agreement.
The Court finds that this new legal structure does not change the parties’ intentions with regard to the investment project, in which the acquisition of apartments in the Netherlands would be financed for 30% by companies affiliated with Cofilux (Ilka and Warando) and for 70% by ABN AMRO. The fact that - after the incorporation of Benelux Wonen II - Benelux Wonen II purchased real estate properties as well does not materially modify the agreements made between the parties. The Court finds that Benelux Wonen and Benelux Wonen II should, with regard to the investment project, the property acquired and the operation of the Loan Agreement, be seen as a single entity. In view of the above, Benelux Wonen's defence – that its loan agreement with Benelux Wonen II is in no way connected to the Loan Agreement – does not allow the conclusion that Benelux Wonen II did not receive any loans from Ilka. At the hearing, [naam 7] stated that the total amount of all the loans Benelux Wonen received was around EUR 9.5 million. According to [naam 7] , an amount of EUR 3 million of these loans was provided by Benelux Wonen to Benelux Wonen II. [naam 7] also stated that the amount of EUR 3 million consisted of a mix of loans granted by Ilka, Warando and ABN AMRO. Therefore, the Court finds that it is reasonable to assume that a part of the loan provided by Ilka to Benelux Wonen, which also includes certain funds originating from ABN AMRO, was in fact used by Benelux Wonen II to purchase its real estate assets. Consequently, the Court finds that the variable interest is to be calculated in respect of the joint real estate portfolios of Benelux Wonen and Benelux Wonen II.
Does "prorent to the lent amount" refer to two or three lenders?
5.16.
In Ilka's view, "pro rent" concerns a pro rata calculation of the money loans provided by companies affiliated with Cofilux (Ilka and Warando). According to Ilka, the companies affiliated with Cofilux are the sole entities entitled to variable interest. In this regard, Ilka
inter aliaargues that Cofilux was the only shareholder and managing director in Benelux Wonen that "personally" ran the financial risk by providing loans to Benelux Wonen. Therefore, the parties agreed that the variable interest rate was higher and linked to the valuation of the properties for which the loans were used. If the Court were to follow Benelux Wonen’s reasoning, this would mean that Ilka would effectively be entitled to a variable interest of 1.08% per year and a total interest of 6.08% per year. This is by no means market standard, since Ilka provided a high-risk investment (loan) for five years. Market standard would be a percentage of 8-12%.
inter aliaargues that Cofilux was the only shareholder and managing director in Benelux Wonen that "personally" ran the financial risk by providing loans to Benelux Wonen. Therefore, the parties agreed that the variable interest rate was higher and linked to the valuation of the properties for which the loans were used. If the Court were to follow Benelux Wonen’s reasoning, this would mean that Ilka would effectively be entitled to a variable interest of 1.08% per year and a total interest of 6.08% per year. This is by no means market standard, since Ilka provided a high-risk investment (loan) for five years. Market standard would be a percentage of 8-12%.
5.17.
Benelux Wonen states that "pro rent to the lent amount" refers to the full amount that has been lent to Benelux Wonen. In other words, the loans provided by Ilka, Warando and ABN AMRO must be considered when calculating the variable interest.
5.18.
The texts of both the first Loan Agreement and the amendment to the Loan Agreement are the same and refer to the entitlement of Ilka to a variable interest equal to a percentage of the net capital gain “prorent to the lent amount”. No reference is made in the Loan Agreement to the meaning of the words “prorent to the lent amount.” The parties have furthermore not submitted any correspondence in which a reference and/or a clarification is made to this wording, nor have they provided the Court with more detailed information about their discussions on this wording of the Loan Agreement. Ilka has also not given the Court any additional background information on market standards confirming its statements on this issue.
5.19.
The Court agrees with Ilka that Cofilux took a financial risk by providing loans to Benelux Wonen through its subsidiaries, without a (second-rank) mortgage on the properties. As stated by [naam 3] at the hearing, Cofilux in return demanded a share of the profit of Benelux Wonen, as a result of which a variable interest of 30% was agreed between the parties. However, the Court finds that the profit of Benelux Wonen is not solely attributable to the loans provided by Cofilux, but it is also the result of the loans provided by ABN AMRO. The reason is simple: Benelux Wonen used all the loans to purchase and acquire the apartments. Therefore, the increase in the value of the properties is not only attributable to the loans of Cofilux and Warando but also to the loans of ABN AMRO. The fact that of all shareholders it was only Cofilux that provided loans to Benelux Wonen does not automatically imply that it is entitled to a larger part of the profits derived from the ABN AMRO loans than the other shareholders.
Conclusion with regard to the variable interest
5.20.
Considering the above facts and circumstances, the Court finds that it cannot be concluded that Benelux Wonen still has to pay Ilka an amount of EUR 371,208.00 in variable interest. Ilka's calculation of the outstanding variable interest cannot be followed.
Taking the above considerations into account, the Court finds that Ilka is entitled to the following amount of variable interest (in euros):
Asset valuation 21,837,262.00
Purchase price - 15,598,044.00
Gross capital gain 6,239,281.00
Costs - 470,245.00
Taxes (25%) - 1,442,243.00
Net capital gain 4,326,730.00
Ilka (11,96%) 517,476.88
30% 155,243.06
- 148,000.00
7,243.06
With regard to the 8% transfer tax (claimed by Benelux Wonen as costs), the Court finds that Benelux Wonen has not made sufficiently clear why these costs have to be deducted from the gross capital gain at this time, since the property has not been sold yet and the costs have not been incurred. The parties have also not agreed, expressly or otherwise, that the transfer tax must be paid by Ilka. Furthermore, it is uncertain whether the transfer tax will be payable by Benelux Wonen if and when it sells the properties, as stated by Benelux Wonen. It is not immediately obvious that this is market standard (generally transfer tax is payable by the purchaser). Therefore, the Court finds that Benelux Wonen has insufficiently substantiated its claim for payment of 8% transfer tax by Ilka.
5.21.
From the above it follows that the Court will grant Ilka's claim under (b) for an amount of EUR 7,243.06, to be increased by the contractual interest of 5% and the penalty interest of 2% as of 15 February 2022. In this regard, the Court finds that it follows from Article 7 of the Loan Agreement that the penalty interest the parties agreed on is 2%. The penalty interest claimed by Ilka under (d) will be dismissed. The Court rules that the penalty interest is only allowable on the amount of EUR 7,243,06 as of 15 February 2022, the date the Loan Agreement ended. As mentioned above, the statutory commercial interest does not apply because of the agreed interest rate of 5 % plus 2%.
5.22.
As a consequence, the Court finds that Benelux Wonen has not paid Ilka too much variable interest since Benelux Wonen’s most recent calculation does not include Benelux Wonen II's real estate portfolio. Also the payment of 8% transfer tax has to be deducted from Benelux Wonen's calculation. Therefore, Benelux Wonen's calculation cannot be followed and Benelux Wonen's counterclaim under (a) will be dismissed.
Legal fees
5.23.
With regard to the legal fees claimed by Ilka, the Court considers that the amount of EUR 33,299.04 is based on legal activities related to the total amount claimed by Ilka. In view of the above, this amount cannot be allowed since Ilka is only entitled to a small amount of the total amount it claimed. Ilka has not submitted the underlying specifications of the legal costs. Therefore, a correct calculation of the relevant legal activities cannot be made. In the given circumstances, this is for Ilka’s account. At this stage of the proceedings, the Court sees no reason to allow Ilka an opportunity to submit the underlying specifications. This leads to the conclusion that the compensation of Ilka's legal fees based on the Loan Agreement, in other words Ilka's claim under (e), will also be dismissed.
Ilka's alternative claims
5.24.
Since only a small amount of Ilka's primary claim is allowed, the Court will discuss Ilka's alternative claims as well. Ilka seeks inspection or production of a copy of certain documents of Benelux Wonen regarding the costs and taxes of the real estate in Benelux Wonen's portfolio, tax filings as from 2017 and an overview of Benelux Wonen's finances as from 2017, evidencing any cost item of over EUR 2 million. Ilka seeks inspection/production on the basis of Article 843a DCCP in order to be able to determine the variable interest due by Benelux Wonen under the Loan Agreement. At the hearing, Ilka stated that so far it has not been fully provided with any such documentation to calculate and verify the variable interest it is entitled to. Benelux Wonen argues that Ilka's demand cannot be executed, simply because the documentation that Ilka is looking for does not exist. Ilka is looking for a proof of actual costs and taxes paid in respect of the real estate portfolio, whereas Benelux Wonen has not (yet) paid any such costs or taxes, because it has not (yet) sold its real estate portfolio, except for one property ( [adres] , [plaats] ) which was sold after the Loan Agreement had ended.
5.25.
The Court’s reasoning is as follows. Benelux Wonen has sufficiently substantiated its position that it has not sold off any properties during the Loan Agreement (and thereafter), causing variable interest to be due. Absent any facts and circumstances to the contrary, the Court finds that the documentation requested by Ilka does not provide the information Ilka is looking for. As a consequence, Ilka has no legitimate interest in its claim. For that reason, Ilka's alternative claims under (f), (g) and (h) will not be allowed.
Damages
5.26.
According to Benelux Wonen, Ilka did not fulfil its contractual obligation to pay the remaining EUR 300,000.00 under the Loan Agreement. Benelux Wonen argues that it would have been granted a EUR 1,000,000.00 loan from ABN AMRO if Ilka had paid the full amount of EUR 1,300,000.00 in accordance with the Loan Agreement. As a result of Ilka's defaulting under the Loan Agreement, Benelux Wonen states that it lost EUR 1,300,000.00 in investment opportunities. Given the average purchase price of properties acquired by Benelux Wonen of EUR 97,350.00 and the increase of the investment by 40% during the period of the Loan Agreement, Benelux Wonen would have made an additional gross capital gain of EUR 520,000.00 and an additional net capital gain of EUR 251,160.00, according to Benelux Wonen. Taking into account the calculation method of 30% prorent the lent amount, Benelux Wonen argues that consequently it suffered EUR 228,699.00 in damages.
5.27.
Ilka argues that the last instalment of EUR 300,000.00 should in principle have been paid to Benelux Wonen on or before 14 August 2017, were it not for the fact that this amount was no longer required for the real estate properties that Benelux Wonen wished to purchase at that time. According to Ilka, this was also communicated by [naam 3] when the discrepancy between the Loan Agreement and the actual loan amount provided was flagged by ABN AMRO and by [naam 7] and was not seen as any problem, given that the amount mentioned in the Loan Agreement was merely the maximum amount that could be lent by Ilka (as a sort of facility that Ilka had negotiated with its own bank). Benelux Wonen has never demanded that Ilka should pay the additional EUR 300,000.00, at least not until its letter of 28 September 2022. According to Ilka, this is too late. Benelux Wonen's claim is time-barred. Furthermore, Ilka is of the opinion that Benelux Wonen has not complained in a timely manner within the meaning of Article 6:89 DCC and Benelux Wonen has not substantiated any damages either.
5.28.
The Court will dismiss Benelux Wonen's claim for damages. It is undisputed between the parties that Benelux Wonen has never requested Ilka to pay the remaining amount of EUR 300,000.00, not even when Benelux Wonen was explicitly informed that there was a discrepancy between the Loan Agreement and the actual loan amount provided by Ilka. Although [naam 7] did provide a possible solution for that discrepancy in terms of capitalisation of the interest, this solution was never welcomed by Ilka. Afterwards, Benelux Wonen never demanded payment of the additional amount of EUR 300,000.00. Therefore, it cannot be held that Ilka is in default of payment of the additional amount. The Court agrees with Ilka there is no other plausible explanation than that there was simply no need for payment of the remaining amount. As a result, Ilka cannot be held liable for the damages that Benelux Wonen claims to have suffered as a result of the "missing" payment. Therefore, Ilka's other defences need no further discussion. Benelux Wonen's counterclaim under (b) will be dismissed.
Conclusion
5.29.
In summary, the Court will grant claim (b) of Ilka to an amount of EUR 7,243,06, to be increased with the contractual interest of 5% and the penalty interest of 2% as of 15 February 2022. Ilka's other claims in the original action and Benelux Wonen's counterclaims will be dismissed.
Costs of the proceedings
5.30.
Since neither party has succeeded on most points in the claim in the original action, the Court will order that each of the parties bear its own legal costs, including the costs incurred by Ilka for the prejudgment attachments.
5.31.
Benelux Wonen, as the unsuccessful party in the counterclaim, will be ordered to pay the costs in connection with the counterclaim. In the counterclaim, the costs on the part of Ilka are set at:
- lawyers' fee EUR 12,000.00 (3 x EUR 4,000.00).
Furthermore, the statutory interest (Article 6:119 DCC) on the costs of these proceedings will be allowed, as stated in the decision.
6.Decision
The Court:
in the original action
6.1.
orders Benelux Wonen to pay Ilka an amount of EUR 7,243,06, to be increased by contractual interest of 5% and penalty interest of 2% as of 15 February 2022 until the date of full payment;
6.2.
declares this judgment enforceable notwithstanding appeal;
6.3.
orders that each of the parties bear its own legal costs, including the costs for the prejudgment attachments;
6.4.
dismisses any other claim;
in the counterclaim
6.5.
dismisses Benelux Wonen's claims;
6.6.
orders Benelux Wonen to pay Ilka the costs of these proceedings, set at EUR 12,000.00 plus statutory interest thereon (pursuant to Article 6:119 DCC) with effect from the fifteenth day after the date of this judgment until payment is made in full;
6.7.
declares this judgment enforceable notwithstanding appeal with regard to the costs of these proceedings.
Done by A.C. Bordes, C.W.D. Bom, and L.S. Frakes, Judges, assisted by A. Hut, Clerk of the Court.
Issued in public on 19 April 2023.
APPROVED FOR DISTRIBUTION IN eNCC
SIGNATURE PAGE 1 OF 2
A.C. BORDES
(PRESIDING JUDGE)
SIGNATURE PAGE 2 OF 2
CLERK OF THE COURT