Alora Property Group Pty Ltd as trustee for Alora Property Group Trust v Henry McKenna (as Liquidator of Alora Davies Development 104 Pty Ltd)

The dispute before the Court of Appeal of New South Wales concerned the interpretation of a shareholders' agreement between Alora Property Group Pty Ltd as trustee for Alora Property Group Trust (the appellant) and Henry McKenna, the liquidator of Alora Davies Development 104 Pty Ltd (the respondent). The central issue was when project management fees, to which the appellant was entitled under the agreement in respect of a development project, became payable. The appellant contended the fees were payable upon the granting of development approval, while the respondent argued they were only payable upon the completion of the project by sale.

The court was required to determine the proper construction of clause 7.1 of the shareholders' agreement, specifically whether the entitlement to project management fees arose upon the grant of development approval or at the completion of the development project through sale. This involved considering the scope of the project management services and the intended source of funds for the payment of these fees.

The Court of Appeal held that the project management services were not limited to work solely related to obtaining development approval. Crucially, the agreement did not contemplate any source of funds for the project management fees other than the proceeds from the sale of the completed development. Therefore, the court reasoned that the fees were only intended to become payable upon the completion of the project by sale, as this was the only point at which funds would be available to meet such an obligation.

The appeal was dismissed, and the appellant was ordered to pay the respondent's costs.