Amcor Limited v ACI Operations Pty Ltd

In the Supreme Court of Victoria, Amcor Limited (Amcor) sought declarations and an injunction against ACI Operations Pty Ltd (ACI) concerning the interpretation and enforceability of a deed of covenant and indemnity (the Deed). The dispute centred on whether the Deed, entered into in 1987, imposed an ongoing obligation on ACI to indemnify Amcor against liabilities arising from the disposal of certain waste materials from a former manufacturing site. Amcor argued that the Deed created a perpetual indemnity, while ACI contended that the indemnity was limited in time or scope.

The primary legal issue before the Court was the construction of the Deed, specifically whether the indemnity provisions were intended to be perpetual or were subject to an implied term of reasonableness or a finite duration. The Court was required to determine the scope of ACI's obligations under the Deed in light of the language used and the surrounding circumstances at the time of its execution, particularly in relation to environmental liabilities that may not have been fully contemplated in 1987.

The Court analysed the Deed's wording, focusing on the absence of any express time limitation or mechanism for termination of the indemnity. It applied principles of contractual interpretation, emphasising that clear and unambiguous language is required to establish a perpetual obligation. The Court found that the Deed, as drafted, imposed a continuing indemnity without express limitation, and that there was no basis to imply a term that would curtail ACI's obligations. The Court rejected ACI's arguments that the indemnity should be limited by reference to the foreseeability of environmental liabilities or by analogy to statutory limitation periods.

The Court therefore made declarations that the Deed imposed an ongoing obligation on ACI to indemnify Amcor against liabilities arising from the disposal of the specified waste materials, and granted an injunction restraining ACI from asserting that its obligations under the Deed had ceased.