Bega Cheese Limited

The dispute in *Bega Cheese Limited* concerned the interpretation of a deed of covenant and release entered into between Bega Cheese Limited and its former director, Mr. Ian Donald. The core of the disagreement revolved around whether Mr. Donald was entitled to receive certain payments under the deed, specifically relating to a "Change of Control" event. The matter came before Justice Irgang of the Supreme Court of New South Wales.

The primary legal issue before the Court was to determine the proper construction of clause 3.1 of the deed, which stipulated the conditions under which Bega Cheese Limited was obliged to make payments to Mr. Donald. This involved an analysis of the language used in the deed, particularly the definition of a "Change of Control" and whether the specific transaction that occurred constituted such an event as contemplated by the parties. The Court was required to ascertain the objective intention of the parties at the time the deed was executed.

Justice Irgang's reasoning focused on the plain and ordinary meaning of the words used in the deed, read in their context. The Court considered the surrounding circumstances and the purpose of the deed, which was to provide for Mr. Donald's entitlements upon certain events following his departure from the company. The Court found that the transaction in question did not satisfy the definition of a "Change of Control" as it was narrowly defined within the deed. Therefore, Bega Cheese Limited was not obligated to make the payments sought by Mr. Donald under that specific clause.