In the matter of Alexandria Landfill Pty Limited (No 2)

The matter before the court was an application by Alexandria Landfill Pty Limited, the respondent, seeking a declaration that the applicant, the first defendant, had breached the terms of a Shareholders Agreement and seeking associated costs. The dispute centred on the interpretation of the term "declare" in the company's constitution and the meaning of certain terms in the Shareholders Agreement. The primary issue for the court was to determine the correct interpretation of the term "declare" in the company’s constitution and the extent to which the Shareholders Agreement was binding on the company.

The court examined the constitution and the Shareholders Agreement in detail. It held that the term "declare" in the context of the company’s constitution was ambiguous and needed to be interpreted in light of the overall purpose and context of the constitution. The court found that the Shareholders Agreement did not bind the company as it was not authorised by the constitution. The court also concluded that the applicant had not breached the Shareholders Agreement as the terms were not binding on the company. The court found that the respondent was substantially successful in the proceeding, and thus, the costs should be apportioned in a manner that reflected the relative responsibility of the parties. The respondent was awarded costs, but the court ordered that a portion of these costs be reduced due to the severable issue being belatedly abandoned by the respondent.

The court ordered that the first defendant pay the respondent’s costs of the proceeding on an indemnity basis, with a reduction of 10% to reflect the belated abandonment of the severable issue by the respondent.