WW Australia Pty Ltd & Village Themepark Management Pty Ltd v Trust Company Limited

The dispute before the Supreme Court of Victoria concerned the interpretation of a deed of covenant and a related lease agreement. WW Australia Pty Ltd and Village Themepark Management Pty Ltd (the applicants) sought declarations regarding their obligations under these agreements, which involved the operation of a theme park. Trust Company Limited (the respondent) was the trustee for the holders of secured notes issued by the applicants. The core of the disagreement lay in whether the applicants were obligated to pay a proportion of their gross revenue to the respondent, as trustee for the noteholders, under the terms of the deed of covenant.

The primary legal issue before the Court was to determine the proper construction of clause 10.1 of the deed of covenant. Specifically, the Court had to ascertain whether the phrase "gross revenue" as defined in the deed encompassed all revenue generated by the applicants from their theme park operations, or if it was limited to revenue derived from specific sources as argued by the applicants. This interpretation was crucial for determining the extent of the applicants' payment obligations to the respondent.

The Court analysed the language of the deed of covenant and the lease agreement, applying established principles of contractual interpretation. It considered the ordinary meaning of the words used, the context of the agreements as a whole, and the commercial purpose they were intended to serve. The Court found that the definition of "gross revenue" in the deed was broad and inclusive, encompassing all revenue generated from the operation of the theme park, irrespective of the specific source or how it was accounted for by the applicants. The Court rejected the applicants' submission that certain revenue streams should be excluded, finding no basis for such an exclusion in the plain wording of the deed.

The Court therefore made declarations that the applicants were obligated to pay a proportion of their gross revenue, as defined in the deed of covenant, to the respondent.