Cleanaway appeals Supreme Court ruling on FY18 landfill levy, takes $27.5m provision
Cleanaway Waste Management (ASX: CWY) has lodged an appeal against the Victorian Supreme Court decision concerning the historical underpayment of landfill levy at Melbourne Regional Landfill (MRL) for FY18, the company confirmed on 17 July 2026.
The two key financial takeaways for investors are a $27.5 million provision covering multiple periods, and an expected FY27 cash flow impact of approximately $12.3 million. The FY18 underpayment amount subject to the Supreme Court proceedings is $6.9 million.
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Breaking down the levy dispute and the numbers
The dispute spans three separate financial years, though only the FY18 matter was before the Supreme Court. The Victorian Environment Protection Authority (EPA) conducted separate audits for FY19 and FY22, claiming underpayments relating to similar products. These later amounts were not part of the court proceedings.
The Victorian Supreme Court landfill levy ruling, handed down in May 2026, found that quarry materials purchased from Boral for use at Melbourne Regional Landfill constitute ‘waste’ under the relevant legislation, establishing the legal basis on which the FY18 underpayment liability rests.
| Period | EPA Claimed Underpayment | Subject of Supreme Court Proceedings? | Notes |
|---|---|---|---|
| FY18 | $6.9m | Yes | Appeal lodged |
| FY19 | $4.7m | No | EPA audit, similar products |
| FY22 | $7.2m | No | EPA audit, similar products |
All amounts above are stated before costs and interest. Further detail regarding these proceedings is set out in Note 33 to Cleanaway’s FY25 Financial Report.
What the provision and cash impact mean for investors
Notwithstanding the appeal, Cleanaway intends to take a $27.5 million provision covering the relevant FY18, FY19 and FY22 levies plus assessed costs and accrued interest. The company will treat this provision as an “underlying adjustment.”
The expected cash flow impact for FY27 is approximately $12.3 million, representing payment of the disputed FY18 levy amount and associated costs and interest.
The distinction between the accounting treatment and the cash movement is set out below:
-
Accounting: $27.5m provision, treated as an underlying adjustment
-
Cash (FY27): approximately $12.3m, covering the FY18 levy plus costs and interest
The provision recognises the full estimated liability across all three periods while the appeal proceeds. The expected cash outflow is a fraction of the total provision and is confined to the FY18 matter.
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What happens next
The appeal of the Supreme Court decision has been lodged, with the outcome now pending. The FY19 and FY22 claimed amounts remain outside the court proceedings, while the provision is intended to be taken despite the appeal continuing.
The announcement was authorised for release by the Chair of Cleanaway.
Investors seeking full background on the proceedings can refer to Note 33 of Cleanaway’s FY25 Financial Report.
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