Alan Davis Group v Rivkin Financial Services

The case of Alan Davis Group v Rivkin Financial Services involved a dispute over the validity of a selective share buy-back agreement between the two companies. The agreement was conditional upon approval by the shareholders, which was to be recommended by the directors. The plaintiff, Alan Davis Group, purported to terminate the agreement when the market value of the other shares increased. The defendants, Rivkin Financial Services, argued that the termination was invalid, as it was dependent on shareholder approval, which had not been obtained. The case was heard in the Federal Court of Australia.

The legal issues before the court included whether the plaintiff's termination of the agreement was valid, whether the plaintiff was an associate of the party that negotiated the settlement under the ASX listing rules, and whether the plaintiff was excluded from voting under the listing rules. The court was required to determine whether the plaintiff's actions complied with the ASX listing rules and whether the termination of the agreement was valid.

In its decision, the court found that the plaintiff's termination of the agreement was invalid as it was dependent on shareholder approval, which had not been obtained. The court also found that the plaintiff was an associate of the party that negotiated the settlement under the ASX listing rules, as it was acting in concert with that party. However, the court found that the plaintiff was not excluded from voting under the listing rules, as the provision in question did not apply to the circumstances of the case. The court ordered that the agreement be implemented as per its original terms.

The court's decision provides important guidance on the validity of selective share buy-back agreements and the requirements for shareholder approval under the ASX listing rules. The case highlights the importance of ensuring that all necessary approvals are obtained before terminating such agreements and the need for companies to carefully consider the implications of acting in concert with other parties.