Findex Group Limited v McKay

The case of Findex Group Limited v McKay involved a dispute between Findex and Mr McKay, a former principal of Civic Financial Planning Pty Ltd. The central issue was whether Mr McKay was personally bound by the restraint provisions in a shareholders' agreement and whether he breached these provisions. The court had to determine if Mr McKay, by signing the agreement both as a director of Vandaman and on his own behalf, was also personally bound by the terms of the shareholders' agreement. Another significant issue was the enforceability of the restraint provisions, particularly whether they were reasonably necessary to protect the legitimate interests of the parties. The court also considered whether Mr McKay breached the restraint provisions and if so, whether the applicants suffered any loss as a result.

The court found that Mr McKay was not personally bound by the restraint provisions in the shareholders' agreement because his signature on the agreement did not indicate an intention to be personally bound. The court ruled that the restraints were not enforceable as they were unreasonable in terms of the parties whose conduct they sought to restrain. This conclusion rendered the issue of whether Mr McKay breached the restraint provisions moot, as the restraints were deemed unenforceable. Regarding the potential breach of section 183(1) of the Corporations Act and the application for an injunction, the court did not find that Mr McKay breached this section. Lastly, the court dismissed the proceeding against Vandaman as it was in voluntary liquidation and did not appear at the final hearing.

The court ordered that the proceeding be dismissed, the applicants pay Mr McKay’s costs, and granted leave for the parties to apply to vary the costs order under specific conditions. The submissions for any variation of the costs order were to be concise and legible.