Findex Group Limited v McKay

Findex Group Limited appealed against a decision of the primary judge in relation to a restraint of trade clause in a shareholders agreement. The appeal was dismissed by the Full Court of the Federal Court. The primary judge found the restraint of trade provision to be unreasonable and therefore not enforceable. The appellants submitted that the primary judge erred in his construction of the restraint of trade clause and that it should have been given a "commercial construction". The court held that the primary judge's interpretation was not erroneous as it gave effect to the unambiguous terms used by the parties. The court further held that the restraint of trade clause contained separate groups of restraints by "Covenantors" and "Affiliates", and that the primary judge's construction did not contain such an error. The court also held that the restraint of trade provision could not be severed in the manner contended by the appellants. Finally, the court held that the restraint of trade provision was not valid and enforceable because it was unreasonable.

The appeal was dismissed and the appellants were ordered to pay the first respondent's costs of and incidental to the appeal. The Full Court held that it was expedient and in the interests of justice to entertain the arguments put on appeal, as the appeal arguments concerned questions of law and raised no new facts. The court also held that there was no prejudice to the first respondent if the appellants were permitted to advance the arguments on appeal.