One missing agreement, one stalled buyback, and a $222,500 order
A Queensland court has ordered a company to honour a share buyback promise made to a senior executive more than three decades ago.
When Greg Johnston retired in July 2019, after more than 44 years with Aquatec Maxcon Group Ltd — serving as its managing director since 1985 — he expected a clean exit. In 1989, as part of a management buyout, Johnston and other senior staff had signed a deed with 202 Ltd, the company's ultimate holding company. They each purchased shares in Aquatec, and 202 Ltd undertook to use its best efforts to buy those shares back at a set per-share value based on the company's annual accounts when staff resigned after at least five years. It was, in the words of Johnston's counsel, an arrangement that "incentivised the senior staff to continue working for Aquatec on the promise that something of real value would be provided in return."
Johnston held up his end. He turned down other job opportunities over the years, partly because he believed the buyback would be there when the time came.
202 Ltd did initially follow through. In August 2019, it purchased 300,000 of Johnston's shares at $4.45 per share, totalling $1,335,000. But when Johnston came back for the remaining 50,000 shares in July 2020, the company stalled. By early 2021, it had refused outright. Johnston took the matter to court in October 2021.
Then things got complicated. After the litigation began, 202 Ltd found a second agreement buried in its own records, signed on 23 May 1994, that everyone, including Johnston himself and the company's own directors, had completely forgotten. That agreement declared the 1989 deed "is superseded by this agreement and is null and void and to no effect whatsoever," and required renegotiation by 23 May 1997, failing which it would terminate. 202 Ltd argued this wiped out any remaining obligation.
In a decision handed down on 2 March 2026, the District Court of Queensland rejected that argument. The court found that because neither party had ever attempted to renegotiate the 1994 agreement, and neither had formally ended it, the agreement had not automatically lapsed. It remained in force. And so did 202 Ltd's obligation.
The court went further. Even if both agreements had fallen away, it found 202 Ltd still could not simply walk away. For over 27 years, the company had noted in every annual report that it was obliged to buy back senior staff's shares on resignation. Johnston had read those disclosures each year and taken them at face value. He told the court that had he known otherwise, "I would have seen that as a serious breach of faith and I would have been out of there."
202 Ltd was ordered to purchase the remaining 50,000 shares at $4.45 per share, totalling $222,500. Its separate claim seeking a partial refund for the first 300,000 shares was dismissed.
The message for reward and HR practitioners is straightforward. Share schemes and buyback undertakings carry legal weight well beyond the day they are signed and filed. When a company reaffirms those commitments year after year in its own publications, they can crystallise into enforceable obligations regardless of what other documents exist. Reviewing legacy retention arrangements, particularly for long-tenured employees approaching retirement, is not optional. It is basic people risk management.
