THE CORPORATIONS LAW

CHAPTER 2L - DEBENTURES

PART 2L.4 - TRUSTEE

SECTION 260JB   EXEMPTIONS AND INDEMNIFICATIONS OF TRUSTEE FROM LIABILITY  

260JB(1)  [Exemptions and indemnifications]  

A term of a debenture, provision of a trust deed or a term of a contract with holders of debentures secured by a trust deed, is void in so far as the term or provision would have the effect of:

(a)  exempting a trustee from liability for breach of section 260JA for failure to show the degree of care and diligence required of it as trustee; or

(b)  indemnifying the trustee against that liability;

unless the term or provision:

(c)  releases the trustee from liability for something done or omitted to be done before the release is given; or

(d)  enables a meeting of debenture holders to approve the release of the trustee from liability for something done or omitted to be done before the release is given.

260JB(2)  [Definition of release]  

For the purposes of paragraph (1)(d):

(a)  a release is approved if the debenture holders who vote for the resolution hold 75% of the nominal value of the debentures held by all the debenture holders who attend the meeting and vote on the resolution; and

(b)  a debenture holder attends the meeting and votes on the resolution if:

(i) they attend the meeting in person and vote on the resolution; or

(ii) if proxies are permitted - they are represented at the meeting by a proxy and the proxy votes on the resolution.