Corporations (Aboriginal and Torres Strait Islander) Act 2006

CHAPTER 6 - OFFICERS  

PART 6-4 - DUTIES AND POWERS OF DIRECTORS AND OTHER OFFICERS AND EMPLOYEES  

Division 271 - Duty to discharge certain trust liabilities  

SECTION 271-1   DIRECTORS LIABLE FOR DEBTS AND OTHER OBLIGATIONS INCURRED BY CORPORATION AS TRUSTEE  

271-1(1)    
A person who is a director of an Aboriginal and Torres Strait Islander corporation when it incurs a liability while acting, or purporting to act, as trustee, is liable to discharge the whole or a part of the liability if the corporation:

(a)    has not discharged, and cannot discharge, the liability or that part of it; and

(b)    is not entitled to be fully indemnified against the liability out of trust assets solely because of one or more of the following:

(i) a breach of trust by the corporation;

(ii) the corporation ' s acting outside the scope of its powers as trustee;

(iii) a term of the trust denying, or limiting, the corporation ' s right to be indemnified against the liability.

The person is liable both individually and jointly with the corporation and anyone else who is liable under this subsection.

Note:

The person will not be liable under this subsection merely because there are insufficient trust assets out of which the corporation can be indemnified.

271-1(2)    
The person is not liable under subsection (1) if the person would be entitled to have been fully indemnified by 1 of the other directors against the liability had all the directors of the corporation been trustees when the liability was incurred.

271-1(3)    
The person is not liable under subsection (1) merely because of doing (or refraining from doing) a particular act if the director does (or refrains from doing) the act:

(a)    in good faith; and

(b)    with the belief that doing (or refraining from doing) the act is necessary to ensure that the corporation complies with a Native Title legislation obligation.