Commonwealth Consolidated Acts

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Directors liable for debts and other obligations incurred by corporation as trustee

             (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.

             (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.

             (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.

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