All Topics / Legal & Accounting / Personal liability extended for directors of corpo

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  • Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi there.

    It may be of interest to all the Trust junkies out there to hear about a recent South Australian Supreme Court decision. (Hanel & Anor v O’Neill [2003] SASC 409 (Supreme Court of South Australia (Full Court)).

    It seems that the court has decided that “Directors of corporate trustees will be personally liable for any liability incurred by the trustee if the trustee had insufficient assets to meet that liability at the time it was incurred. “

    For more info have a look at these:
    http://www.lawfuel.com/index.php?page=articles&handler=focus&publicationid=282&return=blur-article

    and

    http://www.mallesons.com/publications/alerts/Financial_Services_Alerts/7282186W.htm

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of FFCommFFComm
    Member
    @ffcomm
    Join Date: 2004
    Post Count: 627

    Wow!!!

    This is bad news. I feel that we should get a small party together and kneecap the bloke who refused to pay the rent…

    What are your thoughts on a company being trustee???
    Also what are the implications of lawsuits??? (is the trustee liable for accidents (i.e. some moron trips over a carpet and sues you for six figure sum??)).

    Rgds.
    Lucifer_au

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Lucifer

    Just remember, this guy signed a lease as director of the trustee company and then broke it mid term. when they sued, the trust had no assets so they have come after him. Usually a director/trustee would be required to provide a personal guarrantee. In this case it looks like he didn’t. But it is something deliberately done by the trustee. If there were accidents etc, then I am sure it would be different.

    Also good trust deeds may help.

    But I am not a lawyer, so don’t know what the hell I am talking about. Just bs-ing a bit!

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of FFCommFFComm
    Member
    @ffcomm
    Join Date: 2004
    Post Count: 627

    I think I would have to agree with you. One of the good things about a trust is protection of assets. It would be pointless if that protection would be removed….

    Well here hopeing!

    Rgds.
    Lucifer_au

Viewing 4 posts - 1 through 4 (of 4 total)

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