Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 233

233. (1) Where:

   (a)  a relevant body corporate while acting or purporting to act in the
        capacity of trustee of a trust, incurs a liability:

        (i)    in the case of a company or prescribed corporation-whether
               within or outside Australia; or

        (ii)   in the case of a foreign corporation-within Australia;

   (b)  the relevant body corporate is for any reason not entitled to be fully
        indemnified out of the assets of the trust in respect of the
        liability; and

   (c)  the relevant body corporate has not discharged, and is unable to
        discharge, the liability or a part of the liability; the relevant body
        corporate and the persons who were directors of the
        relevant body corporate when the liability was incurred and were not
        innocent directors in relation to the incurring of the liability are
        jointly and severally liable to discharge the liability or the
        undischarged part of the liability, as the case may be.

(2) For the purposes of this section, a trustee of a trust shall not, merely
because:

   (a)  the trust has no assets; or

   (b)  the assets of the trust are insufficient to indemnify the trustee in
        respect of the liability concerned; be taken not to be entitled to be
        fully indemnified out of the assets of the trust in respect of a
        liability.

(3) In this section:

"Australia" includes the external Territories;

"innocent director", in relation to the incurring of a liability by a
relevant body corporate while acting or purporting to act in a capacity of
trustee of a trust, means a person who:

   (a)  was a director of the relevant body corporate at the time when the
        liability was incurred; and

   (b)  if the persons who were directors of the relevant body corporate at
        that time had been at that time the trustees of the trust and had
        incurred the liability, would have been entitled to be fully
        indemnified in respect of the liability by one or more of the other
        trustees;

"liability" means a debt, liability or other obligation;

"relevant body corporate" means:

   (a)  a company;

   (b)  a foreign corporation; or

   (c)  a prescribed corporation.