Western Australian Current Acts

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44 .         Duty of care and diligence

        (1)         An officer of an incorporated association must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if that person —

            (a)         were an officer of the association in the association’s circumstances; and

            (b)         occupied the office held by, and had the same responsibilities within the association as, the officer.

        Penalty: a fine of $10 000.

        (2)         An officer of an incorporated association who makes a business judgment is taken to meet the requirements of subsection (1), and his or her equivalent duties at common law and in equity, in respect of the judgment if the officer —

            (a)         makes the judgment in good faith for a proper purpose; and

            (b)         does not have a material personal interest in the subject matter of the judgment; and

            (c)         informs himself or herself about the subject matter of the judgment to the extent the officer reasonably believes to be appropriate; and

            (d)         rationally believes that the judgment is in the best interests of the association.

        (3)         For the purposes of subsection (2) —

        business judgment means any decision to take or not take action in respect of a matter relevant to the operations of the incorporated association.

        (4)         The officer’s belief that the judgment is in the best interests of the incorporated association is a rational one unless the belief is one that no reasonable person in the position of the officer would hold.

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