Section 197(1)(b) of the Corporations Act 2001 (Cth) remains uncertain in its operation: it is unclear whether a director of a corporate trustee escapes personal liability where the trust deed provides an entitlement to indemnity but the trust has no assets. Three judges of the Full Court of the Supreme Court of South Australia reached different conclusions on this question. In proceedings against a director under s 197, the underlying liability of the corporate trustee must be independently established and cannot be conclusively proved by a default judgment against the corporate trustee alone.
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