Section 1318(2) of the Corporations Act 2001 permits the Court to relieve directors from liability for past conduct where they have acted honestly and ought fairly to be excused, including against claims by third parties (not limited to claims by or on behalf of the company). However, s 1318(2) has no prospective operation — the Court cannot grant relief in advance for future breaches. Where the Court finds a particular type of conduct justified, directors can proceed on the basis that retrospective relief would almost certainly be available on a later application. Persons who have not yet suffered injury from asbestos exposure are not contingent or prospective creditors and cannot prove in a winding up.
The full text is available to signed-in members, including the 33 later cases that cite this judgment.
2 of the 33 citing cases carry a classified treatment. How each court treated it is available to signed-in members.