The Court held that a director's deed indemnity clause requiring a company to indemnify a director 'on a full indemnity basis and to the full extent permitted by law' obliges the company to pay the director's defence costs as and when incurred in proceedings alleging liability to the company, subject to a repayment obligation under cl 3.3(d) if the director is ultimately found liable — this is consistent with s 199A(3)(a) of the Corporations Act because the prohibition only bites upon a finding of liability. The Court further held that the 'Relevant Period' in the deed, which governed the separate advance-of-costs mechanism in cl 3.3(a), ended when the director first ceased office and was not retrospectively extended by a subsequent reappointment years later, meaning the advance provision had no application to proceedings arising from the director's third period of service. The indemnity under cl 3.1 was, however, broader than cl 3.3(a) and extended to liabilities incurred in related Italian proceedings seeking precautionary seizure orders, as those liabilities were incurred by the director in his capacity as an officer of the company.
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