The Senate today passed without amendment the Corporations Amendment Bill (No.1) 2005.
“The Bill amends the Corporations Act 2001, to clarify the scope of the potential personal liability of the directors of corporate trustees”, said the Hon Chris Pearce MP, Parliamentary Secretary to the Treasurer.
The amendment addresses concerns that have arisen in light of the decision of the South Australian Supreme Court in the case of Hanel v O’Neill, that directors of corporate trustees could be personally liable in any case where there are insufficient assets to discharge the liabilities of the trust.
Mr Pearce said that it was important to clarify the extent of personal liability faced by directors.
“As a result of Hanel, these directors were effectively treated as guarantors of any liability entered into on behalf of a trust. This was never the intention of the relevant provision.
“The Bill will improve certainty for the directors of all corporate trustees, from large superannuation trusts through to trading trusts running a small business,” he said.
The Bill also contains a technical amendment to clarify the operation of a transitional provision in the Corporations Act. The amendment will ensure the auditor independence provisions that applied prior to the enactment of the CLERP 9 legislation continue to apply to financial years commencing prior to 1 July 2004.
Mr Pearce thanked all stakeholders who provided comments on the Bill.
10 November 2005
CANBERRA
Contact: Gillian Harvey (03) 9887 3890