Rickus v Motor Trades Association of Australia Superannuation Fund Pty Limited [2010] FCAFC 16

Rickus v Motor Trades Association of Australia Superannuation Fund Pty Limited [2010] FCAFC 16

On the proper construction of the Deed of Indemnity and the company constitution, the appellant is entitled to indemnity for legal costs incurred in successfully defending or resisting proceedings brought by the company (Trustee) or in circumstances where those proceedings are discontinued without a finding of liability against the director, as s 199A(3) Corporations Act only prohibits indemnity where a finding of liability is made. Since no such finding was made in the Trustee's proceedings, the appellant is entitled to indemnity. The primary judge's contrary finding and approach to costs were in error, and the appropriate order is that the Trustee pay the appellant's costs occasioned by...

Jurisdiction
Australia
Judgment Date
26 February 2010
Procedural Posture
Appeal / Judgment on Appeal and Leave Applications
Outcome
Appeal allowed
Legal Topics
["directors' Indemnity" 'construction of Indemnity Deeds' 'company Constitutions' 'legal Costs' 'discontinuance of Proceedings']
['corporations Law' 'superannuation Law' 'contract Law'] ["directors' Indemnity" 'construction of Indemnity Deeds' 'company Constitutions' 'legal Costs' 'discontinuance of Proceedings']

Case Brief

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Procedural Posture

Appeal / Judgment on Appeal and Leave Applications

Legal Issues

  1. 1 ['Interpretation of Deed of Indemnity regarding indemnity of director for legal costs against claims brought by the company itself' 'Whether company constitution provides independent indemnity for director' "Application of s 199A Corporations Act on indemnities for directors' liabilities and costs" 'Proper approach to costs orders after discontinuance of proceedings' "Existence and scope of common law indemnity for directors' costs"]

Ratio Decidendi

On the proper construction of the Deed of Indemnity and the company constitution, the appellant is entitled to indemnity for legal costs incurred in successfully defending or resisting proceedings brought by the company (Trustee) or in circumstances where those proceedings are discontinued without a finding of liability against the director, as s 199A(3) Corporations Act only prohibits indemnity where a finding of liability is made. Since no such finding was made in the Trustee's proceedings, the appellant is entitled to indemnity. The primary judge's contrary finding and approach to costs were in error, and the appropriate order is that the Trustee pay the appellant's costs occasioned by...

Court Disposition

Appeal allowed

Orders

  • ["The time for the appellant's application for leave to appeal costs order is extended to 4 February 2009." 'Leave to appeal is granted.' 'The appeal is allowed.' "Set aside the primary judge's order dismissing the appellant's Cross-Claim and order for costs." 'Declare the appellant is entitled to indemnity under...