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Corporations (Aboriginal and Torres Strait Islander) Bill 2006

Part 6-4 Duties and powers of directors and other officers and employees

Division 262 Introduction

262-1   What this Part is about

This Part sets out some of the most significant duties of directors, secretaries, other officers and employees of Aboriginal and Torres Strait Islander corporations.

Other duties are imposed by:

               (a)     other provisions of this Act; and

              (b)     the provisions of the Corporations Act that are applied to Aboriginal and Torres Strait Islander corporations; and

               (c)     other laws (including the general law).

A particularly important duty that is imposed on the directors of an Aboriginal and Torres Strait Islander corporation is the obligation imposed by section 558G of the Corporations Act (as applied by section 531-1 of this Act) not to incur debts, make distributions to members or enter into uncommercial transactions when the corporation is insolvent.

Division 274 deals with the powers of directors.

Note:          Section 683-1 defines both director and officer . Officer includes, as well as directors and secretaries, some other people who manage the corporation or its property (such as receivers and liquidators).



 

Division 265 General duties

265-1   Care and diligence—civil obligation only

Care and diligence—directors and other officers

             (1)  A director or other officer of an Aboriginal and Torres Strait Islander corporation must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if that reasonable person:

                     (a)  were a director or officer of an Aboriginal and Torres Strait Islander corporation in the corporation’s circumstances; and

                     (b)  occupied the office held by, and had the same responsibilities within the corporation as, the director or officer.

Note 1:       This subsection is a civil penalty provision (see section 386-1).

Note 2:       Section 265-20 makes special provision for actions done to comply with Native Title legislation obligations.

Business judgment rule

             (2)  A director or other officer of an Aboriginal and Torres Strait Islander corporation who makes a business judgment is taken to meet the requirements of subsection (1), and the director’s or officer’s equivalent duties at common law and in equity, in respect of the judgment if he or she:

                     (a)  makes the judgment in good faith for a proper purpose; and

                     (b)  does not have a material personal interest in the subject matter of the judgment; and

                     (c)  informs himself or herself about the subject matter of the judgment to the extent he or she reasonably believes to be appropriate; and

                     (d)  rationally believes that the judgment is in the best interests of the corporation.

The director’s or officer’s belief that the judgment is in the best interests of the corporation is a rational one unless the belief is one that no reasonable person in the director’s or officer’s position would hold.

Note:          This subsection only operates in relation to duties under this section and the equivalent duties at common law or in equity (including the duty of care that arises under the common law principles governing liability for negligence). It does not operate in relation to duties under any other provision of this Act or under any other laws.

          (2A)  To avoid doubt, a director of an Aboriginal and Torres Strait Islander corporation that is a registered native title body corporate is not taken to have a material personal interest for the purpose of paragraph (2)(b) if the director does not need to give the other directors notice of the interest because section 268-5 applies.

             (3)  Business judgment is any decision to take or not take action in respect of a matter relevant to the business operations of the corporation.

265-5   Good faith—civil obligations

Good faith—directors and other officers

             (1)  A director or other officer of an Aboriginal and Torres Strait Islander corporation must exercise his or her powers and discharge his or her duties:

                     (a)  in good faith in the best interests of the corporation; and

                     (b)  for a proper purpose.

Note 1:       This subsection is a civil penalty provision (see section 386-1).

Note 2:       Section 265-20 makes special provision for actions done to comply with Native Title legislation obligations.

Note 3:       Section 265-35 deals with the situation of directors of wholly-owned subsidiaries.

             (2)  A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note 1:       Section 694-55 defines involved in .

Note 2:       This subsection is a civil penalty provision (see section 386-1).

265-10   Use of position—civil obligations

Use of position—directors, other officers and employees

             (1)  A director, secretary, other officer or employee of an Aboriginal and Torres Strait Islander corporation must not improperly use his or her position to:

                     (a)  gain an advantage for himself or herself or someone else; or

                     (b)  cause detriment to the corporation.

Note 1:       This subsection is a civil penalty provision (see section 386-1).

Note 2:       Section 265-20 makes special provision for actions done to comply with Native Title legislation obligations.

Note 3:       The contact person for the corporation is covered by the reference to an employee of the corporation.

             (2)  A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note 1:       Section 694-55 defines involved in .

Note 2:       This subsection is a civil penalty provision (see section 386-1).

265-15   Use of information—civil obligations

Use of information—directors, other officers and employees

             (1)  A person who obtains information because he or she is, or has been, a director or other officer or employee of an Aboriginal and Torres Strait Islander corporation must not improperly use the information to:

                     (a)  gain an advantage for himself or herself or someone else; or

                     (b)  cause detriment to the corporation.

Note 1:       This duty continues after the person stops being an officer or employee of the corporation.

Note 2:       This subsection is a civil penalty provision (see section 386-1).

Note 3:       Section 265-20 makes special provision for actions done to comply with Native Title legislation obligations.

Note 4:       The contact person for the corporation is covered by the reference to an employee of the corporation.

             (2)  A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note 1:       Section 694-55 defines involved in .

Note 2:       This subsection is a civil penalty provision (see section 386-1).

265-20   Acts done to comply with Native Title legislation obligations

                   A person who is a director or other officer, or an employee, of an Aboriginal and Torres Strait Islander corporation that is a registered native title body corporate does not contravene subsection 265-1(1), 265-5(1), 265-10(1) or 265-15(1), and does not breach the person’s equivalent duties at common law and in equity, merely because of doing (or refraining from doing) a particular act if the person does (or refrains from doing) the act:

                     (a)  in good faith; and

                     (b)  with the belief that doing (or refraining from doing) the act is necessary to ensure that the corporation complies with a Native Title legislation obligation.

265-25   Good faith, use of position and use of information—criminal offences

Good faith—directors and other officers

             (1)  A director or other officer of an Aboriginal and Torres Strait Islander corporation commits an offence if he or she:

                     (a)  is reckless; or

                     (b)  is intentionally dishonest;

and fails to exercise his or her powers and discharge his or her duties:

                     (c)  in good faith in the best interests of the corporation; or

                     (d)  for a proper purpose.

Penalty:  2,000 penalty units or imprisonment for 5 years, or both.

             (2)  A director or other officer of an Aboriginal and Torres Strait Islander corporation that is a registered native title body corporate does not contravene subsection (1) merely because of doing (or refraining from doing) a particular act if the director or other officer does (or refrains from doing) the act:

                     (a)  in good faith; and

                     (b)  with the belief that doing (or refraining from doing) the act is necessary to ensure that the corporation complies with a Native Title legislation obligation.

Note:          A defendant bears an evidential burden in relation to the matters in subsection (2) (see subsection 13.3(3) of the Criminal Code ).

Use of position—directors, other officers and employees

             (3)  A director, other officer or employee of an Aboriginal and Torres Strait Islander corporation commits an offence if he or she uses his or her position dishonestly:

                     (a)  with the intention of directly or indirectly gaining an advantage for himself or herself, or someone else, or causing detriment to the corporation; or

                     (b)  recklessly as to whether the use may result in him or her or someone else directly or indirectly gaining an advantage, or in causing detriment to the corporation.

Penalty:  2,000 penalty units or imprisonment for 5 years, or both.

Use of information—directors, other officers and employees

             (4)  A person who obtains information because he or she is, or has been, a director or other officer or employee of an Aboriginal and Torres Strait Islander corporation commits an offence if he or she uses the information dishonestly:

                     (a)  with the intention of directly or indirectly gaining an advantage for himself or herself, or someone else, or causing detriment to the corporation; or

                     (b)  recklessly as to whether the use may result in him or her or someone else directly or indirectly gaining an advantage, or in causing detriment to the corporation.

Penalty:  2,000 penalty units or imprisonment for 5 years, or both.

265-30   Interaction of sections 265-1 to 265-25 with other laws etc.

             (1)  Sections 265-1 to 265-25:

                     (a)  have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of the person’s office or employment in relation to an Aboriginal and Torres Strait Islander corporation; and

                     (b)  do not prevent the commencement of civil proceedings for a breach of a duty or in respect of a liability referred to in paragraph (a).

             (2)  This section:

                     (a)  does not apply to subsections 265-1(2) and (3) to the extent to which they operate on the duties at common law and in equity that are equivalent to the requirements of subsection 265-1(1); and

                     (b)  does not apply to section 265-20 to the extent to which it operates on the duties at common law and in equity that are equivalent to the requirements of subsections 265-1(1), 265-5(1), 265-10(1) and 265-15(1).

265-35   Directors of wholly-owned subsidiaries

                   A director of an Aboriginal and Torres Strait Islander corporation that is a wholly-owned subsidiary of a body corporate is taken to act in good faith in the best interests of the subsidiary if:

                     (a)  the constitution of the subsidiary expressly authorises the director to act in the best interests of the holding body corporate; and

                     (b)  the director acts in good faith in the best interests of the holding body corporate; and

                     (c)  the subsidiary is not insolvent at the time the director acts and does not become insolvent because of the director’s act.

265-40   Responsibility of secretaries for certain contraventions

             (1)  A secretary of an Aboriginal and Torres Strait Islander corporation commits an offence if the corporation contravenes:

                     (a)  subsection 69-20(1) or (2) (requirement to lodge copy of constitutional changes); or

                     (b)  section 88-1 (requirement to lodge material about change of name); or

                     (c)  subsection 112-5(5), (6) or (7) (requirements about registered office); or

                     (d)  section 180-35 (requirement to give copy of register of members or register of former members); or

                     (e)  subsection 304-5(1), (3), (5) or (6) (requirement to lodge details of directors and secretaries); or

                      (f)  section 330-10 (requirement to lodge general report); or

                     (g)  section 348-1 (requirement to lodge annual report).

Penalty:  5 penalty units.

             (2)  An offence based on subsection (1) is an offence of strict liability.

Note:          For strict liability , see section 6.1 of the Criminal Code .

             (3)  A person does not contravene subsection (1) if they show that they took all reasonable steps to ensure that the corporation complied with the section.

Note:          A defendant bears a legal burden in relation to a matter mentioned in subsection (3) (see section 13.4 of the Criminal Code ).

265-45   Meaning of reasonable reliance on information or advice provided by others

             (1)  If:

                     (a)  a director of an Aboriginal and Torres Strait Islander corporation relies on information, or professional or expert advice, given or prepared by:

                              (i)  an employee of the corporation whom the director believes on reasonable grounds to be reliable and competent in relation to the matters concerned; or

                             (ii)  a professional adviser or expert in relation to matters that the director believes on reasonable grounds to be within the person’s professional or expert competence; or

                            (iii)  another director or officer in relation to matters within the director’s or officer’s authority; or

                            (iv)  a committee of directors on which the director did not serve in relation to matters within the committee’s authority; and

                     (b)  the reliance was made:

                              (i)  in good faith; and

                             (ii)  after making an independent assessment of the information or advice, having regard to the director’s knowledge of the corporation and the complexity of the structure and operations of the corporation; and

                     (c)  the reasonableness of the director’s reliance on the information or advice arises in proceedings brought to determine whether a director has performed a duty under this Part or an equivalent general law duty;

the director’s reliance on the information or advice is taken to be reasonable unless the contrary is proved.

             (2)  To avoid doubt, a person may be considered an expert in relation to questions of traditional laws and customs.

265-50   Responsibility for actions of delegate

             (1)  If the directors of an Aboriginal and Torres Strait Islander corporation delegate a power under section 274-10, each director is responsible for the exercise of the power by the delegate as if the power had been exercised by the directors themselves.

             (2)  A director of an Aboriginal and Torres Strait Islander corporation is not responsible under subsection (1) if:

                     (a)  the director believed on reasonable grounds at all times that the delegate would exercise the power in conformity with the duties imposed on directors of the corporation by this Act and the corporation’s constitution (if any); and

                     (b)  the director believed:

                              (i)  on reasonable grounds; and

                             (ii)  in good faith; and

                            (iii)  after making proper inquiry if the circumstances indicated the need for inquiry;

                            that the delegate was reliable and competent in relation to the power delegated.



 

Division 268 Duties in relation to disclosure of, and voting on matters involving, material personal interests

268-1   Material personal interest—director’s duty to disclose

Director’s duty to notify other directors of material personal interest when conflict arises

             (1)  A director of an Aboriginal and Torres Strait Islander corporation who has a material personal interest in a matter that relates to the affairs of the corporation must give the other directors notice of the interest unless subsection (3) or section 268-5 says otherwise.

Penalty:  10 penalty units or imprisonment for 3 months, or both.

             (2)  For an offence against subsection (1), strict liability applies to the circumstance, that the director of an Aboriginal and Torres Strait Islander corporation has a material personal interest in a matter that relates to the affairs of the corporation.

Note:          For strict liability , see section 6.1 of the Criminal Code .

             (3)  The director does not need to give notice of an interest under subsection (1) if:

                     (a)  the interest:

                              (i)  arises because the director is a member of the corporation and is held in common with the other members of the corporation; or

                             (ii)  arises in relation to the director’s remuneration as a director of the corporation; or

                            (iii)  relates to a contract the corporation is proposing to enter into that is subject to approval by the members and will not impose any obligation on the corporation if it is not approved by the members; or

                            (iv)  arises merely because the director is a guarantor or has given an indemnity or security for all or part of a loan (or proposed loan) to the corporation; or

                             (v)  arises merely because the director has a right of subrogation in relation to a guarantee or indemnity referred to in subparagraph (iv); or

                            (vi)  relates to a contract that insures, or would insure, the director against liabilities the director incurs as an officer of the corporation (but only if the contract does not make the corporation or a related body corporate the insurer); or

                           (vii)  is in a contract, or proposed contract, with, or for the benefit of, or on behalf of, a related body corporate and arises merely because the director is a director of the related body corporate; or

                     (b)  all the following conditions are satisfied:

                              (i)  the director has already given notice of the nature and extent of the interest and its relation to the affairs of the corporation under subsection (1);

                             (ii)  if a person who was not a director of the corporation at the time when the notice under subsection (1) was given is appointed as a director of the corporation—the notice is given to that person;

                            (iii)  the nature or extent of the interest has not materially increased above that disclosed in the notice; or

                     (c)  the director has given a standing notice of the nature and extent of the interest under section 268-10 and the notice is still effective in relation to the interest.

Note:          Subparagraph (b)(ii)—the notice may be given to the person referred to in this subparagraph by someone other than the director to whose interests it relates (for example, by the secretary).

             (4)  The notice required by subsection (1) must:

                     (a)  give details of:

                              (i)  the nature and extent of the interest; and

                             (ii)  the relation of the interest to the affairs of the corporation; and

                     (b)  be given at a directors’ meeting as soon as practicable after the director becomes aware of the director’s interest in the matter.

The details must be recorded in the minutes of the meeting.

Effect of contravention by director

             (5)  A contravention of this section by a director does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.

Section does not apply to single director corporation

             (6)  This section does not apply to an Aboriginal and Torres Strait Islander corporation that has only 1 director.

268-5   Interest as common law holder of native title

             (1)  This section applies if:

                     (a)  an Aboriginal and Torres Strait Islander corporation is a registered native title body corporate; and

                     (b)  a director of the corporation has a particular interest as one of the common law holders of native title, being native title:

                              (i)  which the corporation holds in trust for the common law holders of the native title; or

                             (ii)  for which the corporation acts as agent or representative for the common law holders of the native title.

             (2)  The director does not need to give the other directors notice of the interest under subsection 268-1(1).

             (3)  A failure to give the other directors notice of the interest does not breach any general law rule about conflicts of interest.

268-10   Director may give other directors standing notice about an interest

Power to give notice

             (1)  A director of an Aboriginal and Torres Strait Islander corporation who has an interest in a matter may give the other directors standing notice of the nature and extent of the interest in the matter in accordance with subsection (2). The notice may be given at any time and whether or not the matter relates to the affairs of the corporation at the time the notice is given.

Note:          The standing notice may be given to the other directors before the interest becomes a material personal interest.

             (2)  The notice under subsection (1) must:

                     (a)  give details of the nature and extent of the interest; and

                     (b)  be given:

                              (i)  at a directors’ meeting (either orally or in writing); or

                             (ii)  to the other directors individually in writing.

The standing notice is given under subparagraph (b)(ii) when it has been given to every director.

Standing notice must be tabled at meeting if given to directors individually

             (3)  If the standing notice is given to the other directors individually in writing, it must be tabled at the next directors’ meeting after it is given.

Nature and extent of interest must be recorded in minutes

             (4)  The director must ensure that the nature and extent of the interest disclosed in the standing notice is recorded in the minutes of the meeting at which the standing notice is given or tabled.

Dates of effect and expiry of standing notice

             (5)  The standing notice:

                     (a)  takes effect as soon as it is given; and

                     (b)  ceases to have effect if a person who was not a director of the corporation at the time when the notice was given is appointed as a director of the corporation.

A standing notice that ceases to have effect under paragraph (b) commences to have effect again if it is given to the person referred to in that paragraph.

Note:          The notice may be given to the person referred to in paragraph (b) by someone other than the director to whose interests it relates (for example, by the secretary).

Effect of material increase in nature or extent of interest

             (6)  The standing notice ceases to have effect in relation to a particular interest if the nature or extent of the interest materially increases above that disclosed in the notice.

Effect of contravention by director

             (7)  A contravention of this section by a director does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.

268-15   Interaction of sections 268-1 and 268-10 with other laws etc.

                   Sections 268-1 and 268-10 have effect in addition to, and not in derogation of:

                     (a)  any general law rule about conflicts of interest; and

                     (b)  any provision in an Aboriginal and Torres Strait Islander corporation’s constitution (if any) that restricts a director from:

                              (i)  having a material personal interest in a matter; or

                             (ii)  holding an office or possessing property;

                            involving duties or interests that conflict with the director’s duties or interests as a director.

268-20   Restrictions on voting

Restrictions on voting and being present

             (1)  A director of an Aboriginal and Torres Strait Islander corporation who has a material personal interest in a matter that is being considered at a directors’ meeting must not:

                     (a)  be present while the matter is being considered at the meeting; or

                     (b)  vote on the matter.

Penalty:  5 penalty units.

             (2)  Subsection (1) does not apply if:

                     (a)  subsection (4) or (5) allows the director to be present; or

                     (b)  subsection 268-5(2) applies in relation to the interest; or

                     (c)  for any other reason, the interest does not need to be disclosed under section 268-1.

Note 1:       A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code ).

Note 2:       Because section 268-5 provides that certain interests a director has as a common law holder of native title do not need to be disclosed, those interests will not prevent the director from being present and voting.

             (3)  An offence against subsection (1) is an offence of strict liability.

Note:          For strict liability , see section 6.1 of the Criminal Cod e.

Participation with approval of other directors

             (4)  The director may be present and vote if directors who do not have a material personal interest in the matter have passed a resolution that:

                     (a)  identifies the director, the nature and extent of the director’s interest in the matter and its relation to the affairs of the corporation; and

                     (b)  states that those directors are satisfied that the interest should not disqualify the director from voting or being present.

Participation with Registrar’s approval

             (5)  The director may be present and vote if he or she is so entitled under a declaration or order made by the Registrar under section 268-25.

Director may consider or vote on resolution to deal with matter at general meeting

             (6)  If there are not enough directors to form a quorum for a directors’ meeting because of subsection (1), 1 or more of the directors (including those who have a material personal interest in that matter) may call a general meeting and the general meeting may pass a resolution to deal with the matter.

Effect of contravention by director

             (7)  A contravention by a director of:

                     (a)  this section; or

                     (b)  a condition attached to a declaration or order made by the Registrar under section 268-25;

does not affect the validity of any resolution.

268-25   Registrar’s power to make declarations and class orders

Registrar’s power to make specific declarations

             (1)  The Registrar may declare in writing that a director of an Aboriginal and Torres Strait Islander corporation who has a material personal interest in a matter that is being, or is to be, considered at a directors’ meeting may, despite the director’s interest:

                     (a)  be present while the matter is being considered at the meeting; or

                     (b)  vote on the matter; or

                     (c)  both be present and vote.

             (2)  A declaration under subsection (1) is not a legislative instrument.

             (3)  However, the Registrar may only make the declaration if:

                     (a)  the number of directors entitled to be present and vote on the matter would be less than the quorum for a directors’ meeting if the director were not allowed to vote on the matter at the meeting; and

                     (b)  the matter needs to be dealt with urgently, or there is some other compelling reason for the matter being dealt with at the directors’ meeting, rather than by a general meeting called under subsection 268-20(6).

             (4)  A declaration under subsection (1) may:

                     (a)  apply to all or only some of the directors; or

                     (b)  specify conditions that the corporation or director must comply with.

Registrar’s power to make class orders

             (5)  The Registrar may make an order in writing that enables directors who have a material personal interest in a matter to be present while the matter is being considered at a directors’ meeting, vote on that matter, or both be present and vote. The order may be made in respect of a specified class of Aboriginal and Torres Strait Islander corporation, directors, resolutions or interests.

             (6)  An order made under subsection (5) in respect of a class of Aboriginal and Torres Strait Islander corporation is a legislative instrument.

             (7)  The order may be expressed to be subject to conditions.

             (8)  Notice of the making, revocation or suspension of the order must be published in the Gazette .



 

Division 271 Duty to discharge certain trust liabilities

271-1   Directors liable for debts and other obligations incurred by corporation as trustee

             (1)  A person who is a director of an Aboriginal and Torres Strait Islander corporation when it incurs a liability while acting, or purporting to act, as trustee, is liable to discharge the whole or a part of the liability if the corporation:

                     (a)  has not discharged, and cannot discharge, the liability or that part of it; and

                     (b)  is not entitled to be fully indemnified against the liability out of trust assets solely because of one or more of the following:

                              (i)  a breach of trust by the corporation;

                             (ii)  the corporation’s acting outside the scope of its powers as trustee;

                            (iii)  a term of the trust denying, or limiting, the corporation’s right to be indemnified against the liability.

The person is liable both individually and jointly with the corporation and anyone else who is liable under this subsection.

Note:          The person will not be liable under this subsection merely because there are insufficient trust assets out of which the corporation can be indemnified.

             (2)  The person is not liable under subsection (1) if the person would be entitled to have been fully indemnified by 1 of the other directors against the liability had all the directors of the corporation been trustees when the liability was incurred.

             (3)  The person is not liable under subsection (1) merely because of doing (or refraining from doing) a particular act if the director does (or refrains from doing) the act:

                     (a)  in good faith; and

                     (b)  with the belief that doing (or refraining from doing) the act is necessary to ensure that the corporation complies with a Native Title legislation obligation.



 

Division 274 Powers of directors

274-1   Powers of directors (replaceable rule—see section 60-1)

             (1)  The business of an Aboriginal and Torres Strait Islander corporation is to be managed by or under the direction of the directors.

             (2)  The directors may exercise all the powers of the corporation except any powers that this Act or the corporation’s constitution requires the corporation to exercise in general meeting.

Note:          For example, the directors may enter into contracts and borrow money.

274-5   Negotiable instruments (replaceable rule—see section 60-1)

             (1)  Any 2 directors of an Aboriginal and Torres Strait Islander corporation that has 2 or more directors, or the director of an Aboriginal and Torres Strait Islander corporation that has only 1 director, may sign, draw, accept, endorse or otherwise execute a negotiable instrument.

             (2)  The directors may determine that a negotiable instrument may be signed, drawn, accepted, endorsed or otherwise executed in a different way.

274-10   Delegation

             (1)  Unless the corporation’s constitution provides otherwise, the directors of an Aboriginal and Torres Strait Islander corporation may by resolution delegate any of their powers to:

                     (a)  a committee of directors; or

                     (b)  a director; or

                     (c)  an employee of the corporation; or

                     (d)  any other person.

             (2)  The delegate must exercise the powers delegated in accordance with any directions of the directors.

             (3)  The exercise of the power by the delegate is as effective as if the directors had exercised it.

274-15   Right of access to corporation books

Right while director

             (1)  A person who is a director of an Aboriginal and Torres Strait Islander corporation may inspect the books of the corporation (other than its financial records) for the purposes of a legal proceeding:

                     (a)  to which the person is a party; or

                     (b)  that the person proposes in good faith to bring; or

                     (c)  that the person has reason to believe will be brought against him or her.

Note 1:       Section 322-25 gives the director a right of access to financial records.

Note 2:       See also section 376-1.

Right during 7 years after ceasing to be director

             (2)  A person who has ceased to be a director of an Aboriginal and Torres Strait Islander corporation may inspect the books of the corporation (including its financial records) for the purposes of a legal proceeding:

                     (a)  to which the person is a party; or

                     (b)  that the person proposes in good faith to bring; or

                     (c)  that the person has reason to believe will be brought against them.

This right continues for 7 years after the person ceased to be a director of the corporation.

Note:          See also section 376-1.

Right to take copies

             (3)  A person authorised to inspect books under this section for the purposes of a legal proceeding may make copies of the books for the purposes of those proceedings.

Corporation not to refuse access

             (4)  An Aboriginal and Torres Strait Islander corporation must allow a person to exercise the person’s rights to inspect or take copies of the books under this section.

Interaction with other rules

             (5)  This section does not limit any right of access to corporation books that a person has apart from this section.