Natcomp Technology Australia Pty Ltd v Graiche

Natcomp Technology Australia Pty Ltd (Natcomp) appealed to the Full Federal Court against a decision of a single judge concerning the application of director's duties under section 60(1) of the *Corporations Law*. The dispute involved whether Mr Graiche was a de facto or shadow director of Natcomp, and the extent of his involvement in the company's business required to establish such a directorship.

The primary legal issue before the Full Federal Court was to determine whether Mr Graiche's conduct and level of influence over Natcomp's affairs constituted him as a director, either de facto or shadow, for the purposes of section 60(1) of the *Corporations Law*. This required the court to consider the nature and degree of control or direction Mr Graiche exercised over the company's management and operations.

The Court affirmed the principles governing the identification of de facto and shadow directors. It held that to be a de facto director, a person must act as a director in substance, even if not formally appointed. For a shadow director, the person must be someone in accordance with whose directions or instructions the directors of the company are accustomed to act. The Court found that the evidence supported the conclusion that Mr Graiche's involvement was such that he was accustomed to directing the directors of Natcomp, thereby fulfilling the criteria for being a shadow director.

The appeal was dismissed, and Natcomp was ordered to pay Mr Graiche's costs.