Note Printing Australia Ltd v Leckenby

Note Printing Australia Ltd brought proceedings against one of its former directors, Mr Leckenby, seeking to recover costs and expenses incurred in defending criminal proceedings against him. The Federal Court was asked to determine whether the former director was entitled to be indemnified during the proceedings and before the verdict, or whether the indemnity arose only at the conclusion of the proceedings if there was no finding of guilt. The court was also required to determine whether the obligation to refund the former director's costs if he was found guilty breached section 199A(3)(b) of the Corporations Act 2001 (Cth).

The court found that the deed of indemnity provided that the former director was to be indemnified by the company during the proceedings and before the verdict, and that the obligation to refund arose only if the former director was found guilty. The court held that the obligation to refund did not breach section 199A(3)(b) of the Corporations Act, as it was a condition subsequent to the former director's guilt, and not a penalty. The court applied the decision in Rickus v Motor Trades Association of Australia Superannuation Fund Pty Ltd (2010) 265 ALR 112, which held that a condition subsequent did not breach the prohibition in section 199A(3)(b) of the Corporations Act.

The court held that the former director was entitled to be indemnified during the proceedings and before the verdict, and that the obligation to refund did not breach section 199A(3)(b) of the Corporations Act. The court dismissed the appeal and granted leave to appeal to the Full Court of the Federal Court. The final orders were that the appeal be dismissed and leave to appeal be granted to the Full Court of the Federal Court.