Abstract

The majority decided in Hanel v O'Neill that directors of trustee companies could be held personally liable to discharge the debts incurred by a company pursuant to s 197(1) of the Corporations Act 2001 (Cth) . On 18 November 2005, legislation was passed to amend s 197(1); this was to overturn the decision. This article evaluates other relevant cases and argues that the recent amendment to s 197 is unsatisfactory as it leaves potential for abuse by directors of certain trustee companies. The article suggests further reform to the section and to this end, suggests ways for s 197 to reconcile with other parts of corporate law, such as insolvent trading and directors' duties.