In Rickus v Motor Trades Association of Australia Superannuation Fund Pty Limited [2010] FCAFC 16, the Federal Court of Australia Full Court allowed an appeal from a Federal Court decision that a director’s deed of indemnity only related to costs involved in third party claims, not costs in respect of disputes with the company of which he was a director.

The Full Court considered the terms of the deed, company’s Constitution and section 199A of the Corporations Act and decided that the appellant (who was the company’s former chairman) was entitled to indemnity pursuant to the Deed of Indemnity in the circumstances of the present case in respect of legal costs incurred by him in defending and resisting the Trustee’s proceedings and in resisting the Trustee’s claims before those proceedings were commenced.

If you are a company director do you know what your deed says? As deeds of indemnity are, like insurance policies, only looked at after an event occurs, we recommend a regular review to ensure they remain appropriate to your needs.