In the recent case of Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6 the Full Federal Court has shed some light on the definition of de facto director. The decision draws attention to a wider range of persons who may be covered by the law in relation to directors and consequently a wider range of persons who may be at risk of liability.
In Grimaldi, a number of companies joined forces for a mining project.
The Full Federal Court set out the principles which determine whether a person is a de facto director. It was held that a ‘director’ for the purposes of the law may include a person who although not validly appointed as such, that person ‘acts’ in the position of a director. The court also pointed out that it was possible for a person’s relationship with a company to grow from being a person on the sidelines to the position of de facto director.
The determination of de facto director status will depend on the nature and extent of the functions performed and the constraints imposed on them. Grimaldi was a ‘consultant’ but his activities within the company put him in the position of de facto director.
For more information or legal advice on this issue or other commercial law issues contact a commercial lawyer at Matthews Folbigg in Parramatta. We specialise in business law including director’s duties.
Phillip Brophy
Commercial, Trusts, Estate Planning & Superannuation Group
Phone: 02 9635 7966
Email: phillipb@matthewsfolbigg.com.au
