I think you misunderstood. Shareholder can't be liable for the actions of the company.
But the people who may be shareholders do other things such as be directors or perform work at the property and they could potentially be sued because of this.
Does shareholder of corporate trustee matter?
- Thread starter ilovemalteser
- Start date
I think you misunderstood. Shareholder can't be liable for the actions of the company.
But the people who may be shareholders do other things such as be directors or perform work at the property and they could potentially be sued because of this.
so as an example so I fully understand, in the even there was an accident at the property and insurance would not cover then who is responsible or what protection is there for the shareholder and director (does it differ?).
For instance, if there was an electrical fault and it was reported and nothing done and an accident, the Trustee may be responsible for negligence - who would get the blame in this case - the directors of the Trustee coy.
And if there was say an unapproved granny flat/part of the bulding (ie dual income) and there was an accident to one of the tenants (that had not been reported and there was no negligence/OHS issues evident) - who would then be liable or a potential target (should we say) for prosecutors - the Trustee coy's directors as they are the one directing the actions?
For instance, if there was an electrical fault and it was reported and nothing done and an accident, the Trustee may be responsible for negligence - who would get the blame in this case - the directors of the Trustee coy.
And if there was say an unapproved granny flat/part of the bulding (ie dual income) and there was an accident to one of the tenants (that had not been reported and there was no negligence/OHS issues evident) - who would then be liable or a potential target (should we say) for prosecutors - the Trustee coy's directors as they are the one directing the actions?
Depending on the circumstances...
If negligence then the person who causes the injury and/or the occupier such as tenant or owner. This may generally be the owner, but could be the person leasing the property or it could be the person who repaired the glass window with the wrong glass or it could be the agent.
If contractual then it would usually be the person who enters the contract. With a property this would usually be the title holder.
A trust is not a legal entity so it cannot purchase property. The title holder is the trustee.
(one last question)
and who is responsible from the Trustee coy in the event of negligence on the property if nobody else is at fault (ie not a tradesman or agent). Will they come for the coy's directors or shareholders or both?
See above.
A company is a separate legal person and can be sued. Shareholders are separate legal persons to the company. If there is no fault then there probably will be no action. If the company is sued it is the company itself that is named on court documents. The company will be a $2 asset but indemnified out of the trust assets. So there the assests of the trust will be at risk.
Generally directors won't be sued, but they can.
I had some clients operating a business through a company, yet an action was brough against them personally because of the way they conducted the business.
This is all from the POV of the landlord being sued.
What about the other angle of an individual beneficiary being sued?
Thanks Terry, I am just playing devil's advocate and just playing the worst case scenario which I think is there being a death/accident on the property and the insurance (if there is any claim) dont cover under their Policy who would then be next in line to blame (or sue from the point of the prosecution).
If it is the Trust coy then the only thing they can get/recover is the trust assets (being the house itself) but dont have access/right to go after the shareholders and/or director - right?
If it is the Trust coy then the only thing they can get/recover is the trust assets (being the house itself) but dont have access/right to go after the shareholders and/or director - right?
Just think if you had ANZ shares and ANZ went down could a liquidator come after your assets? Nope
If there is a death/injury at the property then the likely one to be sued would be the trustee company. It is possible for them to go after the directors, but this would depend on a lot of things and would probably be unlikely.
