Director´s Retirement Benefit Held To Be Valid

In brief

• A director arranged for his services to be made available through a company, and requested that payment be made to it.

• The court accepted that the payment had been made available, indirectly, to the director as remuneration, for the purpose of calculating the maximum retirement benefit that could be paid to the director.

The Corporations Act 2001 limits the amount that companies may pay a director in connection with their retirement, without shareholder approval. In Dome Resources NL v Silver [2008] NSWCA 322, the New South Wales Court of Appeal considered this limitation in the context of a challenge to the validity of a retirement deed, which it held to be valid and effective.