Companies Act 2014 section 483

Civil liability of directors and experts

Section 483 establishes the civil liability of directors and experts involved in the preparation or implementation of a merger, allowing shareholders who suffer loss or damage due to misconduct or untrue statements to seek compensation.

• Shareholders who suffer loss due to misconduct by a director or expert during a merger can claim compensation from the responsible individual.
• Untrue statements in key merger documents — including the draft terms, directors' explanatory report, expert's report, and merger financial statement — give rise to a right to compensation.
• Directors can defend themselves by showing the document was issued without their knowledge or that they had reasonable grounds, after exercising all reasonable care and skill, to believe the statement was true.
• Experts who prepared reports can similarly avoid liability by promptly notifying the company and shareholders of the untruth, or by demonstrating competence and a reasonable belief in the truth of the statement.

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