South Australian Current Acts South Australian Current Acts53—Duty to deposit trust money in combined trust account
(1) A law practice
must, within 14 days after 31 May, and within 14 days after
30 November, in each year, out of trust money held in the practice's
general trust account, deposit the appropriate amount in the combined trust
account.
(2) The appropriate
amount is the amount (if any) necessary to ensure that the following formula
is satisfied:
Where—
"A" "1" is the amount held on the practice's behalf in
the combined trust account
"A" "2" is the lowest aggregate (determined by reference to the relevant ADI
statements) of the amount held in the practice's general trust account and the
amount (if any) simultaneously held in the combined trust account on the
practice's behalf during the period of 6 months ending on 31 May or
30 November (as the case requires).
(3)
The combined trust account is a composite account consisting of separate
accounts established by the Society at each approved ADI.
(4) If a law practice
maintains 2 or more general trust accounts, those accounts will, for the
purposes of this section, be taken to be a single trust account the balance of
which is the aggregate of the respective balances of each of those
trust accounts.
(a) may
withhold money from deposit under subsection (1) if—
(i)
the money is necessary to meet an immediate claim on the
practice's general trust account or to establish or maintain a reasonable
balance in the general trust account sufficient to meet claims reasonably
expected in the ordinary course of legal practice in the near future; and
(ii)
the practice has, on or before the day on which a deposit
under subsection (1) is required to be made, given written notice to
the Society accordingly; and
(b) is
not obliged to deposit money under subsection (1) in relation to a
particular period of 6 months if the lowest aggregate referred to in
subsection (2) was, during that period, less than $10 000 (or some
other sum fixed by regulation for the purposes of this subsection).
(6) If a
general trust account is maintained by a firm of legal practitioners or a firm
of incorporated legal practices or a firm of legal practitioners and
incorporated legal practices, the general trust account will, for the purposes
of this section, be taken to be the general trust account of each member of
the firm, and the members of the firm are each liable to perform the
obligations imposed by this section, but the discharge by 1 member of the firm
of the obligations under this section in relation to the general trust account
will be taken as a discharge by all the members of the firm of their
obligations in relation to that general trust account.
(7) If the Council has
reasonable cause to suspect that a law practice has not complied with the
obligations of this section, it may, by notice in writing served on the
practice, require the practice to attend before it and to produce evidence of
the trust money received by the practice, the amount from time to time
standing to the credit of the general trust account, and such other relevant
matters as may be specified in the notice.
(8) If a law practice
establishes a general trust account and has, at the time of establishing the
account, no other trust account, the balance of the general trust account
during the first month after its establishment is, for the purposes of this
section, to be ignored.
(9) A law practice
that fails to make the appropriate deposit by the last date for payment is
liable to pay the Society, for the credit of the statutory interest account,
interest on the outstanding amount at the prescribed rate for the period of
the default but, if the appropriate deposit is made within 7 days after
that date, no liability for interest arises under this subsection.
(10) A law practice
may withdraw money held on the practice's account in
the combined trust account if, and only if, the withdrawal is necessary to
meet an immediate claim on the practice's general trust account or to
establish a reasonable balance in the general trust account sufficient to meet
claims reasonably expected in the ordinary course of legal practice in the
near future.
(11) If a law practice
withholds money from deposit under subsection (5)(a) or withdraws money
under subsection (10), the external examiner for the law practice must,
in the external examiner's report for the relevant year, express an opinion on
whether the withholding or withdrawal was justified, and if the amount exceeds
the amount that could, in the external examiner's opinion, be reasonably
justified, on the amount of the excess (but before the external examiner
includes a statement expressing such an opinion in the report, the external
examiner must allow the practice a reasonable opportunity to comment on the
proposed statement and may make any modification to the proposed statement
that the external examiner considers justified in the light of the practice's
comments).
(12) If the
withholding or withdrawal of money is not justified, or exceeds an amount that
could be reasonably justified, the law practice is liable to pay to
the Society, for the credit of the statutory interest account, interest at the
prescribed rate on the amount withheld or withdrawn, or the amount of the
excess, (as the case requires), from the date of the withholding or withdrawal
until the amount on deposit in the combined trust account is restored to the
level required by this section.
(13) The Society may,
for any proper reason, remit interest payable under subsection (9) or
(12) wholly or in part.
(a) may
approve an ADI for the purposes of this section if satisfied that the ADI is
prepared to pay a reasonable rate of interest on money deposited in
the combined trust account; and
(b) may
revoke an approval previously given under this subsection.
(15) If the Society
revokes the approval of an ADI under subsection (14)
the combined trust account, so far as it was kept at that ADI, must be
transferred to an ADI that continues as an approved ADI.
(16) In this
section—
"general trust account" has the same meaning as in Schedule 2.