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Rules of Practice 1994 (S.R. 1994, No. 229)
|Requested: 29 Apr 2017|
|Consolidated as at: 17 Mar 2006|
Division 11 - Trust account inspectors
47. Appointment of trust account inspectors
(1) The Council, by instrument, may appoint one or more trust account inspectors.
(2) An instrument is to be signed by 2 members of the Council.
(3) A person may not be appointed as a trust account inspector unless he or she
(a) is a member of the Institute of Chartered Accountants; or
(b) is a member of the Australian Society of Certified Practising Accountants; or
(c) holds an approved qualification.
48. Assistant trust account inspector
A trust account inspector, with the approval of the Council, may appoint an assistant.
49. Bank accounts
A legal practitioner is to supply to the trust account inspector particulars of each bank account maintained or operated by that legal practitioner in respect of his or her practice during the accounting period.
(1) A trust account inspector is to carry out an examination, at least once in every 12 month period, of each legal practitioner who holds a practising certificate.
(2) An examination is to consist of the following:
(a) an examination of the book-keeping system in each place of business of the legal practitioner to determine whether or not the system complies with the requirements of this Part;
(b) a check of a sample of postings to each trust ledger from records of receipts and payments of clients' money;
(c) a check of the arithmetical accuracy of those records;
(d) a comparison of a sample of lodgements into, and payments from, the trust account, as shown in bank statements, with the records of receipts and payments of clients' money;
(e) a check of the system of recording costs and making withdrawals in respect of costs from the trust account;
(f) a sample of transactions recorded in each trust ledger during the accounting period in order to ascertain
(i) whether the entries relating to those transactions are in accordance with the rights of each client as those rights appear to the trust account inspector from the documents held by the legal practitioner; and
(ii) whether the accounting has been carried out in accordance with this Part;
(g) a check of the extraction of balances of the trust ledger accounts at any one date during the accounting period including
(i) a check of the additions of the extraction of balances; and
(ii) a check of the reconciliation of the total of the balance with the balance shown in the bank statement; and
(iii) a check that any amount shown in the reconciliation as being money in hand was promptly deposited; and
(iv) direct confirmation with the bank concerned of the accuracy of the bank balance used in the reconciliation;
(h) a check that, as at the date chosen for the check of the extraction of balances and the check of the reconciliation, the total of any debit balances in the trust ledger account was covered in accordance with rule 37;
(i) a check of some money taken to the credit of the office account of the legal practitioner to ascertain that the credit was not money which should have been credited to a client's trust account;
(j) an inquiry into the amount on deposit with the Trust.
(3) A trust account inspector may carry out an approved inspection of a legal practitioner's affairs if the inspection relates to the operation of that legal practitioner's trust bank account.
(4) The Council may fix and impose a scale of fees for an examination.
(5) A trust account inspector may carry out an examination in the presence of a legal practitioner appointed by the Council under subrule (6).
(6) The Council may appoint a legal practitioner to be present at an examination.
51. Documents for examination
(1) A trust account inspector may require a legal practitioner to produce for examination the following documents held by the legal practitioner on behalf of a client:
(a) stocks or shares;
(b) mortgages or other securities;
(d) any other documents.
(2) A legal practitioner is to comply with a requirement made under subrule (1).
(3) A legal practitioner complies with a requirement made under subrule (1) in respect of a title or mortgage if he or she produces for inspection a receipt or other documentary evidence that the title or mortgage has been produced for the purpose of the Land Titles Act 1980.
52. Report to Council
(1) A trust account inspector is to report to the Council if, in the course of examining a legal practitioner's accounting records and other relevant documents, the trust account inspector
(a) finds those records to be in disorder at any time during the accounting period; or
(b) considers that there should be a closer examination of the records; or
(c) has reasonable grounds to suspect that
(i) there is irregularity in the accounts; or
(ii) the legal practitioner has failed to keep the accounts in accordance with this Part.
(2) A trust account inspector may make any further examination necessary to complete a report if of the opinion that a legal practitioner has not complied with this Part.
(3) A further examination is not limited to the accounting records for the accounting period.
53. Letters to clients
(1) A trust account inspector, at the time of making an examination, may require the legal practitioner whose accounting records are under examination to deliver certain letters to the inspector.
(2) The letters are to
(a) be in an approved form; and
(b) be written on the business paper or letterhead of the legal practitioner; and
(c) be signed by the legal practitioner; and
(d) be addressed to those clients specified by the inspector.
(3) Subject to subrule (4), the number of letters required to be provided by the legal practitioner is not to exceed 10% of the number of clients of the legal practitioner who are involved in money for investment or securities.
(4) The number of letters may exceed 10% of the clients of the legal practitioner, if
(a) the legal practitioner consents; or
(b) the Council approves.
(5) A legal practitioner must comply with a requirement made under subrule (1).
(1) A legal practitioner has the right on the ground of privilege to refuse to produce any document to a trust account inspector engaged in an examination.
(2) If a legal practitioner refuses to produce any document on the ground of privilege, the legal practitioner is to report to the Council in writing the circumstances of the privilege.
55. Production of documents
(1) The Council, at any time, may require a legal practitioner to produce to a person appointed by the Council for that purpose any of the following documents kept by the legal practitioner to record costs and expenses:
(a) accounting records;
(b) documents relating to the entries in those records;
(c) copy receipts;
(d) cheque butts;
(e) bank statements.
(2) The Council is to notify the legal practitioner of
(a) the time and place at which the documents are to be produced; and
(b) the person to whom the legal practitioner is to produce the documents.
56. Obstructing a trust account inspector
(1) A practitioner must not obstruct or delay a trust account inspector, an assistant trust account inspector or a legal practitioner appointed by the Council under rule 50(6) in the exercise of any functions.
(2) A practitioner who contravenes subrule (1) is guilty of professional misconduct.
57. Unauthorized disclosure
(1) Subject to subrule (2), a trust account inspector, an assistant trust account inspector or a legal practitioner appointed by the Council under rule 50(6) must not make an unauthorized disclosure of
(a) any matter that comes to their notice in the course of an examination; or
(b) anything contained in a report.
(2) A trust account inspector may disclose any matter
(a) to an assistant; or
(b) to a legal practitioner appointed by the Council under rule 50(6); or
(c) in a report.
(3) A member of the Council, employee of the Society or legal practitioner must not make an unauthorized disclosure of anything in a report.
(4) In this rule,unauthorized disclosure means a disclosure to a person other than
(a) the Attorney-General; or
(b) a member of the Council; or
(c) a person authorized by the Council; or
(d) an employee of the Society; or
(e) a legal practitioner appointed by the Council under rule 50(6); or
(f) the Supreme Court.