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Lawyers and Conveyancers Act 2006

Conduct of practice by practitioners - Trust accounts

110: Obligation to pay money received into trust account at bank

You could also call this:

"Lawyers must put clients' money in a safe bank account"

Illustration for Lawyers and Conveyancers Act 2006

When you get money for someone else, you must put it in a trust account at a New Zealand bank. You have to keep the money safe for that person and only use it as they tell you to. If you are a lawyer or part of a law firm, you must follow these rules or you might get a fine of up to $25,000. You are considered to have received money for someone else if it is deposited into your bank account or if you take control of the money. You must put the money in a trust account and keep it safe for the person who owns it. This rule applies to lawyers and law firms. If you break this rule on purpose, you can get in trouble and have to pay a fine. You can look at the Lawyers and Conveyancers Act 2006 for more information.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM366140.

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Part 6Conduct of practice by practitioners
Trust accounts

110Obligation to pay money received into trust account at bank

  1. A practitioner who, in the course of his or her practice, receives money for, or on behalf of, any person—

  2. must ensure that the money is paid promptly into a bank in New Zealand to a general or separate trust account of—
    1. the practitioner; or
      1. a person who, or body that, is, in relation to the practitioner, a related person or entity; and
      2. must hold the money, or ensure that the money is held, exclusively for that person, to be paid to that person or as that person directs.

        1. An incorporated firm that, in the course of its practice, receives money for, or on behalf of, any person—

        2. must ensure that the money is paid promptly into a bank in New Zealand to a general or separate trust account of the firm; and
          1. must hold the money, or ensure that the money is held, exclusively for that person, to be paid to that person or as that person directs.

            1. For the purposes of this section, a practitioner or an incorporated firm is deemed to have received money belonging to another person if—

            2. that person, or a bank or other agency acting for, or on behalf of, that person, deposits funds by means of a telegraphic or electronic transfer of funds into the bank account of—
              1. the practitioner or incorporated firm; or
                1. a person who, or body that, is, in relation to the practitioner, a related person or entity; or
                2. the practitioner or incorporated firm takes control of money belonging to that person.

                  1. A person commits an offence against this Act and is liable on conviction to a fine not exceeding $25,000 who knowingly acts in contravention of subsection (1) or subsection (2).

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                  Notes
                  • Section 110(4): amended, on , by section 413 of the Criminal Procedure Act 2011 (2011 No 81).