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Lawyers and Conveyancers Act 2006

Fidelity Funds

329: Power to rule off fund

You could also call this:

"The Governor-General can decide to limit a special fund to help pay for legal costs."

Illustration for Lawyers and Conveyancers Act 2006

The Governor-General can make an Order in Council to rule off a fidelity fund. You need to know the Minister recommends this after a regulatory society requests it. The Minister must be satisfied the fund is not enough to meet judgments and payments. The regulatory society must give a report with their request. You will see this report states why rule off is desirable and includes an independent auditor's report. The Minister decides whether to recommend an Order in Council after getting the report. The Minister has the final say in deciding whether to recommend an Order in Council. You can find out more about publication requirements for these orders in Part 3 of the Legislation Act 2019. This is secondary legislation.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM367811.

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328: Provisions applicable if fund insufficient to satisfy claims, or

"What happens if there's not enough money to pay all claims against the Fidelity Fund"

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330: Consequences of rule off, or

"What happens to a fidelity fund when it is ruled off and how you get your share"

Part 10Fidelity Funds

329Power to rule off fund

  1. The Governor-General may, by Order in Council, made on the recommendation of the Minister, rule off, from time to time, either the Lawyers' Fidelity Fund or the Conveyancing Practitioners' Fidelity Fund, and the fund to which the Order in Council applies will accordingly be ruled off on the date on which the Order in Council comes into force.

  2. The Minister may not recommend the making of an Order in Council under subsection (1) in relation to a fidelity fund unless—

  3. the regulatory society that holds that fidelity fund requests the Minister to recommend the making of an Order in Council under this section in relation to that fidelity fund; and
    1. the Minister is satisfied, on the basis of a report provided under subsection (3), that the fidelity fund is not sufficient to meet—
      1. all judgments obtained and claims allowed against the fidelity fund; and
        1. all other payments authorised under this Part, or rules made under this Part, to be made from the fund.

        2. Any request made under subsection (2) by a regulatory society must be accompanied by a report from the council of the society.

        3. The report under subsection (3)—

        4. must state the reasons why the council making the report is of the opinion that rule off is desirable; and
          1. must be accompanied by a report from an independent auditor outlining the basis for the opinion that rule off is desirable.

            1. The Minister must, within 1 month after receiving a report under subsection (3), decide whether to recommend the making, under subsection (1), of an Order in Council in relation to the fidelity fund to which the report relates.

            2. Subject to subsections (2) to (5), the Minister, on receiving a report made under subsection (3), has an absolute discretion to decide whether to recommend the making, under subsection (1), of an Order in Council in relation to the fidelity fund to which the report relates.

            3. An order under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

            Notes
            • Section 329(7): inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).