11.42Where the majority of trustees wish to make use of the provision but other trustees do not agree, the court can make an order under the section requiring payment or transfer to the Crown. A receipt from the Treasury discharges the trustees and the money and securities are then administered by the Treasury.
11.43Where money has been paid to the Crown under section 77, an ex parte application can later be made under section 79 by any person claiming an interest in it for the recovery of that money or securities held by the Crown. The court may make such orders as it thinks fit.
11.44The Treasury advises that each year a number of trustees pay money or transfer securities to the Crown under section 77. The Treasury will not accept a transfer of funds under the provision unless trustees are able, in their affidavit, to provide sufficient evidence that they have taken all reasonable steps to locate beneficiaries and pay out the funds. Most of that money is paid over by the trustees of unit trusts or superannuation trusts when the trustees want to wind those trusts up. The Treasury receives some money from solicitors firm trust accounts. It seems the mechanism is not, however, currently used by the trustees of private trusts. This is likely to be because there are other options available when trustees wish to pay out such funds and beneficiaries cannot be found.
11.46Money that is not claimed and paid out during the six years that it is held in a trust account by the Treasury is then transferred to the Crown bank account as unclaimed money. The Treasury currently holds approximately two million dollars ($2,672,638.81) on trust. Approximately $250,000 was transferred from the trust account to the Crown bank account on 1 July 2011 as it had, at that date, been held for 6 years. On 1 July 2012, $115,000 was transferred to the Crown bank account. The Treasury estimates that approximately three per cent of the trust money and securities paid to the Crown under these provisions are subsequently claimed and paid out to claimants. The remaining 97% ends up in the Crown Account and is never claimed.
11.47Some final backstop procedure of this kind is necessary. Trustees need to have access to a legislative mechanism under which they can pay unclaimed monies over to the Crown where they are unable to find beneficiaries and distribute it.
11.49Only a few submitters commented on these provisions. All submitters agreed that these long provisions (spanning over four pages of dense text) should be simplified and all unnecessary procedural requirements removed. Submitters considered that the requirement to file an affidavit unnecessarily added to the cost of using the provisions. They considered that trustees should only need to give the Treasury copies of statements of account and of the relevant trust documents (such as deeds and wills). A requirement to provide information about the trust and its beneficiaries would be sufficient.
11.50All submitters also considered that the requirement that the Treasury advertises in the Gazette was no longer appropriate. Very few people are likely to ever see these advertisements so it would make more sense for the Treasury to place the material on a website so that information about missing beneficiaries would be available to anyone who wished to search for it.
11.51The NZLS agreed that a simplified and cheaper process for paying small amounts to the Crown should be included in a new Act. It thought the current section was unclear as to whether the Treasury can refuse to accept money where the required information is not given and that this should be clarified.
11.52Two submitters suggested that there is an informal understanding that the Treasury does not in practice charge for the work involved in administering funds under the provisions because this is offset by any interest it earns on the money and is not required to pay to claimants. These two submitters suggested that this was a fair trade off that should be set out in the legislation.
11.53We accept all but the last point made by submitters. Although the Crown may earn sufficient interest on unclaimed money to cover the costs of administering the scheme, that is not necessarily the case. We consider that the Crown should therefore retain a power to deduct any reasonable costs and expenses before making payment to any claimant.
11.54Sections 77 to 79 could be simplified and all unnecessary procedural requirements and detail removed. In particular the current requirement that trustees file an affidavit seems unnecessarily onerous, particularly when small sums of money are involved. A simpler less expensive process would seem more appropriate for dealing with unclaimed money.
11.55At present a significant amount of money is never claimed from the Treasury and ultimately is absorbed into the Crown Account. This suggests that notification in the Gazette is insufficient to bring the existence of funds to the notice of unaware beneficiaries. These days an obligation to make information publicly available is likely to be more effective than giving notice in the Gazette. Publication of a directory of unclaimed funds on a website should be more effective.
11.56Treasury officials have advised us that they are happy with the changes to the provision proposed in this chapter.
11.57In addition, at some future date, consideration could be given to amalgamating all the different provisions and arrangements the Crown has for dealing with unclaimed money into one regime. At present the Unclaimed Money Act 1971 covers unclaimed money from deposits in banks, financial institutions, some money in solicitors trust accounts, unclaimed proceeds of life insurance policies, and unpaid wages and employee benefits. Money is paid to the Commissioner of Inland Revenue under that Act. However, under some Acts other unclaimed money and assets are to be paid to the Public Trust, and under others to the Māori Trustee. In addition unclaimed awards from court cases, reparations to victims of crime are held by the Ministry of Justice and unclaimed prisoners’ allowances are held by the Department of Corrections. The number of different arrangements involving different arms of the Crown suggests that at some stage a review of this whole area may be desirable.