Insolvency & Restructuring

Money held in our Trust Amount on your behalf is Trust Money. Trust Money and Trust Accounts are regulated by the Legal Profession Uniform Law (NSW) and the Legal Profession Uniform General Rules 2015 (“the Legal Profession Uniform Laws”).

When asking for Trust Money we use the terms Initial Trust Amount and Next Stage Trust Amounts to help clients more easily understand the nature and purpose for which we require the payment of money into our Trust Account.

A Trust Account is a bank account in which we hold Trust Money on your behalf. Most law firms use a Trust Account to manage the payment of legal costs, and to receive and hold Trust Money on behalf of clients.

It is our Firm Policy that we hold sufficient Trust Money at any time to cover our estimated costs and disbursements for each stage of work that we perform.

Payment of the Initial Trust Amount and Next Stage Trust Amounts also guarantees your understanding of our estimates of costs for each stage of work and provides us with assurance that you are willing to proceed on that basis.

The Initial Trust Amount and Next Stage Trust Amounts are based on our estimates of the costs and disbursements to be incurred in the completion of the initial or next stage of work in your matter, or over the course of the next calendar month, where there is no clearly defined stage.

The Initial Trust Amount is payable upon you entering into a Legal Services Agreement with us. As your matter progresses, if requested, you are required to pay Next Stage Trust Amounts within seven (7) days of a request.

As your matter progresses, we may determine it appropriate to “protect” Trust Money for a particular purpose (e.g. for payment of Barristers’ fees or Expert Witness expenses). Protected Trust Money cannot be transferred towards payment of our Tax Invoices.

Whether an amount is marked as protected is at our discretion.

We may suspend work in relation to your matter and/or terminate our Legal Services Agreement if:

• you do not pay our Tax Invoices within seven (7) days,
• if you do not pay the Next Stage Trust Amount within seven (7) days of a written request (unless otherwise agreed), or
• we apply any Trust Money towards payment of a Tax Invoice, and you do not reinstate the Next Stage Trust Amount in full.

When we render a Tax Invoice we will inform you of the Next Stage Trust Amount (if any) and account for the Trust Amount held at the time when asking you for payment. This may include:

• a request for payment to our Office Account in respect of a Tax Invoice,
• a request for payment of money into our Trust Account towards the Next Stage Trust Amount, and/or
• a request to authorise the transfer of Trust Money towards payment of a Tax Invoice.

To streamline our processes and avoid confusion, unless we are rendering a final Tax Invoice or there is no immediate next stage of work, we will endeavour to minimise the amount of Trust Transfer requests that we seek when rendering a Tax Invoice. Our Invoice emails will clearly stipulate the amount(s) payable to our Office Account and/or Trust Account in relation to our Tax Invoices and Next Stage Trust Amounts (where applicable); or the Trust Money transfer authorisation sought. Please read these emails carefully.

The Legal Profession Uniform Laws governs when we can withdraw your money from our Trust Account. Generally, we can only withdraw the money:

• in accordance with an authority or direction from you,
• at the end of seven (7) business days after we have given you a Tax Invoice referring to the proposed withdrawal of Trust Money (unless you have objected to the withdrawal and taken one (1) of the steps set out in Regulation 42(3) within 30 days),
• to reimburse us when we have made a payment on your behalf and we have given you notice of the proposed withdrawal and reimbursement.

Law firms have a common law lien (security) over Trust Money for the payment of their costs and disbursements. If you provide us with a direction to pay or deal with Trust Money held on your behalf, we will comply with your directions subject to any lien we have.

Your money remains on deposit in our Trust Account. The relevant Rules prevent us from holding money in our Trust Account over an extended period. Therefore, we will refund any amount held in excess of the Next Stage Trust Amount to you on your request and the balance at the end of your matter.

Our Trust Account is an account with ANZ Bank. We must deposit Trust Money we receive to this account and give you a receipt for your deposit as soon as practicable. The amount that you have paid into our Trust Account is then recorded against your name and your file number.

We are required to give you a Trust Account Statement at certain intervals and on your request.

You will be notified of any withdrawals that we make from your Trust Account and they must be clearly recorded against your file. Our Trust Account (and all general trust accounts) are not interest-bearing accounts and large sums should therefore not be left deposited for extended periods.

The NSW Law Society’s Trust Account Department has the responsibility for examining records maintained by law practices to ensure they properly account for the Trust Money received and which is held on behalf of another person. This firm has been randomly audited on a number of occasions by the Trust Account Department of the Law Society and has an exemplary history of Trust Account compliance.

Each year, an independent auditor is appointed to inspect our Trust accounting records. We must present our Trust ledgers for the applicable period and provide documentary evidence of any transactions that the auditor selects for investigation.

Regardless of the amount of time funds have been held in our Trust Account, and provided that reasonable efforts have been made to locate the owner of Trust Money, unclaimed Trust Money may be surrendered to Revenue NSW in accordance with the Legal Profession Uniform Law Application Act 2014. Should the owner then require the return of the funds, they will need to lodge a request directly with Revenue NSW.