By Luke Sinclair, Solicitor on 21/03/2022 – [SOURCE]
In these proceedings, the applicant applied to the Court pursuant to s 96 Trusts Act 1973 (TA) regarding the final distribution to members for the winding up of a lawfully unregistered managed investment scheme to see if the applicant was justified in paying to the Public Trustee the distribution payments for whom they held insufficient details for.
The Applicant submitted that were the Fund a registered managed investment scheme, s 601NG Corporations Act 2001 (Cth) (CA) would operate to direct undisturbed. However, as it is a lawfully unregistered managed investment scheme s 601NG would not apply. Thus, leaving a gap requiring the exercise of judicial direction under s 96 TA.
The applicant identified four potential methods for dealing with the undistributed or unclaimed funds, 1) Pay the Public Trustee under Part 8 of the Public Trustee Act 1978, 2) pay into Court under s 102 TA, 3) Pay ASIC or 4) an order in the form of a Re Benjamin Order being an order made by the court for the distribution of assets on death when it is uncertain whether a beneficiary is alive. The order authorizes the personal representatives of the deceased (who will be administering the estate) to distribute the property on the basis that the beneficiary is dead; the personal representatives are therefore protected from being sued if the beneficiary is in fact alive and entitled.
When considering the four options, Williams J considered that it was to be “consistent with statutory object and functions of the Public Trustee” for the unpaid funds to be distributed to the Public Trustee. Further to this, unlike payment to into Court, the Public Trustee has an existing mechanism for claims on unpaid funds to be made, assessed and, if accepted, paid. Payment to the Public Trustee has the added benefit of allowing the applicant to retire as Trustee of the fund and preventing further costs of the liquidation.