Chapter 15
The Public Trust

Section 83B – Audit of accounts


R44 The new Trusts Act should re-enact section 83B of the Trustee Act 1956, relating to an application for the accounts of trust property to be audited, in modernised form and with modification so that the process continues to rely on an application to the Public Trust, but no longer also requires an application to a judge in chambers as is currently the case.

Current law and practice

15.14Section 83B provides a process by which a beneficiary or trustee can make an application for the accounts of trust property to be investigated and audited by a solicitor or chartered accountant appointed with the agreement of the applicant, the trustees and the Public Trust, or, if there is no agreement, by the Public Trust alone. The provision requires that an application be made to a judge in chambers in addition to requiring the agreement of the Public Trust.

15.15It is a long and complex provision. We understand that applications under the section are seldom made, but that beneficiaries and trustees do on occasion apply to the Public Trust to begin this process. In most of these cases, the Public Trust’s involvement in initiating negotiations as to how the audit might be carried out and who will pay for it leads the trustees and beneficiaries to settle the matter among themselves without an application to a judge ever being made or an auditor being appointed. The provision is considered to be a useful tool in encouraging trustees and beneficiaries to work out their disagreements. However, we have heard comment that the provision is overly bureaucratic as it effectively requires the double handling of an application to appoint an auditor because it involves both the Public Trust and the court.

Recommended reformTop

15.16We recommend that the provision is retained, but with a modified process so that the need for an application to a judge in chambers is removed. Instead, we think it would be appropriate and effective for the applicant beneficiaries and trustees to apply to the Public Trust to appoint an auditor with the agreement of the applicant and the trustees, if possible. This is unlikely to alter what actually happens in practice now. The role for the Public Trust is administrative rather than adjudicative and is consistent with its current range of roles.

Application to existing trustsTop

15.17This recommendation would apply to all trusts, including existing trusts, from the date of the enactment of the new Act as it provides assistance to trustees and beneficiaries by simplifying a statutory process.