In this Part of this Act, unless the context otherwise requires,—

This Part of this Act applies to—

This Part of this Act shall not apply to persons classified as registered accountants (other than those registered by the Council as engaged to a substantial extent in accountancy work for remuneration otherwise than in the course of their normal salaried employment) nor to public accountants who have been classified as retired or honorary members in terms of the rules of the Society, nor to holders of practising certificates issued under section 34 of the principal Act who are not actively engaged in the practice of the profession of accountancy.

References to public accountants in this Part of this Act shall accordingly, unless the context otherwise requires, be read as meaning those public accountants to whom this Part of this Act applies in accordance with subsection (1) of this section; and as including those holders of practising certificates and persons to whom this Part of this Act applies in accordance with that subsection; but as not including registered accountants (other than those registered by the Council as engaged to a substantial extent in accountancy work for remuneration otherwise than in the course of their normal salaried employment) nor those public accountants and holders of practising certificates to whom this Part of this Act does not apply in accordance with subsection (2) of this section.

There is hereby established a fund to be known as the New Zealand Society of Accountants Fidelity Fund.

The fund shall be the property of the New Zealand Society of Accountants, and shall be held in trust for the purposes hereinafter appearing.

All money belonging to the fund shall, pending the investment or application thereof in accordance with this Part of this Act, be paid into a separate bank account of the Society to be called the Fidelity Fund Account.

The fund shall consist of—

There shall from time to time be paid out of the fund, as required,—

The accounts of the fund shall be audited annually by a member of the Society appointed for the purpose by the Council.

Subject to the provisions of section 9 of this Act, the fund shall be administered by the Council on behalf of the Society.

The Council may, by resolution, appoint a Fidelity Fund Board of Trustees consisting of not less than three nor more than six persons, being members of the Society. The Board shall, so far as powers are for the time being delegated to it by the Council under subsection (2) of this section, administer the fund on behalf of the Council.

The Council may, by resolution, delegate all or any of its powers in relation to the fund to the Fidelity Fund Board of Trustees.

Any member of the Society may be appointed a member of the Board of Trustees.

Except as provided in subsection (2) of section 3 and section 12 of this Act, every public accountant shall, for the period commencing on the first day of April, nineteen hundred and sixty-four, and ending with the thirtieth day of November in that year, and for every subsequent year, pay, in addition to any annual fee and any other fees which he may be liable to pay to the Society, such fee as may be prescribed by the Council for the purposes of this Part of this Act, but not exceeding ten pounds for any such period or year.

If any registered accountant, during the course of a financial year of the Society, commences the practice of his profession in New Zealand publicly on his own account or in partnership with another or others, he shall, on making application for classification as a public accountant, or on being classified by the Council as a public accountant without application, become liable to pay to the fund the amount of the prescribed fee for the purposes of this Part of this Act for the financial year in which the transfer is made:

Provided that every registered accountant or public accountant commencing public practice in New Zealand in the second half of any financial year of the Society shall pay half the prescribed fee for the purposes of this Part of this Act for that financial year.

All fees payable under this section shall become due and payable in the same manner as other fees to the Society become due and payable.

If at any time the fund is not sufficient to meet the liabilities of the fund, the Council may, by resolution, impose on every public accountant to whom this Part of this Act applies, for payment into the fund, a levy of such amount as it thinks fit, but not exceeding ten pounds in any one year.

The amount of any such levy shall become payable on a date and in a manner to be fixed by the Council, and if not theretofore paid shall be paid together with the next annual fee payable to the fund in accordance with section 10 of this Act.

No further fees payable in accordance with section 10 of this Act shall be paid to the fund at any time while the amount of the fund, including any investments thereof, and after deducting the amount of all unpaid claims and other liabilities outstanding against the fund, exceeds one hundred thousand pounds.

Any money in the fund that is not immediately required for the purposes thereof may be invested in such of the authorised investments within the meaning of the Trustee Act 1956 as the Council may from time to time think fit.

The fund shall be held and applied for the purpose of reimbursing persons who may suffer pecuniary loss by reason of the theft, embezzlement, or misappropriation by a public accountant, or by his servant or agent, of any money or other valuable property entrusted to him, or which he is in a position to steal, embezzle, or misappropriate, in the course of his practice as a public accountant:

Provided that the Council or Board may, in its absolute discretion, reimburse from the fund any person who may suffer pecuniary loss by reason of the theft, embezzlement, or misappropriation by a registered accountant of any money entrusted to him in his capacity as an accountant otherwise than in the course of his normal salaried employment.

No person shall have any claim in relation to the fund for any theft, embezzlement, or misappropriation by a public accountant, or his servant or agent, in the course of his practice as agent for an insurance company, as an agent of the Totalisator Agency Board, or as agent for any other organisation which has set up in respect of its own activities a fidelity fund or fidelity insurance cover.

No person shall have any claim in relation to the fund in respect of any theft, embezzlement, or misappropriation committed before the first day of April, nineteen hundred and sixty-four.

No person shall have any claim in relation to the fund on or after the said first day of April, nineteen hundred and sixty-four, unless notice of the claim is given in writing to the Council or Board of Trustees within twelve months after the claimant has become aware of the theft, embezzlement, or misappropriation.

The Council or Board may receive and settle any claim against the fund at any time after the commission of the theft, embezzlement, or misappropriation in respect of which the claim arose if, after due investigation and verification of the claim, it is satisfied that the amount as claimed or as adjusted by the Council or Board is properly payable out of the fund in accordance with section 14 of this Act.

No person shall be entitled, without leave of the Council or Board, to commence any action in relation to the fund unless the claimant has exhausted all relevant rights of action and other legal remedies available against the defaulting public accountant or his servant or agent in respect of the loss suffered.

No person shall be entitled to recover from the fund any amount greater than the balance of the loss suffered by him after deducting from the total amount of his loss the amount or value of all money or other benefits received or receivable by him from any source other than the fund, in reduction of his loss.

No amount shall be paid or payable out of the fund as interest on the amount of any judgment obtained or of any claim admitted against the fund.

No person shall have any right of action in relation to the fund in respect of any loss suffered by reason of any theft, embezzlement, or misappropriation committed by a public accountant or his servant or agent at any time after that person has received a notification in writing from the Council warning him against the employment or continued employment of that public accountant, unless that person has taken the earliest possible opportunity of dispensing with the services of that public accountant.

No right of action in relation to the fund shall lie in respect of any loss suffered by the wife or husband of a public accountant by reason of any theft, embezzlement, or misappropriation committed by that public accountant, or his servant or agent, or the servant or agent of any firm of public accountants in which that public accountant is a partner.

No right of action in relation to the fund shall lie in respect of any loss suffered by a public accountant by reason of the theft, embezzlement, or misappropriation by the servant or agent of that public accountant or by the servant or agent of any firm of public accountants in which the public accountant is a partner.

No action for damages shall lie against the Society or any member or servant of the Society for any notification given in good faith and without malice for the purposes of subsection (8) of this section.

In any action brought against the Society in relation to the fund, all defences which would have been available to the defaulting public accountant or his servant or agent shall be available to the Society.

On payment out of the fund of any money in settlement in whole or in part of any claim under this Part of this Act, the Society shall be subrogated, to the extent of that payment, to all the rights and remedies of the claimant against the public accountant or his servant or agent in relation to whom the claim arose, or, in the event of his death or insolvency or other disability, against his personal representatives or other persons having authority to administer his estate, and to all other rights and remedies whatsoever of the claimant in respect of the theft, embezzlement, or misappropriation to which the claim relates.

No money or other property belonging to the Society other than the fund shall be available for the satisfaction of any judgment obtained against the Society in relation to the fund, or for the payment of any claim allowed by the Council or the Board, but if at any time the fund is not sufficient to provide for the satisfaction of all such judgments or claims they shall, to the extent to which they are not so satisfied, be charged against the future accumulations of the fund.

The Council or the Board may, in its absolute discretion having regard to the provisions of this section, determine the order in which the judgments and claims charged against the fund as aforesaid, shall be satisfied, and may, if the amount accumulated is not sufficient to satisfy all those judgments and claims in full, satisfy any such judgments or claims in whole or in part.

Without limiting the discretion of the Council or the Board, it shall, in applying the fund towards the settlement of any such judgments and claims as aforesaid, have regard to the following:

The Society may enter into any contract or contracts of insurance with any company carrying on fidelity insurance business in New Zealand whereby the Society will be indemnified against the liability to pay claims under this Part of this Act, and any such contract of insurance may be entered into in relation to public accountants in general or in relation to any particular public accountant.

No action shall lie against the Society or against any member or servant of the Society for injury alleged to have been suffered by any public accountant by reason of the publication in accordance with fact, of a statement that any contract of insurance entered into under this section does or does not apply to that public accountant.

No claimant against the fund shall have any right of action against any insurance company or other person with whom a contract of insurance is made in accordance with section 19 of this Act in respect of that contract, or have any right to claim any money paid by the insurer in accordance with any such contract of insurance; but all such money shall be paid into the fund and shall be applied in or towards the settlement of relevant claims.

The Council may take possession of, or may serve notice on any public accountant demanding delivery to the Council of the books of account and documents under the control of a public accountant, if it has reasonable cause to believe that—

Where notice has been served on any public accountant pursuant to subsection (1) of this section for delivery to the Council of the books of account and documents under the control of that public accountant, any person having possession or control of any such books of account or documents who refuses or fails without lawful justification to deliver them or cause them to be delivered to the Council forthwith upon demand commits an offence and is liable on summary conviction to a fine not exceeding one hundred pounds.

Upon receipt of any books of account or other documents in accordance with this section, the Council shall forthwith serve on the public accountant a notice giving particulars of the items received and the date of receipt, and if the documents are the property of a firm of public accountants in which the public accountant is a partner, a similar notice shall be served on each partner in the firm.

Any notice served pursuant to subsection (1) or subsection (3) of this section may be served personally on any public accountant or may be forwarded to him by registered letter addressed to him at his last known place of business or residence.

Within fourteen days after any notice has been served on any public accountant in accordance with subsection (3) of this section, the public accountant or any partner in the firm of public accountants of which he is a partner, may apply to the Court for an order directing the Society to return any such books of account or other documents to the person or persons from whom they were received. On the hearing of any such application, the Court shall have due regard to any representations made by the Society for the continued retention of the documents for the purposes of investigation, and the Court may then make such order as it thinks fit.

Notwithstanding the provisions of section 21 of this Act, if the Council has reasonable cause to believe that any money entrusted to a public accountant, or which he is in a position to steal, embezzle, or misappropriate, has been stolen, embezzled, or misappropriated by him or his servant or agent, the Council or any person or persons authorised by it in that behalf shall be entitled to inspect all books of account and other documents under the control of that public accountant or of the firm to which that public accountant or the servant or agent belongs, and to make copies of those books of account and documents and any entries therein.

Every person having possession or control of any such books of account or documents who refuses or fails without lawful justification to permit and enable the Council or any person or persons authorised by the Council to inspect them and to make copies of them and any entries therein, forthwith upon demand by the Council or Board or person authorised by the Society, commits an offence against this section and is liable on summary conviction to a fine not exceeding one hundred pounds.

For the purpose of safeguarding the fund, the Council may appoint at any time any member of the Society to examine the books of account and other documents under the control of a public accountant or a firm of public accountants, and to furnish to the Council a confidential report as to any irregularity or any other matter which in the opinion of the member so appointed should, in the interests of the fund, be further investigated.

Every appointment made under this section shall be in writing and shall be signed by the Secretary of the Society or a member of the Council acting under the authority and on behalf of the Council of the Society.

Upon production by any person so appointed of the instrument of his appointment as aforesaid, he may:

The person so appointed to make any examination for the purposes of this section shall not communicate any matter which may come to his knowledge in the course of his examination to any other person except in the course of his report to the Council as required by subsection (1) of this section.

The Council of the Society, or the Committee or Board authorised by the Council, which receives the report shall consider it in committee and not otherwise; and it shall not be lawful for any member of the Council, or of any Committee or Board authorised by the Council, or for any of its officers, to publish to any person any information disclosed in the report except in the performance of his duty:

Provided that the Council shall have power in its discretion to communicate the contents of the report or any part thereof to any member of the Police Force of New Zealand or to the Investigation Committee, Disciplinary Committee, or Committee of Appeal.

If any public accountant or firm of public accountants or person refuses or fails to produce any of the books of account and other documents for examination when required to do so in pursuance of this section, that public accountant or firm or person commits an offence and is liable on summary conviction to a fine not exceeding one hundred pounds.

If in the opinion of the Council the fund is endangered by a public accountant continuing in public practice, the Council may, by notice duly served on the public accountant, suspend him from membership of the Society until the matter has been heard and disposed of.

Any public accountant who is for the time being suspended from membership of the Society under this section may at any time apply to the Council for revocation of the suspension, and the Council may grant or refuse any such application as it thinks fit.

For the purposes of this Part of this Act, the Council may from time to time make rules for all or any of the following purposes:

Rules made under this section shall not come into force until they are approved by the Governor-General in Council.

Section 34 of the principal Act is hereby amended by inserting in subsection (3), after the words “fees to the Society”, the words “and of fees and levies into the New Zealand Society of Accountants Fidelity Fund”.

Section 32 of the principal Act is hereby amended by inserting, after subsection (2), the following subsection:

The principal Act is hereby amended by inserting, after section 32, the following section: