This Act may be cited as the Protection of Depositors Act 1968.

This Act shall come into force on the first day of January, nineteen hundred and sixty-nine.

In this Act, unless the context otherwise requires,—

Subject to subsection (2) of this section, sections 2 to 10 of this Act shall not apply to the issue of any invitation or advertisement, or the acceptance of deposits of money, by or on behalf of—

The Governor-General may from time to time, by Order in Council, make regulations applying all or any of the provisions of sections 2 to 10 of this Act to any association of persons registered under the Friendly Societies Act 1909, with such modifications (if any) as are prescribed in the regulations.

No person shall issue or cause to be issued any invitation to the public to deposit money with him, or any advertisement relating to any such invitation, or issue or cause to be issued any invitation to any depositors to renew or vary the terms of any deposit made in response to an invitation to the public, unless—

After the thirty-first day of March, nineteen hundred and sixty-nine, no person shall accept a deposit of money from any other person in response to an invitation to the public issued before the commencement of this Act, unless in respect of that invitation paragraphs (a) to (d) of subsection (1) of this section have been complied with.

No person shall accept appointment as trustee for the purposes of this section except a body corporate of any of the following kinds, namely:

The Minister may at any time, in writing, revoke any approval given by him of any body corporate for the purposes of paragraph (c) or paragraph (d) of subsection (3) of this section; but in any such case the revocation shall not affect any appointment of that body corporate as trustee before the date of the revocation, or the powers, duties, or obligations of the trustee under or by virtue of that appointment.

Notice of any approval given by the Minister as aforesaid, and of the revocation of any such approval, shall be published in the Gazette.

No body corporate shall accept appointment or act as a trustee in respect of any invitation to which this section applies, and no person shall accept any deposit or issue or cause to be issued any invitation to which this section applies, if the borrower is a director of the body corporate or, in the case of a company, is a director of any holding company of that company or is the beneficial owner of ten percent or more of the issued shares of that company or of any such holding company.

Notwithstanding anything to the contrary in the trust deed, the trustee shall not, without the consent of the Supreme Court or a Judge thereof, be discharged or retire from the trust until another trustee eligible for appointment as such under this section has been appointed to and taken office in accordance with the provisions of the trust deed or of the Trustee Act 1956.

Section 9 of the Companies Act 1955 (which relates to inspection, production, and evidence of documents kept by the Registrar) shall extend and apply, so far as it is applicable and with the necessary modifications, to the documents filed with the Registrar of Companies pursuant to paragraph (d) of subsection (1) of this section.

If any person or body corporate contravenes any provision of this section, the person or body corporate, and every director or officer of the body corporate who knowingly and wilfully authorises or permits the contravention, commits an offence and shall be liable on summary conviction to a fine not exceeding one thousand dollars.

The borrower shall, at such times and in such form and manner, and to such extent, as the trustee for the depositors may require, furnish to the trustee accounts relating to his business and his assets and liabilities, audited by an auditor approved by the trustee.

The borrower shall from time to time—

Every meeting summoned pursuant to paragraph (c) of subsection (1) of this section shall be summoned by sending by post a notice, specifying the time and place of the meeting, to every depositor at his last known address not later than fourteen days before the date of the proposed meeting. The meeting shall be held under the chairmanship of a person nominated by the trustee or such other person as may be appointed in that behalf by the depositors present at the meeting.

The trustee for the depositors shall exercise reasonable diligence to ascertain whether or not the borrower has committed any breach of the terms of the trust deed or of the terms or conditions of the deposits, and, except where it is satisfied that the breach will not materially prejudice the security (if any) of the deposits or the interests of the depositors, shall do all such things as it is empowered to do to cause the borrower to remedy any breach of those terms or conditions.

The trustee for the depositors shall exercise reasonable diligence to ascertain whether or not the assets of the borrower that are or may be available, whether by way of security or otherwise, are sufficient or likely to be sufficient to discharge the amounts of the deposits as they become due.

If at any time, after due inquiry, the trustee is of the opinion that such assets as aforesaid are insufficient or likely to be insufficient to discharge the amounts of the deposits as they become due, the trustee, having regard to any other powers or remedies available to it, under the trust deed or any enactment or rule of law, for the protection of the interests of the depositors, and to the availability (by way of security or otherwise) of any assets of any person who has guaranteed or agreed to guarantee the repayment of the amounts of the deposits, and to the possible effects on the borrower’s affairs of any application to the Supreme Court or a Judge thereof under this subsection, and to all other relevant circumstances, may in its discretion apply to the Supreme Court or a Judge thereof (hereafter in this section referred to as the Court) for an order under subsection (4) of this section.

On any such application the Court in its discretion, after giving the borrower an opportunity of being heard, and having regard to the rights of all creditors of the borrower, may by order give such directions as the Court thinks necessary to protect the interests of the depositors, the borrower, or the public, whether by way of staying any action or proceeding by or against the borrower, restraining the payment by him of any money to any depositors or to any class of depositors, appointing a receiver of such of his property as constitutes the security (if any) for the deposits, or otherwise.

The Court may at any time rescind any such order or vary it as the Court thinks fit.

The trustee’s duties and powers under this section shall not limit any duties, obligations, or powers imposed or conferred on it by the trust deed or by the terms and conditions of the deposits or by law.

Subsections (1) and (2) of section 96 of the Companies Act 1955 (which relate to the liability of trustees for debenture holders) shall extend and apply, so far as they are applicable and with all necessary modifications, to any provision in any trust deed to which section 4 of this Act applies, whether or not security is given for the deposits; and in determining, for the purposes of the application of those subsections as aforesaid, the degree of care and diligence required of the trustee regard shall be had to the provisions of this section as well as to the provisions of the trust deed.

The trustee may rely upon any certificate or report given or statement made by any person who is solicitor to or auditor of the borrower, if it has reasonable grounds for believing that the person was competent to give the certificate or report or to make the statement.

In any invitation (other than an advertisement) issued to the public to deposit money with any person, in whatever form it is issued, there shall be included—

Where any such invitation, or any advertisement relating to any such invitation, is issued, and the deposits to which it relates are not to be secured by a charge or charges on the borrower’s assets or any of them, any statement in the invitation or advertisement relating to documents to be issued evidencing such deposits shall refer to those documents as unsecured deposit notes or unsecured notes, or by some other description that includes the word “unsecured”, and shall not—

In any such invitation or advertisement, no statement relating to documents to be issued evidencing deposits shall refer to those documents as mortgage debentures or registered mortgage debentures, or by any other description that includes the word “mortgage” or the term “registered mortgage”, unless—

Subject to subsection (7) of this section, no person shall accept a deposit of money from any other person unless—

Provided that it shall be lawful to accept, on or before the thirty-first day of March, nineteen hundred and sixty-nine, any deposit made in response to an invitation to the public issued before the commencement of this Act, without compliance with paragraphs (a) to (c) of this subsection.

Subject as aforesaid, where any person accepts any deposit of money from any other person, and the repayment of the money is not to be secured by a charge on the borrower’s assets or any of them, the borrower shall issue to the depositor as evidence thereof a document acknowledging the borrower’s indebtedness in respect of the deposit. The document shall be described on its face as an unsecured deposit note or an unsecured note, or shall bear on its face some other description that includes the word “unsecured”, and shall not—

No document issued by a borrower evidencing any deposit with him, being a deposit made in response to any such invitation or advertisement, shall be described in any part of it as a mortgage debenture or registered mortgage debenture, or have in any part of it any other description that includes the word “mortgage” or the term “registered mortgage”, unless the provisions of paragraphs (a) to (d) of subsection (3) of this section have been complied with.

This section shall not apply to any deposit with a person if it is shown that the deposit was not made in response to an invitation or advertisement issued to the public.

Every person commits an offence and is liable on summary conviction to a fine not exceeding one thousand dollars who—

Where an invitation or advertisement to the public to deposit money with any person issued after the commencement of this Act includes any untrue statement, any person who authorised the issue of the invitation or advertisement commits an offence and shall be liable—

unless he proves either that the statement was immaterial or that he had reasonable ground to believe and did, up to the time of the issue of the invitation or advertisement, believe that the statement was true.

For the purposes of this section—

The Minister may from time to time, by notice in the Gazette, exempt any person from the application of any of the provisions of sections 4 to 8 of this Act.

Any such exemption may be granted—

In like manner, any exemption granted under this section may at any time be revoked by the Minister, and any condition subject to which any such exemption is granted may from time to time be revoked, varied, or added to by the Minister.

The Governor-General may from time to time, by Order in Council, make regulations applying to any body corporate (not being a local authority within the meaning of the Local Authorities Loans Act 1956, a public body, a bank within the meaning of the Banking Act 1908, a trustee savings bank within the meaning of the Trustee Savings Banks Act 1948, or a company within the meaning of the Companies Act 1955), with such modifications (if any) as are prescribed in the regulations, all or any of the following provisions of the Companies Act 1955, namely: