Certain funds to whom no person is presently entitled may be paid into Court to the Senior Master pursuant to legislation. Such legislation includes s. 69 of the Trustee Act 1958 and s. 77(3) of the Transfer of Land Act 1958.

It is not uncommon for the solicitors for a mortgagee to be holding surplus funds after a sale of real estate which was security for a loan. In circumstances where the entitlement to these funds is unclear, for example because several caveators make a claim to the surplus funds, the mortgagee may elect to pay these funds into Court.

Such funds are held in Common Fund No. 1, and the funds attract interest at the rate fixed by the Senior Master and the Chief Justice pursuant to s. 113(15) of the Supreme Court Act 1986.

Payment into Court pursuant to legislation

Any payment into Court should be made by cheque payable to: ‘The Senior Master of the Supreme Court’.

The cheque must be accompanied by a detailed and comprehensive affidavit which sets out the background to the funds being held by the trustee. The affidavit should account for the sum being tendered, and provide contact details for all potentially interested persons, including the former registered proprietor of a property sold, and any caveator or mortgagee.

All relevant documents such as land title searches, caveats and relevant correspondence must be exhibited to the affidavit.

Upon acceptance the funds will be paid into a new account in Common Fund No. 1. A receipt will be issued by Funds in Court, and a copy sent to every potentially interested party.

Payment out of funds held pursuant to legislation

Funds paid into Court under legislation may only be paid out by an order of the Supreme Court.

The usual way to apply for such an order is by the issue of an Originating Motion in form 5D, in which no defendant is named. Such application should be supported by affidavit evidence, and a copy of the application should be served on any potentially interested party (eg a former owner of real property or a caveator).

When the application is filed at the Supreme Court Registry a hearing date will be fixed before an Associate Judge of the Court hearing general applications. On the first return date an order might be made for payment out, or directions given.

Payment out order

The order for payment out of the funds must also provide for the payment of any interest paid or accrued on the balance of the account in Common Fund No. 1.

Pursuant to the relevant taxation legislation, the Senior Master must retain an amount sufficient to cover any estimated tax liability, and this should be reflected in the payment out order.

Please see the attached form of order which would be effective to provide for a payment from an account in Common Fund No. 1.

Please direct any enquiries regarding dispute funds held in Common Fund No. 1 to the Solicitor to the Senior Master on 1300 039 390.

Attachment:
Payment Out Order (DOC 22.5KB)