Funeral Funds Act 1979 (NSW)

Funeral Funds Act 1979 No 106 An Act to control and regulate contributory and pre-paid funeral funds. Part 1 Preliminary 1 Name of Act This Act may be cited as the Funeral Funds Act 1979. 2 Commencement (1) This section and section 1 shall commence on the date of assent to this Act. (2) Except as provided in subsection (1), this Act shall commence on such day as may be appointed by the Governor in respect thereof and as may be notified by proclamation published in the Gazette. 3 Objects The objects of this Act are— (a) to protect pre-payments made by consumers for funeral services through the registration of funeral funds, and (b) to ensure that funeral services agreed to be supplied under a pre-paid contract are supplied as agreed, and (c) to achieve accountability for money paid by a purchaser of funeral services that have an indefinite delivery date, and (d) to properly manage money paid and other valuable consideration given for funeral services in the long term to provide agreed benefits to the purchaser and the anticipated payment to the supplier of funeral services. 4 Definitions (1) In this Act, except in so far as the context or subject-matter otherwise indicates or requires— actuary means— (a) a Fellow of the Institute of Actuaries incorporated by Royal Charter on 29 July 1884, (b) a Fellow of the Faculty of Actuaries in Scotland, or (c) the holder of a prescribed qualification as an actuary, who has practised as an actuary for a continuous period of not less than 5 years. authorised deposit-taking institution means an authorised deposit-taking institution within the meaning of the Banking Act 1959 of the Commonwealth. bankers' books means— (a) books of a bank, building society or credit union, (b) cheques, orders for the payment of money, bills of exchange and promissory notes in the possession or under the control of a bank, building society or credit union, and (c) securities or documents of title to securities in the possession or under the control of a bank, building society or credit union whether by way of pledge or otherwise. company means a company within the meaning of the Corporations Act 2001 of the Commonwealth. contributor means a person— (a) who makes or has made periodic contributions, or on whose behalf periodic contributions are or have been made, to a person carrying on contributory funeral benefit business, and (b) who is thereby entitled to be provided with a funeral benefit on his or her death. contributory funeral benefit business means business in relation to a scheme or arrangement for the provision of funeral benefits to contributors. Department means the Department of Customer Service. funeral benefit means— (a) the supply of any funeral service, with or without the supply of goods connected with that service, or (b) the payment of money, upon the death of a person, for the purpose of meeting the whole or a part of the expenses of and incidental to the funeral of that person. funeral contribution fund means— (a) a company for the time being registered under section 14 to carry on contributory funeral benefit business, or (b) a person for the time being registered under section 16B to carry on contributory funeral benefit business. funeral fund means a funeral contribution fund or a pre-paid funeral fund. funeral service includes burial service and cremation service. GST has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth. individual means a natural person. inspector means an inspector appointed under section 8. officer, of a corporation, has the meaning given by the Corporations Act 2001 of the Commonwealth. pre-paid contract means an agreement whose purpose is or includes the payment of money (in a lump sum or by instalments) or the giving of other valuable consideration for the supply of a funeral service, with or without the supply of goods connected with that service, being an agreement made before the death of the person who is to be supplied with that service, and includes an agreement prescribed as a pre-paid contract under section 5. pre-paid funeral benefit business means the business of supplying funeral services under pre-paid contracts. pre-paid funeral fund means— (a) a person or a group of individuals that is for the time being registered under section 37 to act as trustee or trustees of trust funds under pre-paid contracts, or (b) a person for the time being registered under section 39A to act as trustee of trust funds under a pre-paid contract. rules, in relation to a company that carries on or proposes to carry on contributory funeral benefit business, means— (a) the memorandum of association of the company, (b) the articles of association (if any) of the company, and (c) any other rules of the company dealing with— (i) a matter referred to in section 13 (1), (ii) the payment of contributions, and (iii) funeral benefits. Secretary means— (a) the Commissioner for Fair Trading, Department of Customer Service, or (b) if there is no person employed as Commissioner for Fair Trading—the Secretary of the Department. Note— The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act. (2) For the purposes of this Act— (a) a person does not carry on contributory funeral benefit business by reason only that the person contributes for funeral benefits, and (b) a person carries on contributory funeral benefit business if the person accepts any contributions for funeral benefits, otherwise than in the capacity of an agent. (3) For the purposes of this Act— (a) a person does not carry on pre-paid funeral benefit business by reason only that the person pays any money or gives any other valuable consideration for the supply of any funeral service under a pre-paid contract, and (b) a person carries on pre-paid funeral benefit business if the person agrees to supply any funeral service under a pre-paid contract. (4) In this Act, a reference to the supply or provision of a funeral benefit to any person is a reference to the supply or provision of that benefit in connection with the death of that person. (5) In this Act, the description of an Act as an Act of the Commonwealth means an Act of the Parliament of the Commonwealth and all amendments of that Act, whether by subsequent Acts of that Parliament or otherwise and any Act of that Parliament passed in substitution for that Act. (6) Notes included in this Act do not form part of this Act. 5 Agreement to supply burial site a pre-paid contract in certain cases An agreement whose purpose is or includes the supply of a burial site is prescribed as a pre-paid contract— (a) if the agreement does not specify the site, either individually or as a site within a specified area, (b) if, where the agreement so specifies the site, the person who agrees to supply the site does not, at the time the agreement is made, own, or have the power to assign the exclusive right to burial in, the site or area, as the case may be, or (c) if, where the site is within an area specified in the agreement, the person who agrees to supply the site has, at the time the agreement is made, already entered into agreements for the supply of the number of sites contained in that area. Part 2 Administration 6 Documents All documents lodged under this Act with the Secretary are to be kept in an office of the Department. 7 (Repealed) 8 Inspectors (1) The Minister may appoint inspectors for the purposes of this Act. (2) The Minister shall not appoint a person, other than a person employed under the Government Sector Employment Act 2013, as an inspector under subsection (1) unless the person is appointed— (a) with the approval of the Secretary of the Premier's Department and on such terms and conditions as may be approved by the Secretary of the Premier's Department, and (b) for a term not exceeding 3 years. (3) A person, other than a person employed under the Government Sector Employment Act 2013, who is appointed as an inspector under subsection (1) is not, in his or her capacity as an inspector, a Public Service employee within the meaning of that Act but, if the terms and conditions on which the person is appointed so provide, any specified provisions of that Act or the regulations or rules under that Act, whether with or without specified modifications, apply to and in respect of the person as if the person were a Public Service employee within the meaning of that Act. (3A) An investigator appointed under the Fair Trading Act 1987 is taken to be an inspector for the purposes of this Act. (4) An inspector shall be provided by the Secretary with a certificate of his or her authority as an inspector. (5) An inspector, on exercising in any place a power conferred on the inspector by or under this Act, shall, if so requested by a person apparently in charge of that place or of any work being performed there, produce the certificate of his or her authority as an inspector. 9 Delegation (1) The Secretary may, by instrument in writing, delegate such of the Secretary's powers, authorities, duties and functions under this Act (other than this power of delegation) as may be specified in the instrument of delegation to any person employed in the Department. (2) The Secretary may, by instrument in writing, revoke any delegation under subsection (1) either wholly or in part. (3) A delegation under subsection (1) may be made subject to such conditions or such limitations as to the exercise or performance of any of the powers, authorities, duties or functions that have been delegated, or as to time or circumstance, as may be specified in the instrument of delegation. (4) A power, authority, duty or function, the exercise or performance of which has been delegated under subsection (1) may, while the delegation remains unrevoked, be performed or exercised by the delegate from time to time in accordance with the terms of the delegation. (5) Notwithstanding the making of any delegation under subsection (1), the Secretary may continue to exercise or perform all or any of the powers, authorities, duties or functions that have been delegated. (6) Any act, omission or thing done, omitted or undergone by a delegate while acting pursuant to a delegation made under subsection (1) shall have the same force and effect as if the act, omission or thing had been done, omitted or undergone by the Secretary. 10 Appointment of independent actuary (1) The Secretary may appoint an independent actuary to assist the Secretary in performing his or her functions under this Act. (2) Without limiting subsection (1), the Secretary may appoint an actuary— (a) to provide advice in relation to the ability of an applicant for registration under this Act to carry on a funeral fund successfully and in compliance with the provisions of the Act that would be applicable to the applicant if registered, or (b) to assist the Secretary in conducting an inquiry under Division 2 of Part 5 into the affairs, or such of the affairs as the Secretary determines, of a funeral fund. Part 3 Funeral contribution funds Division 1 Registration of funeral contribution funds 11 Contributory funeral benefit business to be carried on only by companies registered under this Act (1) A person must not carry on or advertise that the person carries on or is willing to carry on any contributory funeral benefit business unless that person is a funeral contribution fund. Maximum penalty—20 penalty units or, in the case of a continuing offence, 2 penalty units for each day the offence continues. (2) Without limiting the application of subsection (1), a person carries on contributory funeral benefit business if the person undertakes to provide contributors with a funeral service in New South Wales. (3) A person is exempt from the application of subsection (1) if the person is a friendly society within the meaning of the Life Insurance Act 1995 of the Commonwealth. (4), (5) (Repealed) 12 Application for registration to carry on contributory funeral benefit business (1) A company may apply to the Secretary to be registered under this Act to carry on contributory funeral benefit business. (2) An application for registration made pursuant to subsection (1) shall— (a) be made in or to the effect of the form approved by the Secretary, and (b) be accompanied by— (i) a written statement showing the reasons for believing that, if registered, the company would be able to carry on contributory funeral benefit business successfully, (ii) a copy of the rules of the company, and (iii) such other documents as may be prescribed. 13 Requirements for registration (1) A company is not entitled to be registered to carry on contributory funeral benefit business unless, under the rules of the company— (a) the company does not carry on pre-paid funeral benefit business, (b) the income of the company derived from contributory funeral benefit business is to be applied only for the provision of funeral benefits to contributors and to meet the management expenses of the company in carrying on contributory funeral benefit business, (c) the contributors to the company are prohibited from being members of the company, (d) the company is required to have not less than 3 directors, (e) the name of the company is not a name, or a name of a kind, that the Minister has directed the Secretary not to accept for registration, (f) the company is required to appoint an auditor and the person so appointed is required to be a person who may, under the Corporations Act 2001 of the Commonwealth, be appointed as the auditor of a company, (g) (Repealed) (h) the company will be able to comply with such of the provisions of this Act as would be applicable to it, and (i) provision is made for such other matters as may be prescribed. (2) The Minister shall cause a direction given by the Minister under subsection (1) (e) to be published in the Gazette. (3) The Secretary may prepare and publish in such manner as the Secretary thinks fit a model set of rules for a funeral contribution fund. 14 Registration of company to carry on contributory funeral benefit business (1) On receipt of an application for registration from a company under section 12, the Secretary may, subject to subsection (2), register or refuse to register the company to carry on contributory funeral benefit business. (2) The Secretary shall refuse to register a company to carry on contributory funeral benefit business if the Secretary is satisfied that— (a) the application for registration was not made in accordance with section 12, (b) the company will not be able to carry on contributory funeral benefit business successfully, or (c) the company is not entitled to be so registered under section 13, or (d) the company is not fit to be registered having regard to the character and reputation of the directors and other officers of the company. 15 Alteration or addition to rules of funeral contribution fund (1) An alteration of or addition to the rules of a funeral contribution fund shall not have any force or effect until it is approved in writing by the Secretary. (2) An application made to the Secretary for an approval under subsection (1) shall be accompanied by such documents as may be prescribed. (3) The Secretary shall refuse to approve an alteration of or addition to the rules of a funeral contribution fund under subsection (1) if the Secretary is satisfied that the fund, by reason of the alteration or addition— (a) will not be able to carry on contributory funeral benefit business successfully, or (b) would be a company not entitled to be registered under section 13. (4) Where a company is not entitled to be registered to carry on contributory funeral benefit business unless under its rules provision is made for a matter prescribed for the purposes of section 13 (1) (i), the Secretary may direct a funeral contribution fund that was so registered before that matter was prescribed, by notice served on the fund, to make, within such time as is specified in the notice, such alterations of or additions to its rules as are specified in the notice in order that provision is made for that matter. (5) A funeral contribution fund shall comply with a direction given to it under subsection (4). Maximum penalty (subsection (5)): 20 penalty units. 16 Cancellation of registration of funeral contribution fund (1) The Secretary may, by notice in writing served on a funeral contribution fund, cancel the fund's registration if— (a) the fund has not commenced to carry on contributory funeral benefit business in New South Wales within 6 months after its registration, or (b) the fund is commenced to be wound up or is under official management, or (c) the fund has entered into a compromise or scheme of arrangement with its creditors, or (d) a receiver and manager has been appointed, whether by the Supreme Court or otherwise, in respect of the property of the fund, or (e) the fund or any person involved in the management of the fund is convicted of an offence involving fraud or dishonesty or fails to comply with a provision of this Act or the regulations, or (f) at the request of the fund, or (g) any other ground prescribed by the regulations is established. (2) The cancellation of the registration of a funeral contribution fund under subsection (1) (paragraph (f) excepted) takes effect on the expiration of 28 days after the notice of the cancellation is served on the fund by the Secretary or, if an appeal is lodged against the cancellation under Part 6, on confirmation of the cancellation or the withdrawal of the appeal. (3) Where the whole of the contributory funeral benefit business of a funeral contribution fund is transferred to, or amalgamated with, the contributory funeral benefit business of any other funeral contribution fund or of a person exempt from the application of section 11, the registration of the firstmentioned fund shall be deemed to be cancelled. (4) Where the registration of a funeral contribution fund is cancelled, or deemed to be cancelled, under this section, the Secretary shall notify the Australian Securities and Investments Commission accordingly. 16A Payment of GST by funeral contribution fund Nothing in this Part or in the rules of a company prevents a company from applying income of the company to the payment of GST payable on the supply by the company of funeral benefits. Division 1A Persons registered as funeral contribution funds on or after 30 November 2004 who were previously exempt 16B Provisions applying to previously exempt persons who are registered to carry on contributory funeral benefit business (1) This section applies to a person (whether an individual or corporation) who, immediately before the repeal of section 16C by the Regulatory and Other Legislation (Amendments and Repeals) Act 2016 (the Amendments and Repeals Act), was registered under that section to carry on contributory funeral benefit business. (2) The following provisions apply in relation to a person to whom this section applies— (a) the person continues to be registered to carry on contributory funeral benefit business (except if the person's registration is cancelled or during any period in which the person's registration is suspended), (b) the person's registration continues to be subject to any conditions to which it was subject immediately before the repeal of section 16C by the Amendments and Repeals Act, (c) if the person was exempt from complying with one or more provisions of this Act or the regulations because of an exemption granted by the Secretary, that exemption continues in force, (d) if the person is an individual, this Act continues to apply to that person in the same way as it applies to a funeral contribution fund that is a company, with any necessary changes. (3) The Secretary may exempt a person registered under this section from complying with such of the provisions of this Act or the regulations as the Secretary considers appropriate having regard to all of the circumstances in which the person carries on contributory funeral benefit business. 16C (Repealed) Division 2 Provision of funeral services 17 Tied arrangements with undertaker A funeral contribution fund that has undertaken to provide contributors with funeral services may, notwithstanding any law (other than this Act) to the contrary, enter into an agreement to have all or any number of those services carried out by the same person. 18 Cash payment in certain cases if funeral service not carried out by undertaker designated by fund (1) Where a funeral contribution fund does not provide a contributor with a funeral service which it has undertaken to provide, the legal personal representative of the contributor is entitled to be paid the prescribed cash payment by the fund to meet the whole or any part of the expenses of and incidental to the funeral of the contributor if— (a) the fund was unable or unwilling to provide the service, (b) the Secretary is satisfied that the service was not carried out by the undertaker designated by the fund for that purpose because the person who arranged for the service to be carried out did not know and had no reasonable means of ascertaining that the fund had undertaken to provide the service, and the Secretary notifies the fund accordingly, or (c) the service was not carried out by the undertaker designated by the fund for that purpose because the legal personal representative was unable or unwilling to pay for the cost of transporting the body of the contributor to the place at which the service was to be carried out by the undertaker so designated. (2) For the purposes of subsection (1), the prescribed cash payment is— (a) except as provided in paragraph (b), the amount that the fund would have been required to pay if the service had been carried out by a person designated by the fund, or (b) where the rules of the fund so provide, the amount specified in those rules as the prescribed cash payment for the purposes of subsection (1). 19 Costs recoverable by undertaker where funeral service provided by fund (1) Where a funeral contribution fund undertakes to provide a contributor with a funeral service and on the death of the contributor a funeral service is carried out by an undertaker pursuant to an agreement with the fund, that undertaker is not entitled to recover in any court any charges for the service so carried out from any person other than the fund unless— (a) the service so carried out was different from or included a service additional to the service that the fund had undertaken to provide, (b) the person who agreed to the different or additional service had, before agreeing thereto, signed a statement to the effect that the person was aware that the contributor was entitled to be provided without cost with the service that the fund had undertaken to provide but that the person agreed to the different or additional service, and (c) the charges for the service so carried out are reduced by the amount that is equal to the cost of the service that the fund had undertaken to provide. (2) A person shall not demand payment for any charge which the person is not entitled to recover under subsection (1). Maximum penalty—10 penalty units. Division 3 Management of funeral contribution funds 20 Certain persons prohibited from managing etc affairs of funeral contribution funds (1) Subject to this section, a funeral contribution fund shall not enter into any contract, agreement, arrangement or understanding with a person by virtue of which the affairs, or any of the affairs, of the fund are managed, controlled or promoted by a corporation or by a person who is not employed by the fund to manage, control or promote those affairs as an officer of the fund under a contract of service. Maximum penalty—10 penalty units. (2) Any contract, agreement, arrangement or understanding entered into in contravention of subsection (1) shall be void. (3) Subject to this section, where at the time at which a company becomes a funeral contribution fund any contract, agreement, arrangement or understanding exists between the fund and another person which would, if the contract, agreement, arrangement or understanding had been entered into after that time, have been entered into in contravention of subsection (1), that contract, agreement, arrangement or understanding shall, notwithstanding any of its provisions to the contrary, be deemed to be terminated from that time. (4) An offence against subsection (1) is not committed by reason only that a corporation or a person not employed by a funeral contribution fund as an officer of the fund under a contract of service acts on behalf of the fund as a banker, accountant, auditor, legal adviser, actuary, underwriter, advertising agent or collector of contributions or in any other prescribed capacity. (5) An offence against subsection (1) is not committed by reason only that a person who is employed by a funeral contribution fund as an officer of the fund under a contract of service is also employed by another person under a contract of service. 21 Management expenses in administration of funeral contribution funds A funeral contribution fund is entitled to receive a commission for its services in acting as trustee of contributions received by it from or on behalf of a contributor. Division 4 Investment and borrowing 22 Investment of surplus funds etc (1) A funeral contribution fund may invest any of its funds that are not immediately required for the purpose of providing funeral benefits or meeting its management expenses in any manner— (a) for the time being authorised for the investment of trust funds, or (b) prescribed for the purposes of this paragraph. (2) A funeral contribution fund shall open at and maintain with one or more authorised deposit-taking institutions one or more current or deposit accounts in the name of the fund and shall— (a) forthwith after receiving any contributions, pay those contributions into that account or one of those accounts, and (b) keep any of its money not invested under subsection (1) in that account or one of those accounts. Maximum penalty—10 penalty units. 23 No borrowing except for temporary accommodation A funeral contribution fund shall not borrow any money except that, for the temporary accommodation of the fund, the fund may obtain advances by overdraft of current account in any one or more banks, building societies or credit unions to such extent as may, from time to time, be approved by the Secretary. Maximum penalty—10 penalty units. Division 5 Returns and registers 24 Returns (1) A funeral contribution fund shall, in each year within 3 months after the last day of the fund's financial year, lodge with the Secretary a return containing the particulars specified in subsection (2) and accompanied by such documents as are specified in subsection (3). (1A) The Secretary may exempt a funeral contribution fund from the requirement to lodge a return under subsection (1) if the Secretary is satisfied that the fund is subject to adequate reporting requirements under a law of the Commonwealth. (2) The particulars required to be contained in the return under subsection (1) are— (a) the address, as at the date of lodgment of the return, of the registered office of the funeral contribution fund, (b) all such particulars with respect to the person who, as at the date of lodgment of the return, is an executive officer of the fund (within the meaning of the Corporations Act 2001 of the Commonwealth) and with respect to any person who, as at that date, is a director or secretary of the fund in respect of whom the fund has lodged (or should have lodged) a notice under Part 2D.5 of that Act, (c) the name and address of every person who, as at the date of lodgment of the return, is an auditor of the fund, (d) the name and address of every bank, building society and credit union at which the fund, as at the date of lodgment of the return, maintains an account or keeps any of its money, and (e) such other particulars (if any) as are prescribed. (3) The documents required to accompany the return under subsection (1) are— (a) a copy, certified by a director or secretary of the funeral contribution fund, to be a true copy of an annual financial report relating to the fund required by Division 1 of the Commonwealth (as applying of its own force or under subsection (3A)) to be prepared for or with respect to its financial year immediately preceding the date on which the return is required to be lodged with the Secretary under subsection (1), and (b) a copy of an auditor's report or reports required to be made by Division 3 of Part 2M.3 of the Corporations Act 2001 of the Commonwealth on that financial report (as applying of its own force or under subsection (3A)). (3A) An exempt fund is declared to be an applied Corporations legislation matter for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act 2001 in relation to the provisions of Division 1 of Part 2M.3 of the Corporations Act 2001 of the Commonwealth, subject to the following modifications— (a) the provisions apply as if— (i) sections 292 (2), 293 and 294 were omitted from that Part, and (ii) section 296 (1) were omitted and the following subsection inserted instead— "(1) The financial report for a financial year must comply with the accounting standards." (b) a reference to ASIC is to be read as a reference to the Secretary, (c) such other modifications (within the meaning of the Corporations (Ancillary Provisions) Act 2001) as may be prescribed by the regulations. Note— Part 3 of the Corporations (Ancillary Provisions) Act 2001 provides for the application of provisions of the Corporations Act 2001 and Part 3 of the Australian Securities and Investments Commission Act 2001 of the Commonwealth as laws of the State in respect of any matter declared by a law of the State (whether with or without modification) to be an applied Corporations legislation matter for the purposes of that Part in relation to those Commonwealth provisions. Section 14 (2) of the Corporations (Ancillary Provisions) Act 2001 ensures that a declaration made for the purposes of Part 3 of that Act only operates to apply a provision of the Corporations legislation to a matter as a law of the State if that provision does not already apply to the matter as a law of the Commonwealth. If a provision referred to in a declaration already applies as a law of the Commonwealth, nothing in the declaration will affect its continued operation as a law of the Commonwealth. (4) A funeral contribution fund shall, not later than 14 days after a change occurs in any particular referred to in subsection (2) in relation to the fund, lodge with the Secretary