Singapore legislation
Clause 54
Clause 54
Application of fund
(1)
Subject to this Part, a fidelity fund shall be held and applied for the purpose of compensating persons who suffer pecuniary loss —
from any defalcation committed by a sole trader who is liable to contribute to that fund, whether or not he has been freed and discharged from payment under section 50 of this Act or by any of his clerks or servants in relation to any money or other property which, whether before or after the date of the coming into operation of this Act, in the course of or in connection with the sole trader’s business —
was entrusted to or received by the sole trader or any of his clerks or servants for or on behalf of any other person; or
(the sole trader being in respect of the money or other property either the sole trustee or a trustee with another person) was entrusted to or received by the sole trader or any of his clerks or servants as trustee or for or on behalf of the trustees of that money or property; or
from any defalcation committed by the partners or by any of the partners in a member firm or by a member company or any of its directors who are liable to contribute to that fund, whether or not they have been freed and discharged from payment under section 50 of this Act or by any of the clerks or servants of such a member firm or company in relation to any money or other property which, whether before or after the date of the coming into operation of this Act, in the course of or in connection with the business of that firm or company —
was entrusted to or received by the partners or any of the partners or by a member company or any of its directors or any of the firm’s or company’s clerks or servants for or on behalf of any other person; or
(the partners or any of the partners or the member company being in respect of the money or other property either the sole trustee or trustees or trustee or trustees with any other person or persons) was entrusted to or received by the partners or any of the partners or the member company or any of its directors or any of the firm’s or company’s clerks or servants as trustee or trustees or for or on behalf of the trustees of that money or property.
(2)
Save as otherwise provided in this section, the total amount that may be paid under this Part to all persons who suffer loss —
through defalcations by any sole trader and through defalcations by any of his clerks or servants; or
through defalcations by the partners or any of the partners in a member firm or by a member company or any of its directors and through defalcations by any of the firm’s or company’s clerks or servants,shall not, in any event, exceed in respect of that sole trader or that member firm or company the sum of one hundred thousand dollars, but for the purposes of this subsection any amount paid from a fidelity fund shall to the extent to which the fund is subsequently reimbursed therefor be disregarded.
(3)
If, after taking into account all ascertained or contingent liabilities of a fidelity fund, the committee considers that the assets of the fund so permit the committee may from time to time by notice published in the Gazette increase the total amount which may be applied from that fund pursuant to the provisions of subsection (2) of this section and from the date of such publication until the notice is revoked or varied the amount specified in the notice shall be the total amount which may be applied as aforesaid.
(4)
A notice under subsection (3) of this section may be revoked or varied by the committee by notice published in the Gazette and a notice which is so varied shall have effect accordingly.
(5)
If, in any particular case after taking into account all ascertained or contingent liabilities of a fidelity fund, the committee considers that the assets of the fund so permit the committee may apply out of the fund such sum in excess of the total amount limited by or under this section as the committee in its absolute discretion thinks fit in or towards the compensation of persons who have suffered pecuniary loss as provided in subsection (1) of this section.
(6)
For the purposes of this section “sole trader”, “partner in a member firm” or “director of a member company” includes a person who has been, but at the time of any defalcation in question has ceased to be, a sole trader, a partner in a member firm or director of a member company if, at the time of the defalcation the person claiming compensation had reasonable grounds for believing that person to be a sole trader, a partner in a member firm or a director of a member company (as the case may be).