This arrangement worked well for about two years. In 2017, however, the term deposits matured and the funds remained in the current accounts without being reinvested for almost two years. Navin said the bank should reimburse the trust for lost interest because he had come to rely on the bank letting him know the term deposits had matured and seeking further instructions. Indeed, the bank had an obligation to seek further instructions, he said. Lost interest amounted to $30,000, according to Navin, but he claimed only half of this sum on the basis there had been a mutual misunderstanding.

Our investigation

The bank had, with the exception of a single diary note, no record of contact with Navin in the two years leading up to 2017. The diary note recorded that Navin had initiated contact in this one instance. The bank had, however, notified Navin by post whenever term deposits matured. We considered the obligation was on Navin, especially as a professional trustee, to look after the trust’s affairs. He knew or should have known when term deposits were due to mature. Any check of the current accounts during the two years in question would have revealed that the funds were sitting there.

Outcome

The bank offered $4,000 in recognition of the fact it had a longstanding relationship with the trust’s beneficiaries, and Navin accepted this on behalf of the trust.