Dáil Éireann debate -
Wednesday, 3 Feb 1937

Vol. 65 No. 1

Public Business. - Circuit Court (Registration of Judgments) Bill, 1936—Second Stage.

Minister for Justice (Mr. Ruttledge)

The main object of this Bill is to carry out a recommendation that was made by the Joint Committee set up to consider the Courts of Justice Act, 1924. One of their recommendations was that Section 336 of the Bankruptcy Act should be applied to Circuit Court judgments. Since then representations have been made by other interested bodies, including the Incorporated Law Society, to have such provisions passed into law. The position at present is that under this section (336) of the Irish Bankrupts and Insolvents Act of 1857, if the holder of a judgment in the High Court does not register that judgment within 21 days after it is entered up and he subsequently levies on the creditor, in the event of that creditor becoming a bankrupt, the Official Assignee in Bankruptcy can recover from the person who has collected under such execution. The Official Assignee can recover from him and regard the judgment of the court as null and void.

Under the old County Court system there was no necessity whatever for the creditor to register that judgment. He came in and could levy execution and that money was not recoverable from him by the Official Assignee if the creditor subsequently became a bankrupt. In the limited jurisdiction of the old County Court that was not regarded as being much of a hardship. But under the extended jurisdiction of the Circuit Court— now extended to £300, and in some cases unlimited jurisdiction—it may result in much hardship. It was represented by the business community and the legal body concerned as a matter that may result in much hardship. It was also represented that in the County Court you could not register a judgment unless it was £20 exclusive of costs. It is very easy for members of the House to realise, particularly with the extended jurisdiction of the Circuit Court to which I have referred, that it might be a considerable hardship on a successful defendant where an unjustifiable action possibly was brought against him, that he could not register that judgment and secure his rights in the event of bankruptcy or otherwise. That is being remedied under this Bill.

These are the two main purposes of the Bill. The other portions of the Bill are really repealing very antiquated sections spread over various Acts, one going back 86 years and another going back 72 years. It is more or less an attempt to codify the law dealing with these judgments and to have it in one Act. This is a Bill that is asked for by the solicitors' profession—we have the recommendations of the Incorporated Law Society —and it was asked for, I understand, when there was a commission set up to consider the Bankruptcy Act some years ago by the Minister for Industry and Commerce. That commission reported in favour of this amendment of the law and, as I have already stated, it has been recommended by the body that was set up here to inquire into the working of the Courts of Justice Act, 1924. In the original draft of the Courts of Justice Bill of 1936 it was intended to have such an amendment inserted, but on reconsideration it was not considered a suitable place.

Mr. Dillon

Would the Minister repeat the second purpose of this Bill; he spoke of a successful defendant registering his judgment and I could not follow him?

Mr. Ruttledge

He could not register unless there was a judgment for £20 exclusive of costs. The position has been that a successful defendant has no remedy—he could not go and register his judgment for costs.

Mr. Dillon

He can now levy for his costs. The Minister brings this Bill forward because of strong recommendations from various interested bodies. At first glance I see one difficulty about which I should like to hear a reassuring word. This Bill proposes that where a very diligent creditor sues and then hands the decree to the sheriff, who levies on the debtor, that the debtor can presumably go bankrupt and that his estate can get back from the diligent creditor all that he succeeded in extracting by levying his decree; that money goes into the hands of the Official Assignee and is divided amongst the other creditors. The difficulty I envisage is this: Supposing I want to recover on a decree against John Smith. After getting the decree John Smith meets me outside the courthouse door and says: "Now I warn you that if you hand that decree to the sheriff I will go bankrupt, whereupon you will have to refund the money to the Bankruptcy Court; you will have to pay the sheriff's costs for the execution of this decree and out of that you will only get a dividend from Bankruptcy Court." Would John Smith be able to say: "You will only get a dividend on the costs of this trial and the sheriff's costs?" If John Smith, the successful defendant's creditor is in a position to say that, nobody can ever levy a decree again because the position then of the diligent creditor will be far worse than the position of the indolent creditor, the man who does not resort to the law at all, because the diligent creditor will not be able to recover his own costs at all from the Official Assignee while the indolent creditor has been saved these costs. The diligent creditor will suffer great loss if what the Minister has said is a true statement of the case. I do not see how the Incorporated Law Society can believe that this provision will improve the Bill; nor can I see how any business man can think it will improve the Bill. I have always understood that the whole maxim of the common law was that the courts were not inclined to relieve the litigant from the consequences of his own indolence —that you had to satisfy the court that you had been diligent in securing your own rights before the court would move. This provision reverses by statute that principle. I think that principle of common law a very, very sound one and I have yet to hear from the Minister a convincing reason why we should depart from it.

Mr. Ruttledge

The answer to the Deputy is that if the creditor registers his judgment then the Official Assignee cannot recover. I do not know that I am quite clear as to what the Deputy is at, but take the position in the Circuit Court. There is a successful plaintiff. He gets a decree, and, as the Deputy knows, he has various remedies. He can levy execution, and subsequently get a judgment mortgage in the court of equity and proceed to sale. A difficulty would arise where this party afterwards became a bankrupt. Now, at present the position is, as I have tried to explain already that, in the High Court, for the purpose of getting in at all on a bankruptcy and to rank as a creditor, to rank in the sense as if he had levied execution, a creditor would have to register his judgment within 21 days, whereas in the Circuit Court he need not have done anything whatever about registering. He could simply come along when the Official Assignee was dealing with the matter and claim to rank as a creditor, simply by sitting on his decree and doing nothing about it. The purpose of this Bill is to remove that anomaly, and to bring both the High Court and the Circuit Court procedure into line.

Mr. Dillon

What is the Minister's view of the case of a successful plaintiff who gets a decree and does not register it? Instead of registering it he promptly hands it to the sheriff who levies successfully.

Mr. Ruttledge

He is quite all right in the Circuit Court. He has levied and he has secured his money in the Circuit Court.

Mr. Dillon

I understood the Minister to say that if there was a subsequent bankruptcy, the Official Assignee could recover from him the proceeds of his levy.

Mr. Ruttledge

Not in the Circuit Court, and that is the complaint.

Mr. Dillon

And the Minister is going to give the Official Assignee power to get back from the successful plaintiff the proceeds of his levy.

Mr. Ruttledge

No, I am not trying to do anything of the kind. I am trying to put on creditors now the onus that they must register their judgments within 21 days, the same as they have to do at present in the High Court. If they do that, there is no question at all of the Official Assignee in the matter.

Mr. McMenamin

The Minister and all of us who have had experience in these matters know well what happens. It is this: that the moment a man gets a decree from a judge, he hands it to the sheriff to be executed. We have all known of cases of that kind. The man does not register it. The difficulty that Deputy Dillon refers to arises then.

Mr. Ruttledge

No, because there would not have been an immediate bankruptcy.

Mr. Dillon

I understand there is an emergency procedure by which a debtor claims the protection of the court. The sheriff can be received at the debtor's premises with a notice that the debtor is claiming the protection of the court. In that case the sheriff levies at his peril. He does not levy. He goes away and tells the creditor that he cannot be paid.

Mr. Ruttledge

He goes into court, and if he can levy there and then he is all right. If, subsequently, this man takes the protection of the court, then if he does that, what I am trying to do under this Bill is to have a Circuit Court decree put in the same position as that of a High Court decree at present. What is done, and what always has been done in the High Court, is that if they anticipate any difficulty about the other party becoming bankrupt, or of taking the protection of the court, they go and register their judgment, just the same as other documents are registered, with a view to protecting the creditors, so that everyone has notice of the debts that are due or outstanding. But the complaint has been that a Circuit Court creditor could have a decree in his pocket while other creditors knew nothing about it. The purpose of this Bill is to bring the position of creditors in the Circuit Court into line with that of creditors in the High Court.

Question put and agreed to.

Committee Stage ordered for Wednesday, 10th February.