Dáil Éireann debate -
Tuesday, 13 May 1958

Vol. 168 No. 1

Committee on Finance. - Administration of Estates Bill, 1957—Second Stage.

Minister for Justice (Mr. Traynor)

I move that the Bill be now read a Second Time. The purpose of this Bill is to make certain amendments in the law relating to the administration of the estates of deceased persons with a view to clearing the way for a more comprehensive measure of reform in this branch of the law which is at present under consideration in my Department.

Of these amendments, the principal one is that which provides for the devolution of all real estates in the same way, that is to say, on the executor or administrator of the deceased. Under the law as it stands, real estate, other than freehold registered land, does not devolve on the personal representative but passes directly to the heir-at-law or to the person to whom it has been devised.

The greater part of the real estate in the country already devolves on the personal representative as it consists of registered land purchased under the Land Purchase Acts, which is treated as personal property for the purposes of devolution. It is chiefly in towns that there is to be found unregistered freehold land though there is a small quantity of such property elsewhere. In any case, the present differentiation in treatment is an anomaly which cannot be justified and the Bill proposes to put an end to it. Admittedly, the recognition of an heir-at-law and the privileged position of the eldest son are even greater anomalies but they are more complicated matters which can best be left over for consideration in connection with the more comprenhensive Bill to which I have referred.

The other proposals in the Bill consist of amendments of the law of a more or less technical character. For this reason, there has been circulated with the Bill an explanatory memorandum which goes into the proposals in detail. The Bill contains explanatory sidenotes showing whether a particular provision involves a change in the law or is merely a provision consolidating existing statutory enactments. And a legend as to the abbreviations used in these sidenotes will be found on page 1 of the text of the Bill.

This is really a Committee Stage Bill and I do not think that the House would wish me to take up its time by going over the ground that is covered in the explanatory memorandum and repeating what is said therein in a different form of words. The Bill is a non-Party measure and I hope the House will see its way to give it a Second Reading.

Mr. Sweetman

I agree with the Minister that this is, to a very large extent, indeed to an overwhelming extent, a Committee Stage Bill. In fact, I propose to-day to confine myself to remarks on one aspect of it, an aspect on which the Minister touched, but no more than touched. I frankly confess I do not understand why the provisions of this Bill in relation to real estate have been limited to what I may describe as the technical process of devolution.

The Bill provides that in relation to real estate it will devolve just as personal estate or as chattel real estate. So much to the good, but it seems to me illogical to do that in this Bill and at the same time not to tackle the problem of the beneficial interest in that real estate. I would have preferred that the Bill did not even pass the technical devolution of real estate to the executor now and had deferred that until the more comprehensive Bill of which the Minister speaks, rather than that the technical aspect should be dealt with now leaving over the beneficial aspect.

In these days I do not think there is any case—certainly in the country—to retain the principle of heirship-at-law. Too often one sees in the country a small piece of land that is freehold and attached to it a piece of land that has been bought out under the Land Acts. It occasionally arises, through the machinations of the Land Commission, that they make an enlargement to a parent, freehold holding. In such a case, whether it is used as part of the same farm, sometimes part of the same field, the freehold portion of the land and the portion of land bought out under the Land Acts go on an intestacy to different people and that causes quite unnecessary trouble.

In addition, there is the provision that arises in respect of voluntary registration under the Local Registration of Title (Ireland) Act, 1891. Such a voluntary registration does not mean that the land registered passes as personality, but it continues to pass as realty. We have also the cases that arose some years ago where land that had been bought from the Land Commission as realty before vesting was declared also to be realty in the hands of the allottees put on it by the Land Commission before they would come under the 1891 Act. It seems to me that it would be desirable to ensure that all the lands in Ireland—and by the word "lands" one includes the word "houses"—should pass beneficially in the same way on the death of an owner if that owner had not made a will.

I hope that it will be possible for the Minister to indicate that he will not wait for a more comprehensive measure to provide that. He could do so now in Part II of this Bill. I am completely unable to understand what case can be made for the introduction of Part II before the introduction of a comprehensive measure unless, of course, the Minister has already set his face against making the devolution of real estate the same as that of chattel real property, and I doubt very much if he has.

This is not a question of Party politics in any way. The bones of this Bill have been on the stocks for a considerable time; they were there in my time and I know that certain of my colleagues, as well as myself, expressed views from time to time that it would be desirable not to change the beneficial ownership as well. I should like the Minister to indicate whether he obtained views that can be published on this Bill from the bodies that would be concerned with it once it has been enacted—the Bar Council, the Incorporated Law Society and so forth.

If the Bill has been issued without consultation with those bodies in its existing form then I would ask the Minister to have a very protracted period between now and the Committee Stage so as to enable adequate time for consideration to be given to the Bill, not merely by the bodies I have mentioned but also by the general members of the legal profession, barristers and solicitors.

It seems to me that we can discuss various details more accurately on the Committee Stage but with a view to having my mind cleared before that stage, if the Minister is able to answer this question I should like him to do so: is it clear that Section 6, sub-section (1), (b), (ii) has not got the effect of barring the entail? I think it has only the effect of saying that the property vests in the executor and that the subsequent claimant entail can claim that property from the executor beneficial. If I am wrong in that, and if the Minister wishes to bar the entail in this way, I suggest it is a very untidy way of doing it. I think I have interpreted the section correctly but it is desirable that it should be stated beyond doubt.

The Minister did not give us any indication of when his comprehensive measure is likely to come along. All Ministers hate to say when further legislation is likely to come but perhaps, as well as dealing with the one feature to which I have referred, the Minister would tell us what other features are under examination for that comprehensive measure. By giving us such indication we might be able to judge when it is likely he will be able to come to the House with the comprehensive measure. If the Long Title permits it I would suggest very strongly that between now and the Committee Stage the Minister should change Part II in such a way that the beneficial interest will follow the technical devolution to the executor.

Dr. Esmonde

I am rather chary about talking on a Bill such as this, as it deals with an extremely complicated matter and it is rather difficult for the average layman to understand. This Bill seems to be a copperfastening sort of measure, to make it easier for the State to get taxes out of those who are liable to pay them. It also seems to be one of those pieces of legislation to bring us into line with British legislation. Whenever the British introduce new legislation, it has been the invariable custom here to follow it closely.

The principal reason I rise to speak is that, as a mere layman, I have always felt that death duties are an imposition on the public, although it is the estates which pay them, and they do not redound to the benefit of the country as a whole. When the Minister is introducing legislation such as this, dealing with estates, it leads to a lot of preparation and concentration, at considerable expense to the State; and it seems a pity that, if there is to be further legislation—and, unfortunately, I missed the Minister's opening speech—there is no reference to any change with regard to death duties. We are not a very big country and we are not overburdened with wealth, so our aim is to encourage people who have money to spend to come and live in Ireland. That is what we want. I cannot help feeling that were we to amend the death duties, it would be a considerable incentive to people to come and settle here.

I am personally conversant with cases in many different walks of life, in which considerable hardship—and, I may add, considerable unemployment —has been caused by the iniquitous system of death duties. I do not know who was responsible originally for thinking of death duties, but I suppose that in the dim and distant past some brainy politician or administrator thought of them as being an easy way of raising taxation. When a man is dead he cannot protest and it seemed an easy way of getting money for the benefit of the people as a whole. That has proved to be entirely wrong. In the case of a big business combine— and the tendency in the modern world is for businesses to become bigger and bigger—when the owner or principal director dies and half his estate is seized by the State for the death duties, his business is unable to continue as heretofore and there is considerable unemployment. I think we have reached the stage in modern thought when everybody is beginning to realise that.

Added to that, there is the fact that there is no great incentive to the people who can save, to save when they feel that when their time comes and they pass along it will be pinched by the State.

An Ceann Comhairle

Is the Deputy addressing his remarks to the wrong Minister?

Dr. Esmonde

As far as I know, this Bill deals with death duties and there is a special clause in the Bill which makes it easier to follow them.

An Ceann Comhairle

I do not think the matter comes within the four corners of this Bill.

Mr. Sweetman

Section 9, Sir.

Dr. Esmonde

It is in the Bill; it is in the White Paper which deals with the Bill, as I understood it when studying it. It says that the law is being amended to provide that an administration bond shall include provisions for the payment of death duties, income-tax and surtax. What could be plainer than that? The object of this Bill is to enable the Department of State to recover death duties more efficiently than they did before and therefore I maintain I am entitled to talk about it. If you rule that death duties do not come into this, perhaps the Bill means that no one will be asked to pay them?

An Ceann Comhairle

I shall not construe the Bill.

Dr. Esmonde

I only wish to speak on the subject of death duties, to which I object—and I am not the only person who objects to them. I am trying to point out that they have had on our economy as a whole a detrimental effect.

An Ceann Comhairle

I do not think this Bill imposes death duties.

Dr. Esmonde

But it deals with death duties.

An Ceann Comhairle

The Deputy knows, of course, that it is the Finance Act that imposes death duties.

Dr. Esmonde

Yes, Sir. What I am suggesting is that when the Minister is introducing a Bill dealing with death duties he should have introduced a remission of them or a new arrangement.

An Ceann Comhairle

In other words, he could repeal the Finance Act by a section in this Bill? The Deputy is straying away altogether from the purpose of this Bill.

Dr. Esmonde

If you, Sir, rule me out of order, I have nothing to do but sit down; but I think I have successfully made my point.

Major de Valera

On this question of death duties, Section 9 says, in effect, that nothing in this part of the Bill shall affect any duty payable in respect of real estate or impose any additional duties thereon. It seems to me that, as Deputy Esmonde said, the reason for bringing this forward may very well be a consideration in the collection of death duties and that is a fair point enough from the point of view of the Exchequer.

There is also the point which Deputy Sweetman made; and I think it is the kernel of the thing. This Bill deals with the mechanism of devolution and does not touch what happens the property itself. It seeks to keep the old story there and still modify it. I notice that in the White Paper there is a phrase that the amount of non-registered land that would go to the heir in the country is small. I do not know whether it is small enough not to matter. Perhaps Deputy Sweetman could say how far the problem in regard to the heir-at-law is a practical problem. I gather that Deputy Sweetman, from his experience, feels that it is of sufficient interest to warrant the introduction of a Bill of this nature.

Mr. Sweetman

In my small practice, I have three cases going through at present where it is a problem.

Major de Valera

I can certainly see that in the cases such as Deputy Sweetman mentioned, where there is a freehold which would devolve on the heir, that is, ordinary freehold and a statutory equivalent in the form of registered land, where the land is parcelled up and moving towards the beneficiaries in two different ways, it is very hard to argue that that situation should not be adjusted. If we are not prepared to defend the proposition that the heir-at-law should inherit as heretore and if we are prepared to go as far as we do in this Bill, I am inclined to reiterate the question as to whether the whole thing should not be dealt with in one neat sweep. If we merely change the mechanism and still leave the old complications, I am afraid we may solve one problem at the expense of bringing in others. Reading the Bill itself will be, as one of the speakers said, a question for Committee Stage, but the White Paper in this case serves a very useful purpose because, by taking it in conjunction with the Bill, it will sometimes raise the problem more clearly than the Bill itself.

One thing strikes me on looking at the White Paper. We read in the intention, as submitted by the Minister in his White Paper, that he proposes that a person's real estate should be administered in the same way as personal estate and be subject to the same liabilities for debts, costs and expenses, but the order shall not be changed. Later on, when dealing with paragraph 9, there is an implication that the intention is not to change the mechanisms. I ask at this stage—I know it is a matter for the Committee Stage but I throw out the suggestion now—whether we might examine it much more closely? I agree that if you go into this Bill in detail, you may get into contradictions, for the reason that you are not fundamentally removing the difference between registered land and freehold land which would descend to the heir. That distinction still remains there.

There is a great deal of case law and, indeed, statute law in the form of the Statute of Limitations and other enactments. One might get involved. We need not go into all the possibilities. We should ask ourselves whether we are simplifying the situation or giving cause for further litigation. Are we not complicating the situation at this stage? Admittedly, where small problems arise, you will get the intention worked out very often, but if anything substantial arises, that is what makes law. I still have the feeling that if we leave the anomaly there, that registered land——

Mr. Sweetman

Under Part IV only.

Major de Valera

That would be registered land. That could be attached to a realty devolving on the heir.

Mr. Sweetman

But voluntarily registered land does not.

Major de Valera

I mean Land Commission land. In that case, you could have a parcel of land that, for all practical purposes, would be one wholly up to the death of the proprietor. It is very probable that in that case the intention, and also the natural sequence of facts would be such as to indicate a single, simple devolution, but if that owner died intestate you would then have by force of subsequent law, quite apart from administration or anything else, a partition. That would be the net effect. Would I be right?

Mr. Sweetman

Unless one of the Land Acts overrided it.

Major de Valera

There again you go into more complications, the "ifs" and the "buts." These are the things that will make the case. Take the simple case that I have tried to indicate. You do not solve anything. The fact that it all comes in to the one executor does not seem to have any great advantage, except from the point of view of people collecting testamentary debts and expenses. Except from the point of view of death duties, it does not seem to be of very great advantage to do it this way.

Would the Minister, therefore, between now and the time when the Bill is ready for Committee Stage, consider that possibility and whether it would not be advisable to introduce an amendment on Committee Stage to cover that point? I know off-hand that it is rather a frightening thing to consider changing the law to that extent, but, in practice, it will be found that the interests of the heir-at-law have remained simple and uncomplicated. In fact, it has been so clear that all the amendments and changes to get outside it have left the law itself essentially simple in regard to the heir-at-law. I may be wrong. If that is the case and if it were decided that a proper State policy would be to change the law in regard to the contingent interest of any heirs-at-law to the situation which rules in regard to registered land or—to put it this way—put freehold on the same basis as any other kind of property, perhaps the neatest and quickest way of doing that would be in this Bill. If we thought that desirable, the job would not be such a difficult one after all and it would not necessarily entail further extensive legislation.

I do not know what kind of Bill the Minister envisages as a more comprehensive measure at a later stage. What is this Bill to embrace? The problem of the heir-at-law could be dealt with in a simple Bill which could not be classified as an extensive measure. It could be taken as part of an extensive reorganisation of the law in other Departments. This item stands so isolated as to enable it to be taken into this Bill. Could we at this stage inquire from the Minister whether amendments in that sense would be in order on Committee Stage?

Mr. Sweetman

Might I ask the Minister a question? At page 2, second paragraph, of the White Paper, it says that the duty is now to be payable by the executor. Is it clear that the duty in respect of real property will be paid by the executor out of the real estate and not out of the personal estate?

Major de Valera

As it stands, it would appear that the executor would have to pay out of the real estate.

Mr. Sweetman

I am not sure.

Major de Valera

As it stands. Is it the intention to do the other? I agree there is a question there.

Mr. Sweetman

The duty could be paid as the property beneficially passes.

Major de Valera

The problem there is whether we are amending the machinery or the substantive law.

Mr. Sweetman

The present law is that the duty is paid out of real estate.

Mr. Traynor

I am advised that it will continue to be payable out of the real estate.

Mr. Sweetman

I am relieved to hear that. The Bill is clear but the White Paper is not.

Mr. Traynor

Generally speaking, this is an initial effort to meet with the demand that has been made from time to time from all sides of the House to bring about a reform of the law and this is only a first attempt at that. It is, so to speak, something in the nature of a step forward. We have got to creep before we start to run. When the comprehensive Bill is being dealt with—it is on the stocks at the present moment—the whole law of intestacy may be discussed. Deputy Sweetman asked me when that Bill would be ready. I cannot say definitely when it will be ready. I do not like mentioning a specific date but it is possible that we may be able to bring it before the House before the end of the year. I should not like to go any farther than that. I may perhaps be a bit optimistic but I can assure the Deputy that the Bill is under active consideration. It is being examined by the people who are dealing with the matter and I know that from time to time there have been discussions on the proposed provisions.

In the Bill before the House we are not tackling the question of the descent of real estate in intestacy, but that problem will be covered in the larger Bill. The present Bill will give the Probate Office and the district probate registries time to alter the existing practice as to the grant of probates and administrations so that everything will be in order when the comprehensive Bill is enacted. I agree that the institution of the heir-at-law is out of date and that all property should pass in the same way but there are a number of other problems in connection with intestacy that have to be solved in the comprehensive Bill. As I said, this latter Bill should be available about the end of the year.

Section 6 (1) (b) (ii) is not designed to bar an entail. I think Deputy Sweetman made a query about that particular point. Between now and the Committee Stage I shall examine the point the Deputy made to see if the provision requires clarification.

With regard to the question Deputy Dr. Esmonde raised about death duties, the law of death duties is a matter for the Minister for Finance and we are not, in fact, dealing with it in this Bill at all. It is true to say that there are references to death duties in the Bill but the law is not being altered. Alleviating the burden of death duties might bring several people of property here though it is problematical whether it would or not.

Dr. Esmonde

If legislation were being introduced to deal with death duties, surely it would be introduced by way of a Bill from the Minister's Department rather than from that of the Minister for Finance?

Mr. Sweetman

No, Finance.

Mr. Traynor

It is a matter for the Minister for Finance. The only thing I can say finally in regard to the present Bill is that it is a Committee Stage Bill. The technical matters raised in the course of the discussion will be examined and they can, if necessary, be covered on the Committee Stage. However, I doubt if in the present Bill we should go much farther than we have gone.

An Leas-Cheann Comhairle

When is it proposed to take the next stage?

Mr. Traynor

Next Wednesday?

Mr. Sweetman

Did the Minister say that the Bill, as presented, had been considered by the Bar Council and the Incorporated Law Society?

Mr. Traynor

I understand not.

Mr. Sweetman

Then I would ask for considerably longer than until next Wednesday.

Mr. Traynor

A fortnight from tomorrow?

Mr. Sweetman

Very well, and if the bodies indicate they have not enough time I am sure the Minister will accommodate them.

Question put and agreed to.

Committee Stage ordered for Wednesday, 28th May, 1958.