Dáil Éireann debate -
Wednesday, 10 Feb 1960

Vol. 179 No. 1

Public Business. - Hire-Purchase (Amendment) Bill, 1957—Second Stage.

Minister for Industry and Commerce (Mr. J. Lynch)

I move that the Bill be now read a Second Time.

As the Bill is of a somewhat technical nature, I arranged for the circulation of an explanatory memorandum which I trust Deputies have found helpful. The purpose of the Bill is two-fold. Firstly, it provides for the conferring on the Minister for Industry and Commerce of the power to regulate by order minimum deposits and maximum periods of payment in connection with hire-purchase and credit-sale transactions and the information to be given in relation to goods advertised or displayed for hire-purchase or credit-sale. Secondly the Bill provides for the amendment in a number of important respects of the Hire-purchase Act, 1946, which deals with the private rights and liabilities of parties to a hire-purchase or credit-sale agreement and the powers of the courts in legal proceedings arising out of hire-purchase transactions.

One of the more important economic phenomena of recent years has been the increase in the use of consumer credit facilities. This development has been most pronounced in the case of hire-purchase transactions. While the consumer credit system was firmly established in this country before the last war, it is only since that time that it has attained its present proportions. Figures compiled by the Central Statistics Office show that in 1938 there were 64,000 hire-purchase and credit-sale transactions the total retail value of which amounted to £1.5 million, while in 1958 the number of such transactions was 242,000 and their total retail value £15.6 million. Thus, between 1938 and 1958 there was a four-fold increase in the number of transactions and a ten-fold increase in their retail value. Part of the increase in retail values as compared with 1938 is due to the decline in the value of money in the interval. Nevertheless, it is clear that the use of the facilities of hire-purchase has increased very considerably.

Hire-purchase benefits the community in a number of ways. It increases the demand for a wide range of consumer goods and other products and in that way promotes production and employment. It enables persons of limited income to furnish and equip their homes and to acquire many of the conventional necessities of life, the purchase of which would otherwise have to be deferred. So long as hire-purchase facilities are utilised sensibly and prudently there is no doubt but that the system is a useful one and that in normal conditions it can be beneficial to the national economy. This may be particularly true when the facilities are availed of for productive purposes as, for example, the purchase of industrial machinery and plant which will add to the national income and provide useful employment.

Hire-purchase has now become such an important economic and social factor in the life of the community that I am sure that the House will agree that it is essential that the conduct of this business should continue to be subject to regulation so as to ensure, firstly, that the economic consequences of hire-purchase spending can be controlled in the national interest and secondly, that the practical operation of the system as between the owner and the hirer of goods is fair and equitable.

While the growth of hire-purchase plays an important part in the development of the economy it can give rise to serious problems. Hire-purchase credit provides spending power and creates a demand for goods and services. To the extent that the demand is for imported goods, it is capable of having an adverse effect on our balance of payments. Furthermore, if hire-purchase were to encourage and facilitate expenditure on consumer goods, the quantum of national savings available for productive investment would be affected. It is very desirable, therefore, that, if circumstances at any time so require, the Government should have the power to control those undesirable consequences of hire-purchase. Part II of the Bill provides, therefore, that the Minister for Industry and Commerce may make Orders regulating the volume of business transacted by prescribing minimum deposits and maximum periods of payment.

This Part of the Bill also authorises the Minister for Industry and Commerce to prescribe, by order, the information to be given in relation to goods advertised or displayed for hire-purchase or credit-sale. The interests of hirers or buyers in this matter are already protected to some extent by Sections 3 and 4 of the Hire-purchase Act, 1946, which provide that, before a hire-purchase or credit-sale agreement is entered into, the hirer or buyer must be informed of the cash price of the goods. The agreement itself, which must be in writing, must show the cash price and the hire-purchase or total purchase price of the goods. When advertising and displaying goods for sale on hire-purchase and credit-sale terms, many traders do not show the cash price or the hire-purchase or total purchase price but merely the amount of the weekly or monthly instalment.

I think that it will be agreed that the practice of showing only the amount of the instalment induces many people to buy goods without knowing the exact cost or the full extent of the commitments being entered into. I consider, therefore, that it is very desirable that, at the time that goods are displayed or advertised, consumers should be made aware of the price at which the goods may be purchased for cash, the total hire-purchase price and the number, frequency and amount of the instalments payable. The powers contained in Part II of the Bill will enable the Minister for Industry and Commerce to require that information of this kind shall be made available to the public.

The Hire-Purchase Act, 1946 was primarily designed to protect the interests of persons who hire or acquire goods under credit-sale agreements. As I mentioned at the outset, it establishes and defines private rights and liabilities between owners or sellers, and hirers or buyers of such goods, and it provides guidance for the courts in legal proceedings arising out of hire-purchase transactions. A detailed examination has been conducted by my Department of the present state of the law on this subject and of the manner in which the Act of 1946 has been operating. There have been consultations with various interested parties including hire-purchase companies, and an opportunity has been taken to obtain the views of the Judiciary and Court officers who have specialised experience in this field. The investigations which have been carried out show that a number of changes in the law are desirable and it is with these changes that Parts III and IV of the Bill are concerned.

Under existing law, if a hirer defaults in payments under a hire-purchase agreement and the owner takes legal proceedings for the recovery of the goods, the court may make an order giving the hirer an opportunity of paying the outstanding balance of the hire-purchase price by instalments. If, due to some misfortune such as illness or unemployment, the hirer falls behind in the payments under the court order and, fails, or is unable, to apply to the court for a variation of the order before his default occurs, he may lose the goods, even though at the time he may have paid off practically all his indebtedness. It is clearly inequitable that the hirer should lose the goods in such circumstances, and provision is, therefore, made in the Bill to enable the court to vary its order at any time before the goods are actually returned to the owner in accordance with a delivery warrant issued under the order. The hirer is also being given the right, which he does not at present possess, to pay the outstanding balance of the hire-purchase price instead of handing over the goods in compliance with a delivery warrant. This provision will not interfere with the rights of the owner to recover whatever costs and expenses may have been awarded to him by the court.

In ordinary civil proceedings, if a defendant admits a plaintiff's claim and makes an offer of payment which the plaintiff accepts, judgment is entered in the court often without any query and without attendance of the parties. This cannot be done at present in hire-purchase cases, since the Act of 1946 provides that an order giving relief to a hirer may be made only at the hearing of the action after the court has regard to all the relevant circumstances of the case. These precautions are not really necessary where the owner has accepted the hirer's offer of payment and, accordingly, it is provided in the Bill that in such case the court may enter judgment forthwith. This provision should help to speed up court procedure and reduce legal expenses, to the benefit of both hirers and owners.

The Act of 1946 renders void any clause in a hire-purchase agreement authorising an owner to enter the hirer's premises for the purpose of seizing the goods which are let under the agreement. The Act furthermore provides that, where one-third of the hire-purchase price has been paid, the owner cannot enforce any right to recover possession of the goods except by action in the courts. It has been represented by the hire-purchase companies that these provisions operate harshly. It has been said that there have been cases in which a hirer acquired a motor vehicle or tractor under a hire-purchase agreement and subsequently abandoned it in a place or in circumstances in which it was subject to serious damage or depreciation.

The hire-purchase companies claim that in such cases they should have the right to recover possession of the vehicle—and, if it is necessary for that purpose, to enter the premises of the hirer—pending legal proceedings under the Act of 1946. The Bill seeks to provide an equitable remedy for owners in cases of this kind. It includes a provision to enable the owner to insert in a hire-purchase agreement a clause permitting him to enter upon any land or premises of the hirer (except a dwelling house or a garage or other similar building attached to a dwelling house) for the purpose of recovering possession of a vehicle let under the agreement.

The Bill provides, moreover, that, even where one-third of the hire-purchase price has already been paid, the owner will, in circumstances of the kind mentioned, be entitled to recover possession of the vehicle without a court order and hold it pending the making by the court of an interim order for the purpose of protecting the vehicle from damage or depreciation. Two safeguards are being provided against the abuse of this provision. Firstly, where an owner recovers possession of a vehicle he will be obliged to make an application to the court within 14 days for an interim order as to the custody of the vehicle. If he fails to do so he will be deemed to have recovered possession in contravention of the Act of 1946, and this means that the hirer will be released from all liability under the relevant agreement and may sue the owner for payments already made on foot of the agreement. The second safeguard is that if, on the hearing of the action, the owner fails to satisfy the court that in all the circumstances of the case he was entitled to seize the vehicle, the court may award damages against him in respect of the recovery and ensuing retention of the vehicle.

In the Circuit and District Courts, most civil proceedings founded on contract may, at the election of the plaintiff, be brought before the court in the circuit or district in which the contract is alleged to have been made. Many of the hire-purchase companies are situated in Dublin, and it is generally claimed by them that the contracts which they enter into are made in Dublin, irrespective of where the hirer resides. As a result, many actions involving defendants resident in country areas are brought in the Dublin courts. It would be more proper that they should be disposed of in the local courts since the expense involved in defending such cases in the Dublin Metropolitan District would often be substantial in relation to the value of the goods.

I am satisfied that it would be more equitable that all Circuit Court and District Court proceedings arising out of hire-purchase transactions should be taken in the area in which the hirer resides and the Bill provides accordingly. By virtue of Section 20 of the Hire-Purchase Act, 1946, this is already the position in regard to actions brought in the District Court for the recovery of possession of goods let under hire-purchase agreements. Lest there should be a tendency to bring actions in the High Court, the Bill also provides that the High Court may of its own motion remit to the Circuit and District Courts any proceedings which, in its opinion, ought have been commenced in those courts.

It is proposed to take advantage of the opportunity afforded by the Bill to revise the limits on the jurisdiction of the Circuit and District Courts in relation to hire-purchase actions. It is now being provided that the Circuit Court shall have jurisdiction in all such actions where the hire-purchase price of the goods involved, or the amount of the claim for arrears of rentals, does not exceed £1,000 and that in the case of the District Court the limit of jurisdiction shall be raised to £100. This revision of the limits of jurisdiction is justified by the decline in money values since 1946.

In hire-purchase actions taken in the High Court and Circuit Court, if the defendant does not enter an appearance or defence, the owner is entitled to apply for judgment in the office of the court. I am informed that, in the majority of cases, defendants do not enter an appearance or defence and judgment is given in the office of the court usually for the recovery of the goods, arrears of rentals and costs. This procedure of judgment being given in the office of the court deprives the defendants of the reliefs to which they may be entitled under the Act of 1946. In the circumstances I am satisfied that the law should be altered so as to compel owners to apply to a judge in court for judgment in default of appearance or defence.

As a result of the recent examination of hire-purchase law by my Department, it has come to my notice that in some hire-purchase actions in recent years judgment has been entered in the office of the court against both the hirer and guarantor—against the hirer for the recovery of the goods and arrears of rentals due at the date of commencement of the action and against the guarantor for the outstanding balance of the hire-purchase price, with costs against both hirer and guarantor. Such judgments are obviously inequitable; but it seems that, when an action is not defended, the office of the court has no option but to enter judgment for the full claim made by the owner.

Under the Hire-Purchase Act, 1946, if a hirer defaults under a hire-purchase agreement and determines the agreement by returning the goods to the owner, his liability for further payments to the owner is limited to payment of the arrears of rentals due at the time of termination of the agreement and, in addition, payment of any sum which it is necessary to add to the amounts already paid and the arrears due in order to make up one-half of the hire-purchase price.

When the Act of 1946 was passed it was clearly the intention of the Oireachtas that, whenever a hire-purchase agreement is determined, the most that the owner should be entitled to recover, in addition to the return of the goods, is the arrears of rentals due plus whatever additional sum is needed to make up one-half of the hire-purchase price. It was the view of the Oireachtas at the time that one-half of the hire-purchase price represented reasonable compensation to the owner for the use of the goods and depreciation while they were in the possession of the hirer. I think it is only equitable, therefore, that, in any case in which the goods are returned to the owner, the liability of a guarantor should be exactly the same as the liability of the hirer. Provision to this effect is made in the Bill.

My attention has been drawn to an abuse arising out of the sale by dealers of goods which they have acquired under hire-purchase "stocking" agreements. Cases have occurred in which dealers have sold to the public goods so acquired, without first discharging the "stocking" agreement. The purchaser found afterwards that he was not the legal owner of the goods and, in order to acquire title to them, had also to pay the hire-purchase company concerned. It is proposed to amend the law so as to safeguard the purchaser in a case of this kind.

These are the main provisions of the Bill, the need for which, I feel sure, will be generally accepted. In the preparation of the measure, I have tried to hold the balance as fairly as possible between the parties to hire-purchase transactions, and I hope that I have succeeded in so doing. I feel sure that the general principles underlying the Bill will commend themselves to the House.

Mr. Cosgrave

The figures which the Minister gave of the number of hire purchase transactions in 1938 and 1958 indicate that, so far as this country is concerned, hire-purchase has been a post-war development. While we were familiar with the use of this system of credit in other countries before the war, the phenomenal growth of the system in this country has been a post-war development.

I wonder if particulars are available in the records kept in the Department of Industry and Commerce of the goods covered by hire-purchase transactions or if there is a record available in the Department or in the Central Statistics Office which differentiates between the types of goods and the value in each case? Undoubtedly, the growth of hire-purchase transactions in the post-war period has been very considerable, even allowing for the depreciation in the value of money.

While it is true that much of the credit advanced for this form of transaction is being used for the acquisition of certain forms of equipment which people could not afford otherwise, such as house furnishings and articles of that sort and for the purchase of plant and machinery for agricultural and other productive purposes, I should imagine that quite an amount of the credit so advanced has been in directions which encourage people to avail of credit without considering the consequences. For that reason, although hire-purchase is generally recognised as a method of finance that has come to stay, some views, that might be regarded as old-fashioned, on this method of finance may not be entirely out of place. I should be glad if the Minister in the course of his reply would furnish particulars of different categories of goods, machinery and equipment.

The proposed changes in the Bill are, in the main, improvements but there are certain matters to which I should like to refer. Under Section 6 details of the agreement may be required by the Minister and certain forms of agreement may be insisted upon. Section 9 authorises the Minister to appoint authorised officers and it appears that the section is rather widely drawn. Very considerable powers are granted to these officers to enter premises, carry out inspections, demand whatever particulars they require, and generally carry out investigations with a view to ascertaining the terms and the conditions under which goods are sold under a hire purchase agreement.

The penalty provided for under this and other sections is a maximum fine of £100 for a person convicted of an offence or imprisonment for a term not exceeding six months or both a fine and imprisonment. The powers granted in Section 9 are somewhat excessive and there should be a safeguard guaranteeing the owner of the premises certain rights. These should be incorporated in a provision which would prevent any undue exercise of authority by an inspector unless on foot of an authorised warrant. While the inspector has to have a warrant, this warrant is a different warrant from the search warrant which a Garda officer would have and these warrants are used only in certain specified cases.

Undoubtedly the growth of hire purchase has stimulated very considerably the demand for goods and has generated a whole new business that was not there before this form of finance came into existence and certainly before it was used so widely as in recent years. It may well be there will be a far greater increase in hire purchase transactions in the future. For that reason, it is desirable in the public interest that power should be taken to specify, as is taken in Section 6, the terms and conditions under which agreements are made.

There are many cases of simple people, people unused to reading agreements or interpreting them, who find themselves in a position in which they undertake commitments and subsequently find these commitments beyond their capacity. Having paid a certain number of instalments, they discover that the hirer either can reclaim the goods in question or, alternatively, the person who has gone guarantor and who in many cases is no better qualified than the purchaser has been committed to repayment or to refund the balance outstanding on the transaction.

It is important, therefore, that full publicity should be given to the rights of people entering into these agreements. When the Act is passed, the Minister should avail of the opportunity to publicise the fact that agreements must be in the prescribed form, notifying intending purchasers, or people who are about to enter into these transactions, of their rights under it and of the obligation on people entering into a hire purchase agreement to have the agreement in the prescribed form.

The Minister mentioned that it was because of the fact that a number of these transactions took place in areas outside Dublin it was proposed to make the change in Section 25, and that that applied to both the Circuit Court and the District Court. As I understand the Section at the moment, the High Court has power to remit a case under this section. Is the High Court prevented from doing that where the transaction exceeds £1,000? In Section 19, as I understand it, the present Circuit Court limit of £1,000 is retained. There is no limit in Section 25.

Mr. Norton

I think the House generally will welcome this Bill because it has been realised that the 1946 Hire-Purchase Act had certain infirmities which have been brought to light since then, as the hire purchase business developed as it has undoubtedly developed since that year. In so far as this Bill takes up the slack in the 1946 Act, it has everything to commend it.

Of course, there were some noticeable deficiencies in the 1946 Act. The first was the fact that there was no power to compel people in the hire purchase business to display the cash price of the article in addition to the amount which would be paid weekly or monthly on the article if it were purchased on the hire purchase system. There was one case in this city of a firm from across channel which set up business here on a most elaborate scale and produced a bewildering collection of the most attractive goods in the main shopping centre. You looked in the window but you could not find out what was the complete price of any article in the window. A ticket was attached to the goods saying: 1/- a week, 2/- a week, 2/6 a week, 4/- a week; the amount varied according to the type of article. It is tempting human nature too much to expect people, seeing these very attractive rates of weekly payments on an article in a window and feeling that they need that commodity at home, to exercise all the prudence they ought to exercise both in relation to the quality of the article and their financial resources with the result that you find people in these circumstances temporarily dispossessing themselves of any judgment as to whether they are getting good or bad value for their money. They are attracted by the article, by the simplicity of the payments and the moderateness of the charges. They buy, and continue to buy other articles with the result that they find a heavy draught on the family income which eventually means that they either default in the payments with the subsequent loss of the articles or that they run into debt in other directions.

I think the provision in the Bill which compels the seller to show both the hire purchase charges and the cash value of the article will enable the person to give some consideration to the value of the articles in a shop window and not allow himself to be misled into buying the articles merely because the price per week or per month is made to look small. By concealing the cash value, an article displayed for purchase under hire purchase conditions could work out to be very expensive and not worth the money ultimately paid for it in hire purchase repayments. Stopping that gap in the 1946 Act is doing something which is desirable; it will prevent people being carried away by their enthusiasm into buying something which they badly want simply because they think they can pay the low price at which it is exhibited.

So far as hire purchase generally is concerned, I am strongly in favour of it. I have listened to people say that they do not like it. It has its deficiencies but on the whole it is a good system. You need prudence and commonsense to operate it so far as the purchaser is concerned. I think that hire purchase enables people to acquire good household furniture which they would not acquire if they had to save the cash for it but if they are to acquire good furniture and other attractive articles they must steel themselves to paying the instalments regularly. They must also see that they do not, by means of hire purchase, involve themselves in financial obligations in excess of their ability to pay. If people are prudent in what they buy, hire purchase can be a good scheme and a very valuable economic stimulant in so far as encouraging families to improve their domestic living standard is concerned, and also as a means of creating a demand for manufactured goods.

The system is not without its disadvantages. If you take a range of articles costing between £50 and £100 and compare it with similar articles made outside the country which are somewhat dearer it is quite possible that hire purchase conditions may react to the disadvantage of the Irish produced article. If you take an Irish article costing £80 and compare it with an imported article costing £90, you may find that, by a system of attractive terms over a longer period of years and no deposit, the imported article is offered on more advantageous terms than the Irish article. You may get a longer time to pay for the imported article and that facility may, in fact, overcome any tariff or protection given to the Irish article.

I think the Minister is right when he says that uncontrolled hire purchase can easily create a position here in which foreign manufactured articles would be in an advantageous position as against home produced articles by setting the period for the hire purchase repayments for the imported article over five years while the period for the repayments on the Irish produced article would be only two or three years. I am glad that the Minister is taking power in the Bill to deal with a situation of that kind and to regulate the type of payments to be made.

In Section 6 of the Bill, which is probably the most effective section of it, the Minister is taking power to regulate and control hire purchase, sale on credit and the letting of goods. One of the things that the Minister may do is to state the minimum deposit to be paid. Trying to make provision for the payment of a deposit is a pretty intricate business. When it was attempted in connection with the methods adopted by the previous Government to deal with the heavy importation of goods, it was discovered that quite a number of people who wanted to sell goods on the hire purchase system, where a substantial deposit was required as a condition of the sale of the goods, managed to dodge the requirement by lending the purchaser the amount of the deposit as a separate transaction.

Where a deposit of £2 or £3 was required and where the buyer was unable to deposit the money, the seller came along to him and said that he would lend him the money privately. The seller trusted the buyer with the amount of the deposit and possibly hoped to get it back in some other way. I think it is very difficult to close that gap as far as deposits are concerned. We tried the method of saying that, if the deposit was not paid, the whole transaction was invalidated as far as the seller was concerned and that he could not enforce the agreement if he tried any "fiddling" in respect of the deposit. I mention that matter to the Minister so that consideration can be given to it when he comes to regulating the matter of deposits.

I notice that Section 6 gives the Minister power to make regulations to control the hire purchase of goods. Is it intended to control the hire purchase of services as apart from goods? One can see from the newspapers that one can now go to America for a holiday by paying a deposit on a ticket and paying the remainder over a certain period after the holiday. Is that hire purchase? It is very like it. I do not know if there is any agreement of the hire purchase type but such holidays are not goods and the money cannot be refunded afterwards if you do not like the holiday. If services of that kind developed, is it intended to class them as hire purchase or does the Department propose to stand aside from that and let it take its own course? The Minister might well ask whether goods in this Bill mean that only goods as such are covered, and whether services, professional services, medical services, transportation charges, or services of that kind, are likely to be caught or whether they are to ride free while the Bill itself relates only to goods.

I think, generally speaking, however, the Bill will be welcomed as a means of closing some gaps the closing of which has been shown to be necessary by experience. I think the House will generally approve of the Bill.

Mr. Moloney

I join with other Deputies in welcoming the introduction of this Bill which if anything is overdue. We have had no amending legislation in relation to hire purchase since 1946. In view of the very substantial growth in this form of finance in the purchase of goods which has taken place since, it was desirable that the legislation now before us should come for consideration at this stage. The Bill is described as the Hire-Purchase (Amendment) Bill, 1957, which indicates that it was drafted nearly three years ago. For some reason which the Minister probably can explain the final draft has been delayed since then. I feel that, in the final drafting, if certain anomalies which came to light since have not been taken into account, it is possible the Bill might be now brought up to date.

As far as can be understood, this measure is generally welcomed by the public at large and substantially agreed to by the hire purchase finance companies operating in this country. As everybody knows there has been a very substantial increase in the past few years in the number of hire purchase companies that have come into this business particularly in the past year. I understand that about 13 very large hire purchase companies are now operating here a hire purchase business in a variety of high priced articles and that possibly 12 more are carrying on activities in the hire purchasing of furniture and small articles in the line of domestic appliances.

In one particular respect the Bill is very satisfactory. I refer to the provision in relation to the decision of issues that might require to be dealt with by the Court. Under the 1946 Hire Purchase Bill, in the case of court proceedings, cases had to be listed in the District Court area proper to the head office of the finance company involved and not where the hirer resided. That position created considerable hardship in the case of hirers who found themselves in the unfortunate position of having to go before the court on the application of the hire purchase company. It was particularly so in small transactions such as bicycles and smaller articles where the amount involved was only £15 or £20. The cost that would necessarily have to be incurred in coming to Dublin where most of these cases were heard appeared to the hirers to be such that whether or not they had a good case, they were inclined to let the decision of the court be made without appearing. They decided it was too expensive to put in any evidence that might be relevant to their case and let the decree be given by default. I am quite sure the Minister's Department was inundated with complaints in that connection and as a result the Minister thought fit to rectify that anomaly now whereby future court proceedings will have to be instituted in the areas where the defendants live. That gives an opportunity to every hirer who finds himself brought before the Court for possession of the goods to come before the local court, make his defence and get an equitable decision. I understand that the hire purchase companies have taken some objection to this particular section. They make their case that from their point of view it does not give them the protection they have under the previous Act. If the hire purchase companies have a grievance in that respect I suggest the Minister might look into that point and see if the difficulty can be surmounted. In the case of larger transactions, where the amount involved is pretty substantial, my view is that the powers under the previous Act were not too detrimental to such hirers. In some cases they would actually prefer to have the hearing of the case carried on at a court in the city as a result of which there would possibly be less local publicity about the transaction. However we cannot have it both ways.

To meet the hire purchase point of view in this connection it occurred to me that the Minister could provide in the Bill that where the hirer was agreeable to have the Court proceedings, whether District Court, Circuit Court or High Court, taken in the area where the hire purchase company carried on the business it might meet the position.

With regard to the supervision of hire purchase, in the past we all know that there was none at all. The power the Minister now seeks to have under the Bill of some degree of supervision is a step in the right direction. Officers are to be appointed to obtain whatever information the Minister requires to enable him to review the position from time to time and to make any consequent orders accordingly. The power the Minister has reserved under the Bill to make orders with regard to the deposits to be paid and the period of repayment is a very satisfactory way of handling this matter. The hire purchase interests feel that that power could best be utilised if it was put into the Bill and exercised from the terms of whatever would be included in the Bill. I do not think that would be the best way. The general economy of the country would influence the orders the Minister would have to make from time to time. In a period of inflation it is obvious that the Minister would have to discourage the development of hire purchase. The only practical way in which the Minister could keep it under control is by having power to make these orders as and when necessary and have copies of them placed before the House.

Hire purchase as operated in this country at present is, generally speaking, conducted on straightforward lines. The rates of interest are, however, considered excessive. In recent times, owing to the high degree of competition existing among the various houses engaged in hire purchase, rates have been very substantially reduced. In due course, when that competition becomes keener and when the hire purchase companies find they have a very high degree of protection under this legislation, we can look forward to a further general reduction in these rates bringing them into line with the rates of the commercial banks.

I also wish to refer to the provision made under the Bill for the purchase of goods by a hirer in cases where such goods are already under hire purchase. A number of cases have appeared in the Courts during recent years where a hirer, who still owed instalments on a particular article, re-sold the merchandise to a new hirer without paying off the outstanding liability. In such cases the last purchaser eventually found himself faced with a demand not alone for the amount of accommodation he got himself by way of hire purchase but also for whatever amount was left outstanding by the previous hirer. In a number of cases the new hirer contested the issue but, as the law stood, the decision invariably was that the last hirer had to make good the whole deficiency. Certain relief is intended under the Bill to a hirer involved in that type of transaction if he can prove he purchased the goods in good faith and took all reasonable steps to ensure they were not the subject of a hire purchase transaction already.

There was also another very serious defect in the former Bill in regard to what is known as a stocking plan. That was where a finance house financed a trader with a stocking plan whereby he was enabled to stock vehicles or goods in his showrooms under what was known as the stocking plan system. That system provided that the dealer could hold the goods on show for a certain period but if they happened to sell the merchandise in the meantime they were obliged to notify the company financing the transactions. In a number of cases—not too many happily—unscrupulous traders sold the goods and did not inform the stocking plan company that they had been disposed of. In due course when the payments were not forthcoming and the finance company investigated, they found the goods were disposed of to another person, very often under hire purchase transactions with another company. They then proceeded to obtain the goods from the new purchaser and a very embarrassing situation arose. I am glad the Minister has provided for that. In my opinion he has made adequate provision to ensure that in any situation of that kind the person so affected has a reasonable chance of establishing his claim and will not be dealt with too severely. I have nothing further to say on the Bill at this stage but I am glad it has been found acceptable by the various interests concerned.

Mr. Barrett

There is no doubt whatever that this Bill should generally be welcomed by the House. The passing of the 1946 Act and similar Acts in England shows that, whilst, as Deputy Norton says, hire purchase can be a very useful thing, it is also necessary to control some of the wily operators who appear on the hire purchase scene. Therefore, I welcome this Bill which very effectively closes up some of the gaps which were displayed in the 1946 Act as it was submitted to the wear and tear of the wiliness of the operators and the care of the Courts in dealing with the essentials as it came before them.

For that reason the Bill is to be welcomed, but it is most unfortunate that the Minister should in certain parts introduce some of the most obnoxious and unwelcome sections one could find in a Bill. Deputy Norton very rightly said that the type of tradition provided for in section 6 is a good thing. That is quite true but we are here to legislate in regard to such things. We are not here to give the Minister power to walk away and, at any time he thinks fit, do what we think we should do here and what is our bounden duty. There is no reason I can see why there could not be put before this House specific provisions in relation to all the matters which are contained in subsection (2) of section 6. In fact, speaking from memory, in the 1946 Act, there were specific provisions which are now being handed over by this House to the Minister or to some administrative back-room boy and he may do as he wishes in respect of the matter.

I refer to subsection (6) which provides for the giving of information in visual advertisements. As far as I remember, the 1946 Act did specifically legislate for that and there is no reason why we cannot have such legislation again. I often think we might as well go home at 4 o'clock on a Wednesday and play Ludo when we are giving Ministers power which really resides in us and which we should be very slow to resign to any Minister. Therefore, while we are protecting the hire purchaser, we should be very careful in this Bill not to do violence to the rights of this House.

While protecting the hire purchaser, we should also be careful not to do violence to the rights of the individual of the nature involved and foreshadowed by, for instance, section 7, which gives the Minister the widest powers over the citizens of this State, be they operators of hire purchase or otherwise. The Minister can ask for details of almost any matter of a most secret nature that arises in the course of their operations. I think that is bad. Something might be necessary but I do not think legislation from this House should tend that way.

While it is quite true that the necessity for something of that nature might arise in regard to hire purchase, that is no reason why the House should be unduly restrictive on the rights of the ordinary individual. Mark you, this Bill does not give a person even the right to appeal against the Minister after this assault upon his freedom. It does not say he can go to any Court. It puts the Minister on a pinnacle above the ordinary man in the street and gives him powers which, I think, rival even the powers of the Revenue Commissioners.

Section 9 is even worse—that persons who are to be appointed by the Minister can walk into any business which is being operated by a hire purchaser and do almost anything. They can take the man's breakfast off his plate. They can require him to give almost any information they want, no matter how secret it may be or how damaging it may be to his business. Whilst the Bill in a sort of weak way tries to pay lip service to democracy by saying you need not answer any questions that will incriminate you, it does not impose on the gentleman who goes in with the Minister's warrant the obligation to tell the person to whom he goes that he need not answer any question. The worst criminal in this State is given that opportunity. A policeman has to warn him that he need not give any answers. In this case, once the person appointed by the Minister gets his warrant, he can walk in and get as much information as he likes. He can say in an incidental way—in fact, there is no obligation at all imposed on him and it would simply be an act of grace for him to do so—when walking out: "By the way, you need not disclose anything you think would be incriminating." I think that is careless legislation—it is worse; it is dangerous and I deprecate it.

I would like to point out also that Section 10 is most injurious. It purports to say that any information that the gentleman with the warrant gets from anybody may not be disclosed to anybody and goes on in a most ambiguous way in subsection (2) (b):

the disclosure of information for the purpose of legal proceedings under this Part of the Act

may be made. It does not say to whom the disclosure may be made. Under the section as it is if I decided on legal procedure in a hire purchase case, be I the hire-purchaser or the person letting out the goods, I could go to one of these gentlemen with the warrants and he could, as the Bill stands at the moment, make any disclosure he chooses. I think that again is careless legislation, dangerous legislation. I commend to the Minister the points I have made. I think he understands the nature of the protest I made. He knows as a lawyer the necessity for protest of that nature. He knows the necessity for curbing efforts by any Minister, by any Department of State, to rob from this House the rights which they have. The House should be slow to surrender them to a Minister and the Minister should be slow to ask the House to do so.

Listening to some of the speakers earlier I was reflecting that the processes of democracy are slow and necessarily so and the Minister should not ask the House to do violence to those processes as he now invites the House to do by passing this Bill. At some later stage I would ask him to investigate the points that I have made. I think some of them at least are worthy of notice and if the Minister were to pay attention to the points made we might get a better Bill. We would certainly get a safer Bill and we would certainly be—not setting a precedent—not continuing the unfortunate tradition that has grown up not alone here but in other countries.

Dr. Browne

I think this is a matter of the greatest importance. The decisions we take here will clearly bind us for many years to come if we go on the precedent established by the Minister of amending the 1946 Act in 1960. It is very important that the legislative processes of the House should give the best possible legislation especially in an important service which I suppose now affects a great part of the lower and middle income groups in our society in one way or another. The proof of that, I suppose, is that if one were to go to any of the houses equipped with a garage and take away much of the household equipment and the motor car and other such items bought on hire purchase there would be very little left in the house where the garages are, or anywhere else.

Hire purchase is only in its infancy, if one takes the American figures. The expansion is only beginning and consequently the pattern it should take is of the greatest importance. I welcome the Minister's decision concerning the insistence on displaying the total price because the abuses of that which occur are outrageous. The "£78 television set for 2/6 down" offer and no mention of the total cost in my view amounts, in many cases, to taking money by false pretences. Hire purchase is a new service to which many people have not yet become accustomed and in many of their minds it is an outrage against their ideas of thrift and the general idea there was in the past that one should not owe money. That has given way to this new idea of it being quite respectable to borrow money. That largely stems, I think, from a sense of greater economic security in our community in which people can foresee conditions under which they can continue to make reasonable payments and for that reason they can enter into commitments with the intention of seeing them out to the end.

This is a desirable and inevitable development and the only question now is the pattern in which it should operate. The difficulty which arises in pleading the case which I propose to put before the House comes from the fact that there is a tendency to use hire purchase for luxuries rather than for what were, or have become, necessities in many houses. There is the difference between the housewife who wants water heaters, electric fires, equipment, irons and various things for furnishing the house, the essentials for furnishing, household equipment and the other extreme mentioned by Deputy Norton of paying for holidays on hire purchase. Very few, I think, would be unduly worried about the conditions under which people enter into agreements about their holidays, but in regard to these other matters, the semi-essentials or essentials for a modern standard of living I would ask the Minister to consider this point of view.

It seems that hire purchase has become the poor man's banker, the small man's banker and it has enabled many people who could not otherwise do it to buy everything from the kitchen necessities right up to television sets and radios, enabling a commercial traveller to buy a motor car and in that way qualify for a particular job. But there is a fallacy in this banking system for the middle income group or for the small or poor man and that is the—as far as I can see—uncontrolled rates of interest. It has been established or accepted that most banks have what most people might consider were not very acceptable or very desirable rates; others might consider they were quite good or at least within reason for many people. Most of the people concerned with hire purchase are people who do not have—certainly up to recently, they did not have—bank accounts and could not get loans at the rates which the banks charged, which may be high or low as different people may regard them. The middle income person cannot get these loans at reasonable rates and has to go to the hire purchase companies in order to buy different goods with which to equip a house.

The Minister would be well advised to consider this question of interest rates. I have been told by a Deputy that this is interference with the liberty of the individual but at the same time hire purchase is becoming a great social service and for that reason I think the Government has a right to fix a maximum rate of interest to be charged. I was interested to read the other day that the hire purchase development has gone as far as Russia and according to what I read in The Observer or one of these papers, the interest rate charged by the Government there is two per cent. This seems remarkably moderate.

The Government here established hire purchase long before outside companies in so far as buying houses, for instance, is concerned and in those cases moderate interest rates are charged. Hire purchase rates should more closely approximate these interest rates. At the worst, surely the rates charged by the commercial banks are those which the Minister should try to impose in regard to these transactions. It is no good saying, as it might be said, that the commodities bought on hire-purchase are things which people can do without. I do not think they are in respect of about 80 per cent. of the items at present covered by hire-purchase. They are not things which the average person in a modern society can do without and, consequently, the consumer should be protected in this way.

Somebody was talking about the invasion of rights by the enquiries involved and the examination of books. That goes on in relation to income tax. There may be invasion of rights but that is in order to protect the consumer, the general mass of the public. In addition to that, of course, the hire purchase operator has a number of protections conferred upon him by this Bill, so that it is not all one way at all.

The first point is that I do not think the hire purchaser has the right to opt out or refuse to avail of the particular service. In most cases, people go into these things because they simply have to, because they cannot borrow the money at a reasonable rate and are not of sufficient standing that the banks would lend them money and, out of their own earnings or employment conditions, are not able to accumulate the capital to pay the cost downright. Consequently, they have no choice but to go to the hire purchase company.

Deputy Moloney suggested competition, whereby we might get a reduction in interest rates. From what I have seen of the operation of most of these companies, there is no competition. There is no competition in interest rates or, if there is, it is getting to the stage of cut-throat capacity and that will be the end of the competition, and we will have the same position obtaining as we find at present in relation to the petrol companies, the motor car people and the various other price rings, cartels and agreements, which are made between these organisations and are continuing to be made by these organisations, in order to exploit the consumers. So, I am afraid I do not agree. There is so much talk here about the advantages of the competitive factor in private enterprise but we see very little of it in action and, in fact, what we find is that the consumer is faced with an interest rate which does not vary from one society to another, from one article to another, and that he has no choice then but to borrow money—which is all he is doing—at exorbitant rates.

If the Minister is going to lay down that the total price must be clearly displayed so that the consumer knows what he has entered into, then it would be wise to consider establishing that some maximum interest rate must be charged, and no more than that, by the hirer of the goods.

The service is one of great value and, in view of the Minister's and the Department's relative inertia since the last Bill, it is quite clear that we are not going to get any amending legislation for many years to come. It seems to me, therefore, that one of the most important points must be the interest rates at which the money is lent. There should be some limitation. It is reasonable to impose some limitation because this is a service which affects in the majority of cases the poor people and the middle income group and it is a service which is growing all the time and to which there is, apparently, little or no limit.

Mr. McGilligan

This is mainly a Bill for Committee, of course, where the details can be discussed and where we can have our various points of view put forward in order to bring about a better measure. I except one matter, which is a question of principle, that is, the one stated by Deputy Barrett a moment ago: Why should all this legislation pivot upon Orders to be made by the Minister? Why should not the House get its full freedom of criticism on any important proposal such as will be contained in Orders about to be brought forward? The Minister and his officials must have their minds made up at the moment on the scheme within the framework of Section 6. That scheme ought to be revealed to the House before we give the Minister the tremendous powers that are being taken here in Part II.

In addition to that, this House occasionally gives over to Ministers various types of control. There are two ways in which that control may be regulated. One is by having the situation that where Ministers get tremendous powers, wide and sweeping powers, by Order, the Order has to be brought before the House and affirmed by the House by resolution passed from time to time. The lesser form of control is the one in this measure: The Order must come before the House but, unless annulled, is accepted and the annulment has to take place within 21 days, that is, 21 sitting days, after the Order is brought in.

We have, therefore, an Order with the slighter type of control. We have an Order, which is effected, as Deputy Barrett said, by an extension of Ministerial powers, very wide indeed, without any indication being given of the necessity for these powers being put into the Minister's hands. In addition, there is all this question about securing information by all the procedures that certainly up to this have been reserved for search warrants when matters in the nature of criminal matters were thought to be going on in certain premises.

Finally, there is the penalties section. Anybody who commits an offence under the Act is liable to a fine not exceeding £100 or to a term of imprisonment not exceeding six months or to both such fine and such imprisonment.

We have the whole scheme of Ministerial control, with the lesser type of parliamentary control, having the Order negatived, and finally we have the penalties section.

In between, the Minister took great powers with regard to furnishing information—Section 7; the appointment of officers—Section 8; and then there is what these officers are given also in the way of powers. I am not sure that I am reading too much into one phrase because some of the Deputies seem to think that we are going to have great extension of control through many men being appointed as authorised people for the purposes of the Act. I see in subsection (1) of Section 8:

The Minister may appoint such and so many of his officers as he thinks fit to be authorised officers for the purposes of this Part of this Act.

I took that to mean that the authorised officers are mainly going to be members of the Department and are not going to be extra people employed or hired for the purposes of this Act. If it means that the Minister makes an appointment, the person then becomes an officer and then may become an authorised officer, then, of course, there can be a very definite and big extension of the number of people of the Civil Service type who are going to get great powers under the Act.

There is, as Deputy Barrett pointed out, certain prohibition with regard to the disclosure of information. That prohibition seems to be a bit one-sided. Deputy Barrett pointed out that while there is prohibition against disclosing information, and contravention of that constitutes an offence, at the same time, subsection (2) of Section 10 ordains that "subsection (1) does not apply to the disclosure of information for the purpose of legal proceedings under this Part of this Act." I presume that means disclosure to the Minister or to those who are going to prosecute the person. However, I can imagine circumstances in which the person who is being brought up under this Order for refusing to give information would like to see a report that has been made by an authorised officer to the Minister. I am sure for that particular document privilege would be claimed and would, of course, be granted by the courts but this is very one-sided. That is quite clear, and there has been no case made why these extensive powers, backed by this penalty clause, should be put into this part of the legislation.

Deputy Norton raised the question of what he called the giving of credit for holidays. I do not see how that can possibly come under the sweep of this Act because this Act is related to the 1946 Act. The 1946 Act, in an earlier section, defined goods and I do not see how what Deputy Norton refers to could possibly be brought under this Act and I hope it never will.

Deputy Norton also mentioned there was a possible danger that people who wanted to push the sales of goods not manufactured in this country could give easier terms and that the Minister might be able to prevent that under Section 6. I cannot see that the Minister will have power under this Bill to stop that. All he can say is that there must be a minimum deposit, that the down payment must be a certain fraction of the price of the article and the instalment must be not less than or any more than a certain amount. They cannot prevent one firm giving better terms than what are the ordained terms. I take it the ordained terms will mean that they cannot go beyond a certain figure. I think the hope expressed in that regard by Deputy Norton is bound to be falsified.

Another point is that if an action is taken, it is to be taken in the area in which the contract was made instead of as it is at the moment. It has to be made where the defendant resides instead of being at the option of the plaintiff, where the contract was made. It is suggested that will mean a saving of expense. I should like to know how that will save any expense. At the moment, if a Dublin hire purchase firm takes an action against a person in Cork who has entered into a hire purchase transaction and who has failed to make the required repayments or acted in breach of the hire purchase Order, the case is listed in Dublin and the person in Cork travels to Dublin. Under this Bill the purchaser will remain in Cork but the hire purchase witnesses must travel down to Cork. I cannot see how there will be any saving but I can see the Cork solicitors may do more business this way than the Dublin solicitors are doing at the moment. This is only a change as between the legal people in the background who are for the plaintiff and for the defendant, but if the Minister can give me an explanation as to how shifting the area will mean any lessening of expense I would be very glad to hear it.

Deputy Cosgrave raised the question of the transfer of actions. It is now proposed that the High Court may transfer, of its own motion, cases either to the Circuit Court or District Court. The Circuit Court jurisdiction is based on a limit of £1,000. It is scarcely the case that the High Court will ever send to the Circuit Court a case which is outside the jurisdiction of the Circuit Court. Does this mean that if the matter in dispute does not involve a sum of more value than a £1,000 that it must automatically go to the Circuit Court, or what will the High Court consider of its own motion when it comes to decide whether an action pending in the High Court is to be sent either to the Circuit Court or to the District Court? I take it also that Section 28 is not going to be exhausted when an action pending in the High Court has been transferred. Will the Minister explain what he thinks will operate in the mind of a judge of the High Court when he is transferring, of his own motion, a case listed for the High Court which he desires to transfer to the Circuit Court?

I do not know what will be the position in regard to cost as affected by Section 26. The Minister said there are many occasions on which hire purchase companies will take actions and there will be no appearance entered, with the result, of course, that there is no defence put up. I do not know how many such cases there would be— some percentage was mentioned but it was taken up by my colleague, that a very high percentage of hire purchase transactions are not brought to Court. If that be the case, the situation is that for some reason or another a person who is made a defendant in a hire purchase case and decides not to contest it, can save some costs by that. The Minister is now going to put the whole matter into Court and the judgment must be given either by a judge, or if appropriate by the Master of the High Court. Does that mean that the defendant in the hire-purchase action who wanted to minimise his costs will now have to make some appearance in Court which will mean incurring extra costs? That will not cheapen the cost in relation to legal proceedings.

Deputy Norton suggested that hire purchase was a good development. Deputy Dr. Browne thinks it is almost a social service. I believe the reason why there is such an increase in hire purchase transactions in this country is simply because of the situation that has developed in regard to wages and salaries since they continue to be tied to the 1939 level of wages and salaries. With all the efforts that have been made for many years back, only nominal improvements have occurred in order to bring the purchasing power up to the 1939 level. So long as those conditions continue, so long will hire purchase become more and more popular. The wage packet has not increased to such an extent as to give a real advantage to those who depend on the wages and salaries they receive for the service they render to the community.

We have been told also that hire purchase has now become respectable. The banks are going into it and Deputy Dr. Browne thinks the interest rate should be in some way restricted; if it is going to be restricted it ought to be restricted not in relation to hire purchase only but to bank transactions generally. I do not know whether the Minister intends that the authorised officers should have the wide control this legislation will give them. Under Section 9, any authorised officer may do any one of the following things: he may enter and inspect premises at which any activity in connection with the business of letting or selling goods is carried on. He may take extracts from books, request information in regard to any entries in such books, and so on, and it is made an offence if there is any obstruction. I presume that will apply in future to a bank which engages in the financing of hire purchase activities, because it would certainly seem to be an activity in connection with the letting or selling of goods. It would be a rather peculiar performance if in a casual way under legislation like this a power is given for the inspection of the bank books simply because a bank happens to engage a very small part of the funds at its disposal in some type of hire purchase. In any event, the fact that that comes in Section 10 is another reason why these matters under Section 6 had better be put into legislation.

The House should know what it is the Minister is proposing to do. The whole thing is clouded and vague at the moment and the Minister should tell us what Orders he proposes to make under Section 6. We should know the general terms of the Orders and if he has not thought them out already I would be very much surprised. There must be a fairly good idea in his Department as to what these Orders are likely to be. I should imagine that if the measure is put through the House by St. Patrick's Day the Orders would be made within a month. If that is so he should now tell us what they are likely to be.

Mr. Sherwin

I want to make a few general remarks on this matter. Being a member of the Dublin City Council it is my lot, usually at this time of the year, to meet thousands of people threatened with eviction because they cannot pay their rents. From now until the striking of the rate, everybody who owes money will get a court order or an eviction order. I shall be meeting thousands of these people. In nearly every case I shall get the story as to why they are in trouble. I find that in a large number of cases it is due to hire purchase. They tell me that they have to pay this and that and that they are not able to pay both rent and hire purchase.

They have other commitments and it is my experience that while hire purchase is a good thing, in so far as it enables people to get furniture and other articles which otherwise they would not be able to buy, thousands of those who avail of it are uneducated people. Whether we like it or not, a very large number of the working people are uneducated. Most of them have little or no experience of reading or writing. From the time they leave school they forget most of what they have learned and when they go to buy something they think in terms of the "never-never". They sign agreements. I have one here and the print is so small that I could not read it without my glasses. I find it difficult to read it with my glasses.

From conversations I have had with those people, I am well aware that, in the majority of cases they do not know what they have signed. They simply want the article and I am satisfied, from reading the agreement, that it is such that they do not know what it is all about. We are here, not to protect the "wise guy" but to protect the innocent. The "wise guy" can look after himself. That is why it is a good thing that there are certain sections in the Bill to prevent people losing their goods if their circumstances disimprove. We have something like that in the Housing Department of the Corporation. We agree to reconsider such cases and where a person's economic circumstances have disimproved we give him another house.

It is into the barrow of the "smart Alecs" when these poor people get into financial difficulties and for that reason the phraseology in the agreements should be such that even an illiterate person would be able to follow it. The Minister should have a say in the wording of these agreements and in the manner in which they are printed. The average buyer does not know, and probably does not care, what is in the agreement. He is only concerned with getting the article but he is the one who suffers in the end.

While I have said that hire purchase is both good and bad, I must admit that it leads to deception and even to conspiracy, if you like. For that reason I am not at all certain that the deposit should be small. I think that the amount of the deposit should be fair to ensure that there is good faith on the part of the purchaser. A lot of people buy goods on the hire purchase system and sell them for half the money to pay off somebody else. I know of people who knew that they were to be evicted for non-payment of rent and who went out and bought an article on the hire purchase and then "flogged" it for half the money to save themselves from eviction. Anyone looking for goods on hire purchase ought to be able to produce a clear rent receipt. I am saying that for the good of the people themselves. I cannot understand a person who is in debt, and who is not able to pay his way, going out and getting an article on hire purchase. That kind of thing should be discouraged.

I make those remarks from my own personal experience because I hear these stories day after day. Advantage is taken of these poor people who signed this agreement in good faith. They are people who think that they can keep up the payments but, being pressed for other debts, find that they cannot do so. These are the people we must protect. I say again that people ought to have a clear rent receipt before they are allowed to sign hire-purchase agreements. The Minister should do something about the form of the agreement because people tell me that they do not know what it is all about. The Minister should protect these simple people because there are some clever sharks going about and some of them are too clever. There are other gentlemen who lend people money and charge them 50 and 60 per cent. The Minister should smash that sort of person. Anyway it is a good or a bad business. I think it has a balance of good. That is the only way I can describe it because it is my only personal experience.

Mr. Larkin

Hire purchase is with us. I do not think there is any use in saying, in this day and age, it is possible even to envisage a situation in which all citizens will be enabled to pay cash for those things they require in the course of their ordinary lives. Possibly the State itself is one of the biggest hire purchase operators. The financial operation of lending money to people to purchase their houses is hire purchase. Similarly with regard to the supply of motor vehicles and every imaginable article one can think of. The procuring of furniture on the hire purchase system encourages people to enter into the commitment of buying a home. The purchase of a house involves an immediate secondary commitment for the average person starting out in life on a salary or wage, the commitment to purchase furniture, essential kitchen utensils, and so on, as well as decorations for the home.

In view of the average salary or wage rate paid at present to young people entering upon matrimony and starting life together, it would be utterly impossible for them to provide themselves with these necessaries without the hire purchase system. Our concern to-day, basically, is to protect people forced to use the hire purchase system against exploitation and unfair and unjust treatment. Some of the practices of people operating in the hire purchase field in the past have certainly been neither just nor equitable nor charitable.

The Minister dealt with proposals in the Bill which call for the publication not only of the amount to be paid by a prospective hire purchaser weekly or monthly but also the gross amount of the cost of the particular goods and the cash value of the same goods. Regulations on these lines are essential. It is essential, whether it is made legal by Act of this House or by Ministerial regulation, to publicise these facts. Specific attention should be drawn to the necessity to publicise them widely and not just to permit people engaged in hire purchase to display in front of an article of, say, furniture "2/6d. a week" and then, in very small print, on the remote corner of the same notice "£20" or "£30 cash value" and a certain amount gross value.

Section 6 provides:

The Minister may by Order provide for the regulation and control of hire purchase, the sale upon credit and letting of goods or any class or description of goods.

I do not know whether a matter I want to refer to now is covered by that description but I think it is. Aside from the practice of selling goods by way of the gradual payments system or "payments out of income", which is the term used by many of the more important stores in this city and various towns and cities in the country, and the term "weekly payments" or "hire purchase repayments" there is another system which has become a public scandal in the city. I refer to the operation of the sale by commercial enterprises of goods through an agent. This system operates on the basis that an agent alleged to be the representative of a particular company offers to intending purchasers not just an article but a docket which, on production by the purchaser to the particular firm involved, entitles him to receive the goods.

An Leas-Cheann Comhairle

I am afraid that would not arise on this particular matter.

Mr. Larkin

I want guidance on this. I do not think, in this particular case, it should be excluded in so far as the purchaser is obtaining goods on credit. He may not be signing a formal hire purchase form but he is not paying cash for the goods and the goods are not being paid for at the time of purchase. They are getting the goods on some promise to pay, over an extended period, for the goods issued by the owners of the goods.

I raise this matter not because a system operates which promotes hire purchase to function in this way but because, functioning in this way, an opportunity is left to unscrupulous people to issue dockets to citizens in difficulties and then to re-purchase those dockets, representing an article, maybe a wireless set, a washing machine, a suite of furniture, a bed or something else, for a fraction of the initial cost. The purchaser is then left in the position of engaging in a transaction to buy a piece of furniture which he never receives. He may enter into this arrangement to buy, say, a bed for £20. He gets the authority to go to the firm and collect that bed valued at £20. However, he is in temporary difficulties. The agent, acting on behalf of a huge reputable firm, then proceeds to buy that authority back from him for £5 but the purchaser has to pay the £20.

Mr. Dillon

Has he now not got the bed and £5?

Mr. Larkin

The position is that he has never had the bed; they have never obtained the bed, they have obtained authority to acquire the bed for a sum of £20. Because they are in financial difficulty, they sell that authority back for £5 and they must pay to the person from whom they originally received the docket the sum of £20. This is a common practice in the city of Dublin.

I do not know whether the Minister is aware of it but if he will make inquiries I am sure he will find that there is not a housing area in the city of Dublin in which these alleged agents—and, mind you, they all act on behalf of fairly substantial firms in the city—are not engaged in this practice of "illegal money lending." I think that is the only correct description to apply to it. I feel that as long as the eventual purchaser or proposed purchaser of an article is involved, whether they actually possess the goods or not, if they are offered goods on credit whether by way of a formal hire purchase arrangement or by some agent acting on behalf of a company, they should be provided with a formal hire purchase agreement which would protect them. To my mind, it should be illegal for agents, operating in the manner they do, to offer goods without having such a formal hire-purchase form completed.

I am fully in favour of arrangements being made under hire-purchase regulations to afford people an opportunity of obtaining essential goods by means of a hire-purchase system and I am particularly interested that any operations which involve, proceed or are based upon a projected sale of goods under the system should be covered by proper regulations and proper machinery. I would ask the Minister to look into this matter because the situation for a number of years has been so serious that families have been cut short of essential food; families have been deprived of clothing because of the operations of unscrupulous people through the system of the check or docket system. I do not say for one moment that everyone who acts as an agent is unscrupulous, harsh or unfair or indulges in this practice.

Deputy Sherwin referred to his knowledge of practices in the city. I know of one individual case which came to my personal notice only three months ago where a mother with eight young children was facing eviction through arrears of rent and on three separate occasions obtained the money to clear her arrears of rent through this docket system. Her situation on the last occasion was so serious that she obtained the money through the operation of the system on the basis of a payment over a period of two months of £6 a week. Almost the total income of the family had to go out in order to repay such a small sum. I am sure that there are Deputies who are familiar with the position in areas where there is severe unemployment and where a substantial number of our people are living and existing on a low income. Each and every Deputy is aware that these circumstances exist. I would suggest to the Minister that having brought this Bill before the House, he should have the situation to which I have adverted considered with a view to protecting the unfortunate people concerned.

Mr. P.J. Burke

I welcome this Bill. It is a Bill that in my estimation represents a social advance. When an honest person purchases furniture and, through no fault of his own, becomes ill or unemployed, he has the right under this Bill, if pressed by the firm which supplied him with the goods under the hire-purchase system, of going to the courts and pleading his case, thus being saved the humiliation of having the furniture taken away. The majority of hire-purchase firms are decent, respectable firms and we cannot say that they have unduly pressed people over the years. It may be that a vicious system has grown up in certain areas but in the city and county of Dublin, as I know them, the persons giving out goods on the hire-purchase system want to retain their good name and they have been very reasonable over the years.

There is one type of character I should like to see dealt with under the Bill. That is the individual who comes along and tells a person that he will not get any credit unless he gets a friend, perhaps working in the same job as himself, or a friendly neighbour, to act as guarantor. Directly the friend signs that guarantee, the other fellow who has no notion of paying at all, defaults and the unfortunate guarantor is followed up. These are the lads I would like to get after and to see punished because I have had that experience with some of them. Some people in a position to pay will not pay; they want the guarantor, having signed on the dotted line, to pay. These are the type of people who will take advantage of their neighbour, their neighbour possibly existing in shocking circumstances.

I was on that particular line just before the Dáil adjourned for the Christmas recess. Before the adjournment an unfortunate man came to me. He was in receipt of £6 10s. per week. Because he happened to have a Corporation house in Ballyfermot, a man working with him asked him to go guarantor for a bicycle. The first thing this scoundrel did was to sell the bicycle and get out of the country. I should like to see an extradition order against such people allowing them to be tried and sent to jail. A friend and myself had to save that unfortunate guarantor from jail by paying the money ourselves.

We also have the case, mentioned by Deputy Larkin, of these agents who go around housing schemes giving unfortunate people goods, encouraging them to take goods, without asking any guarantee but charging exorbitant fees. Such behaviour is a disgrace. These people have broken up families because sometimes the husband will hear nothing about it, perhaps, until he gets the bill. These agents are bleeding the people. I have never come across a decent hire purchase company that did not deal reasonably with people who, through unemployment or illness, were unable to pay for a period, but these agents in the Corporation housing schemes play on the feelings of the people. A lot of our work is dealing with cases of that kind, trying to bring families together again—families that have been broken up by these unscrupulous agents. I shall raise a number of other points on the Committee Stage. I welcome the Bill and compliment the Minister on introducing it.

Mr. Lindsay

I must confess, having listened to the speech of Deputy Burke, there is one thing about which I am satisfied. It certainly is not the social advantage he claims for this Bill but that there appears to be more voters than agents in county Dublin. When is this kind of thing going to end—that we must come in here making pleas for people who enter into agreements with their eyes open and, through pride or human frailty or for any other reason, want to enter into those agreements voluntarily and then, when they find they are unable to pay, come to their local T.D. or somebody else to help them out of their difficulty by himself or himself and his friend paying up and saving them from the fate which would be theirs if they had defaulted? This is a most awful state of affairs. The implied confession in the speech we have just heard must, in my view, border very closely on a very severe breach of the Electoral Abuses Act. One would imagine, listening to the speeches made here, that hire purchase companies, their agents and canvassers and the sellers of the goods who can put hire purchase at the disposal of purchasers, had all cloven hooves and that they were descending upon a group of holy innocents, certainly in some counties if not all over the country. Hire purchase is a form of economy that is with us to a very considerable degree and, as Deputy McGilligan said, is not likely to be taken out of the economy so long as wages and salaries are fixed in the manner they are fixed now and related to certain periods in our cost of living assessments.

I do not see any particular reason for becoming enthusiastic about this Bill. Neither, on the other hand, do I see any very great reason for rejecting it in globo, but there are certain aspects of it that will require investigation and, moreover, require explanation by the Minister for Industry and Commerce. I should like to know, as I am sure the House and the country would like to know, what the reasons for the changes are. What has happened to make these changes necessary? If allegations are to be made involving hire purchase companies, those allegations should be made and the people should be informed as to the exact necessity for the proposals contained in the Bill. Then the public might receive it with more enthusiasm and be ready to accept it.

Mr. J. Lynch

There is no reaction from the public yet as to their enthusiasm for the Bill.

Mr. Lindsay

If this memorandum is to be any indication of the Minister's desire to make the Bill clear and let the people know what this is about, he will not have anything by way of enthusiasm or rejection. I want to know like Deputy McGilligan and, I think, Deputy Cosgrave, what the reason is for sending actions from Dublin to the country. If it is to save cost, Deputy McGilligan has already explained that it will only increase costs. If it is to give country solicitors in any part of Ireland work which they are not now getting from the hire purchase companies, that will not save cost because what will happen is that the recognised and retained Dublin solicitors for the betterknown hire-purchase companies will employ solicitors in the country as their agents and that will increase the cost, and the cost of it all is going to go on to the purchaser whether the case is heard in Dublin, Cork, Galway, Sligo, or anywhere else.

What is the reality of this business of bringing cases to the country instead of having them in Dublin? Is it that it affords an opportunity to the defaulting person in the country to come to the nearest court? I do not think there is any reality in that because the man that will not defend a hire-purchase summons for default in Dublin in the comparative privacy and secrecy of a court in Dublin is certainly not going into the local district court in front of his neighbours to defend something, and he will not welcome it. I do not think that the hire purchase companies at all relish a situation wherein they have to sue people for non-compliance with the terms of their agreements. I think they would do far better if people were sufficiently well off to be able to honour their agreements or fulfil the clauses of their agreements by regular payments. What advantage will it be to get a postponed agreement for that type of person? A person who defaults once in hire purchase—with the exception of one struck down by sickness or temporary loss, and I want to emphasise the word "temporary"— will default again and you are only putting the hire-purchase company to the expense of having the hearing and the further postponement and transfer of title and a further agreement upon which they will have to sue again sooner or later.

If a reputable hire purchase company is suing a defendant down the country who has no intention of defending the case—he has got what he can out of the transaction and has no further interest in it—the plaintiff wants to have that heard in Dublin. Equally, the defendant wants to have it heard in Dublin to avoid the resultant publicity of a country hearing. What right has the Minister or this House to compel the plaintiff to go to the country or to compel the defendant to undergo the sort of publicity he is trying to avoid and, incidentally, the resultant increase in cost?

I sympathise with Deputy Barrett's view of this legislation by Order and, as Deputy McGilligan said, we would like to know what sort of Orders are contemplated before the House should be ready to give the Minister the very wide powers he seeks whether by way of order or appointment of his officers for the raiding, as it may well be described, of hire purchase company offices, or even commercial banks.

It has been said that there is no appeal to the Minister but I would not give twopence for a section giving that right of appeal. If there was to be any sort of appeal it should be an appeal by way of arbitration and if it was to the Minister or to some person appointed by him it should be an appeal by oral hearing, where the person appealing will be able to give his point of view against the Departmental point of view or, what is more important, where he will be able to know what the Departmental view is and how he can overcome it in order to make his appeal successful.

With those exceptions I think the Bill is completely innocuous in so far as it tends to be a social advance. It is a denigration of legislative powers; it is an inroad on the rights of individuals and corporate bodies and above all, it interferes with the freedom of either a company or an individual to select his ground and his venue for the hearing of any particular action. Finally, if you are going to remit a case to the Circuit Court, as the Minister well knows, under the guise of saving expense, let us suppose it is sent down to the Circuit Court—I shall not say in Cork—in Galway or in Ballina. For some reason or another the appropriate witness for the hire purchase company is not able to attend at the particular sitting, say, in November in Ballina or, on the other hand that the defendant who purports to defend by reason of the High Court of its own motion having come to his assistance, moryah, is able to get his case adjourned through illness or some other reason that must be accepted by the Court at that time, then it goes on from November until next February, another hearing, and more witnesses, and something may go wrong again, whereas with the judgment in the office here there is none of that difficulty or delay or recurring expense. I think the Minister and his advisers would do well to look into the section dealing with these particular aspects of this Bill.

Sir Anthony Esmonde

We have had the hire purchase system with us for a long time and Deputies have had an opportunity of seeing it work. The system has served a very useful purpose in as far as it was used by the people for the purpose of furnishing houses and acquiring the ordinary necessities of life, but a large amount of the hire-purchase dealings at the present time are concerned with luxury goods. I cannot help feeling that the Government have been motivated in introducing this Bill by finding themselves faced with a considerable deficit in the balance of payments due to the importation of goods which are manufactured elsewhere, and are sold to our citizens to the detriment of our economy. Be that as it may, I do not agree that this Bill is the correct approach to the situation.

I have always been very much against control and very much against bureaucratic interference with the ordinary way of life of our people. Unfortunately, practically every new Bill introduced in this House is a further inroad on the liberty of the individual. If we pass this Bill unamended I think sufficient has been said on this side of the House, principally by Fine Gael speakers, to show that it would be highly desirable that the Minister should give the Bill a great deal of consideration.

Section 7 provides:

Any person who carries on, or is employed in connection with, the business of letting or selling goods shall, whenever so required by the Minister, furnish to the Minister any books, documents, records, particulars, or information in that person's power or control which the Minister may require for the purposes of this Part of this Act.

Does not that mean that if we pass this Bill the officials—which I take it means the officials of the Department of Industry and Commerce—may enter any premises and may enquire into the most intimate and private details concerned with any firm?

While accepting the fact that there is a temptation under hire purchase for people to exceed their capacity to pay or ultimately to meet the demands that will come on them when they submit themselves to the hire-purchase system, it is only natural in a country such as this, with small wage-earners, where the vast majority of the people have limited means, a comparatively poor country, that there are incentives to utilise hire-purchase. It is reasonable to assume that there should be some method of controlling or curbing the desire or inclination of people to live beyond their means. It is often said that they are not set a very good example by Governments in this matter. As Deputy Barrett so rightly put it, there should be some form of legislation whereby this House itself would have control over the specific measures that are to be adopted. In this case, it seems to me —not being a lawyer, I may be wrong —the Bill gives carte blanche to the Minister for Industry and Commerce or his officials to interfere in the private lives and business of the citizens.

Surely there must be some other way by which we can deal with the situation if it is getting out of hand. If we have reached the stage where everyone is living beyond his means, where there is a tremendous inflow of luxury goods, and it is causing embarrassment to the Government, surely there is some other way of meeting it openly by directly clamping down on the particular instance that is affecting our economy, rather than by introducing a Bill such as this.

Furthermore, if the officials of the Department go into business premises, it is mandatory on them under the Act not to disclose what they find to anybody. There is, of course, the escape clause, that they may utilise the information for the purpose of prosecutions. Who is going to prosecute? If anyone is going to prosecute in any matter in relation to this Bill, it is the State, and the State will prosecute through the Minister for Industry and Commerce. Therefore, the escape clause or, rather, the sop which is put into the Bill in order to indicate that some sort of secrecy will be observed in the affairs of a private individual, is entirely abrogated because we assume, when powers such as these are being sought in the Bill, that if the Minister or his advisers find that there is any matter in connection with which they should resort to the law, all the intimate and private details connected with the business concerned will be exposed to the public eye.

Does that make for efficiency? Is that an incentive to private enterprise? Is that the principle to which the majority of this House are committed? I have often listened to Ministers saying that our economy is based, in the major issues, on a private enterprise economy. No matter what the situation may be, even though it is a fact that there are people here who are exploiting the poorer elements in the country, this Bill is not the way to deal with the situation.

Having read this Bill and having listened to the debate this afternoon, I would respectfully suggest to the Minister that many cogent reasons have been advanced as to why he should take another look at the matter. The House should not pass legislation such as this which will give bureaucracy another stranglehold over our people and will give the officials and the State the right to interfere with the private lives of individuals. The liberty of the subject should be sacred to every Deputy. I personally object to the passing of what I consider to be blind legislation and, therefore, with respect, I would ask the Minister to reconsider it.

Mr. Dillon

I just want to refer to two matters. I would suggest to the Minister that, in view of the wide powers conferred upon him by section 6, section 4 is not the appropriate form for this Bill and he ought seriously to consider bringing his regulations, made under section 6, before the House and getting approval for them before they acquire the force of law. I readily concede that where powers to make law by regulation are very narrow and restricted by the terms of a Bill, the provisions of section 4 of this Bill may be sufficient safeguard but to use those provisions for so wide a section as section 6 of this Bill is to do something which is not necessary and which constitutes a very serious inroad on the power of this House to make the law.

I should like, further, to refer to the provisions of section 16 which relate to recovery of the possession of motor vehicles. Under the original Act of 1946, I understand that the person who sold a motor vehicle under a hire-purchase agreement could not enter the premises of the hirer to recover the vehicle without an order of the court. It is proposed now, I gather, to give him certain rights of entry to recover a vehicle and even where a third of the price of the vehicle has been paid he is entitled to seize the vehicle and to hold it pending a decision of the court as to where the true ownership of the vehicle lies.

It is a very grave matter to give anybody a right to enter another person's premises to effect a seizure without the intervention of the court and I do not really understand why it should be necessary to give the vendor of a motor vehicle that power any more than you give it to the vendor of any other commodity. Although the motor vehicle is the subject of a hire-purchase arrangement, in fact, it is a credit transaction. There is no obligation on a motor salesman to sell a motor car to anybody he does not like to sell it to. He certainly does not sell it to somebody for the love of that person's lovely blue eyes. He sells a motor car in the ordinary course of trade hoping to make a legitimate profit on the transaction. I suggest to the Minister that in those circumstances there is no good reason why he should be given the right to enter the hirer's premises to seize his car without getting the appropriate order from a court of competent jurisdiction.

The trouble I find, Sir, in Dáil Éireann is that we sometimes casually legislate in this way, justifying it as being an exceptional departure to deal with an exceptional situation. I am not prepared to concede there is any fundamental difference between a motor car or an armchair or any other article of commerce which would justify a man breaking into his neighbour's premises to seize the one while he is forbidden to make such an entry, under the authorisation of a Court of competent jurisdiction to seize the other.

The queries put by Deputy McGilligan and others call for an answer. One is the strange power of the High Court, on its own motion, to transfer a case from its Court to another Court without stating in the Bill what matters the High Court should consider if they proposed to act in this way. Secondly, Deputy McGilligan makes a strong case for the proposition that the transfer of proceedings under this Bill from the place where the contract is made to the place of residence of one of the parties may involve the purchaser in additional cost. It would appear the Minister brings in this proposal with the intention of saving costs. I would be interested to hear from him if he is in a position to rebut the suggestions that have been made from this side of the House that the new procedure, instead of reducing costs, will substantially increase them.

I hear the merits and the beauties of the hire purchase system universally sung in these days. I see a great difference between hire purchase facilities for the purchase of a house and hire purchase facilities for perishable commodities like wireless sets, cheap furniture and other articles of that character. This may be an old-fashioned view but I believe it is in the best interests of individuals and in the best interests of society that persons proposing to purchase commodities under hire purchase should have accumulated some part of the purchase price before they embark on contracts of this kind. From the point of view of the community, it often astonishes me the extremes to which it is thought expedient to go on occasion to restrict public investment on the grounds that in a given period that might be detrimentally inflationary in the economy while, at the same time, very great expenditure may be undertaken for the purchase of consumer goods under the facilities of hire purchase with little or no general control being exercised at all.

From the point of view of the individual, it is a cause of constant astonishment to me to see how many of my neighbours have installed television sets. I have never been able to afford a television set; yet I see growing around me on the houses of neighbours who heretofore I did not think were as affluent as I, forests of television aerials. Surely there must be something inherently mistaken in the view that one is to equip oneself with every luxury for which one's heart can long without any reference at all to one's capacity to pay for it before one begins to enjoy it.

If a young family wants to establish itself ordinary providence requires that they should have some prospect of being able to pay the current expenses of the family, but it is reasonable, after making prudent calculations, that they should equip themselves with a house if they intend permanently to reside in one area. They can often pay the instalments on a house under the Small Dwellings (Acquisition) Act or similar legislation which will be less than the rent they would have to pay if they became tenants and they are accumulating an asset which at any time they can sell; and in the ordinary course if it is a good house it is an asset that will be worth all that has been paid for it at the end of the period prescribed for payment. It is reasonable, I suppose, to purchase the essential furniture wherewith to establish the home if one can clearly foresee one's ability to meet the weekly charge out of one's weekly income, but when you get beyond these things, I cannot help asking myself if we are not creating very serious social problems by stimulating the purchase of what could reasonably be regarded as legitimate luxuries on the never-never, rather than waiting until one has accumulated a surplus which would justify one's indulgence in luxuries of that character.

I should be glad to know with certainty from the Minister: do the regulations which it is proposed to make under Section 6 give him power to differentiate in regard to the size of the deposit with reference to the quality of the goods, that is to say, can he prescribe there must be a deposit of 50 per cent. on a television set and that 10 per cent. would be sufficient to purchase furniture, or is he restricted to prescribe a minimum deposit for all hire purchase transactions? I think he should have a differential power. I admit that a strong argument can be made that everybody ought to be free to make his own bargains and to abide the consequences thereof. However, where you have growing up in our community a high-powered credit system such as this hire purchase business has become, some rational safeguards are necessary if very serious social and national economic evils are to be avoided.

I particularly urge on the Minister that this is not an occasion when the provisions of Section 4 are appropriate. I further urge upon him that he should alter that Section to provide that regulations made by him under this Bill shall be approved by Dáil Éireann within a limited time on his motion rather than that they should automatically be deemed to be approved consequent on the failure of anybody to raise them in this House. I press that view particularly upon the Minister because we all know there simply is not available to our Parliamentary institutions the secretariat and the research facilities which make it physically possible for an Opposition, however well intentioned, to scanevery Order that is laid before the House with the close attention that would be necessary if this procedure under Section 4 were to become the norm. Therefore I suggest to the Minister that in our circumstances it is apparent, that where wide powers are taken, he should charge himself with the responsibility of seeking approval and justification for any regulations he may make from Dáil Éireann on his own motion.

Mr. Ryan

We are in a difficulty today in that we are asked to approve an unknown law. We are asked to give our approval to Orders which the Minister may make under this Bill which gives him power to make legislation about which nobody will know until it is put on the table of the House. It will then join the company of so many Orders put on the table of the House of which we have 22 today. As Deputy Dillon has already said, even the best intentioned Deputy has no more time allowed him by his Creator than 24 hours in every day. It will be next to impossible for this House to keep the necessarily watchful eye on the type of legislation which we are being asked to enact under this Bill.

I am sorry that the Minister did not take the opportunity to write into the Bill some fundamental principles of good hire purchase transactions, such principles as he obviously had in mind under Section 6. It should not have been impossible to draft a section in this Bill to govern some basic hire purchase principles to be followed. It should not have been impossible for the Minister to make a decision as to what minimum deposit would be required for particular types of goods. One of the effects of the Bill may be that those carrying out hire purchase transactions may be ignorant of changes in the law for some considerable time after Ministerial Orders have been made and they will be rendering themselves liable to penalties under this Bill.

It may be answered that advertisements in the papers and the placing of Orders on the table of the House will cover that. However, the busier a man is, the less time he has for looking up the legal columns and the Government notice columns in the newspapers and he will frequently find himself in the position of having broken Orders which have been made without his knowledge. I would therefore respectfully ask the Minister to consider before the Committee Stage whether it might not be possible to enshrine in the Bill some of the accepted principles of good hire purchase transactions.

There is an element in connection with hire purchase which cannot be overstressed and which could be covered in some way by this Bill and not left to Ministerial Order. It is well known, and I have learned from my own experience, that people frequently enter into hire purchase agreements without understanding the contents of them. As the Minister well knows, it is an accepted rule of law that a person cannot be heard to say that he did not read or understand the contents of any document which bears his signature. Again and again, practitioners in our law courts hear that argument being made by defendants and it is my firm belief that in a considerable number of cases it is a very genuine argument. On that account, I should like to see some radical steps taken to ensure that a person does not sign a hire purchase document until he has had ample opportunity of reading in detail the document he is asked to sign and of even getting an opportunity of obtaining legal advice on some paragraph or clause in the contract which he may not understand.

We all know that a salesman is mainly interested in getting an order. A salesman carrying out a transaction under a hire purchase contract does not have to bother about getting the customer to come back again because he knows that, if a customer buys a television set or some such article, he will be paying for it for two or three years by which time he will have got heartily sick of the very appearance of the shop. We have cases in which salesmen encourage people to sign hire purchase agreements with glib phrases like: "Sign here and it will be delivered for the week-end." That is happening day in and day out and even people engaged in the hire purchase business themselves have confirmed with me that that is the position. I should, therefore, like the Minister to consider putting a clause into the Bill whereby it would be compulsory for the owner of an article which he proposes to sell under hire purchase to send to the address of the proposed hirer not less than 24 hours before the contract is signed a draft of the contract which that person is being asked to sign.

I say that in all seriousness in order that we may prevent in future the undoubted arrangement which does exist whereby innocent people sign hire purchase contracts without realising what they are doing. If these people are given a period of 48 hours to read a contract, get advice on it and have second thoughts on it, we might have fewer people in our courts incurring additional legal costs and many other unfortunate people incurring the costs which accrue when the owner of the goods brings them into the enforcement courts to collect the money from them at the rate of 5/- and 2/6 a week. What frequently happens is that the costs of litigation far exceed the amount due at the time that litigation was initiated

On that account, I find myself in agreement with the Minister and in disagreement with my colleagues who are opposed to the provision in the Bill that litigation in connection with hire purchase transactions should be brought where the hirers live. I am in complete agreement with the Minister in that. I fail to see why this House should continue to approve of the present system which suits only the large hire purchase companies who write into the hire purchase contracts a clause providing that the contract may be sued on where the contract is accepted.

There is a further clause in many of the agreements to the effect that the contract shall be deemed to be accepted in the City of Dublin. That means that people who enter into hire purchase contracts for small amounts throughout the country can have a district court civil process issued against them for hearing in Dublin in respect of an amount of perhaps £6 or £8. Alternatively, a guarantor whose name has been forged to a hire purchase contract down the country may have a civil process issued against him for some small amount like £5.

Many of those people find it is not worth their while to travel to Dublin, and bear the expense involved in travelling to Dublin, to give evidence in their own defence when they are unlikely to recover even their expenses. Where the amount is small, that happens very frequently.

I speak with some knowledge of this subject by reason of the fact that in my profession as a solicitor I act from time to time for solicitors down the country. Not infrequently I receive correspondence from them confirming what I am now telling this House, namely, that people who get civil contracts for small amounts served on them find it is not worth their while to come to the city to defend them.

I feel that what the Minister has in mind in introducing this section which provides that the hire purchase companies, who can well afford it, ought to bring the proceedings in the area in which the people reside is that if they have a defence they may contest the case and if they have not a defence they need not appear and judgment will be given as a matter of course— and I do not mean that it will involve the degree of publicity which Deputy Lindsay has in mind. If a person has no defence in such a transaction a decree will be given and that is all there is to it. If the person has a defence he should be given an opportunity of making his defence on his own ground. Therefore, I would approve of that section.

I find obnoxious the sections which give the High Court power to remit to other courts some cases without stating the reason for so doing. The Minister may say—speaking respectfully of our Judiciary, that they would not tend to remit cases to lower courts without good reason. However, judges are human beings and might act without good reason. The danger is that remitting some cases may involve additional expense. It is undesirable to write into an Act such an unlimited power. No doubt the Department have in mind the types of cases in which such power ought to be exercised. I respectfully suggest the Bill ought to contain the cases in which it is felt that power ought to be exercised. We should not give power to the court in any other type of case to exercise power of that nature.

I do not think it is an old-fashioned stand to take that there are powers in this Bill which are excessive and which would allow a quite improper interference with respectable business men. Under Sections 7, 8 and 9, officials may inspect the books, records or documents relating to the business of any man or woman who sells an article to another under a hire purchase transaction. The Bill is loose enough to allow such an inspector to inquire into the profits of a business, to inquire into the expenses of running a business and to inquire into the debts of a business and into the creditworthiness of any particular businessman.

It is undesirable that officials who would be moving around from one business house to another should be given that power to probe into the financial affairs of various people. The Bill is general enough, on my interpretation, to give officials that power. I do not believe it is necessary for the proper working of the Act. I do not believe the Minister needs it to make the Orders he is asking us to give him power to make under Section 6. I believe these powers are far too great.

It certainly allows any inspector to pester, annoy or irritate any business house. The reasonable times during which inspectors may carry out these inspections will in most cases be interpreted as hours of business and these will be the most unreasonable times for the carrying-out of such inspections. I am sure the Minister and his Department have not in mind that these inspectors would facilitate businessmen by carrying out their inspections after business hours. It is most likely that the inspectors will insist that the inspections be carried out not later than 5 p.m. That might well upset any business house and particularly the smaller business house.

On that account I ask the Minister to move very carefully in seeking such very wide powers which are not necessary for the proper working of this Bill when enacted. I should like the House to consider that I am not unconscious of the grave need that exists to regulate hire purchase transactions for the betterment of all parties to these transactions. Certainly such a need exists but I do not believe this Bill is going the right way about it.

I shall conclude by returning to the section which gives the Minister powers of inspection. I respectfully ask the Minister to consider setting up some arbitration tribunal to which disputes might be referred because, as it is framed, the Bill will lead to many serious disputes. There will be disputes which will be caused by many respectable and reputable businessmen. It would be most undesirable that it would be left in the hands of officialdom to deal with these difficulties which are almost certain to rise because of the very general nature of the Bill.

Mr. Coogan

I feel that this amending Bill is not going far enough to deal with the abuses in hire purchase. One feature I like about it is the increase in down payment for hire purchase. I think this Bill has been introduced because the Minister feels the impact that television will have on the community warrants its introduction; that people have to be saved from themselves or, rather, from the Joneses. We have that mentality. We see it. It is very striking for any country Deputy coming to Dublin.

They can see the forest of television aerials and where they protrude from. I think we are all aware that they mostly protrude from houses where people can ill-afford them, not that one begrudges in the least the ordinary working man the luxury of television, but on the cost of television, I find myself in agreement with the section which calls for an increase in the down payment. I feel that where luxury goods are concerned the down payment should be increased to help to save people from themselves, as I have said.

Another point is that, before legal action is taken in cases of hire purchase defaulters, the guarantor should be given prior notice. I have seen cases where a guarantor knew nothing about it until the bailiff walked in and demanded the money from him. Such a situation should not be tolerated. I welcome certain sections of the Bill but, as I said, it does not go far enough and the Minister has left it very vague on the question of down payments. I think the Minister, knowing him as I do—he is a reasonable man in that respect—will see that where unnecessary luxury goods are concerned, there is a good limit placed on people who can ill-afford these goods.

Mr. J. Lynch

As has been generally recognised in the course of this debate, hire purchase is something that we have and that we are likely to continue to have. Like many facilities available to us, used wisely it can be very beneficial but used imprudently it can be a very dangerous thing. Having got hire purchase, we must look around to see to what extent it is being used in an imprudent manner. There is some evidence that it has been so used, and there was such evidence before the enactment of the original Act in 1946. It was for the purpose of offsetting this abuse that the original Act was passed. Since then it has appeared that there have been some defects in that Act and the purpose of the Bill is to cure, so far as they can be cured, these defects.

I should like to say at the outset that an impression seems to have been created here that almost everybody who is a hirer or is an owner of goods under a hire purchase agreement has sinister motives—the hirer to get away if possible with as much use of the commodity without paying for it, and the owner to eke out as much by way of repayments out of the hirer as well as getting the property back. I should like to refer the House to the speech I made when introducing the Bill when I said that there were 242,000 transactions in 1958. I feel sure that only a small fraction of these transactions have ever come before any of the courts for determination as to the rights of ownership of the article or for the making of decrees, due to repayment not being made.

It cannot be denied that there are defects in the administration of hire purchase; there are defects in the manner in which both owners and hirers operate and the purpose of this Bill is to cure these defects. Most of the members of the Fine Gael Party who spoke seem to see something very sinister in Section 6 which is the section giving the Minister power to provide by Order for the regulation and control of hire purchase and credit sales. But subsection 2 of Section 6 sets out very clearly what the Minister may provide by Order—first of all the form of the agreement of the hire purchase or credit sale of the goods; secondly the minimum deposit to be made; thirdly the maximum period of repayment and amounts and the frequency of instalments or rentals and fourthly the information to be given in the advertisment.

Mr. M.J. O'Higgins

Is the Minister ignoring the first sentence of the subsection?

Mr. J. Lynch

"Without prejudice to the generality of the foregoing."

Mr. M.J. O'Higgins

Yes. Does that not leave it wide open?

Mr. J. Lynch

There is a certain opening there but, as far as the Minister is concerned, the purpose of this section is to provide the means of making these Orders for providing the form of orders, the amount of a repayment and the periods in which repayments are to be made.

Mr. M.J. O'Higgins

And nothing else.

Mr. J. Lynch

Most of the speakers who spoke on the Fine Gael side seemed to ignore the existence of Section 4 until Deputy Dillon spoke and the only comment—it was not quite the only comment he made in dealing with the Bill—he made on Section 4 was that he thought the Order should be laid before the Houses of the Oireachtas before the particular Order comes into operation. However, it will be seen the Order must be laid before the Houses of the Oireachtas within a period of 21 days or within the next subsequent 21 days in which the House has sat. It gives either House of the Oireachtas that power. There is extensive provision to ensure that legislative power here resides in the Oireachtas in the course of making these Orders to control and regulate hire purchase and credit sale agreements.

The next point to which most criticism was directed was the powers of officers of the Minister to enter upon premises and examine books. If it is accepted that regulations will have to be made, that forms of agreements have to be adhered to and the minimum deposits have to be made, that maximum periods have to be fixed within which repayments for the hire of goods are made, it can be realised that the Minister would tie his hands unless he had some means of ascertaining what the facts were in any single place, some means whereby he could acquire knowledge as to whether the provisions of the Bill were being complied with by particular traders. I do not envisage the invasion into the privacy of individuals anticipated by some of the Fine Gael Deputies being carried out by these officers. In any case, and I am not using this as a defence for it, there is ample precedent, especially in all legislation which is in any way parallel to this type of legislation—in the Restrictive Trade Practices Act, in the Apprenticeship Act and so many others in which certain knowledge is necessary in order to ensure that the Minister will have means to enforce compliance with the provisions of the Bill.

Some of the other criticism was directed to the regulation of court proceedings. It was suggested there was no reason why cases should be brought in the area in which a defendant resides. I think it will be generally agreed that the Court leans in favour of the person to be sued as far as facilitating him is concerned. The plaintiff himself in any action founded on contract, has the option of suing in the place where the contract is made or where the defendant or one of them ordinarily resides. It is not a tremendous extension of that right, or, opportunity, to have an action tried where a person resides, if a person who enters into a hire purchase agreement with him will be obliged to sue in the court area in which that particular hirer resides. It is only fair to him, particularly having regard to the extent to which cases are being brought in Dublin against people living in remote parts of the country in respect of small amounts that might be outstanding in the repayment arrangements arising out of hire purchase transactions. Deputy Ryan was quite right in giving his approval to this provision, having regard to his own personal experience of the manner in which cases involving small amounts are frequently heard in the Dublin courts against people who live far away from Dublin and who, for one reason or another, feel it would not be worth their while to come and defend them, even though they felt they might have a very good defence.

Mr. M.J. O'Higgins

This is Section 19? I am wondering does it interfere with the jurisdiction of the High Court? If the hiring company were to decide to use the High Court machinery, could they still do it?

Mr. J. Lynch

I had intended dealing with that on another point but I shall do so now. Deputy McGilligan in particular suggested that the increasing of the jurisdiction of the Circuit Court and the District Court to enable cases to be taken in these courts where the defendant resides within the area, is something of doubtful value to a defendant if the suggestion is made of reducing the cost. There are many cases in which the defendant would prefer to be sued in his own area than to be brought to the Dublin Court.

In the first instance, most hire purchase companies have agents throughout the country who actually effect the contracts on the premises of the hirer. Even though they are ultimately deemed to have been made in Dublin, the person who will give evidence as to the making of the contract usually is a person residing in or about the area in which the defendant resides. Therefore, there can be no force in the suggestion that in any case somebody would have to go down to Ballyhaunis District Court from some office in Dame Street in Dublin in order to prove the contract and therefore that there will be no expense saved in the bringing of the case in Ballyhaunis rather than at Inns Quay. If, therefore, the hire purchase company, in order to defeat the purpose of that section, brings an action in the High Court in which there is jurisdiction in the Circuit Court, the High Court can of its own motion, remit that action to the appropriate Circuit or District Court as the case may be. It is not unknown that people bring actions in the High Court even though the Circuit Court jurisdiction is ample.

Mr. M.J. O'Higgins

Even the District Court jurisdiction.

Mr. J. Lynch

Even the District Court jurisdiction.

Mr. Coogan

That is a form of decentralisation.

Mr. J. Lynch

On the contrary, a form of centralisation. It is only in such cases, where the jurisdiction is within the limit of either the Circuit Court or the District Court, that the High Court will have power to remit. If the jurisdiction is clearly High Court jurisdiction, the power to remit will not be there.

Mr. M.J. O'Higgins

I do not know whether I made my query clear. The Minister is aware of the ordinary court procedure in the High Court. Even at the moment if a person resides somewhere down the country and the plaintiff wants to bring proceedings in the city of Dublin, even if the amount is within the District Court jurisdiction he can issue a summary summons in the High Court and look for default judgment in the High Court. I am wondering is that procedure interfered with? Admittedly, he is only awarded the appropriate costs at the moment. Is that procedure interfered with by the provisions of subsection (3) of Section 19?

Mr. J. Lynch

The default procedure is being changed in order to prevent what appears to have been abuses—not necessarily deliberate abuses but hardship on guarantors in particular. Hitherto judgments by default could be obtained in the Court office but now, as a result of the provisions of this Bill, judgment would have to be procured in court. Therefore, what the Deputy has in mind will not occur because the High Court office will not have power to mark judgment. The office will have to send the matter on to the judge and at that stage the judge could remit the action to the appropriate court.

Mr. M.J. O'Higgins

That is definite? Theoretically judgment is given by the Master at the moment. Is that discontinued? Must it go to the judge?

Mr. J. Lynch

Yes, it must go to the judge.

Mr. Coogan

Where a defendant would prefer to have it heard in one of the Dublin courts, will the Minister make an allowance for that? They might prefer to have it in Dublin rather than have the local publicity.

Mr. J. Lynch

The defendant could easily convey to the appropriate judge that he would prefer to have it in Dublin. If both plaintiff and defendant prefer to have it in Dublin, it is more than likely that the appropriate judge would say "Very well. We will carry on here and will not remit to the Circuit or District Court."

Mr. Cosgrave

On the other point, the judge or the Master can give judgment? Is that right?

Mr. J. Lynch

I think it is the judge only. I shall check on that. The Master would have power to remit as well. The whole purpose is to ensure that there will not be power in the Court office to mark judgment in order to ensure that no hardship will be done.

Mr. Cosgrave

That there is a hearing?

Mr. J. Lynch

That there is a hearing. The ordinary case is this. The hirer has defaulted in his payments. If he has handed back the goods or if the owner gets possession of the goods otherwise, the owner usually sues the hirer and the guarantor. He sues the hirer for the payments in respect of which he has defaulted and sues the guarantor for the payments outstanding. If judgment is marked against both the owner gets the full value of the goods and also gets the goods in his possession. It is to prevent abuses like that that the provision is being made for the necessity to go to court.

I want to assure both Deputies McGilligan and Lindsay that I have no ulterior motive such as trying to get work into the hands of Cork solicitors, work that might otherwise be done in Dublin. That suggestion certainly ran through their speeches. The whole purpose of this is to assist the defendant to avail of his remedies more easily than he might otherwise be able to do. There are many instances in which the facility of having the case heard or decided in the court area in which one resides gives the defendant certain advantages. For example, there is the case of postponed orders for possession of goods, where the defendant having come to court and made some defence and the Judge is satisfied at least as to his bona fides and notwithstanding making an order for the specific return of the goods hired, will, nevertheless suspend the operation of the order provided the defendant can make alternative arrangements to pay for the goods. If during the course of the payment of the instalments now ordered by the court, or agreed to, he makes default, and even if he has paid for the goods to a considerable extent, the owner is in possession of his execution order and can immediately execute. If the defendant is sick or precluded for some other innocent reason from keeping up his payments as ordered by the court, under this Bill he can go back to the court and ask for extra relief. If the court was in Dublin it might not be possible for him to reach Dublin whereas now he will have the court immediately available in which he can get the extra relief.

Deputy Cosgrave asked some questions in regard to the type of goods that are hired through hire-purchase or credit-sales transactions. At the moment there is in preparation by the Statistics Office some figures for the Trade Journal. Since he spoke I have received a proof of them, an uncorrected proof. As far as a rough calculation on the figures given on the draft statistics goes, the number of transactions in motor cars represents 16 to 17 per cent. of the whole. I want to warn the Deputy that these are my own calculations based on a rough check. The figure for commercial vehicles is 3.5 per cent.; agricultural tractors, machinery and equipment—4.5 per cent.; motor cycles and scooters—5.4 per cent.; pedal cycles—20 per cent.; contractors' plant and industrial machinery—.8 per cent.; radio and television sets—16 per cent. The money value involved—I have taken only three figures but they are fairly representative—is, in the case of motor cars which form 16-17 per cent. of the number of transactions, 12 per cent. of the total money value: agricultural tractors machinery and equipment, which are about 4.5 per cent. of the number of transactions, form about 10 per cent. of the money value; and radio and television sets which form about 16 per cent. of the number of transactions form about 6 per cent. of the money value. These are calculations I made since the Deputy asked the question, but they give some indication of the balance between the type of goods concerned and the money values involved.

I want to tell Deputy Norton that this Bill certainly does not take into account services as opposed to goods and I do not think it is likely that services will ever be taken into account in hire-purchase legislation. If it is necessary, and if it appears that difficulties of a social and financial nature affecting many of the population or the nation would arise, it may be necessary to have a look at the position to see whether or not similar legislation might be necessary in the case of services but at the moment it certainly is not envisaged.

Deputy Dr. Browne referred to the possibility of prescribing interest rates. That is a very big question and it is tied up, as he knows, with financial considerations of a very broad character. It is tied up, for instance, with the bank rate, the building society rate and the money lending rate and, while he seemed to discount the possibility of competition regulating rates and ensuring that there would be a reasonable level, it has been shown in England that the competition that has arisen there has kept interest rates in hire purchase at a comparatively low level. It is interesting to note that, as Deputy Dillon—I think—pointed out, many banks are taking an interest in hire purchase and even in this country we have an instance of a bank taking on certain hire purchase interests with another group.

Dr. Browne

That seems to justify the impression that it is not such high-risk capital as they pretend—the fact that the banks accept it.

Mr. J. Lynch

Possibly that is so, but on the other hand, there is the danger of the destruction of goods and also the difficulty of the owner in many cases not having any guarantor or any other security except the existence of the goods themselves. It is a wide question and it seems to me at the moment that there is a reasonable degree of competition to ensure that interest rates will not become exorbitant and I think the tendency is for them to become more keen and competitive as time goes on.

Deputy Larkin referred to some transactions in which I could not follow him completely. I think what he was referring to was an activity whereby persons had order forms which they could supply to individuals for a certain value of goods to be purchased at a particular shop. I think that is not hire-purchase—it is a form of money lending. Let us say a person named John Browne has the facility of ordering goods from a store owned by John Murphy and if Mrs. O'Brien comes along to John Browne and says: "I want an order for £15 worth of goods," John Browne gives Mrs. O'Brien the order for the goods which Mr. Murphy will supply, but, as a form of separate transaction, Mrs. Browne would have to pay John Murphy £20 for that order form. It is not hire purchase; it is a form of money-lending. It is something that I feel might have been prevalent in the City of Dublin at a certain stage but something that, as a result of well-ordered hire-purchase arrangements, is, perhaps, on the decrease to a considerable extent. It is the first complaint I have heard of the nature and if it were widespread I am sure we would have heard much more about it than just a statement in the House.

I do not think there are any other specific points that I need refer to. There were many specific points made but, as Deputy McGilligan said, these points are better discussed on Committee Stage. I think I can interpret the feeling of the House in general in saying that the Bill in its general form is welcome, that there is a feeling that the provisions of the Bill are necessary and that in its broad terms it is something to which the House gives its approval.

Dr. Browne

Could I ask the Minister if any enquiries have been made as to the usual rates being charged? Are there any statistics available on this question of rates at present being charged?

Mr. J. Lynch

No, not at present.

Dr. Browne

Is the Minister able to say that he is satisfied that the position is reasonably satisfactory at the moment?

Mr. J. Lynch

There are such a large number of firms in competition that it is reasonably satisfactory. I have not personally had any complaints that the interest rates are exorbitant and I feel that, if they were in any instance, some other company would be able to reduce them sufficiently to make their business attractive to the public.

Dr. Browne

If the Minister does not know the rates, how can he judge them? Surely the Minister should have found out what the rates are?

Mr. J. Lynch

I have a good idea of what the rates are.

Question put and agreed to.

Committee Stage ordered for Wednesday, 24th February, 1960.