Companies Bill, 1962—Report and Final Stages.

I move amendment No. 1:

In page 43, line 51, to delete "the" and substitute "a".

The purpose of this amendment is to rectify a simple printing error.

Amendment agreed to.

I move amendment No. 2:

In page 53, line 9, before "fund" to insert "reserve".

This amendment also rectifies a printing error.

Amendment agreed to.

I move amendment No. 3:

In page 60, line 39, after "owner," to insert "or votes at any meeting,".

During the course of the discussion on the Recommittal Stage at the Special Committee, Deputy Sweetman moved an amendment similar to this. He explained that his object in doing so was to impose some penalty on persons who personated shareholders at general meetings and thereby caused considerable inconvenience. I did not accept the amendment at that stage but, on reconsideration, I decided that there was no objection to it and, in fact, that it might be useful and serve the purpose Deputy Sweetman had in mind. I am now moving it as an official amendment.

I am obliged to the Minister.

Amendment agreed to.

I move amendment No. 4:

In page 66, to delete lines 28 to 38 and substitute:

(1) When judgment is recovered against a company and such judgment is subsequently converted into a judgment mortgage affecting any property of the company, the judgment creditor shall cause 2 copies (certified by the Land Registry or the Registry of Deeds, as the case may be, to be correct copies) of the affidavit required for the purpose of registering the judgment as a mortgage to be delivered to the company within 21 days after the date of such registration, and the company shall within 3 days of receipt of such copies deliver one of such copies to the registrar of companies for registration in manner required by this Act. By way of further precaution, the Land Registry, or Registry of Deeds, shall as soon as may be deliver a copy of the said affidavit to the registrar of companies.

In this case also I am moving this amendment consequent upon discussions that took place in the Special Committee on the Recommittal of the Bill. The section provides that where a judgment is converted into a judgment mortgage, the judgment creditor must send two copies of the relevant affidavit to the company against whom he has secured the judgment and the company must file one copy with the Registrar of Companies. During the Recommittal Stage, a number of Deputies expressed uneasiness about the situation which would arise in the event of a company failing to send a copy of the affidavit to the Registrar of Companies. In that case, the public would not then be in a position to ascertain full information about the company's liabilities and might enter into commitments which they might otherwise avoid.

It was Deputy de Valera, I think, who suggested the form of amendment which would deal with this position and would obviate the danger of the public not being informed about a judgment being registered as a judgment mortgage. The purpose of the suggestion made by Deputy de Valera was that a copy of the affidavit which changed the judgment into a judgment mortgage would be sent by the Land Registry or the Registry of Deeds—in which offices it would inevitably be first registered—to the Registrar of Companies. The principal object of the amendment, therefore, is to insert a sentence along the lines suggested by Deputy de Valera, and this was approved by all members of the Committee.

It is my recollection —and I will refer to the report, if necessary—that the suggestion made by Deputy de Valera met the points raised by members of the Committee. However, I am incorporating now in this amendment the suggestion made by Deputy de Valera. In addition, I have re-worded the subsection, making no substantial change, in order to incorporate properly Deputy de Valera's suggestion.

I do not think this amendment does incorporate the suggestion made by Deputy de Valera. The suggestion made by Deputy de Valera was that the documents to be registered in the Registry of Deeds by the judgment creditor should be transmitted by the registrar to the Companies Office. That was my understanding of it. This is an improvement, let me say, on the provisions of the Bill previously, but it is an entirely cumbersome improvement and one that does not go about the matter the right way. It is almost nonsensical to provide in a Companies Bill that, "by way of further precaution, the Land Registry, or the Registry of Deeds, shall as soon as may be deliver a copy of the said affidavit to the registrar of companies." That is duplicating the work that has to be done here. The Land Registry will transmit to the Companies Office and the company secretary will have to make the registration again in the Companies Office. Where on earth is the sense of the Land Registry in a registered land case doing the work if the judgment creditor has to pay a solicitor to duplicate the work?

It is all being done in the name of the sacred cow of trying to get things in one form. I agree that the basis of this Bill is that registrations shall be by the company in the Companies Office. That is the principle, but it is not a sacred principle or a principle to which it is necessary to adhere. It is quite unnecessary to have the duplication of the judgment creditor delivering to the company's secretary and the company's secretary going to the Companies Office and registering there and the Registrar of the Registry of Deeds transmitting it again to the Companies Office. It is quite farcical and it will quite unnecessarily encumber the procedure and put on everybody quite unnecessary costs. I know that some of the costs involved will be picked up by Deputy Colley and myself as solicitors, but it is unnecessary; and solicitors do not like taking unnecessary money.

The suggestion to the Committee was that the judgment creditor should deliver two copies to the Land Registry or the Registry of Deeds and that the Registrar in either of those cases should transmit them to the Companies Office for direct registration.It could be provided at the same time that when the judgment creditor was registering against the company, he would pay the fees necessary for registration in the Companies Office. If that had been done, a great deal of abracadabra could be avoided and the public properly protected.

Amendment agreed to.

I move amendment No. 5:

In page 103, line 1, after "by" to insert "or to".

I propose to insert certain words, the omission of which was a printer's error. The words "by or to" are used in other parts of the subsection.

Did the Minister say it was a printing mistake?

I find it much harder to hear since these "yokes" were put in. You hear the echo of these behind you and the Minister speaking opposite you. The two combine into confusion.

Smoke signals would be better than those.

If we have to put up with them, there should be some switch by which you could turn them off and hear the person speaking in front of you, apart from mumbles.

Amendment agreed to.

I move amendment No. 6:

In page 123, line 6, to delete "accordance with" and substitute "the manner described in".

This is merely a drafting amendment. The words proposed to be deleted—"accordance with"—might not be appropriate in relation to something that had already taken place. Therefore, it is proposed to use instead the words "the manner described in."

This amendment is moved by the Minister to deal with a case I raised at the Committee. The Minister assured me that the parties concerned were absolutely satisfied. At that time, the Minister will remember, I said I thought the Minister's information was inaccurate. It now transpires that mine was slightly more accurate. However, this does meet it.

The Deputy will admit he was not up-to-date with all that had taken place by reason of his absence from the country?

No. This amendment deals with the Bank of Ireland and the Hibernian Bank. At that time I was assured categorically by the Minister that both parties agreed the section met the case. I told the Minister at the Committee that my information was that that was not correct. Subsequently, when I went to the parties after the meeting and produced the Minister's words to them, I was told "No." However, all is well now.

I am assured that the amendment I have introduced now——

Now—yes, that is all right.

But that amendment was, in fact, introduced just before, or agreed with the parties just before, Deputy Sweetman got on to my office.

I am talking about the last meeting of the Committee. If the Minister looks at the records of the Recommittal, he will find I raised that——

Yes, I am accepting that. We are talking at cross-purposes then.

On Recommittal, the Minister had incorrect information.

Amendment agreed to.

I move amendment No. 7:

In page 188, to delete all words from "nothing in this Act" in line 35 to the end of the section and to substitute: "nothing in Section 170 or 299 shall be taken to require any person who has acted as solicitor for the company to disclose any privileged communication made to him otherwise than as such solicitor."

Section 387, which it is proposed to amend, deals with privileged communications.After certain investigations, for example, investigation into the affairs of a company under Section 170 following the report of an inspector or an investigation arising out of a report by a liquidator under Section 299, it may be necessary to bring certain prosecutions, and company solicitors are, by those two sections, obliged to give all the help they can in the proceedings. Section 387 provides a saver, however, for privileged communications. During the Recommittal, a number of members of the Special Committee expressed uneasiness about the wording of Section 387 and I undertook to have it reexamined.

The purpose of the amendment is to exclude communications ofbona fide privilege between a solicitor and his client. That solicitor may act for the company and also individually for directors of the company and the purpose of the amendment briefly is, while not giving the solicitor privilege in the case of a communication made to him in his capacity as solicitor to the company, it does afford him privilege in the case of a communication passing between him and individual directors of the company in his capacity as solicitor for them. That latter position is now saved by the amendment I propose.

It is a bit difficult to follow the wording of this amendment as it is to be written into the section. I am not very happy about it, but, like the earlier amendment, it certainly is a very great improvement on the Bill as it was originally, but unlike the other amendment, I think in this the Minister has gone to a great deal of trouble to meet the point that was raised. I see his difficulty. I see what he wants to avoid and what he wants to ensure—that in the liquidation of a fraudulent company, for example, information cannot be covered up. I see that and I accept his anxiety in that regard, but I am not quite satisfied that a case might not arise in which the appropriate privilege would not be covered by this amendment.I think it goes as far as we can now legislate and if it comes to the last analysis, it will be a judge of the High Court who will have to rule on it and I do not imagine he will rule in too wide a fashion.

I agree with Deputy Sweetman that—he may not have said this but I think it was what he was conveying—the amendment does involve to some extent an encroachment on the existing doctrine of privilege and, like Deputy Sweetman, I am not very happy about that development. On the other hand, I agree that the Minister has a difficult situation to meet and primarily my reason for speaking is to put on record my appreciation of the manner in which the Minister has endeavoured to meet the objections that have been raised. It is only right that tribute should be paid here to the efforts he has made to get this Bill through in a workable form and at the same time meet all objections raised. He has succeeded to a very large extent.

All valid objections.

That spoils the bouquet.

I think the Minister has endeavoured to deal very fairly with all valid objections.

The only other matter I want to mention is one Deputy Sweetman emphasised in Committee and that I think could be emphasised again. It is that the privilege is not the privilege of the solicitor but the privilege of his client. It is because of that that some anxiety was expressed about any encroachment but I think that all members of the Committee were satisfied that the encroachment is only to the extent necessary.

May I add a postscript?I might have enlarged on this when introducing the amendment. The solicitor I have in mind is acting for a company and may also be acting in a private capacity for the directors of the company. The fraudulent practices that might come to light in the course of the type of investigation envisaged in these two sections are usually ones that the company itself would want to unearth and have duly punished. It is possible that the directors of the company could have a controlling interest in it and because of their strong position, they might be able to use their influence to ensure that some fraudulent practices which could be disclosed by the solicitor could not be unearthed and prosecutions taken against them.

Amendment agreed to.

I move amendment No. 8:

In page 192, line 24, to delete "or" where it first occurs and substitute "and".

This is an amendment of the First Schedule which is Table A. The wording in Table A refers to Section 59 which is incorporated earlier in the Bill. The purpose of the amendment is to ensure that the same wording appears in Schedule A as appears in the corresponding Section 59.

Amendment agreed to.

I move amendment No. 9:

In page 212, line 34, to delete "nó" where it first occurs and substitute "agus".

This is an amendment to achieve the same purpose as amendment No. 8, to take account of the Irish wording in Table A.

Amendment agreed to.
Bill, as amended, received for final consideration.
Question proposed: "That the Bill do now pass."

It is appropriate at this stage to say a word in favour of the work which was done in the Special Committee. In doing so, I think Deputies will agree that the Minister was both assiduous in his attendance and co-operative in listening to suggestions and recommendations made in the Committee. That also goes for his staff who were equally assiduous in the help they rendered the Committee. It is sometimes remarked that the procedure here is both cumbersome and out of date. There will be general agreement, I think, that there are many changes which could be effected and which would make our procedure more flexible, thereby enabling business to be transacted more speedily. One of the ways in which that can be accomplished is by a greater use of either Select Committees or Special Committees.The experience we had in this Committee was undoubtedly conducive to a reasonably speedy despatch of business.

There are, however, and I think it is right that it should be said, certain limits to which the use of Special Committees can be extended. One of the limiting factors is that, unless it happens that the Special Committees are dealing with matters not within the province of the same Minister, a Minister and a certain number of Deputies will all be obliged to attend a particular Committee because of their special interest in the work being undertaken by it. To that extent, such a Committee imposes a considerable demand on the time and also on the ability of Deputies who undertake the specialised work involved in a piece of legislation such as this Companies Bill.

It is, I think, correct to say that it involved not merely considerable practical experience, which some members of the Committee had to a considerable extent, but it also involved considerable research and reading on technical matters, on matters not particularly interesting from the point of view of those obliged to deal with the measure. For that reason, while I believe the use of Committees can, and will have, beneficial results from the point of view of getting business dealt with greater despatch, there is a physical limitation and those who sometimes criticise the procedure fail to appreciate the fact that Committees of this sort involve constant and regular attendance, not only by the Minister in charge—he, at any rate, has the advantage of a staff available to brief him and supply him with up-to-date information on the matters the subject of discussion—but also on the part of Deputies acting on the Committee, in addition to their ordinary attendance at the current session of the Dáil. As I have said, the work involved very considerable research and application in order to be adequately versed in the matters the subject of discussion.

Subject to these remarks, I believe the experience we have had on this Special Committee indicates that there are possibilities for extending the use of these Committees in future. We can be reasonably satisfied, I think, with the work that has been done in framing the measure now before the House. I do not know whether the Minister can at this stage indicate whether he expects to have many further official amendments for the Seanad, which amendments will, of course, have to come back here eventually; if that is the case, the matter will require still further consideration. I should also be interested to know if the Minister is yet in a position to indicate when he expects the Bill to become law. He undertook at the Special Committee that adequate advance notice would be given and I have no doubt he will adhere to that undertaking when the measure is being brought into effect by ministerial Order.

As one who served on this Committee, I should like to add my expression of satisfaction at the excellent way in which the Committee worked. The Bill was not, of course, a political Bill. It was a Bill which restless minds did not read with great avidity. It was as dry as dust. Many sections of it could not be less interesting than they were. But it was all part of the task of trying to weave a piece of legislation that fitted into the activities of our companies and, from that point of view, I think the Committee did a very good job of work.

The Minister and the Chairman of the Committee were most reasonable. The Minister made amendments on the basis of their merits and not because of any preconceived view. All the amendments were discussed from the standpoint of whether they would help the Bill or were unnecessary. It was because of the give-and-take spirit which permeated the Committee that it was possible to evolve a Bill which, in the end, gave general satisfaction to those who constituted the Committee. Here, to-day, the measure is passing through this House calmly and with the approval of both sides.

Like Deputy Cosgrave, I think it is a pity we do not use Special Committees more, especially in the case of complicated measures. As far as my recollection goes, there were over 280 pages in the Companies Bill, 13 Schedules and about 400 Sections. Weaving through these was no easy task. It would, I think, have been impossible to deal with the measure in this House. Resorting to the Special Committee was the method adopted to subject this piece of legislation to microscopic examination, have its imperfections sought for, found and eliminated. Ultimately, a very reasonable piece of legislation comes before the House for its approval. The last Companies Bill was passed, I think, in 1908, well over 55 years ago. It will probably be another 50 years before we pass another one. It was desirable, therefore, that we should do everything possible to ensure that this Bill meets our reasonable requirements.

The work of this Committee, and another Committee which functioned last year, the Electoral Law Reform Committee, shows that there is a very good co-operative spirit in the House to be utilised for the purpose of getting agreement on matters which are not the subject of exciting political debate. I had the pleasure of serving on both these Committees. Considering that the problems were extremely difficult and complex, the Committees dealt with them with extraordinary expedition, on the one hand, and with a very high degree of unanimity, on the other. There was a general desire to produce two pieces of legislation which expressed the views and were founded on the experience of the ordinary Deputy and the ordinary man in the street. I would urge the Minister now to use his influence with the Government to ensure that Special Committees are used where possible, particularly where there is agreement among all Parties to tackle these complicated questions thrown up by Bills such as the Companies Bill we are now discussing.

I unfortunately was out of town on the last day the Committee sat and did not therefore get the opportunity of saying what I wish to say now. The Committee were magnificently served by the civil servants whom the Minister brought to the Committee to assist him and the Committee in the work of examining the Bill. There were a number of officials from the Department present and while normally I would not select the name of one official from the others for the purpose of extending any special measure of praise, I think in this instance it would be cowardice not to pay a special tribute to one particular official.

I had never seen the official before and he is not a personal friend of mine. I did not in fact know he was in that Department, but I say now that that official was a travelling compendium on company law, as even relatively experienced Deputies will agree. If a Deputy raised a query on Section 108, for instance, this official's immediate reply was: "Oh, look at Section 127 and you will find this matter is covered there." He had a most remarkable grasp of company law and if he had not been on that Committee, I say we would have been there for many more weeks in our examination of that Bill. The official to whom I refer is Mr. Holloway and I for one should like to place on record my appreciation of the magnificent services he rendered to that Committee.

Hear, hear.

If he ever wants to leave the Civil Service and set up business as a consultant on company law, he will make ten times as much as he is making in the Department.

Please do not tempt him.

The Minister will be very lucky if he does not.

We must remember the Solicitors Act. I want to say a word or two on two aspects of this Bill. At the final meeting of the Special Committee, I paid the tribute I felt was due to Mr. Holloway who proved himself a travelling encyclopaedia on the law. Though he and I differed on many things, it is only right I should say also that the work of the Committee was considerably facilitated by the manner in which Deputy Colley handled the work as Chairman. It is not often we can say that about our opposite numbers.

There is no doubt that this Bill goes now from this House a better Bill than it was when introduced into the House not so very long ago, considering its size. I doubt if there has ever been as long a Bill enacted by the Dáil in our 40 years of existence. It would have been quite impossible for the Bill to have been given the consideration it deserved in the House here. We were able in the Special Committee to give it our attention in a slightly more informal way, but, to a very great degree, we were able to give it far more time than would have been possible because of pressure of business in the Dáil.

It is an example that should be there not merely for this Government but for all Governments, past, present and future—the manner in which a highly complicated, long and technical Bill should be dealt with in Special Committee rather than by attempting to deal with it here across the floor of the House instead of across a small table where we were able to get down and deal with the technicalities as we would not have been able to do so effectively in a Chamber such as this where matters of general policy rather than technical detail would be involved.

The Bill came here as a result of the work of the Company Law Reform Committee, set up as far back as March, 1951. It was set up by the then Attorney General, the late Mr. Justice Casey, largely because of the interest that had been expressed in the matter by the then Taoiseach, Deputy John A. Costello. It is to some extent, therefore, the end in this House of the work that he initiated at that time. The fact that that Committee was set up in 1951 and that the report was issued only in 1958 was not due to any dereliction of duty on their part but to the number of fatalities—many members of the Committee died during the time they were considering the matter. The preparation of the Bill after that was not unduly delayed. In fact, the Minister will agree that its consideration after it came before the House was as expeditious as possible, bearing in mind the importance of the matter and the complications that inevitably ensued.

I pressed the Minister at the Special Committee to give advance notice, if at all possible, of the coming into operation of the Bill. As a matter of fact, it contains a provision enabling the Minister to bring it into force by way of Order. It is true to say that the entire Bill will be brought into force on the one date—that it will not be brought in piecemeal—and I would urge the Minister now to name the date on which he hopes the Commencement Order will become operative.I appreciate it must be to some extent provisional because it must be considered by the other House and I should not like their consideration of it to be abridged in any way, but it is a matter of vital importance to all who practise company law, be they solicitors, accountants, secretaries or the companies themselves, that they should know a long time ahead the date on which the change-over will become operative.

All of us keep substantial stocks of forms ready to meet eventualities; many of us keep type standing with printing firms to deal with memoranda and articles of association. These are not things that can be changed lightly or quickly and if there is not adequate advance notice, there will be a great deal of quite unnecessary waste. I would therefore urge the Minister today to give special notice of the date on which he now anticipates the Bill will come into operation, always bearing in mind its passage through the other House.

I should like to express appreciation of the sentiments expressed by the Deputies as to the manner in which I and my officials handled this in Committee. Particularly on behalf of my officials, I wish to express appreciation of the compliments that have been so ably extended to them and so well deserved. This is perhaps the occasion, after the successful conclusion of a Bill of this nature, at least in so far as this House is concerned, when bouquets may be handed out. I should like to say here and now that our discussions in the Committee were not always harmonious.Cross words were said occasionally, and not always between members on opposite sides but sometimes between members of the same side. That, however, served to add quality to the measure that ultimately evolved from the Committee.

Since bouquets are being distributed, it is only fair I should express my thanks to the Reporting Staff of the House and the secretarial staff provided by the Oireachtas staff. As far as the Reporting Staff are concerned, they did a difficult job very well. It was a difficult job because this is a highly technical Bill and many members frequently spoke quickly and often together, and the reporting staff succeeded in giving a very accurate report of what occurred in that Committee.Having said all that, I think we must confess that we were only doing our duty as expected of us by the public to whom we are ultimately responsible.

As far as the date of the coming into operation of the Bill is concerned, I have in mind a date about three months after the passage of the Bill through the other House. As Deputy Sweetman said rightly, we cannot anticipate the length of the debate in the Seanad. That will depend on what view the Seanad takes of our work and on any further amendments I may suggest to the Seanad. At the moment there is only one amendment I have in mind and if it is accepted by the Seanad, it will come back here for further debate. In order to take reasonable account of any delays that may ensue—and I do not expect any real delays—I suggest, and it is no more than a suggestion, that the date of the coming into operation of the Bill be 1st April, 1964, which, I think, would be a suitable date in many respects.

Could the Minister say, at least, that it would not be earlier than 1st April? That would enable us to make our plans for this up to 1st April and after that we could see what transpires.

Yes; I think I can say that, not earlier than 1st April.

Is it safe to base printing on the Bill as now passed?

Question put and agreed to.