Agricultural Credit Bill, 1977: Committee Stage (Resumed).

Question again proposed: "That section 42 stand part of the Bill."

As there may have been some confusion about the Order of Business perhaps we could have a brief adjournment?

Any Deputy who so wishes may speak to the section and the Deputy who is in possession, Deputy Fitzpatrick, may resume when he returns.

Earlier I had been adverting to the fact that some changes are being made in this section to alter some provisions of section 42 of the 1947 Act. The Minister indicated that in his view what are involved are merely changes of wording and that they have no substantial effect. However, it is desirable that the House be made aware specifically of the changes being made in a case such as this.

There is absolutely no change in the substance. What is involved is merely a tidying up of the wording.

This is only the Minister's assurance. Before we agree to a change of this nature we should be told precisely what the change is. It is very desirable that legislation should be introduced in this form of a composite section which updates and incorporates all existing law, stating it once and for all in a new form. One of the difficulties in proceeding in that fashion rather than adopting the traditional means of amending legislation—that is, specifically removing particular words and substituting other words—is that in using the form which the Minister is using, and I applaud him for it, the change that is being made can be masked. Unless one has the text of the 1947 Act in front of one and compares it line by line and word by word with the text of the 1977 Bill, one does not know the exact changes being made. This is the case here. I have asked the Minister to say what the exact changes are in section 42. He admits that changes are being made and says that they are changes of wording and not of substance. He should be prepared to substantiate that by saying what the changes are so that the House may see that what he is saying is correct.

All we are doing is editing the first part of the 1947 Act. There is absolutely no change in the substance.

Would the Minister read the existing text and the new text?

Has the Deputy a copy of the Bill?

I have a copy of the Bill but I do not have a copy of the 1947 Act. Would the Minister point out exactly what the changes are?

Section 42 (1) (a) (i), (ii), (iii), (iv) and section 42 (1) (b) (i), (ii), (iii), (iv) have now been edited and appear in this Bill as section 42 (1) (a), (b), (c) and (d). It is an editing of the 1947 Act.

There were ten separate statements in subsections (a) and (b) of section 42, whereas there are only four statements in this Bill.

There is no change whatsoever in the substance.

We are dealing here with unregistered land. I am strongly opposed to one of the procedures laid down by the ACC. This procedure has been carried on for a long period. If a person obtains a loan from the ACC for the development of land of say, £5,000 or £10,000, if it is a family farm and there is a right registered on the folio in the Land Registry or on the title deeds and there is a claim in favour of a father and mother if they have signed over a farm to a son or daughter, this father and mother are obliged by the ACC to renounce their rights in favour of the ACC and they give the ACC first charge on the folio. The point I want to make is the priority of charge in favour of the corporation is such that the ACC will have power to sell a farm, though the father and mother may have transferred the farm to their son in the form of a family settlement. It is wrong that a farmer acting in the best interests of his family and the farming community in general is obliged to take second charge in the registry of deeds. This is one example and I feel it is important.

There are often other rights in favour of sons or daughters. The position is that the ACC have first rights and first charge on the family farm. It is set out that the instrument effecting the charge is duly registered in the registry of deeds. The family farm can be sold if this person fails to come up with the money. It can be sold against the wishes of everybody. I am not satisfied with the position as it exists. In circumstances where there are charges registered on title deeds and there are rights in favour of a father or mother or son and daughter, the ACC are wrong in that a farmer who wants a loan to develop his farm has to go to his parents and tell them that he cannot get a loan because of the charge on the title deeds. He must ask his parents to renounce his rights in favour of the ACC. This is morally wrong, though legally I can see the reason for it. The ACC will not give the loan until the parents have renounced their rights.

If the person fails to meet his repayments, the situation is that the ACC have the first rights. It is a simple matter of those giving the money calling the tune but it should not be so in this instance. The ACC should allow the rights of the family to stand on the title deeds. We are continuing something that is wrong. A person who needs money for development purposes is not in a position to argue because he is in a weak bargaining position and he must agree to the conditions.

A difficult situation can arise. If a father signs over his farm to his son and the son falls into difficult financial circumstances because a herd of cows suddenly goes down with tuberculosis or brucellosis what then is the position of the father who gave the farm to the son? Can the farm be sold over his head? The Minister cannot give an assurance to the House. I believe this is something that should be dealt with because it is an important matter. It is something that can easily arise.

What Deputy Enright has said is quite correct. A father signs away his rights. There must be some security for that father in the situation Deputy Enright talked about. The ACC have first claim, as the local authority have when someone builds a new house. Money is got on an individual's security. What is the alternative for the ACC? Would that body accept two independent sureties? People might not like that because they do not like letting others know their business. This is different from what we were discussing earlier. I do not know how one could mortgage the farm and leave the parents out.

(Cavan-Monaghan): Would he be able to borrow money to pay his income tax and rates?

(Interruptions.)

As far as I am concerned there will not be many people in my area paying income tax. I am trying to clarify the position in the case of a mortgagee who gets into difficulties. I know the ACC bend over back-wards in trying to get the money without compelling a man to sell up but they could compel a man to sell. I would like to know if Deputy Enright has any suggestion to make which would meet the situation and enable the parents to remain. Then the difficulty would arise that the ACC could not compel a debtor to sell to pay his debt.

Had Deputy Enright been here earlier he would realise that the points he has made are not relevant on this section. The ACC are not given power of priority where there is a caution registered in the Land Registry.

(Cavan-Monaghan): I think Deputy Enright's point is that the ACC insist on the assignor postponing the right of residence or a life interest before giving a loan to the assignee and he regards that as undesirable. He argues that the ACC should give the loan subject to a right of residence in favour of the parents.

That is a matter that can be negotiated. This Bill does not empower the ACC to force the kind of situation adumbrated.

We are dealing here with priority of charges in favour of the ACC. The first charge a parent retains when he signs a farm over to his son is a charge in favour of himself and his wife. There is a charge of residence and a charge of maintenance. There may also be a charge for a payment of £15 or £20 a week on the title documents. Here we are dealing with priority of charges in favour of the ACC. The first priority that body wants is a charge on the property and it will not give a loan normally subject to negotiation and the first charge will be that that body is charged as registered on the title documents.

This section does not affect their authority to make a loan in such cases without having priority.

In fact it does not. The section provides:

... the charge (including interest and the costs and expenses of all legal proceedings instituted by the Corporation for the purpose of realising the amount at any time owing to the Corporation on foot of the charge) shall as against the land so charged be in priority to and shall override all estates and interests in and all incumbrances and burdens on the land which may be subsisting at the date of the instrument except the said periodic (Land Commission) sum....

Read subsection (2). It provides that the priority conferred in the previous section will not apply at the date of registration of the ACC's charge where a caution appears in the Land Registry as affecting such land.

What line is the Minister quoting?

It is a clarification of subsection (2).

The section says:

unless that person agrees to the contrary, be determined as if subsection (1) had not been enacted.

Irrespective of what the Minister is maintaining, the position appears to be that unless a person agrees to the contrary the ACC will maintain that they have a first charge on the property.

That is not the position. I have clarified the position.

The position at present, whether subsection (1) is enacted or not, is that the ACC will seek to have a first charge.

This Bill does not empower them to do so. They can do so by negotiation if they so wish. This Bill is giving them power to give loans in cases where there are not registered cautions in the Land Registry affecting the land.

(Cavan-Monaghan): It is, where there are unregistered rights. Where there are unregistered rights they are given powers to grant loans and take priority.

Where there is caution on such in the Land Registry.

(Cavan-Monaghan): The caution protects.

Priority rights to not apply in that case to the ACC. That is the position.

A caution or an inhibition is distinct from a charge, is that not correct?

I do not know.

Normally where a caution is entered on a folio, one would check the instrument to see what the caution states. The charge that I am referring to would be registered on the folio. It is not a caution but a charge. The position is that the ACC irrespective of negotiation normally ask people who have a charge to renounce their rights in favour of the ACC.

Is the section agreed?

What the Minister is saying basically is that a person does not have to renounce his rights in favour of the ACC.

That is the position under this Bill. This Bill enables the ACC to give loans in such cases.

If that is the position the Minister should have that written into the Bill.

Not necessarily.

I have explained. I cannot understand how the ACC or any lenders could consider that the creditworthiness of a son would be interfered with in any way by the fact that he allowed his parents to live on in the house or on the land. That should not arise in relation to any lenders.

The Minister is obviously in agreement with me, therefore I see no reason why a subsection of that nature could not be added saying that a person has not to renounce his rights in favour of the ACC.

They do not have to, but if the Deputy feels that the ACC are being unreasonable I will bring any points he has before them for consideration, but this Bill does not give them power to do that.

The Minister seems to agree with most of what I am saying. Deputy Callanan is from Galway and I am certain that if a person there is trying to get a loan from the ACC and a parent has a right on the folio registered in the Land Registry the person is normally compelled by the ACC to have the right moved to a second charge in the folio, giving the ACC the first charge. This rule applies not only to the ACC but to the county councils. For instance, in the transfer of a county council house they normally only agree to the transfer on a life interest. The county councils leave the father with a life interest in the property with a fee simple passing to the son. In the ACC, where a normal business transaction occurs between father and son, the father transfers to the son, and puts on a charge of perhaps £20 per week for residence and maintenance support. At that stage that is the first charge. The ACC then move this charge to a second charge giving themselves priority. That is the priority of charges in favour of the corporation that I referred to. I feel that the corporation should not be allowed to have this priority.

I have not had experience of a case such as that referred to by Deputy Enright, but according to what the Minister is saying the ACC in section 42 need not look for a first charge. This is something new to me. As far as I knew if one were looking for a loan from the ACC the first charge of the place would go to the ACC. Section 42 apparently gives the ACC the right to give loans to people and not necessarily to have the first charge.

I am putting the question that section 42 stand part of the Bill. There is a lot of repetition on this.

This refers to section 96 of the 1964 Act dealing with cautions. This could with merit be discussed by the ACC.

If the Deputy feels that the ACC are being unreasonable in this regard we will refer this to the board for consideration.

This is not a fair situation. People who are looking for loans are obliged because of this section, on obtaining the loan, to renounce their rights. The old section 72 declaration as it was called is what is being dealt with here, and the point the Minister is dealing with:

unless that person agrees to the contrary, be determined as if sub-section (1) had not been enacted.

is not relevant to the point I am making. If the Minister puts this to the board of the ACC will he be in a position to come back to this House before this Bill has been finalised? Will he be able to have the ACC board of directors meet in the meantime and to get a decision from them before Report Stage? It is important that at that stage some amendment be written into the Bill in that subsection.

There is no necessity for that.

Because the Bill is providing for the cases the Deputy mentions and if private arrangements are made between the borrower and his parents, relations or descendants on the one part and the ACC on the other, that is a matter for themselves. Everybody knows, as Deputy Callanan has pointed out, whoever is lending money will look for priority in relation to what he is lending the money on, but where such cautions exist in the Land Registry the ACC cannot get priority over them. Whatever private arrangements are made nobody could legislate for them and they do not have to be covered here. If the Deputy feels that the ACC are being unreasonable in that regard we will ask them to have a look at it.

If the ACC are being unreasonable in this regard the Minister of State will ask them to have a look at it. We are here legislating on a matter of this nature and we will ask them to have a look at it. They can be very nice and may look at it and tell us they have looked at it and that they regret they cannot agree. We should tell them that we have had a look at it and that we are not satisfied with it and we are going to change it.

If we found such a situation existing we would tell them that they have no power under the law to do so. This will be the law when it is passed.

This is the point I am making. If we have a regulation and there are doubts about it why not have it written in on Report Stage? I do not know that the Minister has power to accept amendments but I see no difficulty whatsoever in such an amendment being drafted and inserted into the Bill at this stage.

It is not necessary, as I said.

In agreements such as the Minister of State is speaking of the person negotiates his loan with the ACC and he is not in a position to argue about the terms dictated to him. It is to give leverage to the person negotiating the loan that I ask that this be put into the Bill.

Why did the Deputy not put in an amendment?

The Chair could not accept an amendment.

The Deputy had plenty of time to put in amendments in the last week if he was so concerned about the matter.

I do not know if the Minister of State would be favourably disposed to accepting it.

I see no necessity for it and I think the Deputy's colleagues on either side will agree with me.

The Minister of State has no evidence for making such a statement.

The charges I am referring to are such that they can easily be retained on the folio so as to prevent the ACC from using this leverage. The amendment I have mentioned could cause no difficulty what-ever.

According to what the Minister of State has said it is more or less optional for the ACC to give loans without getting the charges. If you write in that they cannot get these charges you are doing away with the power of negotiating a decent loan. If a man goes to the ACC for a loan and the law is that the ACC cannot get the charge of his father and mother on the folio, the ACC can say. "We will give you £X." That may not be enough and he cannot give the full charge to get enough money. You are throwing a lever back at the ACC to give limited loans which may not be enough for the development that the borrower wishes to carry out. The ACC use the excuse that they cannot get the full charge from the holding on account of the charges already on it. At present, according to the Minister, it is optional to do a private deal and give the whole charge, or a person can get a loan without the full charge. The man will have to say that he cannot give the full charge, that his father and mother cannot help him even if they want to, if that is written into the Bill.

The position is as Deputy Callanan has mentioned at present. Because that is so the corporation will offer peanuts to a person looking for a loan. Because they are offering such meagre amounts, legislation empowering them to grant a loan subject to those rights should be put in this Bill.

There is nothing to prevent them giving loans with those rights attached.

The Minister of State is saying that there is nothing stopping them from giving loans.

We are enabling them to do so.

There is nothing stopping them from giving loans, but in practice they are not giving loans in the instance I am referring to.

The Deputy wants legislation to make them give loans to everybody and anybody.

Instances such as I am referring to would not occur too often and would not cause any serious difficulties for the ACC, and because of the not too many times they would occur this could be placed in the Bill. On Report Stage this will have to be put into the Bill to allow a person negotiating with the ACC to say to them that they are empowered and directed that if there is a charge on the applicant's folio, or in the Registry of Deeds or anywhere else, they are entitled to grant this loan under an Act of the Dáil.

I do not think it necessary.

Question put and agreed to.
SECTION 43.
Question proposed: "That section 43 stand part of the Bill."

I ask the Minister of State if he will give some indication of the effect of a caution which is referred to in this section. What does the existence of a caution as described here mean? What is its legal effect?

This prevents the ACC from getting priority.

I should like the Minister to elaborate on the effect of the caution, and the procedure to achieve the desired effect.

We are dealing with unregistered land. When some person has a claim on it, this section debars the ACC from prior claim.

I am inquiring about the process under the provisions of the 1964 Act.

The caution is a notice to the Land Registry not to allow any charge. It is a simple notice to the Land Registry.

Question put and agreed to.
Sections 44 to 46, inclusive, agreed to.
SECTION 47.
Question proposed: "That section 47 stand part of the Bill."

I do not understand how the section will work and I should welcome an indication of the type of situation which would give rise to this —the limitation on the manner in which money paid by the ACC can be used. Obviously if a tenant for life borrowed money on the strength of his interest, which could terminate long before the investment financed by the loan bore fruit by way of income which would enable repayment of the loan, a problem would arise. Under this section the money will not be paid to the tenant for life but to trustees where trustees exist, and in cases where such trustees do not exist and the valuation of the land does not exceed £100, the money will be paid to trustees to be nominated by the Minister for Agriculture. I should like to be told how this will work in practice. I am not qualified to say whether this is a good idea because I am not very well acquainted with the settled Lands Acts. I cannot see why there is this provision limiting valuations to £100. On the face of it it does not seem to make a great deal of sense.

Section 47 deals with charges by the person who is a tenant for life under the meaning of the settled Acts of 1882 to 1890. Sub-section (1) provides that any such person may borrow from the ACC for permanent improvement purposes which are defined in section 37. The money has to be paid to trustees already existing. Subsection (3) provides that if the borrowing has been done on behalf of an infant as full owner and no trustees exist, the ACC, with the consent of the President of the High Court may appoint two persons to act as trustees to handle the loan.

It is the Minister for Agriculture who may appoint, not the ACC. There is nothing here about the ACC.

The Deputy should look at subsections (3), (4) and (5). Subsection (4) provides that in other cases where no trustees exist, provided that the rateable valuation of the prospective borrower does not exceed £100, the Minister for Agriculture may appoint two persons to act as trustees. Under subsection (5), the borrower, or trustees in the case of an infant, may charge all the lands comprised in the settlement with payment of the corporation loan, and such charge may rank as a priority charge in favour of the corporation. Subsection (3) is new, as of now, the ACC are precluded from giving loans in such cases unless trustees are appointed by the courts. The precedure now proposed should be more expeditious. There is a small change in subsection (4) which increases the rateable valuation limit from £60 to £100. This accords with the jurisdiction of the Circuit Court.

The Minister has not told me anything more than anyone reading the subsections could have told me. He has not said why these procedures are necessary, why the limits exist.

These are provisions which are rarely used but it has been felt necessary to have them.

I realise that tenancies for life are not very common. They arise mostly in cases of widows whose sons or daughters will come into full or limited ownership in due course. First, I wonder can the Minister explain why it is necessary to have all these procedures of paying the money to trustees. Secondly, what happens if the money is granted to a tenant for life who embarks on substantial expenditure with borrowed money in the natural anticipation that he or she has 40 years to live and will have adequate time to raise the amount of money necessary to repay the loan over the period in which the investment which has been made with the loan in the first place is bearing fruit and earning income? What happens if that person dies prematurely? How will the ACC get their money back? Will the residuary owner, the person who comes into full ownership when the tenancy for life is finished, have to bear the cost of repaying the loan undertaken by his or her predecessor, entitled the tenant for life, to do things which he or she may not have wished would be done at all? Is that equitable?

I am not satisfied also that I understand the reference to £100 PLV as against £60 PLV. I can understand that circuit court limits will be raised from time to time but I cannot see why circuit court limits should necessarily be followed in a case such as this. I cannot understand why the situation envisaged in subsection (4) could not arise just as easily in the case of a farm with a valuation in excess of £100 and why the procedures in sub-section (4) would not be just as relevant in the case of a farm with a valuation of £101 as they are in the case of a farm with a valuation of £99. Perhaps the Minister would explain why this figure has been inserted.

(Cavan-Monaghan): Could the Minister of State tell us if the expression “permanent improvement” is defined? It does not seem to be defined in the definition section. It may be defined in some other section.

Section 37, page 24, lines 9 to 21.

In section 37——

We are ten sections beyond section 37. We are on section 47.

We are making progress. Section 47 provides that the corporation "may lend to any such person money for permanent improvement purposes on the security herein-after authorised". Does that entitle trustees to borrow for livestock? I understand the words "permanent improvement" to mean improvement of buildings, fields, draining, building of sheds, silage pits, and so on. What is the position of persons who have a life interest in land if they wish to borrow money to enlarge their herd of cows or to buy cattle or for some other purpose? If they want to go into sheep will they get a loan from the ACC? Or if they want to go into pigs will they get money to develop pig farms? Could the Minister enlarge on that section?

I will try to reply to some of the points raised. First of all, the Settled Land Acts which deal with tenants for life provide for trustees. This was a means of protecting the future owner of the property, the present one being merely a tenant for life. Deputy Bruton made a point about where the permanent improvement charges remain with the land. Presumably the permanent improvement will have enhanced the value of the land.

What about debts incurred?

On the point raised by Deputy Enright, stock could be taken as a permanent improvement, anything that is taken to enhance the value of the land. That is a matter for the ACC.

I take it then that "permanent improvement" includes the purchase of cattle, sheep, and so on. They do not sound terribly permanent to me in that their life expectancy is limited to a number of years. Normally they are turned over in the course of three to four years. Then they are sold. They do not strike me as being permanent improvements. If I have the Minister's word on it I am prepared to accept it.

It is a matter for the ACC. I said it could include stock.

Are the ACC the appropriate body to decide this matter? In effect, the decision as to whether something is a permanent improvement directly concerns only one person. That is neither the ACC nor the tenant for life. It is the person who, in the event of the tenant for life dying, will have to meet the cost. He is the only person who is really concerned as to whether or not the improvement is genuinely permanent and therefore something from which he will benefit as well as having to pay for it. It seems to me to be an unsatisfactory situation that the ACC can decide to grant a loan safe in the knowledge that they will get their money back anyway.

I realise that the trustees under the Settled Land Acts or the trustees appointed by the Minister under sub-section (4) will have to satisfy themselves too that the money is being lent for a permanent improvement. The decision as to whether or not the improvements are permanent rests with the ACC. It might be desirable to say in the section, just to make assurance doubly sure and to ensure that the trustees do not act irresponsibly, that as well as the ACC, they shall be charged with satisfying themselves that the improvements are permanent and will, therefore, benefit the person who will inherit in the event of the tenant for life dying.

In the case of the trustees under the Settled Land Acts that may be met in the principal legislation. This sort of responsibility may be imposed on them there, but I should like to be satisfied by the Minister that it is. I wonder if the same thing applies to the trustees appointed by the Minister for Agriculture. The Minister has not answered my point about the £100 valuation limit.

If the ACC were not the authority at the end of the day to make the decision, and if the Deputy is worried about permanent improvements, if livestock were not included, where would the Deputy suggest it should be decided what a permanent improvement is?

I do not get the Deputy's point.

If the Deputy is hesitant about livestock coming under the heading of "permanent improvement", where would he say we should stop?

Buildings or drainage.

Will Deputies make their points and the Minister will reply to them?

(Cavan-Monaghan): It is clear that the object of section 47 is to enable the agricultural Credit Corporation to advance money to a tenant for life. I concede that the general objective behind it is a laudable one because it is undesirable that land should remain derelict for the want of capital but the object must be for permanent improvement purposes. I do not agree that the purchase of livestock comes within the definition of “permanent improvement purposes” or that the ACC have a general discretion. The term “general improvement purposes” is defined in section 37 as follows:

(a) constructing, altering, improving or repairing buildings on the land,

(b) making on the land improvements of a permanent character calculated to increase, or facilitate or conduce to the increase of, the productivity of the land,

I do not think the purchase of live-stock would fall into that category.

(Cavan-Monaghan): The provision set out in (b) in my opinion refers to drainage, the cutting of fences, the clearing of the land and so on. The section also contains the following provision:

(c) any other purpose, which will be or is intended to be of permanent or long-term benefit to the farm business conducted on the land,

(d) paying the costs and expenses of borrowing the money secured by the charge and giving security for the repayment thereof;

What is clearly intended here is the erection of buildings and fences and drainage work which will have a long-term effect. Is there any obligation on the ACC—I do not think there is—to see that the money is spent on permanent improvements? I do not think that is the case and perhaps that would be too great an obligation to place on the ACC. What will happen if the ACC advance £5,000 to the tenant for life to do drainage work and instead of doing that work he goes off to Cheltenham and loses the money? I assume the only remedy the remainderman has is to follow the tenant or his representatives and if he is the kind of man I have described that might not achieve very much because he might not have any money left. I take it this is the case where the ACC will have to make up their minds whether to lend money to the applicant concerned. I assume they would act in a prudent manner and would advance probably only half the money until the permanent improvements were made. I would have some concern for the remainderman if the ACC were to lend money left, right and centre.

The Deputy has answered his own questions.

What we are speaking about in this section is something that the ACC would deal with very infrequently, perhaps only once a year. It is important that there should be provision to allow the trustees or the persons nominated by the President of the High Court or by the Minister for Agriculture to obtain funds for the purchase of livestock for the farm. It appears to me that the trustees will be allowed to obtain money to erect farm buildings and to carry out reclamation work and so on but they will be restricted to borrowing money for these purposes. The ACC will have a charge on the property which is quite normal but the people concerned will not be able to obtain money from any other financial institution to buy livestock. Even though the trustees carry out improvement work they will be restricted from stocking the land because they will not have the money.

Section 37 does not make provision for livestock and I cannot see how anyone says it does. The Minister should make provision for this. The trustees may be forced into a situation where they have to let the land. I accept that land prices for lettings are exceptionally high but I think the land should be used for grazing on behalf of the people concerned. In addition, if land is let on a regular basis, when the remainderman obtains it it may not be in a very good condition. It is essential that there be some permission to include not only permanent improvements but also to make provision for the purchase of livestock.

With regard to the provision that the trustees may, with the consent of the President of the High Court, nominate two suitable persons, I should like the Minister to tell us who is regarded as suitable. Will the people concerned have a knowledge of farming? Perhaps the Minister will tell the House what he means by "suitable" in that instance?

Many points have been raised and answered by the speakers themselves. In section 37 we went through the definition of "permanent improvement purposes" and I shall repeat it for the benefit of the Deputies. I said that the definition of "permanent improvement purposes" is being extended in this Bill. Up to now such purposes were defined as improvements to land and buildings only.

Since other improvements, such as investment in extra machinery or live-stock, may also be of permanent value to the farm business, it is proposed to extend the definition to include any purpose which will be, or is intended to be, of permanent or long-term benefit to the farm business conducted on the land. It could include loans for livestock. That is a matter for the ACC.

I shall deal with a few of the other points raised. Deputy Bruton asked about the £100 limit in subsection (4). He asked why it was included. That limit is there—assuming that the bigger farmers could afford to go to court themselves—to save people under £100 valuation the expense of going to court.

There was a point raised by Deputy Enright about the kind of people to be appointed. I presume they will be people who will be in a position properly to manage the business of a particular farm.

Would they be relations?

They may or may not be. The scope is there for the ACC in this regard.

To the Minister?

To the ACC, sub-section (4).

Subsection (4) says the Minister.

Subsection (3).

The Minister mentioned the word "livestock". I think he was quoting from a brief.

I was explaining the extended definition of permanent improvement which I did already on the section.

But where is that to be found in the Bill?

(Cavan-Monaghan): Section 37.

Under subsection (a), (b), (c) or (d). But we cannot be reverting. We dealt with that section already.

We have travelled a long way from that section.

The Minister explained it today when we were dealing with it. The section explains permanent improvement purposes and is specific in regard to what it does—something tending to be of permanent or long-term benefit to the farm business. I cannot see how one could refer to an animal one may sell in two years' time as being permanent.

An animal bought in 1973 might not be considered, in 1974, to have been of much permanent benefit.

We cannot argue section 37 at this stage. We have left it behind us.

I said that is the intention and Deputies should accept that.

It is something that may lead to a court case eventually. I put it to the Minister that, irrespective of what appears in the Official Report what appears in briefs, White Papers or anything else, what goes into the Bill is what stands up. Therefore if the Minister had the good intention of including livestock in the Bill—and I think he has—it should be included.

Section 37 may have relevance to section 47. But we cannot go back on section 37 now for any additional definitions.

Can we do it on Report Stage?

The Deputy can do it by amendment on Report Stage, if necessary.

I would have some doubts about the wisdom of including livestock. The rights of the remainderman should be protected.

Let us say a farmer has 20 or 35 cows. Something of permanent improvement in such a case would be to increase that number to 50 or 60. Livestock is involved; that is farming, agriculture.

I know, but suppose the loan was initiated in 1973 when cattle prices were very good, when there was a lot of livestock bought. As we all know, the price of cattle collapsed in 1974. If the tenant for life were to die of shock in 1974 when he discovered what happened to cattle prices, leaving the remainderman sitting there with what was allegedly permanent benefit—which might be calves one could hardly sell at that time; as we all recollect the market was not good for cattle that year—the remainderman might have felt he had not been adequately protected under the legislation. That would not have happened in 1974 because this proposal was not law at that time. I am in disagreement with Deputy Enright on this point and we shall have to sort it out before an amendment goes in. Due caution should be exercised by all parties in this matter to preserve the rights of the remainderman.

(Cavan-Monaghan): I agree with the Minister that possibly subsection (c) of section 37 is sufficiently wide to include live-stock because it refers to the business carried on. The general idea behind this section was to enable the ACC to advance money benefiting both the tenant for life and the remainderman. There can be no doubt about that. If the stock does not pass on to the remainderman, as it very frequently and almost certainly does not, I cannot see how advancing land money to the tenant for life to buy stock—which he may sell himself and charge that on the land, saddling the remainderman with it—can be equitable as between the tenant for life and the remainderman. That is something that would need to be examined and something about which the ACC would need to be very careful. It was never the intention in the Bill that money should be advanced to the tenant for life for his purposes alone, for his working of the land, that he could sell out the stock and, when the land passed into the remainderman's hands, would come to him saddled with debts and mortgages in respect of which he reaped no benefit whatever.

The livestock on the farm would not be part of the tenancy. Presumably the tenancy would be of the land and perhaps of immovable property on it. Tenancy would not be extended to a life tenancy of the cattle. Perhaps the Minister could clarify that point.

We have discussed this fairly thoroughly. When this argument was being pursued by Deputies I said at all times that the ACC can— and I am sure they will—examine all the points raised by Deputy Fitzpatrick and others.

(Cavan-Monaghan): But there is no obligation on them to do so.

Well, are they not taking a chance with their money also? Of course they are; that is their business.

They are not taking a chance.

Progress reported; Committee to sit again.
The Dáil adjourned at 8.30 p.m. until 10.30 a.m. on Thursday, 2 February 1978.