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Dáil Éireann debate -
Thursday, 9 Nov 1978

Vol. 309 No. 4

Industrial and Provident Societies (Amendment) Bill, 1978: From the Seanad.

The Dáil went into Committee to consider amendments from the Seanad.

I move that the Committee agree with the Seanad in amendment No. 1:

Section 28: In page 16, lines 33 and 34 deleted and the following substituted:

"28.—(1) A person or a society shall be guilty of an offence if he or it—

(a) contravenes section 5 (1), 5 (2), 6 (1), 7 (2), 7 (3), 8 (1), 12, 14 (2), 14 (13) (b), 17 (2), 23 (2), 23 (13) (b), 27 (2), 29 (1), 29 (3), 29 (4), 30 (1), 30 (2), 30 (3), 30 (4), 31, 32 or 36,".

Deputy Kelly and Deputy Desmond know that this amendment was the result of a point raised by Deputy Kelly on the Committee Stage. Having looked at it, the draftsman decided that there was some tidying up to be done.

I acknowledge the effort that has been made but I must honestly say that the offences aspect of this Bill is still a mess. I will not hold up this Bill or obstruct the Minister of State——

The Deputy will keep to the amendment.

Yes, I am. Everyone seems to be in very poor form this morning. There must be some very sore heads over there.


I am in great humour this morning.

It must be the headline in The Irish Times.

Deputy Kelly on the amendment.

The people will be giving a verdict of 28 seats against Fianna Fáil, for gross slander and fraud——

There is nothing in the amendment about that.

That is what they are afraid of. For a few minutes I want to deal with the long list of sections a contravention of which will be an offence when this Bill becomes law. The list is a good deal longer than it was, and rightly so, because in the original state of the Bill sections and not subsections were referred to and some mandatory duties imposed on registrars and on the Minister himself, which were capable of being neglected in contravention of the section, theoretically would have exposed the Minister or registrar to prosecution, which obviously was not intended. That aspect of this section has been improved. On the other hand, this is still a drafting disaster and I will briefly explain to the House why this is so.

In section 14 (1) a duty is laid on officers, members, agents, or servants of a society, the affairs of which are being investigated under section 13, to produce to the inspector all books, accounts, deeds, records or other documents and so on. Obviously, that is a mandatory requirement. Yet in section 28, which we are now amending, there seems to be no reference to the offence of failure to produce. There is reference, on the other hand, to a failure to supply. I know that the same thing is meant but we are talking about a situation in which a counsel or solicitor defending a society or officer on indictment or on a summary charge would be looking closely at such matters. The draftsman should have made sure that the words in the section which lays the duty and the words in the section which imposes the penalty and which constitutes the offence are the same. This is a sloppy way of doing this job. I can see quite clearly what is intended but it should not be necessary to have to interpret it in this way.

The same section, 14 (1), requires the officer to give the inspector all assistance. This presumably includes answering questions; that must be the principal component of the idea of giving assistance. Yet this component is particularly singled out in the second subsection and is there declared to be an offence under section 28. Are we to take it that other forms of refusal to give assistance besides refusing to answer questions or to produce documents, if there can be other forms, will not be penalised? They seem to me to fall outside the provision of subsection (2) and equally they seem to fall outside the provision of section 28.

Exactly the same kind of thing could be said about section 23. Again the word "produce" is used instead of the word "supply". Finally, section 35 (2) makes it an offence punishable on summary conviction to a fine of £500 or less to fail to comply with the provisions of section 35 (1). Why is this offence separately listed? It seems to be the only one in this Bill, which contains a lot of potential offences, in which a separate subsection is included with a separate penalty provided.

These are points which suggest that this drafting is still untidy. While we will not oppose the section and we acknowledge that an effort has been made, we feel that a much better effort could have been made.

I support the drafting amendments. We received some advance indication of these amendments a few days ago and have considered them since. It appears that the Bill has had an area of ambiguity removed and it is certainly strengthened. This amendment is sensible and I am glad that these matters were discussed in the Seanad.

I should have added that the long list which it is now proposed will constitute subsection (1) of section 28 does not include subsection (1) of section 14 and subsection (1) of section 23. Turning to section 28, a failure to supply books, accounts and so on in paragraphs (c) and (d) is referred to sections 11 and 21 and sections 13 and 22, not to sections 14 and 23. I understand there is some kind of drafting reason for it but I do not grasp that reason and it is another instance of a rather messy job.

While I appreciate the points made by Deputy Kelly, the draftsman has said that section 28 (1) (a) as amended and section 28 (1) (d) will cover the offence created in section 14 (1) and section 14 (2). He has said that it is quite acceptable, quite enforceable and will stand up in a court of law. Regarding the points made on section 35, the reason for having separate mention of a society under subsection (2) is that a society cannot be indicted and therefore it must be a summary conviction.

Question put and agreed to.

I move that the Committee agree with the Seanad in amendment No. 2:

Section 28: In page 17, lines 17 to 24, subsection (3) deleted and the following subsection substituted:

"(3) Where an offence under this Act is committed by a body corporate or by a person purporting to act on behalf of a body corporate and is proved to have been so committed with the consent or approval of, or to have been facilitated by any wilful neglect on the part of any person who is an officer of the body corporate, that person shall also be guilty of the offence."

This is to rectify loose drafting which we discovered following a point made by Deputy Kelly. Reference was made to the word "official" and, having looked at it again after the Committee Stage here, we decided before going to the Seanad to make the amendment.

Question put and agreed to.

Amendments Nos. 3 and 4 are related and may be taken together.

I move that the Committee agree with the Seanad in amendment No. 3:

Section 30: In page 18, lines 4 to 13, subsection (4) deleted and the following subsection substituted:

"(4) (a) The income and expenditure account and balance sheet of a society shall be in such form and shall contain such particulars as the Minister may specify by regulations, either generally or with respect to a specified class or classes of societies, denoted by reference to such matters as the Minister thinks fit.

(b) Unless the Minister otherwise specifies in the regulations aforesaid, the income and expenditure account and the balance sheet of a society for any financial year shall include corresponding particulars for the preceding financial year.".

This is to accommodate a suggestion made by Senator Alexis FitzGerald, who is very knowledgeable, perhaps the most knowledgeable man regarding company law in either of the Houses of the Oireachtas. The amendment was made to accommodate the Senator. It brings the section of the Bill in line with the provisions in the Companies Act. As originally drafted the Bill would have been similar to the section of the Building Societies Act. It also gives power to the Houses of the Oireachtas to debate if they wish.

Question put and agreed to.

I move that the Committee agree with the Seanad in amendment No. 4:

Section 30: In page 18, between lines 15 and 16, the following subsection inserted:

"(6) Every regulation made under this section shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either such House within the next 21 days on which that House has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to anything previously done thereunder.".

Question put and agreed to.

I move that the Committee agree with the Seanad in amendment No. 5:

Section 36: In page 19, between lines 13 and 14, the following new section inserted before section 36:

"36.—(1) An investment trust company shall not accept or hold deposits.

(2) Notwithstanding subsection (1), an investment trust company incorporated before the 4th day of October, 1978, and which on or before that date had accepted or held deposits shall not hold deposits after the end of the period of two years commencing at the passing of this Act.

(3) In this section ‘investment trust company' has the same meaning as in the Central Bank Act, 1971."

This is the introduction of a new section in which we include investment trust companies which were not previously included. Under section 7 (4) of the Central Bank Act, 1971, an investment trust company was exempted from the scope of section 7 (1) of that Act. They could carry on a banking business without the need to hold a banking licence and without the need to maintain a deposit in the Central Bank. This was a loophole and we are now closing it because we have reason to believe it might happen that an industrial or provident society would direct their business into an investment trust company and get away with it. It is necessary for the Bill to close the loophole.

I support this amendment which closes what was a very evident loophole. Undoubtedly there was an opportunity open to investment trust companies to effectively sidestep. The Central Bank acted appropriately in advising the Minister and the Minister has acted effectively in introducing this amendment. Those who may have intended to avail of the loophole which was so evident will certainly not be able to do so now.

Question put and agreed to.
Amendments reported and agreed to.