Sale of Goods and Supply of Services Bill, 1978: Committee Stage (Resumed).
Question again proposed: "That Section 18 stand part of the Bill."
Before we reported progress I was dealing with subsection 2 which reads:
(2) A provision in a guarantee which purports to make the guarantor or any person acting on his behalf the sole authority to decide whether goods are defective or whether the buyer is otherwise entitled to present a claim shall be void.
The Bill is an excellent piece of legislation but what concerns me in relation to it in general and in relation to this subsection in particular is that we are letting pass an opportunity of legislating in a way that would avoid the necessity of all these cases coming before the District or Circuit Court. The ordinary man in the street is anxious to avoid if possible the cost of going to court. As I said earlier, there is no civil legal aid available for matters such as this. This means that a person bringing forward a case is taking the risk of losing the case and of having to cover the expenses. We should be trying here to bring about a situation in which some person such as the Director of Consumer Affairs, would act as an arbiter on matters arising in connection with the sale of goods.
There are a number of examples that we could follow in this regard. For instance, there is provision for an arbiter in respect of redundancy payments. If there were similar provision in this Bill, a person who still held a grievance after the arbiter's decision would have redress to the Circuit Court. That would be a desirable situation. The only way in which people who have grievances in regard to goods purchased can draw attention to their situation is by writing to the newspapers, to the Department or to their Dáil Deputies. In other words, there is no real redress for them.
The area of the building societies is one in which there is provision also for an arbitrator. The Register acts in this capacity in the event of disputes. In regard to redundancy cases, a full court hearing is not involved but there is provision for a full hearing to be held with the person concerned being entitled to legal representation. The employer, too, is entitled to be represented legally. The whole process is quite a simple matter, regardless of whether there is legal representation. There is a full hearing of the case, a decision is made and an award granted which is binding legally. Because these hearings are informal, there are absent some of the features which might be offputting for individuals in a more formal court hearing. They are not as nervous going into them but nevertheless they achieve the ultimate aim of getting grievances heard, sorted out and finalised. Here there is an opportunity to provide a similar remedy.
All we are doing now is leaving a situation where the only remedy a person has is to go to court. This will lead to a considerable amount of additional litigation and our courts are slow enough at present without having this further legislation thrust upon them. We can appoint more judges if that is what the Government desire but I am concerned about the interests of the consumer. The vast majority of consumers are shy about going to court and when looking for redress they take an easier course of action such as writing to newspapers. It is good that such a remedy is available. While this is good and desirable it is not sufficient and we should certainly have this further redress whereby an aggrieved person can go before somebody such as the Director of Consumer Affairs who would have the power to hear witnesses, take evidence and make decisions which would be binding and all of which would be subject to appeal if either party were not satisfied at that stage.
Are we still on section 18?
This would appear to be more relevant to section 19. I want to avoid having the same debate again on section 19.
In this section we are dealing with guarantees and we could talk for a month about the points Deputy Enright is making. It is one of the things I am very conscious of. There is a tremendously slow process that the ordinary consumer in the street has to go through in order to get his rights under our court system. Discussions are in progress between officials of my Department and of the Department of Justice to see if we can arrive at some sort of system of small claims courts to deal with these claims in a non-court atmosphere so that hearings would be held on a regular basis and people can present their cases more easily. We could talk about the merits or demerits of that. Subsection (2) is more or less saying that no man can be a judge in his own case. We are correcting the law as it was up to now when the supplier or seller could include a provision in a guarantee that he would be the person who would decide on the merits of a case if something went wrong. It was up to him to say whether it was dangerous or defective and so on. In that way he had the opportunity to get out of his responsibilities to the consumer. In this subsection we are making sure that cannot happen and that is something that all of us agree with.
Would it not be possible at this stage to include the provision I am speaking about? I accept the Minister's good will on it but what will happen here is that we will pass this section and this Bill and it will become law. Then at a later stage in order to encompass the points we are discussing now we will have to introduce amending legislation which will take time. A lot of people will have to suffer the teething troubles of this legislation and they should not be asked to do that until after discussions are finalised between the Minister's Department and the Department of Justice. Now is the time for discussions. These matters should be dealt with now and put into this legislation. What I am suggesting would be relatively simple. There are numerous examples of powers appropriate to this type of case. All we are doing here is throwing the situation back to where people will have to take their chance in court. In this instance we should be endeavouring to appoint a Director of Consumer Affairs who would act as an arbitrator and after he has decided in a relatively inexpensive process a person can, if he is still aggrieved, take his case to court at that stage.
Question put and agreed to.
SECTION 19.
Amendments Nos. 8, 9, 10, 11, 14 and 36 are similar and may be discussed together.
I move amendment No. 8:
In page 11, subsection (1), line 3, to delete "Court" and substitute "court".
All the other amendments are based on this. The use of the word "Court" as a proper noun suggests that a particular court the title of which is not specified in the Bill is meant. The intention is, however, that the court in each instance would be the court of competent jurisdiction, for example, the District Court, the Circuit Court, the High Court or the Supreme Court, as appropriate. Therefore, we decided to introduce this amendment so that unnecessary ambiguity on this point would be avoided.
Amendment agreed to.
I move amendment No. 9:
In page 11, subsection (2), line 9, to delete "Court" and substitute "court".
Amendment agreed to.
I move amendment No. 10:
In page 11, subsection (2), line 10, to delete "Court" and substitute "court".
Amendment agreed to.
I move amendment No. 11:
In page 11, subsection (2), line 12, to delete "Court" in each place where it occurs and substitute "court".
Amendment agreed to.
Question proposed: "That section 19, as amended, stand part of the Bill."
Lines 6 and 7 read:
In this subsection, "buyer" includes all persons who acquire title to the goods within the duration of the guarantee.
One of the things that interests me is the period of the duration of the guarantee. Let us take the example of a television. If somebody buys a television and discovers something is wrong with the colour and brings it back to have it repaired it may be going back and forth from the supplier to the manufacturer and so on for a number of months. At some stage the person who has purchased the television set suddenly realises that the period of the guarantee—12 months is normal—has expired while the repairs were being carried out. Is the period of the guarantee suspended while the television set is with the manufacturer?
Let me give an example. I have seen cases where a person purchases an item and leaves it back to have some small repairs carried out. In the meantime the person finds that the period of guarantee has run out while the item is with the manufacturer and at the end of 12 months he finds that he has been led up the garden path. When he gets the item back the guarantee period has elapsed and he cannot take any action in the matter. Will the Minister consider this matter and try to ensure that people are not caught in such a situation?
As I understand it, the situation envisaged by the Deputy where a person buys a television set with a year's guarantee and where he is being put off, he would be covered under that section. I should imagine that the most common item a person would get rid of within the guarantee period would be a car. If a person buys a car with a six months' warranty or guarantee and if he sells it to another person after three months, that second person would have the same rights as if he had bought it in the first case. On the point made by the Deputy with regard to a television set, my understanding of the section is that although the repairs took longer than the guarantee period they would be included under the guarantee in that they came to the notice of the manufacturer within the guarantee period and they were not repaired by him as they should have been. In other words, the manufacturer would lose out if he decided not to repair them until after the guarantee period.
I accept the point made by the Minister to some extent. However, I am concerned that there is no built-in protection to ensure that the consumer is safeguarded for the period the item in question is with the manufacturer.
The consumer would have implied rights regardless of his rights under guarantee. He would have rights under the provision stating it must be of merchantable quality.
It may be necessary to insert a clause to cover that situation. I am sure the Minister is aware that during the years manufacturers have tried to avoid carrying out repairs. I know consumers would have rights at common law. The Minister thinks they will have to rely on their common law rights as distinct from rights under the guarantee.
The consumer will have implied rights under this Bill apart from his rights under the guarantee section.
The situation with regard to guarantees has caused me concern because I have seen many examples of people having to wait for long periods——
If the Deputy looks at subsection (2) he will see that it allows the court to extend the time and this would take into account the point the Deputy was making.
I accept that to some extent but it is at the discretion of the court as distinct from being a statutory right. However, I will look at this before Report Stage.
Question put and agreed to.
SECTION 20.
I move amendment No. 12:
In page 11, line 23, to delete "after the lapse of a reasonable time" and substitute "without good and sufficient reason".
This section amends section 35 of the 1893 Act by extending the time-limit before a buyer is deemed to have accepted the goods. The advantage thereby given to the buyer is that prior to acceptance of the goods, breach of the implied terms can, where appropriate, be treated as breach of condition with the right of rescission, whereas after acceptance it must be treated as breach of warranty when the right to rescind the contract is lost. Acceptance is deemed to have occurred when, inter alia, “after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them”. A United Kingdom Appeal Court decision—Lee-v-York Coach and Marine 1977, RTR 35—ruled that a consumer who had not “rejected” a defective motor car during the period of six months while attempts were being made to have it mended or to persuade the garage to acknowledge their legal obligations, meant that the consumer had “accepted” the car. She was, therefore, unable to reject it and claim back her money. She was entitled only to damages for breach of warranty, the cost of making it roadworthy. It is felt that this operates against the interests of consumers and that it would improve the position if the text were amended to refer to retaining the goods “without good and sufficient reason” rather than “after the lapse of a reasonable time”.
This is a worthwhile amendment and I am in agreement with it.
Amendment agreed to.
Question proposed: "That section 20, as amended, stand part of the Bill".
This is a worthwhile section and the amendment has strengthened it. Will the Minister state if deposits will be necessary?
I am sure the Minister has come across examples of high pressure salesmanship. In many instances books are left at houses and the person has to return them within a specified period if he does not wish to accept them. There is also the situation where a person calls to collect the goods. In some instances the consumer may not get an opportunity to tell the seller that he does not want them. Is the Minister satisfied that this section covers a situation where items are left at houses?
There is a special section, No. 44, dealing with all of that and perhaps it would be better to discuss it on that section.
Question put and agreed to.
SECTION 21.
I move amendment No. 13:
In page 11, to delete lines 42 to 57 and substitute the following:
"(2) Where—
(a) the buyer deals as consumer and there is a breach of a condition by the seller which, but for this subsection, the buyer would be compelled to treat as a breach of warranty, and
(b) the buyer, promptly upon discovering the breach, makes a request to the seller that he either remedy the breach or replace any goods which are not in conformity with the condition,
then, if the seller refuses to comply with the request or fails to do so within a reasonable time, the buyer is entitled:
(i) to reject the goods and repudiate the contract, or
(ii) to have the defect constituting the breach remedied elsewhere and to maintain an action against the seller for the cost thereby incurred by him.
(3) The onus of proving that the buyer acted with promptness under subsection (2) shall lie on him.".
This is purely a drafting amendment and the meaning of the subsection will not change as a result. The subsection contains one of the important innovations in the Bill, that is, the consumer's right to request the seller to replace defective goods and, if the seller fails to do so, to reject the goods. However the subsection is rather long-winded—116 words in all, and is difficult to follow at present. Since it is a measure of direct interest to the buyer, dealing as consumer, it was felt that its presentation and layout should be simplified to make it more easily understandable. This has been achieved by breaking down the subsection as shown in the amendment and creating two subsections from the existing one.
Amendment agreed to.
Question proposed: "That section 21, as amended, stand part of the Bill."
Does this section afford a person sufficient power to bring action for damages also? What would be the position of a person who obtained some item, let us say, a motor car, say some representative of a firm who would be out of work perhaps for a number of days or weeks? That is one example only, of say, car hire, loss of wages, but how far along the line would these actions for damages extend? Does the Minister feel that subsection (5) covers that situation sufficiently?
It does because subsection (5) covers continuing damage as well. It does not prevent the buyer from taking an action for the same breach of warranty if he has suffered further damage as a result of it.
I presume it would all be together in the one action.
No, not necessarily, it could all be together in one action but, after taking one action, if the buyer suffered a loss or damage again after that action, he could take another action for the continuing damage.
Question put and agreed to.
SECTION 22.
I move amendment No. 14:
In page 12, line 43, to delete "Court" and substitute "court".
I do not think there is any need for me to repeat myself; I explained this before.
Amendment agreed to.
Question proposed: "That section 22, as amended, stand part of the Bill."
This section deals with the actual sale of goods whereas section 18 dealt with the exclusion of the buyer's rights under guarantee. Subsection (2) of this section says:
An express condition or warranty does not negative a condition or warranty implied by this Act unless inconsistent therewith.
Is there any danger of the buyer's rights under the guarantee being contradicted here by the exclusion of implied terms and conditions? I do not think so but I am not happy about it.
They are not contradictory either?
The Minister is happy about that?
Question put and agreed to.
SECTION 23.
Question proposed: "That section 23 stand part of the Bill."
I have a query in connection with a conflict of laws in connection with a person in Ireland who might purchase goods outside the country; what powers have our courts in regard to this matter?
The courts in this country?
Yes. Could the Minister elaborate on this. I am thinking of the case of a person who purchases goods outside Ireland. Such a person obtains the goods, brings them back here when perhaps our laws would be disadvantageous to him. If so, do I take it that it is his bad luck in those circumstances. This is something that may warrant elaboration on the part of the Minister's Department, perhaps something in the form of a booklet explaining the position as it will affect people who purchase goods outside the State and who bring them back here for sale. The law could be very disadvantageous to such people, who could find themselves with actions being taken against them here in Ireland. Perhaps the Minister should consider the issue of some form of booklet elaborating on this and the next section. Certainly I am not clear on them myself.
We decided at the very beginning that this was a very legal Bill and that there definitely would be need for the issue of a precise document by somebody, probably by the Director of Consumer Affairs, in order to educate the public on their rights under the Bill. Naturally the sections with which they would be particularly concerned would have to be spelled out in detail. All of the passages that would not be clear from an ordinary person's reading of the Bill would have to be explained in whatever explanatory booklet was issued after the Bill became law. That would probably take into account the point made by the Deputy about consumers not being clear on various parts of it. But they cannot exclude their rights under our law by referring to their rights under the law of another country. It would prevent the parties to a contract from providing that the law of some other country which did not imply certain conditions, warranties and contracts for the sale of goods should govern the contract.
For clarification purposes and also for Report Stage may I take it then that if I buy goods in some continental country and bring them back in here, I buy them under the laws of that country and any mistakes I make before bringing them back here are my responsibility? If I buy goods in another country and bring them here I expect that I am responsible for them and would be faced with this legislation if they are found to be defective.
I probably misled the Deputy. If the goods are purchased outside Ireland the transaction could not be subject to the provisions of this Bill.
Surely they are if I tried to sell them in Ireland?
If one tried selling them in Ireland one would not be a consumer in the first instance.
I take it that the Bill will be important for importers and manufacturers. I appreciate that it is consumerorientated, but what is the position in relation to a person who brings in goods? A person may purchase a large quantity of items and after discovering that they are substandard might try to dispose of them. Do I take it that they can be caught under this legislation? Will a consumer have an action against a person who brings such goods into the country?
Some of our importers should be made aware of this provision.
Question put and agreed to.
SECTION 24.
Question proposed: "That section 24 stand part of the Bill."
In the course of the Second Stage Debate I touched on the situation in regard to the sale of livestock. The Minister is aware that the livestock breeders group refer to the sale of certain items in which the seller's skill was not relied upon. Apparently, a situation is likely to develop where some of our livestock if sold in Ireland may be subject to certain difficulties because of the Bill. Similar terms and conditions do not apply at auctions in Britain or on the Continent. I should like to hear the views of the Minister on this matter.
Exporters will have the right to exclude their liability if they get the agreement of the person they are exporting to. In order to try to overcome the problems of the bloodstock people I have arranged to meet them to discuss the matter.
I should like to thank the Minister for her interest in this matter. The Act passed in England in 1973 did not affect bloodstock sales. Some sections of the 1977 Act provided that no unfair terms be introduced in the written conditions of sale. Some of the conditions of sale at auctions have been amended to comply with that Act. The bloodstock industry here are afraid that a person, after making a purchase here, might try to get out of that purchase using the provisions of this Act. Will the Minister look into this matter?
Question put and agreed to.
Section 25 agreed to.
SECTION 26.
The next amendment is No. 15 in the name of the Minister. Amendment No. 16 is consequential and Nos. 17 and 18 are related. Those amendments may be discussed with amendment No. 15.
I move amendment No. 15:
In page 14, subsection (1) (b), line 8, to delete "or known".
These four amendments are being introduced for the same reason as that applying to the proposed amendment to section 12 (2) of the Table to section 10, implied undertakings as to title in the case of sale of goods. It is considered to be as desirable in a hire-purchase situation as in a sale of goods, that an absolute obligation be placed on the owner of the goods involved—in the case of hire purchase this will be the hire purchase company—to disclose to the hirer any charge or encumbrance there may be on the goods. That amendment was agreed to by the Opposition. Again, as in the sale situation, this obligation to disclose should also apply where the hire purchase company will be transferring to the hirer only a limited title to the goods.
Amendment agreed to.
I move amendment No. 16:
In page 14, subsection (1) (b), line 12, to delete "or known".
Amendment agreed to.
I move amendment No. 17:
In page 14, subsection (2) (a), line 18, to delete "and not known to the hirer".
Amendment agreed to.
I move amendment No. 18:
In page 14, subsection (2) (b), line 27, to delete "or known".
Amendment agreed to.
Section 26, as amended, agreed to.
SECTION 27.
I move amendment No. 19:
In page 14, between lines 43 and 44, to insert the following new subsection:
"(3) A reference to goods on a label or other descriptive matter accompanying goods exposed for sale or hire may constitute or form part of a description.".
This section deals with the letting of goods by description and its provisions are a conceptual parallel with those in section 13 of the Table to section 10 of the Bill, which deals with the sale of goods by description. However, as in the case of a sale of goods by description, it is necessary, in order to give real effect to section 27 (2), to provide that, in a hire purchase situation, a reference on a Table or a notice with goods may be, or form part of, a description for the purposes of the section. The proposed amendment achieves this object by inserting in section 27 a new subsection corresponding with section 13 (3) of the Table to section 10.
Amendment agreed to.
Section 27, as amended, agreed to.
SECTION 28.
The first amendment is amendment No. 20 in the name of the Minister. Amendments Nos. 21, 23, 25 and 27 are consequential on amendment No. 29 and may be discussed with amendment No. 20.
I move amendment No. 20:
In page 15, subsection (3), line 9, after "negotiations" to insert "(as defined in section 35)".
This is one of a series of amendments necessitated by the proposed removal from this section of subsections (6) and (7) and their re-constitution as a new section 35. Since the term "antecedent negotiations" will, under a later amendment, now be defined in the new section 35, and since it is the first instance in the Bill where the term is used, it is necessary to provide in section 28 (3) a "signpost" as to whether the definition of the term is given.
Amendment agreed to.
I move amendment No. 21:
In page 15, lines 26 to 44, to delete subsections (6) and (7).
Amendment agreed to.
Section 28, as amended, agreed to.
Sections 29 and 30 agreed to.
SECTION 31.
I move amendment No. 22:
In page 16, subsection (1), line 30, to delete "Act" and substitute "Part".
This is a drafting amendment which relates specifically to hire purchase situations and not to the sale of goods and supply of services and therefore the word "Part" is more apt than the word "Act", since the only relevant conditions and warranties are those set out in the particular part of the Bill.
Amendment agreed to.
Question proposed: "That section 31, as amended, stand part of the Bill".
Would the Minister explain a little further how the amendment is going to affect the section? I am not quite clear what the Minister is getting at.
What I was saying there was that, in the Bill as it stands, that particular line has the word "Act", but the provisions of the section are for the hire purchase section of the Bill only. They are not concerned with supply of service or sales of goods. We decided to make it absolutely clear by taking out the word "Act" and putting in the word "Part".
Question put and agreed to.
SECTION 32.
I move amendment No. 23:
In page 17, line 3, to delete "section 28 (6)" and substitute "section 35".
Amendment agreed to.
I move amendment No. 24:
In page 17, lines 4 to 6, to delete all words from and including "and shall" in line 4 to the end of the section and substitute:
"and that person and the owner shall, jointly and severally, be answerable to the hirer for breach of the agreement and for any misrepresentations made by that person with respect to the goods in the course of the antecedent negotiations.".
Amendment agreed to.
Section, as amended, agreed to.
SECTION 33.
I move amendment No. 25:
In page 17, line 12, to delete "section 28 (6)" and substitute "section 35".
Amendment agreed to.
Section, as amended, agreed to.
SECTION 34.
I move amendment No. 26:
In page 17, line 15, to delete "warranty" and substitute "an implied condition".
The terms of a contract are divided into conditions and warranties. A condition is a vital term of a contract, going to the root of the contract, a breach of which gives the injured person the option to rescind the contract and claim damages. A warranty is not a vital term in a contract, but one which is merely subsidiary, a breach of which gives no right to rescind but only an action for damages. Section 13 deals with an implied condition, not a warranty. This amendment is aimed at rectifying the reference to a warranty in section 34. It is proposed to alter the marginal note to section 30 accordingly by substituting the words "implied conditions" for the word "warranty" when the Bill is reprinted, as amended in Committee.
Amendment agreed to.
I move amendment No. 27:
In page 17, line 18, to delete "section 28 (6)" and substitute "section 35".
Amendment agreed to.
I move amendment No. 28:
In page 17, line 19, to delete "seller." and substitute:
"seller; and the owner shall, jointly with that person and severally be answerable to the hirer for breach of the implied condition.".
Section 34, as it stands at present applies the condition that the motor vehicle must be free from defects—that is under section 30 (2)—only to the dealer and not to the finance house. Because of this, section 34 is inconsistent with section 14, since under the latter section the finance house is enjoined to the implied conditions contained in section 13 (2). Accordingly, it was felt that section 34 should be amended, to make the finance house, as well as the dealer, liable for breach of the implied conditions under 13 (2).
I am glad that the finance house will share some responsibility. It has been a matter of some concern to me. People have been getting very unsatisfactory motor cars and have been able to obtain finance without any proper investigation as to the quality of the vehicle or its suitability. After relatively short periods, the motor car has been found to be unsatisfactory or useless. Large instalments are due on it and the finance houses are taking action against the buyers. Hire purchase companies have been suing them and they, in turn, have had to sue the garages, which is causing a great deal of problems. I am glad that the hire purchase companies will have to be responsible in this manner. I would ask the Minister two questions: first, does this apply to new and second-hand cars and, secondly, is the Minister satisfied that the same responsibility will fall on the shoulders of the people who are involved in the motor trade only on the sideline and who are turning over money without really providing services, as on the highly reputable and honest dealers with established businesses?
The answer to the first part of the question is yes, that new and second-hand cars are included. The answer to the second part is yes. Genuine motor dealers will welcome the decision; it will ensure that those who have always given a proper service—the majority of them anyway—to the people will be enjoined with that type of dealer to whom the Deputy refers, who will also be included and will not be able to get away from providing services. Very few of these people may remain on in business as a result.
Amendment agreed to.
Question proposed: "That section 34, as amended, stand part of the Bill".
I take it that the hire purchase company will now have the actual responsibility for ensuring that the motor vehicle is in fact roadworthy and value for money?
That, in fact, the obligation rests upon them?
That they cannot escape responsibility?
Question put and agreed to.
NEW SECTION.
I move amendment No. 29:
In page 17, before section 35, to insert the following new section:
35.—(1) In this Part "antecedent negotiations", in relation to a hire-purchase agreement means any negotiations or arrangements with the hirer whereby he was induced to make the agreement or which otherwise promoted the transaction to which the agreement relates; and any reference to the person by whom any antecedent negotiations were conducted is a reference to the person by whom the negotiations or arrangements in question were conducted or made in the course of a business carried on by him.
(2) For the purposes of this Part any negotiations conducted or arrangements or representations made by a servant or agent, if conducted or made by him in the course of his employment or agency, shall be treated as conducted or made by his employer or principal; and anything received by a servant or agent, if received by him in the course of his employment or agency, shall be treated as received by his employer or principal.
In this subsection `representations' includes any statement or undertaking, whether constituting a condition or a warranty or not, and references to making representations shall be construed accordingly.
Amendment agreed to.
SECTION 35.
Question proposed: "That section 35 stand part of the Bill".
Could the Minister elaborate on the old section 35?
It is comparable with section 23 dealing with the sale of goods. The section has the effect of saying that the use of a choice of law clause to select a foreign law for a hire purchase agreement that would otherwise be governed by Irish law is ineffective to displace the operation of sections 26 to 29 and section 31.
Question put and agreed to.
Amendment No. 29a not moved.
SECTION 36.
I move amendment No. 30:
In page 17, lines 34 to 36, to delete all words from and including "and" in line 34 to the end of the section and substitute the following:
"(c) that, where materials are used, they will be sound and reasonably fit for the purpose for which they are required, and
(d) that, where goods are supplied under contract, they will be of merchantable quality within the meaning of section 14 (3) of the Act of 1893 (inserted by section 10 of this Act)"
Where materials are used in the provision of a service they will normally undergo a change through the performance of the contract, for example, sand and cement used in the building of a wall. However, in certain contracts for services, goods supplied under the contract may not undergo a change in performance of the service, for example, where a fridge is installed. Thus a consumer who is supplied with goods in a contract for services is in the same position as a consumer who goes out and buys them himself. Thus, it is logical to ensure that goods so supplied are treated in the same way as goods sold and therefore, to provide that they should be of merchantable quality. The purpose of the amendment is to strengthen the existing section.
Amendment agreed to.
Question proposed: "That section 36, as amended, stand part of the Bill."
Part IV of the Bill relates to the supply of services and section 36 relates to implied undertakings in relation to the quality of service. It is not píous hopes this section deals with. Let us take, for example, the conversion of a central heating system and a person installing a back boiler. We have been told about cowboys and others installing those and houses being destroyed. There are many people who believe they have the necessary skill to do work of this nature but they have not the expertise to do something technical of this nature and they may or may not use the materials. Has the Minister any safeguards for somebody who depends on the skill of one of those people? What safeguard have I if I get John Brown to come into my house to do a job of this nature but he does not know anything about it? What remedy have I if he blows the side of my house into the next garden? If I have any remedy, against whom have I got it? Does the Minister feel it is necessary to have some type of remedy provided? There will be an action against somebody but where do I go if a neighbour of mine has not the means to put back the side of my house, which has been blown away?
The point the Deputy made about the back boiler is particularly relevant because we have had a lot of questions asked about the type of people who have installed back boilers. The Minister for the Environment and my Minister have, publicly on various occasions, implored people to ensure that they only get somebody who has a perfect knowledge of what he is doing to do a job like this. In the case of something going wrong it will be a matter for the courts to decide whether or not the person was competent to do the particular job. If something goes wrong the consumer will have the common law remedy, damages for breach of contract. No matter how informal an agreement is reached between the Deputy and John Brown, as he mentioned, for carrying out services in return for payment, it is a contract and, therefore, the Deputy's rights will have to be protected.
I accept this and I hope that most people will fully realise that in having work of this nature carried out the onus is on the individual who wishes to instal a back boiler to take care, in regard to the person who is going to do the work, that he gets somebody who is competent to do the job. Can the Minister see any way of strengthening the section?
I cannot because we have gone further than they have gone in our neighbouring country across the water, who have not included services at all.
In the event of the Minister receiving a number of complaints in regard to the installation of a back boiler by some company or an individual, has the Director of Consumer Affairs any power to ensure that the person is prevented from continuing such work?
He would not have any power but he would have to investigate any complaint brought to his attention.
Regarding the supply of services, a garage owner, for instance, who sells a car will be responsible under this legislation for ensuring that the vehicle is road worthy and should not be responsible for somebody being injured. If he fails to comply with that provision he may find himself having to pay a very heavy fine. During last winter I witnessed some of the dangerous effects of negligence in regard to the installation of back boilers. The point I am making is that in this legislation we are to allow people to provide some services in respect of which they will not be faced with the same type of responsibility that applies in respect of people providing other services.
In the event of something going wrong the consumer, whether he is buying a car or having a back boiler installed, has a remedy in law.
If, say, somebody installs a back boiler in which there is afterwards a serious explosion, what remedy can the consumer avail of? If somebody is injured by the explosion, what form of redress has he?
The normal laws governing negligence would apply in such a case.
What concerns me is that the person providing a service of this kind may not have any means and this could leave the aggrieved person with very little hope of recovering damages. There would not be much point in obtaining a decree against somebody who could not pay the amount involved. Is there any redress in the event of injury?
The section relates to the question of necessary skill only. It does not provide for remedies.
All of us have read from time to time the many letters from readers to the national newspapers regarding the sort of cases I have mentioned. Would the Minister not agree that the Bill should include a specific type of remedy to cover such cases?
In accordance with this section if, say, John Brown installs a back boiler with which something goes wrong subsequently thereby causing damage, injury or loss of life and if he is without means, the situation would be that the party concerned would not be able to obtain damages. However, the same sort of situation would apply in any other area where a person would not have any means. Consequently, such a situation would be a matter for the Department of Justice.
Perhaps the Minister would consider this question between now and Report Stage.
Question put and agreed to.
SECTION 37.
I move amendment No. 31:
In page 17, subsection (2), line 45, to delete "Act" and substitute "Part".
The reason for this drafting amendment is similar to that for the proposed amendment to section 31 (2). In this case we want to make it clear that subsection (2) of section 37 relates only to implied terms in a contract for the supply of a service and not to a sale of goods or to a hire purchase situation. We are deleting the word "Act" and substituting the word "Part".
Amendment agreed to.
Amendment No. 32 is consequential on the proposal to delete section 39. The Minister will move the amendment and we can then discuss with it the proposal to delete section 39.
I move amendment No. 32:
In page 18, line 18, to delete subsection (7).
Line 18 contains subsection (7) of section 37 and states that this section is subject to section 39. Perhaps I should discuss first the proposed deletion of section 39. This section provides that, in the case of international contracts for services, parties to such contracts will be free to negative or vary their implied obligations under section 36 of this Bill.
The Irish Insurance Association have objected very strongly to this section during the past few months. They argue that it would have the effect of creating an unfavourable distortion of competition for their business. They maintain that foreign firms selling insurance in Ireland could do so with less statutory obligations regarding their contracts than would be the case of firms selling here at home.
While it was accepted that the IIA had a valid point, it was decided that the position of the exporter needed to be looked at and the broader implications of this section reviewed. It was felt indeed that strong representations opposing a section by perhaps the major sector likely to be affected by it warranted a comprehensive reappraisal. The same applied, it will be remembered, in the case of section 13.
The original decision to include this section was prompted by a comparable provision in relation to goods at section 24 where the interests of the Irish exporter of goods are protected by not tying his hands in relation to international contracts. The fact that the importer is also freed under section 24 is not considered significant because the vast majority of cases of the importation of goods would be trade deals where the importer, as a distributor, would be answerable to the buyer for the rights conferred on the latter by the Bill. This point is important because the protection of the exporter's position is incidental to the consumer orientation of the Bill and is justified only in so far as the consumer's position is not jeopardised.
A different situation, however, is found to arise in relation to section 39. Primarily, it is not unusual for an Irish consumer directly to import a service as in the case of insurance agreements or contracts relating to correspondence courses. The Bill, accordingly, is viewed as being an instrument which should provide necessary protection for the consumer in such situations in the context of a consumer measure though not necessarily in spite of the interests of the Irish exporter of services.
A problem, however, arises in so far as the European Communities would be unlikely to tolerate a measure which stood as a barrier to trade by discriminating against an importer alone. Thus the first option for an amendment to section 39 was rejected. The only remaining option then became the deletion of the section in its entirety.
This amendment is justified solely on the consumer lines set out above and further supported by the following considerations: First, the UK in the Unfair Contract Terms Act of 1977 did not see fit to extend the exemption for international contracts for goods to the services situation. Secondly, Irish companies, including insurance companies, will not be placed at a comparative disadvantage on the home market compared with their foreign competitors. This will meet the IIA point. Thirdly, Article 5 of the EEC Draft Convention on the Law Applicable to Contractual Obligations provides that in a contract the object of which is the supply of services to a person for a purpose which can be regarded as being outside his trade or profession, a choice of law made by the parties shall in no case prejudice the application of the mandatory rules of the law of the country in which that person has his habitual residence. Fourthly, specifically on the insurance front, Article 9 of the Freedom of Services Directive provides that the insurer must comply with any mandatory provisions of the country where the risk is situated. So if section 39 is allowed to stand this would have the effect of nullifying the intentions of this directive and the EEC Draft Convention. Finally, considerations (3) and (4) in fact now obviate the need to protect the exporter in the manner originally intended.
Amendment agreed to.
Section 37, as amended, agreed to.
Section 38 agreed to.
Section 39 deleted.
Section 40 agreed to.
SECTION 41.
I move amendment No. 33:
In page 19, line 4, to delete "the Act of 1893 and this Act" and substitute "this Part".
The significance of the words "subject to the provisions of the Act of 1893 and this Act" is as follows: under the 1893 Act a claim may only be made for rescission of a contract where there has been a breach of a condition as opposed to a breach of a warranty. Furthermore, under the 1893 Act a breach of a condition after the goods had been accepted only entitled the plaintiff to damages for breach of warranty. However, under section 53 (2) of the 1893 Act, as inserted by section 21 of this Bill, a buyer may rescind for breach of condition despite the fact that acceptance has taken place provided he deals as consumer and acts promptly on discovering the breach. The above relates to the requirements which must be satisfied before a person is entitled to rescind a contract. However, the parliamentary draftsman felt that the word "otherwise" in section 41 of the Bill adequately covered these requirements and that therefore the words "subject to the provisions of the Act of 1893 and this Act" were superfluous and should be deleted. The words "subject to the provisions of this Part" relate to the provisions of section 42 (2). It was felt that it was necessary to insert this phrase because under that section a court may declare a contract subsisting and award damages instead of rescission in certain circumstances.
Does the amendment deal with innocent misrepresentation or fraudulent misrepresentation or both?
So, if a person innocently misrepresented something he would be faced with rescission and an action for damages?
Amendment agreed to.
Question proposed: "That section 41, as amended, stand part of the Bill."
Does an innocent misrepresentation have to be in relation to a basic part of the contract?
It would have to go to the whole root of the contract?
Question put and agreed to.
SECTION 42.
I move amendment No. 34:
In page 19, subsection (2), line 18, after "claimed" to delete ",".
This is purely a drafting amendment and the deletion of this comma improves the reading and the flow of the subsection.
Amendment agreed to.
I move amendment No. 35:
In page 19, subsection (2), line 20, to delete "or arbitrator".
This subsection was taken from section 2 of the United Kingdom Misrepresentation Act, 1967. We have, however, been advised by the parliamentary draftsman that there is in fact no need for a reference to an arbitrator here. Under the Arbitration Act, 1954, an arbitrator is given the powers of a court if there is an arbitration agreement between the contracting parties, so there is no need to give him powers under this section which he has already acquired under the arbitration agreement.
Amendment agreed to.
Section 42, as amended, agreed to.
SECTION 43.
I move amendment No. 36:
In page 19, line 38, to delete "Court" and substitute "court".
Amendment agreed to.
Section 43, as amended, agreed to.
SECTION 44.
Amendment No. 36A not moved.
Question proposed: "That section 44 stand part of the Bill."
A number of companies sell goods through different types of salemanship. One method is to deliver unsolicited items to people who can return them if they are not satisfied. Another way is for the salesman to say that he will call back to collect the goods but he fails to do so. Does this section cover this area adequately?
Yes, because very often these goods are delivered to a person when in fact he never ordered them and never heard of the company promoting them. Under subsection (1) a person who receives these goods and does not agree to acquire them must let the sender take the goods back during the six months after receiving them but after the six months, provided he has not agreed to return them, they become his property and he can regard them as an unconditional gift to him and he can do what he likes with them. This is tightening up on a situation which existed for a long time.
Question put and agreed to.
SECTION 45.
Question proposed: "That section 45 stand part of the Bill."
In regard to directory entries, what responsibility is placed on a person in relation to specifying wrong information in newspapers and so on? Does this section cover this sufficiently?
We are not talking about advertisements at all. We are talking about directory entries. I will outline the type of situation that occurs. The normal procedure adopted by these individuals is that a demand notice is sent to a business often containing a proof note of a directory entry. The receiving company is asked to check that the note is correct and to send the form back. Immediately this has been done a letter comes back asking for payment of a certain amount of money with a large stamp on the Bill offering a substantial discount for prompt payment in the hope that the person who receives the bill will probably be a secretary or an employee of the company and will note the discount and agree that their boss or employer would like to take advantage of the discount and will therefore send back the money immediately. Once the proof form has been returned there comes an offer of advertising space or an advertising agent calls on the firm pointing out that they have supposedly taken a place in the directory and suggesting that they should take an advertisement to get a larger space. Very often it has been found that these directories never appear or, if they do, they appear in such a limited form that it is of no benefit to the person who has paid his money to have his name included in it. We felt it was time to tidy up the situation because it was becoming a problem for people in business.
Question put and agreed to.
SECTION 46.
I move amendment No. 37:
In page 21, subsection (1), line 24, to delete "Any" and substitute "For the purposes of section 44 (3) and 45 (3), any".
It has been established with the parliamentary draftsman that this section was intended to relate only to unsolicited groups and directory entries as provided for in sections 44 and 45. Indeed, the location of section 46 in the Bill supports this view. However, as presently worded, the provisions of section 46 are open-ended and could apply to any invoice issued in the normal course of any business. Clearly it was not intended to be as all-embracing as that.
There were particular difficulties in having such wide scope. It was felt that, in order to make it clear that an invoice is to be regarded as a demand for payment only in the cases of unsolicited goods and directory entries, it was necessary to relate the provisions of section 46 to the previous two sections I mentioned and not to leave it open-ended as it was.
Amendment agreed to.
I move amendment No. 38:
In page 21, between lines 30 and 31, to insert a new subsection as follows:
This section is ancillary to sections 44 and 45 dealing with unsolicited goods and directory entries. It enables the Minister to require that any invoice issued in this context must contain a statement in a specified format to the effect that no claim is made to payment. It is clear that, if an order made by the Minister is to be effectively enforced, an offence needs to be created for contravention of its provisions. The proposed amendment achieves this objective.
I wonder what type of invoice the Minister has in mind? What is the position with regard to a shop where a person who buys goods worth £50 gets £5 free? Is that what the Minister has in mind?
Any invoice issued in this context would have to contain a statement saying that no claim was made to payment.
Amendment agreed to.
Question proposed: "That section 46, as amended, stand part of the Bill."
This section does not clarify the position as to whom the claim will be against. Will that information be specified in the invoice?
That kind of information would be contained on the invoice itself. It is not necessary to include it specifically.
Question put and agreed to.
Section 47 to 50, inclusive, agreed to.
SECTION 51.
Question proposed: "That section 51 stand part of the Bill."
I note that the Minister requires contracts to be in writing and that this is provided for by order. I should like to know if the Minister will set out a particular amount and, where contracts are over that amount, will they be required to be in writing? In the old Sale of Goods Act there was provision that where contracts were more than a certain amount they had to be in writing and there had to be part payment. The section states:
The Minister may by order provide, in relation to goods or services of a class specified in the order, that a contract for the sale of any such goods or the supply of any such service shall be in writing and any contract of such class which is not in writing shall be unenforceable.
I want to know why this section is in the Bill and I should like the Minister to state if the contracts have to be over a certain amount and the kind of services involved. This section has sweeping powers. I should like to know why this provision was included here and the extent of the powers included in the order.
There is a popular belief that all contracts must be made in writing but that is an illusion and it forms no part of common law. Some contracts must, by statute, be made in writing; a bill of exchange must be in writing and a bill of sale is void unless it is in a certain form. Contracts are made by people every day and they cannot always be written and, in fact, are not written very often. They can be entered into by various means, the most popular being by word of mouth. An example is the normal sale in the shop where there is a contract between the customer and the seller at the point of sale. This section enables the Minister to provide by order, in relation to goods or services of a particular class to be specified in the order, that a contract for the sale of any such goods or the supply of such services should be in writing and that any contract that is not in writing will be unenforceable. I think the Deputy was talking in monetary terms about the level——
I was also talking about the type of goods.
I presume it could be attached to any class but that detail has not been worked out yet. The Minister would have to consult with the various interested bodies to ensure that when an order is made it would cover what would be thought reasonable. It has not yet been decided what might be termed reasonable.
The Bill is an elaborate piece of legislation and it covers matters such as guarantees, warranties, conditions, misrepresentations, hire purchase and so on. For example, it says that any contract of a particular class shall be unenforceable if the Minister so decides by order. That is a fairly sweeping power to include in the Bill at this late stage.
The second point that occurs to me is in regard to the examples the Minister gave of such things as bills of exchange and so on which are normally given in writing. I accept that they have always been in writing and will continue to be in writing. But 99 per cent of the ordinary contracts are made by word of mouth nowadays with very little additional written evidence to support them. I wonder is that section necessary at all?
It was in the original Consumer Protection Bill. Naturally it would be presumed that the Minister of the day would not be making orders in connection with contracts such as those mentioned by the Deputy. But, when there would be a fairly substantial amount of money involved, it would be necessary for him to make an order. That type of order would have to be approved by both Houses of the Oireachtas. Obviously, the Minister would make such an order only after consultation with the various interested parties.
I accept wholeheartedly the goodwill of the Minister. The necessity is another matter I would question in regard to this.
I will take a look at it between now and Report Stage to see what, if anything, can be done.
Just by way of clarification, will it be necessary to have moneys or deposits paid in this instance as well?
Question put and agreed to.
SECTION 52.
I move amendment No. 39:
In page 22, subsection (1) (b), lines 23 and 24, to delete "he considers that, in the public interest, such examinations are proper" and substitute "the Director considers that, in the public interest, such examinations are proper or the Minister so requests".
This section enables the Minister to confer additional functions on the Director of Consumer Affairs. One of these functions under subsection (1) (b) would be that of carrying out in the public interest examinations of any practices arising out of the new provisions of the Bill. As worded at present the initiative for such examinations would lie solely with the Director of Consumer Affairs. However, it might well arise that the Minister, being the member of the Government with responsibility for consumer policy, might wish to have a particular practice examined. The result of such an examination might well be that further legislation might be required in order to curb a particular practice at a particular time. Therefore it is considered desirable that the Minister be in a position to ask the Director of Consumer Affairs to carry out such examinations and the amendment, as it now stands, would enable that to happen. Of course, it must be emphasised that this would not in any way diminish the power of the director to act on his own initiative; it merely gives extra power to the Minister himself.
Amendment agreed to.
Question proposed: "That section 52, as amended, stand part of the Bill."
Subsection (d) says:
without prejudice to the powers or functions of any other prosecuting authority, to bring or prosecute summary proceedings for an offence under this Act.
Would that encompass some of the powers I mentioned earlier? I made the point that the initial cases might be brought and heard by the Director of Consumer Affairs. In this instance is it being stipulated that the Minister may, by order, appoint the Director of Consumer Affairs to bring actions against third parties? I should like the Minister to elaborate on this. I want to know is the Director of Consumer Affairs being appointed as a type of arbitrator, first of all, and, if not, is the Minister considering appointing him as a prosecutor, as distinct from an arbitrator?
We are not considering appointing him as an arbitrator. He is a prosecutor as it is under the Act which set him up, which was the Consumer Information Act. This section gives him extra functions attaching to this Bill in addition to those he has already under the Act which set him up in business. The point the Deputy was making before was something on which I said we were having discussions, and we would have to have discussions with the Department of Justice to ascertain if we can get around the problem obtaining.
One of the duties that should be delegated to the Director of Consumer Affairs should be that along the lines of acting as an arbitrator. I dealt with this at considerable length earlier. Certainly this is something that should be fully considered by the Minister when making an order—that the Director of Consumer Affairs would be appointed as an arbitrator so that he would be able to hear fully in evidence cases brought by an aggrieved consumer and, after the case had been fully heard, the person could then appeal to the Circuit Court. That should be one stipulation included in the order.
The functions set out here are many and widespread in regard to matters which could be and should be investigated by the Director of Consumer Affairs. There are a lot of sharp and shabby practices, people finding that they are being caught under contracts negotiated through sharp practice. That is one example only. There are many other matters that need to be reviewed. I would hope that the Director of Consumer Affairs would be able to have these matters investigated on their being brought to his attention. When does the Minister of State expect that the Minister will be making the order after the passage of the Bill?
Immediately. The Deputy means the order conferring the extra functions on the Director of Consumer Affairs?
Yes, it would be immediately on the enactment of the Bill.
Question put and agreed to.
SECTION 53.
Question proposed: "That section 53 stand part of the Bill."
Are they the normal commercial banks which are being referred to here?
Question put and agreed to.
Section 54 agreed to.
SCHEDULE.
Question proposed: "That the Schedule be the Schedule to the Bill."
Deputy Liam Cosgrave asked the Chair's permission to mention very briefly one point in connection with the Bill and the Chair has agreed.
Perhaps the Minister might consider between now and Report Stage introducing an amendment to exempt bloodstock from the scope of the Bill.
Before Deputy Cosgrave came into the House I had given a commitment to Deputy Enright in that regard. The bloodstock people have been in constant touch with the Department. We are arranging that I will meet representatives of that body to decide whether or not an amendment is necessary. Certainly if the case is put to me that an amendment is necessary, the Bill will be amended accordingly.
Question put and agreed to.
Title agreed to.
Bill reported with amendments.
When is it proposed to take Report Stage?
This day week but subject to agreement between the Whips.
Report Stage ordered for Wednesday, 21 November 1979.
