Companies (No. 2) Bill, 1987: Report Stage (Resumed).

Debate resumed on amendment No. 3:
In page 15, between lines 13 and 14, to insert the following:
"(3) The Minister may make regulations in relation to any matter referred to in this Act as prescribed or to be prescribed.".
—Minister for Industry and Commerce.

Amendments Nos. 3 and 3a are being taken together.

I described why amendment No. 3 was necessary and I have not heard anybody disagree. It is for purely technical reasons so I am making the assumption that the House will accept amendment No. 3. In so far as amendment No. 3a is concerned, where power is provided for the Minister to prescribe by regulation, the Oireachtas will already have approved the general principles involved in the matters where the Minister can make these regulations and the Minister effectively uses the power to prescribe to give effect within the parameters that are so laid down in the Act and in the section concerned. In this Bill in particular, there are a whole range of examples of power to make regulations because, by the nature of the Bill, you cannot prescribe every last detail. We have seen the difficulty in relation to this Bill which is now approaching its fifth year. There are a whole range of examples in dozens of places throughout the Bill which are very technical. Some of the examples are in sections 164, 271, 272 and many others. It would be unreasonable not to have power to make regulations in the normal way.

The second point is that any regulations made still have to be laid before the Houses of the Oireachtas in the normal way and can be annulled within 21 sitting days. Regulations can and do come before the Oireachtas in this manner. If I were to agree to the amendment tabled by Deputies Bruton and Barrett, every regulation made by the Minister would, in future, have to be debated by both Houses which would, inevitably, result in long delays which would not be in anybody's interests.

Obviously some of the regulations would be debated at some considerable length and it will certainly be necessary in the first year of operation of this Bill to make perhaps 20 sets of regulations in order to implement it and to allow the Bill to come into force. If every one of these has to be debated in full in both Houses after the incredibly long debate which has been taking place on this Bill since 1987, there will be further and further delays. It would be like bringing in a number of Companies Bills each year. We all know that the difficulty which will arise in practice in trying to get Dáil time to do this is considerable. I have had difficulty in getting Dáil time to do this Bill — even though it is obviously very urgent — because there are so many other competing Bills and other business which are regarded as equally urgent, perhaps quite validly. If I were to go back to the Government Whip and say that I wanted time over the next year for ten debates in the Dáil and the same number in the Seanad on regulations I would be told that it simply would not be available or that the delay in ordering such debates on them would be considerable.

In this Bill I am proposing what is done in the regulations made under every Act. I do not know if companies legislation is necessarily so much more important that a special arrangement should be made in relation to it. In almost every other Bill it is possible to make the regulation which can potentially be annulled within 21 sitting days in either House. That is reasonably satisfactory in every other field of legislation, so I do not think it should be completely unacceptable or totally unsatisfactory in this case. For that reason I ask the Deputies opposite not to press amendment No. 3a because of the practical difficulties involved.

Deputy Bruton said that there might be substantive changes in the law — perhaps he used the word "substantial"— but, either way, there cannot be substantial changes because they cannot go outside the parameters laid down in this Bill. An awful lot of the regulations relate to my prescribing forms in which to do these various things and my prescribing better ways of trying to prevent people evading the law. I can envisage a situation arising where a particular abuse comes to mind which it would be possible to cure by way of regulation under the Bill. If, let us say, this was discovered at the start of the summer or any other recess it means you have to wait until the end of the recess to try to cure it and indeed well beyond that because it may not be possible to have the regulations discussed at that time. In these circumstances it would be helpful if the amendment was not pushed.

Is amendmewnt No. 3 agreed?

Deputy Bell rose.

Deputy Bell has already spoken. I will remind the House of the rules governing Report Stage. No Deputy, apart from the Member who moves the amendment, can make a second contribution.

I want to ask a question.

I would prefer to stick rigidly to the regulations and maybe Deputy Bell will find some way of making his question relevant in relation to another amendment.

I accept your ruling.

Is amendment No. 3 agreed?

I wish to reply as I moved amendment No. 3a.

No, you did not move it. You agreed to discuss amendments Nos. 3 and 3a together. The Minister moved amendment No. 3 and we discussed amendment No. 3a with it.

On a point of order, I submit that, by agreeing to take the two amendments together, Deputy Barrett did not give up the right he had to reply to the arguments advanced by the Minister in relation to his amendment.

He might not have known that he did but——

I do not know if there is any precedent in this regard but I submit that there is no way that an agreement to take amendments together in any way curtails the pre-existing rights of Members.

The Deputy, for once, would be wrong. If the Deputy had made that point when agreement was being sought on taking the two amendments together, then they would not have been taken together. In so far as you agreed to take them together, you forego the right that normally would be yours in the matter of replying to the second amendment. Sometimes we take six amendments together.

We will not be doing that any more.

If Deputy Barrett was not aware of the fact that he relinquished his right to reply, the Chair will bear with him while he makes a short comment.

Thank you very much.

There can be a separate question in relation to amendment No. 3 although, in this case, if amendment No. 3 is carried you cannot move amendment No. 3a because we would have already agreed amendment No. 3. If Deputy Barrett feels he wants to say something special, the Chair will make an exception although he refused to do so in the case of Deputy Bell. The House should understand that that is the position in the matter of agreeing to take two or three amendments together on Report Stage. One foregoes the right.

I did not understand that either, but we will know for future reference.

I accept what the Chair says. It is not the intention of this side of the House to introduce anything into the legislation that would effectively prevent its proper application, but at the same time we live in a democracy and this is the elected assembly of the people. At times it might be inconvenient for a Minister to have to have a regulation debated. When I dealt with the Intoxicating Liquor Act and the Extradition (Amendment) Act, in both cases the Minister agreed to a similar amendment to that which I propose today as it was felt necessary. Let none of us fool ourselves that the present procedure whereby the regulations are laid in the Library and can be annulled within 21 days is a protection. It is a load of nonsense, because one just does not get the time——

Hear, hear.

——to debate them even if one wants to oppose the regulations. Time in the House is not provided to annul such regulations.

That is right.

That is an abuse of democracy. I would remind the Minister that his party chairman, Mr. McDowell, talked of the need to reform this House when he was a Member of it. It is absurd that we can use a mechanism which effectively gives the Minister carte blanche in relation to future regulations. Whilst there is a technical procedure in relation to annulling regulations the reality is that the regulation can never be discussed here. The regulation would at least have to come in here if the Minister accepted my amendment. It is grand to nod through regulations of a technical nature but at least the House will have the option of deciding whether or not a regulation ought to be debated.

It is not our fault that this Bill has been dragging on for four years. We offered to sit in September to deal with this in Committee and we offered to extend the period in July to deal with it. A number of elections occurred since this Bill was first published and Deputy Des O'Malley is now the Minister. I hope the Minister will follow through in another test of his sincerity in relation to his party's policy on different issues. I hope the Minister will follow through the commitment he has given to the electorate in relation to the opening up of the procedure of the Dáil and allow Members the opportunity to discuss regulations where necessary. There is no reason why regulations cannot be discussed on Friday. Most of the time regulations could be passed on the Order of Business by agreement without debate but at least we would have the option, and that is the point I wished to make in my presentation this morning.

Amendment put and declared carried.
Amendment No. 3a not moved.

I move amendment No. 4.

In page 15, line 38, after "184," to insert "285 (2) (a)".

The purpose of this amendment is to remove the preferential status——

On a point of order, to try to help the debate the substance of this amendment which Deputy Bruton has proposed relates to a matter which is dealt with substantively in Part VI of the Bill. I am prepared to consider Deputy Bruton's points when we come to Part VI but I am not prepared to accept his point now. This is an amendment of substance relating to a significant matter which was already debated on Committee Stage. I undertook to look at this again and I am looking at it again in the context of Part VI. I have not made up my mind yet in relation to Part VI but I cannot accept the amendment now as it is not appropriate for it to go in here. The point in this amendment is dealt with in Part VI and the substantive debate should take place there. I would ask the Deputy to leave this until Part VI when I will have had the opportunity of having a look at it. I have not considered it yet and I therefore cannot accept his proposed change at this stage. I may be able to accept it by the time we get to Part VI.

I will outline why I cannot accept the Minister's gracious suggestion. I put down an amendment to Part VI in conjunction with my colleague in the Special Committee on 13 February. Regrettably that amendment was defeated by an alliance of Fianna Fáil and The Workers' Party in the absence of the Progressive Democrats or Labour representative. I am therefore precluded from reintroducing my amendment to Part VI under the rules of the House. The only way I can reintroduce the matter is in the form in which I am doing so now.

In view of what the Deputy has just said, perhaps we can draw the attention of the Chair to that. If the Deputy is right about being precluded from making the amendment to Part VI, is he not equally precluded here?

It is a different amendment from the one that was defeated.

The Deputy can put down a different amendment on Part VI.

When we get to Part VI I might avail of that opportunity but I draw considerable solace from the fact that the Minister indicated that he was seriously considering this matter. Admittedly the Minister has had ample time to consider it. I am sorry the Minister has not yet come to a decision about the matter, because it is not so long ago that he had a very clear view on it.

So that we can be reasonably organised, do I take it that Deputy Bruton is not accepting the request made by the Minister?

I am unable to because of the nature of the procedural rules governing my interventions at this point, but no discourtesy is intended.

At the moment if a company becomes insolvent there will be a large number of creditors. There will be some voluntary creditors—people who freely lent money or supplied goods to the company on the basis that they would be paid a month later, or something like that. If the company becomes insolvent in the meantime they may not get all of their money. There are also involuntary creditors, people for example who were damaged by the company, in respect of whom the company broke a contract, who pursued the company, took the company to court and got a judgment against the company and whom the company have not yet paid.

They are what are called involuntary creditors. They did not choose to be injured by the company but they were injured and had a claim against the company in respect of the injury. However, if the company are dissolved and there is only a certain amount of money left — say they have assets of £50,000 and debts of £100,000 — and it transpires that they owe the Revenue Commissioners £50,000, under our present law, the Revenue Commissioners, because they enjoy what is known as preference under section 285 (2) (a) of the Companies Act, 1963, will get all their money. The involuntary creditors of the company, people who, perhaps, were run down and injured by a vehicle owned by the company and have a personal accident compensation claim against the company which has been granted by the court but not yet paid, will not get a penny but the Revenue Commissioners will get every penny they are owed. That is not fair, and it is not only I who holds that view.

The Progressive Democrats in their five year programme for tax reform published in November 1988 under the byline Get Ireland Working called for, among other things, “an ending of the preferred status of the Revenue on insolvencies”. That is a statement of the policy of a party led at that time by the present Minister for Industry and Commerce. He told us a few moments ago that he could not quite make up his mind as to whether or not there should be preferred status for the Revenue Commissioners but he laboured under no such hesitancy in 1988. Of course, he was in Opposition at that time but now he is in Government. It is unfortunate that he is not so clear in his mind about what should be done now as he was then.

Perhaps it might help him, and the Government, to decide to implement the Progressive Democrats' policy if I were to remind him that the Progressive Democrats and Fine Gael — I put them in that order so as to win the Minister's heart — are not alone in holding the view that the preferred status of the Revenue Commissioners should be removed. The most authoritative study on company law upon which much of the legislation in Ireland, Britain and elsewhere is based is the celebrated report of the Cork Committee which was chaired by Professor Cork. As I understand it, that committee recommended the removal of the blanket Revenue Commissioner preference which had previously obtained in British law. The Irish Commission on Taxation, a body who were extremely concerned to ensure that taxes be collected, also recommended in their major report on Irish taxation that the Revenue Commissioners no longer needed to enjoy this blanket preference of their debts over the debts of the ordinary creditors of the company trade creditors who failed to be paid or people who were injured by the company and had a claim for compensation. In the view of the Commission on Taxation all of those deserved not to have their claims set aside simply so that the Revenue Commissioners could be paid in full.

The same view has been adopted by a number of professional bodies working in the area. The Confederation of Irish Industry told Deputy Barrett and I no less than four days ago that their view was that combined with the enormous uncertainty about the collection of debts created by the Companies (Amendment) Bill, 1990, with its process of examinership, forced settlements and so forth, the existence of Revenue preference as well created a situation in which it was going to be extremely difficult to justify lending to Irish companies because the people lending the money could not be sure that they would get their money back. Their view was that, either the Revenue Commissioners would grab all that was in the pot or the company would seek the protection of the courts and be thus enabled not to pay back their full debts to those to whom they owed the money. Of course, for a banker the enhancement of the risk of not being able to get money back is that he can charge a higher interest rate, a higher risk premium. One result of Revenue preference would be higher interest rates for businesses because of the greater uncertainty that the existence of Revenue preference creates as to the likelihood of repayment to ordinary creditors, whether they be secured or unsecured.

I understand, of course, that in the past when the Revenue Commissioners did not have such wide powers or such ample information technology at their disposal to collect money owed to them, to identify how much was owed to them and whether someone was falling behind in their payments, they needed this special preference. Of course, the money they collect is money owed to the general population whereas money owed to somebody who has been run down by a company vehicle and injured for life is still only money owed to an individual. I suppose one could argue in some cases that the VAT man should get his money before somebody who has been personally injured and put in a wheelchair for life. I have heard that case argued and it might be an arguable case if the two creditors had equal means of knowing whether or not the company were likely to go insolvent and for enforcing their claim against the company. That may indeed have been the case in the past because when the Revenue Commissioners were operating in the era of the quill pen their means of information about companies were rudimentary to say the least but that is certainly no longer the case.

In modern times the Revenue Commissioners receive from a company, confidentially and solely for their benefit, regular two-monthly returns of VAT and regular monthly returns of PRSI and PAYE. If there is any possibility that the company are in difficulty that is likely to first show itself in either delays in making these payments or in these payments not being made in full. Under our present law and present Revenue practice invariably the first people to know that a company are in trouble and that efforts should be made to collect the money owing by that company to the creditor will be the Revenue Commissioners. Therefore, far from being in the weakest position in terms of taking action to protect their interests at present, the Revenue Commissioners are with the monthly and bimonthly tax returns, away ahead of the game relative to other creditors in knowing whether or not a company are in difficulty and in being able to take action to protect their interests. Not only are they in a position to do that but they have powers to for example, attach money owned by another creditor to the company in order to make sure that they are paid first out of that money. They have sheriffs at their disposal who go out acting for the Revenue, only not for other creditors, to seize goods from the company to make sure they get their money. The Revenue have a battery of powers available to them which ordinary creditors do not have to ensure that they get their money. A worker who has been injured in an industrial accident in a company and who has a claim against the company does not have sheriffs available to him to collect money. He does not have information about whether the company are running behind in their VAT payments or whether, perhaps, the time is right to go to court to claim the money. He does not have any of those protections available to him, yet if the company become insolvent and if people have not pressed their claims in time it is the Revenue Commissioners who get preference, not the individual, the often impoverished individual, who has a claim against the company. It is literally topsy-turvy.

If there is any creditor who does not need preference in the present circumstances, given all the other powers they have, it is the Revenue Commissioners. If there is any creditor who would be most culpable for failing to take action in time to collect their money before a company became insolvent it is the Revenue Commissioners because they have all this advance information about the State of a company which no other creditor has, yet they are the ones who are given preference. Surely, this is wrong.

It is most important that we establish, so far as company insolvencies are concerned, a level playing field between creditors. A level playing field is a concept which has considerable merit for other members of the Government who are in other parts of this building at present, wide awake and listening to this debate. I believe they support the idea that there should be equality of treatment between, for example, those in the commerical radio field and those in the State radio field. What I am asking for in so far as insolvencies are concerned is the creation of a level playing field between private creditors and public creditors. This is a concept which should be well understood by the Government given that they were so anxious to establish a level playing field in the broadcasting field.

Why not have a level playing field also in terms of who has the right to have their money collected in advance of others when a company become insolvent? The deletion of section 285 (2) (a) would have that effect. It would create a level playing field in the matter of the preference for debts. As I am only proposing the removal of section 285 (2) (a) I hope I will have the support of my colleagues in other parties in the Opposition. The provisions of subsections (b), (c) and (d) preserve the preference for wages owed to staff of a company, accrued holiday remuneration and so forth. They would retain their preference under this amendment. The only preferences that would be removed are the preferences enjoyed by the Revenue Commissioners and county councils. I contend that both of those are well able to look after their own interests, have their own money collected on time and get after a company without enjoying special status.

The last point I want to make is that if this amendment is accepted either now or when we come to Part VI — the Minister is probably right when he says that Part VI is the place to make the change from a procedural point of view — it will means the Revenue——

I do not want to interrupt but I must advise the Deputy that contrary to what he said at the beginning there is no procedural constraint on his having the amendment at Part VI.

If an amendment is defeated in Committee it cannot be reintroduced on Report Stage.

A committee of the whole House.

The procedures are pari passu applied to special committees.

No, the Standing Order——

I accept your authority.

It says specifically a committee of the whole House. Obviously, that would be an interpretation of it.

That is good.

Can we spare ourselves the remainder of this debate?

No. I have to say this——

The Chair has been good enough to point out to the Deputy that his reason for wanting to go on with it now is no longer relevant.

I have to say not because, as the Minister may recollect, he was unable to be present for the discussion on this matter in the special committee.

I am just reading what I said in the discussion on the matter, at column 634 of the report, so I must have been present.

Deputy Leyden was present as I recollect. In any event the final point I want to make is that if the amendment is made in Part VI of the Bill it would have to be made in this Part of the Bill anyway because if section 285 (2) (a) is repealed subsequently on Report Stage we would have to come back and make a correcting amendment in this section as I understand it. However, I believe the existence of Revenue preference makes the Revenue lazy in pursuing companies in difficulty. The Revenue know that if they wait and the company eventually become insolvent they will get their money, so they are not in a particular hurry. However, if the Revenue knew that they did not enjoy absolute preference they would act sooner. It would have been much better for many companies and employees, when a company got into difficulties, if the Revenue acted quickly before the debts got completely out of control, forced the company to do whatever restructuring needed to be done and sell whatever assets had to be sold in order to get themselves back on the road.

Early action by the Revenue Commissioners would lead to better company management and ultimately greater job security. At present companies are allowed to roll up large debts and no one acts quickly. We have seen examples of this all too recently, one of which was discussed today at Question Time. That is not an example of the Revenue being owed money but that happens where the Revenue are owed money. Eventually when action is taken the debts are so large that the company cannot be saved whereas if the Revenue, who have more information than anyone else, were forced to act quickly they might act before the company got beyond the point of no return in terms of compound interest accumulating on existing debts. I believe the removal of Revenue preference would lead to better tax collection as well as the better management of companies and better protection for the ordinary individual be he an ordinary employee with a claim against the company who currently cannot be paid as the Revenue get in first, be he someone who has been injured by a vehicle owned by the company or an ordinary trade creditor who has supplied something to the company in good faith and did not have the information the Revenue have about the state of affairs of the company. In this way both the individual and the public interest would be protected and overall we would have a more efficient system of company administration.

The Minister has had considerable time to consider this matter and I am surprised that, having considered it as far back as February, he still has not made up his mind. I hope that what I have said today and what is said in this debate in the House today will persuade the Minister to announce today a firm intention to introduce an amendment to this effect in Part VI of the Bill.

I had some doubts about this amendment but having listened to Deputy Bruton I now have ten times as many. Let me give my reasons very quickly. First, one cannot have an even playing pitch when a company go into liquidation. If there was an even playing pitch the company would not become insolvent in the first place. Over a period of 25 years I have had more dealings involving company closures than any other Member of this House. Frequently I had to go to the Revenue Commissioners and ask them not to put a company out of business, in the longterm interest of people in employment, and had to work out deals with them or to ask them to make deals with companies for payment of moneys outstanding over a period in order to retain the employment in that company. That is happening every day of the week. The Revenue should not have first claim for a number of very important reasons. First, that money does not belong to creditors, it belongs to the workers in the company. It is money which the company has been charged with passing to the Revenue. In the event of a company closure the position is that a worker, if the money is paid in, will at least, get back the tax rebate to which he or she is entitled. If creditors were given the first choice there would be no repayment to the Revenue. The net result would be that all the other people who would be left at work in other companies — the PAYE workers — would have to pay the money that was distributed among creditors of liquidated companies. They are paying enough PAYE as it is. The third point with which I cannot agree relates to injuries. I have dealt with the issue of injuries at work for over 30 years. In the event of somebody being out of work as a result of an accident they can claim disablement benefit. In the event of someone being injured with a company vehicle it should be covered by the insurance cover on the vehicle or public liability if it happens to be on the premises.

What happens if they are not insured?

I cannot accept the explanations that are given. As in the case of a number of other amendments they sound very simple. We agree with the main thrust of what the Minister is trying to achieve, but I could not go along with the suggestion of trying to put creditors on a level playing pitch with Revenue. On the basis of that explanation I would have to oppose that amendment.

The problem about debating the points made by Deputy Bell is that it can appear that one is defensive of improper practices on the part of company directors who are fiddling around with moneys not belonging to them. It is not a popular thing to say: why should not that money be paid over to the people to whom it was due to be paid to in the first place. That is all very plausible and something about which one would be concerned. However, there is one thing missing from Deputy Bell's argument. When you pay over the money that is due to the Revenue Commissioners and where creditors are left without, there are many cases where other small companies employing people are forced into liquidation. The employees in those small companies, who were never involved, will suffer as a result of the continuation of preferential status.

While I understand the point being made by Deputy Bruton to be that if money is collected by a company through VAT, PRSI or PAYE why should that money be lodged in the ordinary account of the company and be used for trading purposes? I can quote an example from the Insurance Act which was recently enacted where there is an obligation on insurance brokers not to use clients' money for their own use but to have it in a separate account. Regarding the issue raised by Deputy Bell why should not moneys collected from VAT, PRSI and PAYE be lodged in separate accounts from which the only people who could draw would be co-signatories, that is the Revenue Commissioners and the company itself. We cannot have it both ways. We cannot allow a situation to continue where a small creditor who may not have the information available to him about the up-to-date position in a particular company can suddenly find that the Revenue Commissioners have pulled the plug and they are left without the money that is due to them.

One must also consider the position of the employees in the smaller companies that will ultimately be left with no other option but liquidation. It is time we looked at the situation in other countries where if one collects taxes on behalf of the State those moneys are lodged in separate accounts. I do not see for one moment why, in any given situation I should pay 23 per cent VAT, which is due to the State and which is not being handed over. I would like to think I am paying my taxes and that they will find their way into the appropriate coffers, but the manner in which we do our business does not bring about that situation. It allows, as Deputy Bruton has said, a situation to develop where the Revenue Commissioners having all the technology available to them, knowing that a company must be facing difficulties but not doing anything about it, and suddenly the company is going into liquidation and the Revenue are first in to get their money. The Revenue Commissioners, like all of us have the advantage of hearing the warning bells early on, should use that information to try to correct the situation before it is too late.

In Part IX of this Bill we still have the provision for the appointment of an examiner. We introduced separate legislation because of the Goodman debacle to try to resolve that particular difficulty. The whole concept behind that legislation is to provide a mechanism whereby companies can be saved rather than allow them to get into a situation where they will ultimately face receivership or liquidation. We are making certain provisions here whereby no action can be taken for up to a period of four months where an examiner is appointed. Why cannot the Revenue Commissioners play their part in seeing to it that if they have information available to them, through up-to-date technology, that they would move immediately and prevent a company from continuing to trade when they should not be trading because they are facing liquidation thus leaving exposed many small creditors, small businesses and many employees in those businesses without anything at a future date?

As I see it, the main point being made in Deputy Bruton's argument is that the Revenue Commissioners are now in a position where they do not need the protection they got under the provision of the 1963 Act because of the introduction of modern technology and also because, despite the other powers given to the Revenue Commissioners, we have not changed in any way that it is obligatory for people collecting VAT or other forms of taxation on behalf of the State to have the use of that money as if it was their own. I know people will argue that it is unrealistic to suggest that some small companies cannot do without the use of some of the taxpayers' money for a limited period to trade themselves out of a difficulty. Any company that depends on taxes collected from somebody else, and who continues to trade should not be trading. They are in serious difficulties. If the Revenue Commissioners can put a company on the right road early on, whether it ultimately leads to the appointment of an examiner or not, surely that is in the best interest of everybody, including the creditors, who may lose out and subsequently affect the jobs of hundreds of thousands of people in other companies who would be affected by a company going into liquidation and the Revenue Commissioners taking everything.

Given what I said at the outset and given what Deputies have said in the course of the debate on this amendment I think it is inappropriate for me to go into the merits or demerits of it now. I am prepared to consider it, as I said already, on Part VI.

I said these very things in the Special Committee, as reported at column 634 of the Official Report, and said I would consider it for the Report Stage the appropriate part is Part VI. I will not go into the arguments for or against it now. Presumably we will have further amendments. I do not know whether a similar amendment can be put down to Part VI if it has been put down to Part I and disposed of. It has been pointed out that there are different rules relating to a Select Committee as opposed to a committee of the whole House. I made it very clear in the Special Committee that I would consider it.

There are many other matters that I shall have to consider. It is a very long Bill and we are taking it Part by Part. I am not dealing with Parts X and XI now. I will deal with them when we get to them. It is better now to confine ourselves to things which are properly within the domain of Part I. In these circumstances, without going into the merits or demerits of it, I would ask Deputies to allow us to consider the matter in Part VI and we will see what may or may not be done at that stage.

In reply to Deputy Bell, a worker in a company who had a claim against the company for civil damages, apart from his rights under workmen's compensation legislation, does not enjoy a special preference under the present law. If the company is not insured the worker has recourse only against the company. A claim from that worker against the company which had been granted in court would not be paid if Revenue took all the money which was available. That is my understanding. It is unfair to workers and to all sorts of creditors. If somebody has suffered a serious injury the normal rights under workmen's compensation to a disablement benefit do not represent sufficient recompense. It would be profoundly unjust if the Revenue collected all their money and a person with a claim of that kind was left unpaid. I do not agree with that and for this reason I put forward the amendment.

I understand this was the final list of ministerial amendments.

Not at all. These relate to three Parts and parts of Part IV. There are some amendments to sections in later Parts because they are related to amendments in the earlier parts. They are not put down on their own.

The Minister was complaining earlier about Deputy Barrett putting down an amendment at 12.05 p.m. today. It now transpires he is to put down more amendments himself, long after the Report Stage has commenced.

To Parts that will not be reached for weeks.

How does the Minister know that?

The Leader of the Deputy's party was on to my office on Friday asking me to guarantee that not more than two Parts would be dealt with.

Because we had not received the amendments at that stage.

The Minister had four months to produce them.

I have them; I have hundreds of them.

Then produce them.

Has the Minister hundreds more amendments which we have not yet seen?

Scores, perhaps over a hundred.

I cannot understand this. The Minister has hundreds of amendments which he has not yet published and he is complaining that we are late in putting in amendments. He said he hoped we would not be putting in more amendments, but now he says he has hundreds of amendments which he has not yet put in.

The vast majority of the amendments I have put down so far, or propose to put down in future, are made in response to points made by members of the Opposition in the Special Committee. If it inconveniences the Deputy to have so many amendments I could refrain from putting them down.

I would presume that if the Minister put forward any amendments it would be on their merits and if he is to withdraw them in a fit of pique because he is criticised in this House it does not suggest that he has a very clear idea of the public interest.

That last bit was especially inappropriate.

No further interruptions. Deputy Bruton to continue.

I have grave doubts as to whether the Minister really intends to do anything about Revenue preference. I think he is saying that he does in order to defuse the case we are making. If the Minister really intended to do something about this, given that it is the only item of company law upon which there is a clearly published Progressive Democrat policy — the only area of the whole Bill on which the Progressive Democrats have pronounced themselves as a party is doing away with Revenue preference — given that the matter was discussed extensively in the Dáil in February, given that the Minister has had the spring, summer and half the autumn to consider this issue and given that there is an amendment before the House on the subject and that he still cannot make up his mind whether he wants to do something about Revenue preference, I do not believe the assurances he has given of his intentions. I hope I am wrong. I hope the Minister will show that he does intend to implement this element of Progressive Democrat policy but I will believe it when I see it. I would have expected that the Minister would have pointed out in response to this amendment that he would be introducing an amendment to Part VI to deal with the matter.

We can save ourselves the trouble of the denial later. I did not say I would bring in such an amendment. Why is the Deputy quoting me as if I had?

The Minister was not listening. I said I would have thought that was what the Minister would have said but he did not. He gave us the same vague assurance of goodwill and the like which was vouchsafed on the previous occasion when the same matter was discussed many months ago. It was not produced as part of the first list of amendments and I have the gravest doubts as to whether the Minister has the faintest intention of doing anything about this. If the Minister does produce an amendment to deal with Revenue preference I will not need any condiments to enable me to swallow my words. I will swallow them with pleasure but I do not expect that this eventuality will arise because if the Minister wanted to do something about it he could have done so. He has not.

I am disappointed for the Progressive Democrats who rallied to the cause on this and other policy items and I am disappointed for the creditors of those companies all over the country who are not having Irish law brought up to standard with law in other countries. I am disappointed the Minister has not taken a decision on this matter and is postponing it yet again.

May I say that——

Acting Chairman

I am sorry, Deputy, but Deputy John Bruton has concluded and the Deputy can speak once only.

I did not speak at all, Sir.

Acting Chairman

The Deputy did not offer before Deputy Bruton.

I am sorry to disagree with the Chair but I did offer.

Acting Chairman

The Deputy knows the procedures in the House. Deputy John Bruton has now concluded. I am sorry, there may be other occasions on which the Deputy can offer but not now.

I should like to put on the record that I did offer before Deputy John Bruton concluded. Perhaps the Chair did not see me.

Acting Chairman

I did not see the Deputy offer when Deputy Bruton was called.

Amendment put.
The Dáil divided: Tá, 43; Níl, 78.

  • Ahearn, Therese.
  • Allen, Bernard.
  • Barnes, Monica.
  • Barrett, Seán.
  • Belton, Louis J.
  • Bradford, Paul.
  • Browne, John (Carlow-Kilkenny).
  • Bruton, John.
  • Bruton, Richard.
  • Carey, Donal.
  • Connaughton, Paul.
  • Connor, John.
  • Cosgrave, Michael Joe. Cotter, Bill.
  • Creed, Michael.
  • D'Arcy, Michael.
  • Deasy, Austin.
  • Doyle, Joe.
  • Dukes, Alan.
  • Enright, Thomas W.
  • Farrelly, John V.
  • Fennell, Nuala.
  • Finucane, Michael.
  • FitzGerald, Garret.
  • Flaherty, Mary.
  • Flanagan, Charles.
  • Harte, Paddy.
  • Higgins, Jim.
  • Hogan, Philip.
  • McCormack, Pádraic.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • McGrath, Paul.
  • Nealon, Ted.
  • Noonan, Michael. (Limerick East).
  • O'Brien, Fergus.
  • O'Keeffe, Jim.
  • Owen, Nora.
  • Reynolds, Gerry.
  • Sheehan, Patrick J.
  • Taylor-Quinn, Madeleine.
  • Timmins, Godfrey.
  • Yates, Ivan.

Níl

  • Ahern, Dermot.
  • Ahern, Michael.
  • Andrews, David.
  • Aylward, Liam.
  • Barrett, Michael.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Brennan, Séamus.
  • Briscoe, Ben.
  • Daly, Brendan.
  • Davern, Noel.
  • Dempsey, Noel.
  • Dennehy, John.
  • De Rossa, Proinsias.
  • de Valera, Síle.
  • Ellis, John. Fahey, Frank.
  • Fitzgerald, Liam Joseph.
  • Fitzpatrick, Dermot.
  • Flood, Chris.
  • Flynn, Pádraig.
  • Gallagher, Pat the Cope.
  • Garland, Roger.
  • Geoghegan-Quinn, Máire.
  • Harney, Mary.
  • Haughey, Charles J.
  • Hillery, Brian.
  • Hilliard, Colm.
  • Jacob, Joe.
  • Kelly, Laurence.
  • Kenneally, Brendan.
  • Kirk, Séamus.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lawlor, Liam.
  • Lyons, Denis.
  • Martin, Micheál.
  • McCartan, Pat.
  • McCreevy, Charlie.
  • Browne, John (Wexford).
  • Calleary, Seán.
  • Callely, Ivor.
  • Clohessy, Peadar.
  • Collins, Gerard.
  • Connolly, Ger.
  • Coughlan, Mary Theresa.
  • Cowen, Brian.
  • Cullimore, Séamus.
  • McDaid, Jim.
  • McEllistrim, Tom.
  • Mac Giolla, Tomás.
  • Molloy, Robert.
  • Morley, P. J.
  • Nolan, M. J.
  • Noonan, Michael J. (Limerick West).
  • O'Connell, John.
  • O'Dea, Willie.
  • O'Donoghue, John.
  • O'Keeffe, Ned.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Desmond J.
  • O'Rourke, Mary.
  • O'Toole, Martin Joe.
  • Power, Seán.
  • Quill, Máirín.
  • Rabbitte, Pat.
  • Reynolds, Albert.
  • Roche, Dick.
  • Sherlock, Joe.
  • Smith, Michael.
  • Stafford, John.
  • Treacy, Noel.
  • Tunney, Jim.
  • Wallace, Dan.
  • Wallace, Mary.
  • Woods, Michael.
  • Wyse, Pearse.
Tellers: Tá, Deputies J. Higgins and Creed: Níl, Deputies V. Brady and Clohessy.
Amendment declared lost.

We now proceed to amendment No. 5 in the name of the Minister. I observe that amendments Nos. 51 and 73 are consequential on amendment No. 72. I am suggesting, therefore, that we discuss the Minister's amendment No. 5, Nos. 51, 72 and 73 together. Is that satisfactory? Is it agreed? Agreed.

I move amendment No. 5:

In page 16, to delete lines 1 to 3, and substitute the following:

"(2) The following provisions are also hereby repealed—

(a) Regulation 8 of the European Communities (Companies) Regulations, 1973,

(b) section 6 of the Companies (Amendment) Act, 1977, and

(c) section 21 of the Companies (Amendment) Act, 1986.".

This group of amendments, the four of them, is on the lines of similar amendments which were tabled on Committee Stage but which, following debate, the then Minister of State, Deputy Brennan, withdrew with a view to clarifying the extent of application of the provisions concerned.

The objective of these amendments is to rationalise and extend the application of certain Companies Acts provisions to unregistered companies. I want to emphasise that I am not, through these amendments, bringing further companies within the scope of the Companies Acts. What I am doing is to apply certain further company law provisions to such unregistered companies as currently exist.

The background to this is as follows. Section 377 of the 1963 Act, and the Ninth Schedule to that Act, applied certain provisions of the Act to unregistered companies. Section 377 provides that an unregistered company is any corporate body other than first, a body incorporated under a public general statute, such as a registered company, a building society, an industrial and provident society, or a statutory board; secondly, a non-profit-making body, or thirdly, any body which is prohibited from distributing its income or property among its members. What this leaves us with, essentially, is companies incorporated by a charter, by letters patent or by a private Act of Parliament. From the researches I have had carried out, I am satisfied that there are very few of these still in existence, so that the actual scope of application of these amendments is very limited indeed.

When these amendments were previously discussed in the House, concern was expressed that the effect would be to apply the provisions specified in the proposed Schedule to a large number of learned bodies such as the Royal Irish Academy, the Incorporated Law Society, King's Inns, the College of Surgeons and the like.

On further examination and having taken legal advice in the matter, I am satisfied that the exemption contained in section 377 (2) (b) of the 1963 Act — which exempts non-profit making bodies — would ensure that such bodies would not be brought within the scope of application of the provisions to be applied to unregistered companies. I am fortified in this view by virtue of the fact that such bodies have not seen it necessary to deliver a copy of their charter, statutes or other instruments/defining the constitution of the body under section 377 (5) of the 1963 Act, or regulation 7 of the European Communities (Companies) Regulations, 1973.

The other main aspect raised in the previous debate related to the application of these provisions to certain State bodies. However, State bodies which are incorporated as companies are obviously already subject to the Companies Acts, and they would not be affected by these amendments. On the other hand, State boards are not unregistered companies either, since they are established under Public General Statutes. Consequently their position will not be changed under these proposals either. It is a much wider question as to why some State bodies are established as companies under the Companies Acts while others are set up under their own Acts as boards, but I think that that is a matter to be addressed in relation to the individual Acts establishing such boards rather than in the context of general companies legislation.

Turning to the amendments before the House, the major change from the amendments which were previously circulated and discussed is the provision in the proposed new section 273 of the Bill, subsections (2) and (3), which would enable the Minister by regulation to add to or subtract from the relevant sections of the Companies Acts to be applied. This would obviously be particularly important as further companies legislation is enacted in the future.

The main amendments in the group are Nos. 72, which would amend section 377 of the Principal Act in the way I have just described, and No. 73, which would replace the Ninth Schedule to the 1963 Act with a modified, up-to-date version. Amendment No. 5 makes some necessary consequential repeals to existing provisions, while amendment No. 51 would delete section 49 of the present Bill, which would now, assuming that these are accepted, become unnecessary.

Amendment agreed to.

Acting Chairman

We come now to amendment No. 6 in the names of Deputies John Bruton and Sean Barrett. Amendments Nos. 7 and 13 are related. Is it agreed that we take them together?

Could we clarify the misunderstanding we had the last time this situation arose? Does that prevent us from replying to the debate?

Acting Chairman

The mover of the first amendment can reply to the debate.

That is if we agree to the three being taken together? That is crazy.

Acting Chairman

Is it agreed?

The three amendments are in the names of the three Deputies. Therefore, one of them can reply.

Acting Chairman

Is it agreed?

It is not really agreed. However, I will deal with these amendments if I may, Sir.

Acting Chairman

Is it agreed to take amendments Nos. 6, 7 and 13 together?

By majority decision we will accept it. We have to accept it, but I am not happy with it, not because they are not related but because only one speaker may reply. It does not seem fair.

Acting Chairman

Is it agreed to take them together?

The House is agreed. I do not agree.

Acting Chairman

We are taking the amendments together.

I move amendment No. 6:

In page 16, line 7, after "company" to insert "in order to enquire into matters stated by the court".

These are amendments dealing with Part II of the Bill which concerns investigations into companies. The main change contained in Part II of this Bill as against the 1963 Act which also had provision for investigations of companies' affairs was that under the 1963 Act the investigations were conducted at the behest of the Minister. Under the 1987 Bill investigations will in future be at the behest of the court or it will be a case of people having to apply to the court to have an investigation undertaken and the people who may apply to have an investigation undertaken are the members of the company, the company itself, a creditor of the company or the Minister. All of these, including the Minister, have to get the consent of the court to conduct an investigation.

During the debate in the House on this Part of the Bill there was considerable argument about whether there was sufficient clarity as to what the purpose of these investigations were. To simply have an investigation initiated by people who apply to the court looking for an investigation without having to say what it is they want found out seems illogical. In a sense, one is sending an investigator in on a sort of fishing expedition, to see what he can find out, without any particular direction or purpose. I do not think there is any point in that. I do not think it is good legislation. There should be a requirement to mandate the investigator appointed by the court to investigate particular stated matters and that is the purpose of these amendments.

In section 7 of the Bill which relates to investigations initiated by the company itself or by members of the company or by creditors we would propose that if, on foot of these applications the court decides to appoint an inspector it should be in order to inquire into matters stated by the court; in other words, the inspector should be given instructions as to what he is to inquire into, which is not provided for at present. That is quite flexible. The court can state any range of matters it wishes. It can give a very general or a very specific mandate as the case may be, but the court should be asked to give a mandate, which is not the case under the Bill as drafted at present.

Amendments Nos. 6 and 7 are basically designed to achieve the same purpose. Amendment No. 13 is the same except that it applies to an investigation initiated under section 8. Under this section the Minister initiates the application to the court. This amendment requires that the Minister should state in his application for the appointment of an inspector the purposes for which he wants the inspection to take place. He will almost certainly do that anyway but it is no harm that he be asked to do so by law. I do not think it is reasonable to have a provision whereby either a Minister or an individual can seek that an inspector be appointed without him being required to state the purposes of the investigation or without the inspector, when appointed, being told either by the court or by the Minister in his application to the court precisely what he is to investigate. It is for the sake of precision that these amendments are put forward and I hope they will be accepted in the context of improving the legislation.

Unless I misunderstand the reasoning behind those amendments, I am not convinced of their necessity for purposes of precision or otherwise. Deputy Bruton seeks that the court specify the matters into which the inquiry is sought. On reading the section as it stands, it states that the court may appoint one or more competent inspectors to investigate the affairs of a company. The rest of that sentence reads: "and to report thereon in such manner as the court directs". I am unclear as to the reason it is necessary to insert "in order to inquire into matters stated by the court". I am not sure what distinction is being drawn, unless it is suggested that the process——

There is a difference between manner and matter.

The process in paragraphs (a), (b), (c) and (d) — as I understand it the Minister proposes to insert a new provision there, adding a case in which such an investigation may take place — is carefully set out, the circumstances in which an investigation may be sought and inspectors may be appointed. Therefore, it seems that if the court is satisfied to accede to that request it might be unwise to require the court to specify with precision the matter that the investigation should cover. Presumably it is more prudent to allow the inspectors appointed by the court on the basis of paragraph (a), (b), (c), (d) or, if the Minister's new provision is accepted paragraph (e) to uncover whatever they can rather than be restricted by the court a priori if the court was in a position to so do at the outset of the investigation. At this stage, unless I misunderstand the reasoning behind the amendments, I do not understand the necessity for them.

Deputy Rabbitte has covered the point I wanted to make. Perhaps in reply Deputy Bruton might indicate the reason for these amendments. They do not seem to be necessary. It seems the section is adequate as it stands at present. It would be interesting to hear the specific reasons for inserting additional words in this section.

It is not quite clear from the wording of Deputy Bruton's amendment whether he wishes the applicant in his initial application to the court to outline the matters which he wants to have investigated. I have listened carefully to Deputy Bruton's argument and I would be inclined to advise the Minister to reject the amendment proposed by Deputy Bruton. If an applicant applies to the court to appoint an investigator, the court can require such evidence in support of the application as it wishes. The applicant will be a person who has run into some problem with the company and will apply to the court to have the affairs of the company investigated. The court will appoint an inspector to investigate the affairs of the company and will almost invariably, in deciding to appoint the inspector, outline the areas to be looked into. During the course of his investigation the inspector may come across some related matters and it may be in the interest of the applicant or some other interested party that these matters be brought to light and reported on to the court. Deputy Bruton said that if his amendment is incorporated into this section, the legislation will remain as flexible as it is now. If that is so, there is no need for the amendment in the first place.

The wording of Deputy Bruton's amendment may introduce inflexibility into the section in that the court would be restricted to outlining certain areas the inspector is to investigate, and if he comes across something else that should be reported he might not be able to do so. I can understand what Deputy Bruton is getting at but the difficulty he is trying to meet is more illusory than real and for that reason I would urge the Minister to reject the amendment.

When the Minister is making his case he might outline the circumstances in which he envisages this section being used. If the application for an investigation is being made by a creditor, what will be investigated? There must be a reason why the investigation is to be carried out. In regard to the further sections about the requirement for the production of documents, evidence and so on, surely a court on hearing an application must know the reasons the investigation should take place and the circumstances that led to the calling for an investigation. The difference between the lodgment of £500 and £200,000 security to cover the possible costs of an investigation is so great that a person must, at the outset, have some indication of what this investigation will cost. A small creditor who may feel that there should be an investigation into the behaviour of directors or into what he might perceive as a fraudulent act may want to use this section but, in so doing, may find himself in a position where the court envisages a wider investigation than the applicant had in mind on the first day and could find that the cost of this investigation could be anything from £500 to £200,000.

Very few creditors could afford £200,000. They may want something investigated but could end up paying for production of evidence which would lead to the State ultimately making charges against the individuals involved in the company under investigation. I can see what Deputy O'Dea was getting at as it is not clear from the section why the creditor — or whoever goes in to court as specified in section 7 looking for an investigation — wants it. Therefore, the amendments proposed by Deputy Bruton and myself merely ask that an investigation be carried out into the affairs of a company into matters stated by the court so that after the hearing the court may order an investigation into some aspects of the company's operations. That in itself will give some indication as to costs which would require the lodgment of £500, £1,000 or whatever the sum is. Everybody would then know what it would cost. However, where an application is made under subsection (3) of this section or under section 8, the court may require the applicant or applicants to give security to the amount not less than £500 and not exceeding £200,000 for payment of the costs of the investigation. As I said, there is a big difference between £500 and £200,000 and very few people would be in a position to lodge security of £200,000.

That is the maximum amount.

Exactly. Who will decide the amount? The court will decide the amount. On what basis will the court decide? Surely they will decide it on the basis of the extent of the investigation. Is it a massive investigation involving many people and high costs or is it a minor investigation? We are asking the Minister to consider our amendment which asks the court to specify what should be investigated by those who will be appointed to do so. It is not our intention to restrict any investigation which should be carried out; we are not trying to prevent information being made available but we want clarity in relation to this section. I cannot at present envisage when this section will be used because it involves enormous costs. Perhaps the Minister would clarify this point.

I understand the point made by Deputy Bruton and the object of the exercise in putting down these amendments. I sympathise with his objective but, on careful reading of the section, his concern is unnecessary. Under section 7 (2) the application has to be supported by such evidence as the court may require. It will not mean that there will be an investigation on demand. It will certainly not be a pure formality as I imagine that the courts will require a good deal of hard evidence and facts — not just supposition, vagaries or generalities — before they accede to the very serious step of allowing inspectors to go into a company to investigate it.

The evidence which would have to be adduced before the court would be motivated to operate the section in the first place would obviously have to set out the parameters of the object of the investigation. The court would examine all that and would, in accordance with the directive in subsection (1), indicate that the inspectors were to report in such manner as the court directs. That is a pretty wide constraint and I imagine that a court, looking at that section, would be unlikely to say that inspectors should just look here, there and everywhere. I would think that a court would look at it and give the power to direct inspectors to report thereon in such manner as the court directs and that they would specify exactly what was to be done and the areas to be looked at, based on the evidence adduced. I imagine that the courts would preclude the fishing expeditions into ancillary matters in the company which were not connected to the evidence adduced to trigger the mechanism of section 7. The parameters laid down in subsection (1) are reasonably adequate and would ensure that a court would decide on what was to be done and how it would take place. The description "to report thereon in such manner as the court directs" is wide enough to cover both manner and matter and I think the courts will do precisely that.

I can see that the aim of amendment No. 6 is to require the court to set down terms of reference for the inspector or inspectors but that is what the court would do anyway, particularly in view of the requirement in section 7 (1) to report in such manner as the court directs. For example, I cannot imagine the court simply directing an inspector to "investigate the affairs of company X". It would be far too vague and sweeping and I do not think, in practice, that any court would do it anyway. Having said that, I am not opposed to the principle of the amendment so far as it goes and I am prepared to agree to do it provided that the word "stated" in the amendment is replaced by the word "specified", which does not change the overall meaning to any great extent.

However, I do not see the same benefit arising from amendment No. 7. I am satisfied that once the court has clearly defined what the inspector is to inquire into, it is unnecessary then to say that its purpose is to achieve these particular purposes. Consequently, I am opposed to this amendment. In fact the words could be misleading in that the inspector's task will be to carry out an investigation and to furnish his report in the matter; it would not be for him to achieve the objectives of the court. Furthermore, if the amendment were made the second clause of the opening three lines of subsection (1) would then read as follows: "The court may appoint one or more competent inspectors ... and to report thereon in such manner as the court directs ... in order to achieve the purposes of the investigation as stated by the court". I honestly cannot make sense of this. It implies that although the court will direct the manner in which the report is to be drawn up, the inspector could nevertheless, if the amendment is not made, somehow draw up his report to achieve some purpose other than "the purposes of the investigation as stated by the court". I do not see the necessity therefore for amendment No. 7.

With regard to amendment No. 13, section 8 clearly defines the circumstances in which the court can appoint inspectors on the application of the Minister, and these are spelt out in paragraphs (a), (b) and (c) of subsection (1). It is totally unnecessary, if not wholly inappropriate, to require the Minister to specify the purposes for which he has petitioned the court given the necessity for him to satisfy the court in accordance with the paragraphs I have just mentioned. This amendment also suffers from the defect I have just mentioned in relation to amendment No. 7. In these circumstances I cannot accept amendment No. 13 either. I will be prepared to accept amendment No. 6 provided the world "stated" is replaced by the word "specified".

I appreciate the Minister's acceptance of amendment No. 6. I understand the Minister's views about amendment No. 7 and I accept them, but I am not quite so sure that I agree with his views on amendment No. 13. Without delaying the House unnecessarily I will say why. It is not quite clear to me why we need section 8 at all. There are three circumstances specified in which a Minister might look for an inspector to be appointed, one being if the affairs of the company are being conducted with intent to defraud, another that the persons involved in the company have been guilty of fraud and another that the members of the company have not been given all the information which they might reasonably expect to get.

If those three circumstances exist they do not require the appointment of an inspector. If the creditors are being defrauded they should take civil action to get their money back. If a criminal offence has been committed, the Minister, rather than looking for an inspector to be appointed, should send the file to the Director of Public Prosecutions. If the members are not getting all the information they should reasonably expect from the directors, they should take civil action against the directors for breach of duty. They should go direct to the source of the problem rather than go through this rigmarole of asking the Minister to apply to the judge to appoint an inspector to find out a lot of information and then eventually after huge costs, have to take civil action to recover the money or take a separate criminal proceeding for fraud. It is not clear why we need these inspections if the circumstances are as stated in section 8.

If a Minister is applying for an inspector to be appointed he should be required to say why. I cannot conceive of any circumstances in which a Minister would want to appoint an inspector in these cases because there are other remedies available. An inspection of the kind envisaged is an elaborate waste of time and money. It was simply to force a little bit of mental rigour on any Minister who might consider a kind of cop out by appointing an inspector rather than taking criminal proceedings, that he would be forced to tell the court why he wanted an inspector rather than criminal proceedings. In other words, the Minister would have to say what purpose he wanted to fulfil in the application. That is why amendment No. 13 is sensible. I could never understand what all this carry on about inspections was about, despite all the debate. The existing procedures are more than sufficient to deal with the circumstances referred to in section 8, without all this waste of money and time.

Amendment No. 6, as amended, agreed to.
Amendment No. 7, not moved.

I move amendment No. 8:

In page 16, between lines 16 and 17, to insert the following:

"(d) in any case, on the application of a director of the company;".

This amendment arose from a suggestion made by Deputy McCreevy on Committee Stage that non-executive directors should be able to petition the courts for the appointment of an investigator. The amendment does not, however, specify any particular category of director, since it would be wise to avoid making any distinction between different categories of directors, and there is not any way in law of distinguishing between executive and non-executive directors. While any director could already apply to the Minister to use his powers under section 8, I agree that in some circumstances it seems desirable that the director should be able to go direct to the court. The safeguards of having to put up some security would also apply in this case and should prevent frivolous or vexatious applications.

I have very serious reservations about this amendment. There could be a danger not so much of frivolous but of vexatious applications being made. It frequently happens in companies big and small that one director disagrees or has a grievance. This amendment would give such a person the opportunity to raise mayhem and cause company shareholders, taxpayers, and goodness knows who else a great deal of money and trouble. Is it really a very good idea to place that very strong power to make such an application in the hands of one person? It is not even as though a grouping of directors are involved where there would be some safeguard. To say that any one director who may be an insignificant person in the company is to be given the power to raise mayhem in a company and possibly destroy the company is ridiculous. If the thing went awry and such a person incurred massive costs he could destroy the company.

The Minister says there is a safeguard, that being that the security for costs would act as a deterrent. It might, but it might not. The provision in section 7 (3) says that the court "may" require the applicant to give security for costs. It does not say that the court "shall" require the applicant to give security for costs. It is a discretionary matter for the court. It is easy enough to envisage a situation where this notional director looking for trouble goes into a court asking for an order, as is his right if this amendment is adopted, and when the question for security of costs comes up, he pleads to the court that he is a person of little or no means and not in a position to give security for costs. It is no secret that courts are slow to stifle litigation on the grounds that a person may not have the money to put up to provide security for costs.

If that kind of plea is made it could very well be that a court may say, "this man says he has a claim; I do not know whether he has but I am not going to stop him going ahead because he does not have the money to put up for security for costs". It could be that some director who goes a bit peculiar in the head, with no control at all, and digs up material which on the trial of an action would not stand up, is empowered to go into court and given, as of right with this amendment, the power to disrupt a company, possibly cause the loss of jobs and the liquidation of the company because of the trauma involved without any balance or check whatsoever. It is a very wide step to take and I must admit I was surprised to see this amendment without any provision for control or check or whatever.

I suppose one could say that the application has to be supported by such evidence as the court may require — that is true — but that would be in the nature of prima facie evidence and there would not be a full hearing with evidence, counter-evidence and so on at that stage. If prima facie evidence was adduced there I think the investigations would go on because that is what the purpose of the investigation would be. I do not think a court is going to have a trial of the action; the court would be likely to say “I think these are matters for the investigators to see too and, therefore, I am not going to make a decision on them. Let the investigators investigate”. It requires the investigation to see that through and to come up with the results.

As I have said, it seems a bit over the top and an excessively wide power to give to one director — it might be one director out of 20 — who gets a bee in his bonnet, trumps up a situation and comes into court. The costs of an investigation could be astronomical. The charges by members of Deputy McCreevy's profession who would carry out these investigations are very high by the hour or by the day and very substantial sums for costs could very easily be run up. I wonder if it is prudent or wise to vest a power that strong and high in one director alone. It certainly will make redundant section 7 (i) (c) which says "in any case, on the application of the company", which means all the directors. I presume that is how the Bill was originally drafted — I was not on the Special Committee. On the one extreme, the position put forward is that the company as a generality will be required to make the application but at some far swing away from that — and there is some deep gulf between the two positions — it is possible that an investigation can be carried out on the application of one director only. Surely more than one director should make the application. Perhaps two directors should make the application so that at least there will be some check or balance there. Otherwise I must admit that it is a matter of some concern to me.

I think Deputy Taylor has made the point very effectively how a vexatious claim could be brought forward by, as he put it, someone who is a bit peculiar in the head. Certainly one can envisage that kind of claim being initiated. Whether it would comply with section 7 (2) or pass the hurdle imposed by section 7 (2) I am not so sure.

When the Minister is replying I would like him to address the corollary of that situation. Sometimes a non-executive director is close enough to the action to believe that an investigation may be necessary or desirable in the interests of the company, its shareholders, its workers or whoever. Very frequently members of a company do not get all the information they might reasonably expect. For example, under section 8 one of the circumstances in which the Minister may cause an investigation to be held is in a situation as specified in paragraph (c) where its members have not been given all the information relating to its affairs that they might reasonably expect.

In my experience that is a fairly frequent occurrence and there does grow up on the board of many companies a kind of unwritten expectation that you toe the line so to speak. If times are rough it may be necessary to dabble in doing things one would not do otherwise and in order to trade ourselves out of a difficult temporary situation or whatever we may engage in decisions or actions which would certainly not come within the scope of what possibly have been made new offences under this Bill when it is enacted. In other words, a non-executive director who is not part of the executive management of the company could be in a position to at least know enough about this to initiate this action and to pre-empt greater damage being done to the company at a later stage.

I am not dismissing at all the possibility of a vexatious application as suggested by Deputy Taylor but I wonder whether on balance the right of a non-executive director, who may have his suspicions and who may not be part of the inner cabal, to trigger this mechanism which would pre-empt greater damage being done to the company might not mean that this is a good reason for allowing that facility to be included as an additional reason in section 7.

Having listened to the debate on his amendment I suggest to the Minister that unless he can give us exceptionally good reasons as to why this amendment should be included it would be wiser to leave it out. If a non-executive director is not happy with what is happening in a company, surely he can contact the Minister and ask him to use his powers under section 8 to have the company investigated. That would get over the possible difficulties outlined by Deputy Taylor and Deputy Rabbitte.

I do not understand why a director would want to have the company of which he is a director investigated. If he thinks there is fraud going on, surely it is open to him to resign and ask for an investigation through the Minister's office, produce the evidence and so on. In the light of the possible dangers or difficulties that could arise by giving one director this power, as outlined by Deputy Taylor in particular, I believe it would be better to leave out this provison, seeing that it was not originally included in the Bill. If Deputy McCreevy had a particular problem, perhaps the powers the Minister is taking under section 8 could be used to deal with those problems. I cannot see a situation occurring on a reasonably regular basis where a director of a company would want the company of which he is a director investigated when, under section 8, he can petition the Minister to have this investigation carried out.

I find it somewhat surprising that an amendment which was put down in response to views which were expressed in the House — and a great number of the amendments I have put down were based on this — is not exactly enthused about by the House. I am entirely neutral about it. It was not I who promised to consider the amendment, or put it down but rather the then Minister of State who is now Minister for Tourism and Transport. I am sure he was endeavouring to be as helpful as myself in these matters.

Deputy O'Dea is the only Fianna Fáil representative who can speak on behalf of the two.

He has been a loyal and truthful servant during the debate on this Bill.

Some Deputies seem to think it would be very strange if a director, in particular a non-executive director, were to apply to the court for an investigation. I do not think that at all. In many respects this is something we should see more of. A non-executive director in particular should be given that power. I do not refer to him here as a non-executive director because there is not that distinction in the companies Acts but he should have that power because one of the weaknesses in Irish companies is that they do not have a supervisory type director as they do in other countries. They tend to be dominated by either executive directors working there full-time, and who have a vested interest, or by proprietor directors who have a lot of money invested in the company and, effectively, own it.

A valuable commodity, not made much use of in Ireland, is the non-executive director who can stand back, who does not have a vested interest, either through a proprietorship or full-time employment, who, perhaps, can say that that sort of thing should not be going on and can resist the pressure described by some Deputies as being necessary, that because things are tough now they will cut a few corners or do things they would not do when economic circumstances were better. It would be good to have someone like that who could blow the whistle on them and say to them, "hold on, you cannot go that route and you will have to stop". If they persist he could say to them that he has power under section 7 of the 1990 Act to go to court, ask for an investigation and say that he thinks they should not pursue that route.

The argument has been made that he is peripheral to the company but he is certainly no more peripheral than the person envisaged by paragraph (d) of subsection (1), the creditor, somebody who is utterly peripheral, who is owed £100, £1,000 or some negligible sum of money. The likelihood of a frivolous or vexatious application being made by a creditor is far greater than it is by a director. In any event one will not be able to make an application just because one feels like it, one will have to comply with subsections (2) and (3), produce evidence which will satisfy the court and put up security. One will not do so lightly.

Could one not make a better case for a chief executive having the power to ask for an investigation?

He is entitled to under this but he might not be under the amendment I propose.

The chief executive is the last man in the company.

Usually the investigation would be into the chief executive rather than by him or at his instigation. I note there is no enthusiasm for the amendment in the House but the point of the overdraft is good and it might do something to encourage greater use of effective non-executive directors, not just people appointed for the sake of decorating the note paper, expanding their own ego or something of that kind but people who can go on in a supervisory capacity to keep an eye on things as against the employees, employee directors and proprietory directors both of whom have vested interests which might cause them, perhaps, to be less objective than a non-executive director. For this reason I suggest the amendment should be made.

Amendment agreed to.

I move amendment No. 9:

In page 16, line 19, after "may require" to insert "or as may be specified by regulation under this Act".

This amendment is along the lines of similar amendments put down by us before. Under section 7 the court may appoint an inspector to investigate a company on the application of 100 members of a company, the company itself, one fifth of the members of the company or a creditor. It is not stated what such an inspector should look for or what criteria the court should use in deciding whether an inspector should be appointed. It simply states that 100 members, one fifth of the members, the company or a creditor can look for an inspector to be appointed for any reasons they like.

It states that an application should be supported by such evidence as the court may require but how is someone to know what evidence the court is going to require until they appear in court? Given the way the section is framed at present, it seems that somebody will have to go into court to say that they want to appoint an inspector. The court will then say for that to happen it will have to be given evidence on a number of points, ask them to go away and come back with that evidence in a week's or a month's time.

To save the necessity for this sort of approach as to what evidence the court may want, it not being known in advance, a power should be vested in the Minister to lay down in regulations the type of evidence which should be put forward to support an application of this kind. That would not preclude the court from looking for additional evidence not specfied in the regulations which I am suggesting the Minister should have the power to make because this is an alternative. The section would read that the application shall be supported by such evidence as the court may require or as may be specified in regulations. Therefore, the court could look for additional evidence apart from that specified by the Minister in regulations.

If this procedure of investigation is to be used, and people are to know whether this procedure of investigation is relevant to the circumstances they are dealing with, some criteria or guidelines should be laid down as to what is envisaged. This is why I am proposing to give the Minister power to specify in regulations the type of matter which ought to be covered.

In a number of sections throughout the Bill provision is included for the Minister to make regulations to overcome certain difficulties which may arise on the implementation of certain sections of Parts as the case may be. I have tabled, or propose to table, a number of similar amendments to other sections which we will come to discuss in due course. On a practical level the question as to what minimum evidence ought to be required under section 7 is one which will exercise the minds of the superior courts rules committee following the enactment of the Bill and on that basis the amendment may be unnecessary.

Having said that, however, I do not necessarily disagree with the idea behind the amendment although I have some other difficulties with it. The first of these is that the subsection talks of evidence which the court may require. Of course the court might require varying amounts and levels of information in different cases.

It might also be difficult for the Minister to make regulations as to the type of evidence which he thinks the court might require since he would have no way of knowing this because it is at the discretion of the court. However, assuming that the Minister did make regulations, I think the court would still have to be free to decide for itself what evidence it required in particular cases. On that basis it would have to be clear that anything specified in regulations would not prevent the court from exercising its own discretion in the matter. Secondly, it would have to be clear who would make these regulations, and I assume the Minister would be the appropriate person. Finally, I prefer the word "prescribed" to "specified" since this is the usual terminology used throughout the Bill. If these changes were made I would be prepared to accept the amendment. To be clear, from a drafting point of view the amendment which I would be prepared to accept would read:

In page 16, line 19, after "may require" to insert "including such evidence as may be prescribed".

Is that after the words "the court may require"?

It is after "may require"— comma I suppose —"including such evidence as may be required." The amendment should include the transforming of the full stop after "require" to a comma and then the words "including such evidence as may be prescribed".

I thank the Minister for that.

It would be clearer if Deputy Bruton would agree to withdraw his amendment and the Minister would move his.

Amendment by leave withdrawn.

I move amendment No. 9 (a):

In page 16, line 19, after "may require" to insert ", including such evidence as may be prescribed."

I am sorry, may I hear the amendment again, please?

The subsection would read:

The application shall be supported by such evidence as the court may require, including such evidence as may be prescribed.

Then we need to define the word "prescribed".

The earlier section defines "prescribed". It means prescribed by regulation made by the Minister.

Amendment agreed to.

I move amendment No. 10:

In page 16, line 20, to delete "or section 8".

This amendment arises from a general Committee Stage discussion on section 7 (3). Some Deputies felt it was wrong that the Minister, as an applicant for an investigation under section 8, might be required to put up security for costs of the investigation. Having reflected on the matter in the meantime I must say I fully agree with the view that was expressed in the House at the time. I believe strongly that if the Minister of the day feels there are grounds for going to court to have an inspector appointed, he should be free to do so or if he is carrying out an investigation under section 8, which is actually the point of this amendment, he should be free to do so without the encumbrance of having to lodge money in court as evidence of his bona fides in the matter. At the same time in case anyone feels that the Minister could pursue vendettas by this route or go on fishing expeditions, I would remind the House that even the Minister still has to persuade the court that there are good reasons an inspector should be appointed. These grounds are laid out in section 8 (1).

Amendment agreed to.

I move amendment No. 11:

In page 16, line 22, to delete "£200,000" and substitute "£50,000".

As Deputy Barrett remarked on an earlier amendment, there is a big difference between £500 and £200,000. Although I acknowledge that this section has been changed substantially from what we started out with, that the power the section confers is discretionary and presumably that the court may choose to waive it, nonetheless, the maximum figure of £200,000 is excessive and could act as a deterrent to the mechanism envisaged in section 7 being triggered albeit for the best of motives. I am proposing an alternative figure of £50,000. I would like to hear the Minister comment on whether he considers that not just the scale of the investigation would be taken into account by the court but also the status of the company or the person seeking the application.

Let us refer to the debate we had on the role of non-executive directors. If I were a non-executive director of a major group of companies and became aware that certain lines of credit were available and had been made available for a specific purpose, and it was proposed that they be drawn down for some other purpose — for example, to fund speculative ventures abroad that had nothing to do with the purpose for which they were approved — my own view would be that I would like to be in a position — as the Minister put it — to blow the whistle. Looking at the figure in security of £200,000 that might be extracted I may have to think again. In the example I have given if one were to go into the court here in six months and suggest that one should investigate that company's affairs, the chances are that the court would be of the view that the allegations were of such a scale that the maximum security should be exerted. That would certainly cause me to think again before I would undertake that kind of commitment.

Deputy Bruton described the Bill as a rich man's Bill. He was arguing for his earlier amendment to be used as a method of putting pressure on the Government — on the Minister specifically — to widen the scope of the civil legal aid scheme. He warned that those of us on those benches would rue the day we did not support his amendment. He may be right. If I were to broaden the scope of the civil legal aid scheme I would not start with the corporate area; nonetheless, I take the point made. I do not think that access should be cut off because of the expense of the security required. I would ask the Minister to consider whether the maximum ought not to be reduced. I thank him for the amendment already made to the subsection in respect of the lower figure.

I have listened to what has been said. Deputy Rabbitte may misunderstand because he sees the figure of £200,000 printed in the Bill. He thinks that the courts will frequently make an order in respect of security of cost for that amount. That figure is simply put in as a cut off point to prevent the courts putting any higher figure in a very exceptional or unusual case. The important part of this section reads:

Where an application is made under this section...., the court may require the applicant or applicants to give security,....

There is a limit on the amount of security they can ask an applicant to give. I would imagine that in the great majority of cases the court will not ask for security, particularly if there is some reasonable evidence put before it. I would think it would be only in a case where there would seem to be very little evidence that they would be inclined to ask for security and probably the order would not be made anyway. There is provision under the rules of court for all sorts of instances in which the courts may order security for costs against a plaintiff. The cases are very rare, as I am sure Deputy Taylor would agree. The court is not inclined, on the face of it, to ask people having recourse to it to give security for costs because if this is done to any excessive extent, except in very exceptional cases, the court is denying access to itself. The whole approach to the courts under our Constitution is that persons should be encouraged to have access to them and to approach them. In no sense is this obligatory but it is put in as an indication of a cut-off figure in a very complicated case, which would be very rare.

I am inclined to leave it there, particularly since I believe that the question of giving any security at all, even as little as £500, will only arise in a small minority of cases. If an applicant has reasonable evidence I do not think the courts will ask for any security. It would be wrong for them to do so. It does not seem to be unreasonable to have a maximum cut-off figure which obviously will be rarely used. There may be some very big, contentious cases where costs would run to £500,000 or £1 million and it is better in those cases to have a cut-off figure. I recommend that the House should leave the figure as it is. Perhaps Deputy Rabbitte will consider not pressing his amendment.

I find it somewhat strange that a provision dealing with security for costs was put in at all. The Minister was quite right when he said that it is rarely, and only in very exceptional circumstances, that the courts make orders for security for costs when litigation is brought. The only instance of which I am aware, where it is ever contemplated, although there may be others, is where the plaintiff does not reside within the jurisdiction. If a person who lives in England, France, Germany or elsewhere initiates litigation in this country the courts may have a fear that if that person lost the litigation the person who got the award of costs would be unable to recover them from the person living outside the jurisdiction.

It seems rather strange that in these circumstances it was found necessary to introduce the measure. My view is that the whole thrust of the direction of the section is wrong and misguided. It would have been better to have left out the security for costs aspect and to have no provision for it but rather to deal more carefully with the nature of who is to be entitled to bring the application and the evidence to be put up front before the mechanism of the section could be triggered.

It is all very well for the Minister to say that in any case it is only a discretion to the court and that the court may perhaps not make any order for security for costs. Human nature being what it is, when the judge looks at this section and sees there the unusual provision which enables him to give security for costs, he may be inclined to look at it as an invitation to avail of the power in the section. I do not recall seeing this power in any other Act. It could have the effect of stifling at birth a worthwhile investigation, which would be a pity if the evidence is there.

A more logical course would have been to have laid down criteria for the evidence and to have spelled out what evidence would be required to enable an investigation to go ahead. The question of whether the person making the application to the court has or has not the means to put up security for costs to get proceedings under way seems somewhat irrelevant to the object of the Bill. If the object of the Bill is to have investigations carried out in appropriate cases and if there is sufficient evidence that would be prescribed to get such an investigation under way, what on earth is the relevance of providing that security for costs has to be given and that the matter cannot go on unless a particular sum, be it large or small, can be provided for security for costs by the person or group of persons who make the application? That should not be relevant. Either it is right for it to go on or it is not. The courts may look at the section and be inclined to see in it the intention of the Oireachtas that this should be a special kind of application and consequently the security for cost provision will be brought into play in a case where it should not be. If there is to be provision for security for costs, the maximum figure should be kept to a minimum. I agree with Deputy Rabbitte that the figure of £200,000 is too high. Perhaps the Minister would consider £100,000.

I might interrupt helpfully to say that this concept of security for costs in this context is not new. There are two such provisions in the 1963 Act, at sections 165 and 390.

We are now living in 1990 and should perhaps update our thinking in these matters. Would the Minister consider the points made here in the light of the provisions of section 13? This refers to expenses of investigation of a company's affairs where the court may direct any person, being a body corporate or the applicant or applicants for the investigation, to repay the Minister for Justice to such extent as the court may direct, not exceeding an amount of £200,000. In view of that provision, is subsection (3) of section 7 necessary?

What is emerging from the debate — and the point I made earlier — is not so much whether the figure should be £500 or £200,000 but rather its effect on the people whom the Minister would want quite rightly to instigate an investigation. Whether we insert this subsection or not is irrelevant in so far as we have made provision in section 13 for dealing with the ultimate costs of a case. From what I can gather the point being made from this side of the House is the effect that the provision stated in subsection (3) would have on a possible small creditor seeking an investigation. He would have to go to court before he would know whether he would be required to lodge security. That is the problem with the wording of the subsection as it stands.

Having listened to the debate I would prefer if the subsection were not there at all and that the matter were dealt with under the provisions of section 13. I do not know whether the Minister has power to delete the subsection without notice at this stage; perhaps he would not want to anyway. If he does not, then accepting Deputy Rabbitte's amendment might have some minor effect in terms of thinking of a small creditor. A sum of £50,000 is a great deal of money to a small businessman who could possibly be faced with this ultimate lodging of security up to £50,000 or £200,000.

Section 7 (3) would appear to be unnecessary if we can deal with the whole issue under the provisions of section 13. For that reason, if it is possible, I would ask the Minister to delete that subsection or, if not, to support Deputy Rabbitte's amendment.

I am prepared to cut my contribution very short if the Minister accepts the suggestion advanced by Deputy Taylor. If he is not I want to assure him that I think I understand it perfectly well; if one looks at the record — I am sure I said, in introducing the amendment, that the power being conferred on the court was discretionary and that it will not in all cases extract the maximum security for costs; that goes without saying. But, as the Minister himself conceded, it may in what he called very contentious cases.

The Minister is one of a very small group of people in this House who knows more about the Goodman affair than we can even put on the record of this House. I would ask him to give me an honest opinion on what he thinks would have been the position if, say, some six months or a year ago somebody who falls into the categories stipulated under section 7 (1) (a), (b), (c) and (d) caused an investigation to take place into that group of companies. It might have pre-empted the enormous scale of affairs that has happened since then. It might well have prevented the examiner process being necessary. Nonetheless, imagine going into a court some 12 months ago talking about the largest group of companies in the meat sector here and making allegations along the lines of the information advanced in this House on 28 August last. What conclusions does the Minister honestly think the judge would have come to? What conclusions would a court have come to in those circumstances, as Deputy Taylor said, faced with the fact that section 7 (3) includes this particular provision of security for costs to a maximum of £200,000? It seems to me that a court — with the probity that that company had in establishment political circles at that time — would have said: this exactly fits into the category of the vexatious case Deputy Taylor adduced earlier, or if we are seriously to consider proceeding with this then maximum security of costs would be exacted. In those circumstances the effect would be to deter the person bringing forward the request for an investigation. I am not asking that the motion enshrined in section 7 (3) be abolished altogether, that the court has the discretion to exert security for costs where it thinks it proper, but to allow a cut-off point as high as £200,000 could be counter-productive in terms of the objective of section 7, which would be a pity.

In an effort to resolve the problem I might put a proposition to Deputy Rabbitte which might be agreeable to the House, that is that we make the figure £100,000.

I agree and thank the Minister.

Amendment No. 11 is altered to read as follows:

In page 16, line 22, to delete "£200,000" and substitute "£100,000".

Is that agreed? Agreed.

Amendment agreed to.

I move amendment No. 12:

In page 16, between lines 23 and 24, to insert the following:

"(4) Where the court appoints an inspector under this section or section 8, it may, from time to time, give such directions as it thinks fit, whether to the inspector or otherwise, with a view to ensuring that the investigation is carried out as quickly and as inexpensively as possible.".

This amendment imports the substance of an amendment tabled on Committee Stage by Deputies John Bruton and Seán Barrett which the then Minister of State indicated he was disposed to accepting in principle. We would all be anxious that investigations under this Part would be carried out and completed with all possible alacrity. Obviously, while we cannot insert any mandatory guidelines here this amendment will put down a clear marker of what is the intention of the Oireachtas in this regard. For that reason I would ask the House to accept it because it reflects what was essentially agreed already.

I thank the Minister.

Amendment agreed to.
Amendment No. 13 not moved.

We come to amendment No. 14 in the name of the Minister. With the Minister's indulgence I might draw the attention of the House to the fact that amendments Nos. 14 and 17 are related and might be discussed together.

I move amendment No. 14:

In page 16, line 31, after "purpose", to insert "or in an unlawful manner".

I am proposing these two amendments in an effort to make absolutely sure that, within the general bounds of section 8, the Minister is not precluded from seeking the investigation of cases which ought to be investigated. For example, although section 8 gives wide grounds for the Minister to seek to have an inspector appointed it does not go far enough in two respects. First, section 8 (1) (a) talks in terms of the affairs of a company being carried on with intent to defraud or for a fraudulent or unlawful purpose. However, a company may be carrying on all sorts of unlawful activities without, technically speaking, doing so for an unlawful purpose. That is why amendment No. 14 seeks to insert the words "or in an unlawful manner".

The second amendment would simply delete the word "voluntary" from section 8 (2) (a) since I see no compelling reason why an inspector should not be appointed in suitable cases to investigate the affairs of a company that is being wound up by the court. In fact often that may be the more appropriate type of liquidated company to be investigated. Of course I quite accept that, in a court liquidation, the liquidator, being an officer of the court, might be expected to carry out certain inquiries as to whether anything untoward had occurred in the company prior to its winding up. But in most cases I would imagine that he would have neither the time nor resources to fund such inquires in the necessary depth. Therefore, I see the facility to have an inspector appointed in such cases as being a useful additional option in the Bill. I commend that amendment also to the House.

Amendment agreed to.

We come to amendment No. 15 in the names of Deputies S. Barrett and John Bruton.

As there is less than one minute remaining I suggest that we leave it until we resume.

As there is less than a minute remaining there is not any point in proceeding with the next amendment.

Perhaps Deputy John Bruton would move amendment No. 15 and then move the adjournment of the debate. I have that in mind to prevent amendments Nos. 14 (a), (b), (c) and (d) making their appearance before the next step.

The Minister is rather generous in revealing a weakness that he might see in our adjourning at this stage. Deputy Seán Barrett had indicated that he was not anxious to move his amendment and we will leave it at that. We have concluded business on the Bill. We will report progress having dealt with the last amendment, No. 14.

Debate adjourned.