I propose that the House go back into session to facilitate—
Companies (Amendment) (No. 2) Bill: Report Stage (Resumed).
Debate resumed on amendment No. 26:
In page 32, between lines 42 and 43, to insert the following:
"(10) A notification in writing to the registrar of companies of the matter referred to insubsection (9)(b) shall not, of itself, be regarded as constituting defamatory matter.”.
–(Minister of State at the Department of Enterprise, Trade and Employment, Deputy Treacy).
What type of session?
—open debate. I have no difficulty agreeing to a Committee Stage debate on the amendment.
Is it agreed to recommit the Bill in respect of this amendment? Agreed.
Bill recommitted in respect of amendment No. 26.
As there appears to be a misunderstanding regarding what amendment No. 26 is designed to achieve, it would be helpful to give a fuller explanation in that regard.
On Committee Stage, which took place on 21 July, I indicated in respect of section 47 that certain matters had been brought to our attention on which I had not had time to reflect before Committee Stage but which appeared to warrant more detailed consideration. A Law Society submission on the Bill, dated 16 June 1999, gave rise to that indication. Many of the points raised by the Law Society supported the direction of the Bill. Some other points raised queries on the provisions but, having considered them, it was decided not to make adjustments. However, in respect of section 47, two of the issues in particular appeared to merit further examination. I was unable to complete that examination before Committee Stage and, accordingly, I flagged the possibility of returning to section 47 on Report Stage.
Sections 43 and 47 deal with notifications that must or can be made to the Companies Registration Office by certain parties. In the case of section 43, the obligation is specifically imposed on the existing person who is the Irish resident director where that person ceases to be a director and there is no other person who meets the obligation of every company having an Irish resident director. In the context of section 47, changes were proposed to section 195 of the Companies Act, 1963, in relation to notifications to be made where a person ceases to be a director. This applies in all circumstances and not only in relation to the person who fulfils the role of the resident Irish director of an Irish registered company.
In the context of the amendments to section 47, the Law Society pointed out that the notification which is being made by a resigning director may operate in circumstances where there is an insolvency or other adverse circumstances. In this instance, it suggested that there was a need for a saver concerning the possibility of defamation. That is essentially the new section 11D being inserted by amendment No. 32 which we will reach later. When that amendment was being prepared it was considered that a similar concern could arise in respect of notifications made pursuant to section 43, Part IX of the Bill.
To illustrate this by way of an example, as Deputy Rabbitte requested, it could happen that a person would honestly believe he or she was the last resident director of a company, cease to hold that position and make a notification to the Companies Registration Office not knowing another director of the company met the residency requirements set out in section 44, Part VIII, which it is proposed to amend in amendment No. 27. In such circumstances, the remaining director may feel his or her rights have been infringed or his or her good name impugned. While I appreciate that the notification of a person ceasing to be a director is made with his or her knowledge, it was considered that in the interests of ensuring directors comply with this obligation, we should provide the support of this additional saver. That is the reason for the amendment. I hope this clarifies matters.
In answer to Deputy Rabbitte's question it is important I try, as far as I can, to provide an illustration of what might prevail. Say that a well known Irishman, Pat Rabbitte, owned a company called Pat Rabbitte International. He acquires other companies throughout the world but Pat Rabbitte International is the controlling company. Pat Rabbitte may have homes in Ireland, Monaco, Paris, Acapulco or wherever and he could be in and out of the country on many occasions, as are many big business people. There may be a doubt among certain State agencies as to whether he meets the residency requirement under either company or taxation law. Another nominated person may have fully met them and he notifies the company's secretary he is resigning from the company. Following acceptance of this amendment this person will be obliged to notify the Companies Registration Office. In that instance Pat Rabbitte, who is the chief executive and a well known Irishman, publicly acknowledged for his contribution, may consider that his rights have been impugned in some way because he believes he is de facto resident in the country even though other State agencies may, for various reasons, consider he is not. This provision is proposed to address that situation and to protect the rights of each individual.
I am not sure matters are clearer. The Minister of State's language made me think of the adage "will the last person leaving the world turn off the lights". I understand the submission to which the Minster of State refers was made by the Law Society. This means it has been made on behalf of solicitors who are, by and large, the people who will register these companies. They are concerned that if a resident director resigns somebody unknown to that person may claim to be still a director.
The Minister of State will recall I asked if this provision would allow a secretary, cleaning lady or somebody else to be listed as a company director to which he responded the director would have to know what the company was about. Why would a director, who is a resident director for the purpose of registering this company and knows what the company is about, know nothing about some other person such as the fictitious Pat Rabbitte referred to by the Minister of State, who, as a director, fulfils the rules with regard to residency? How much does the person offering his resignation know about the company of which he is supposed to be a director? I understand that one could not be made a director in ignorance of what was happening, as has happened where solicitors' secretaries are appointed company directors.
I am not a lawyer, but I cannot understand in legal terms the position of the fictitious person described by the Minster of State, who is a resident in Ireland but also lives in Monaco, Acapulco and other places. If I am a director, my name is on the board of directors and I am an Irish resident when the company was established. If I decide to resign my directorship and I declare in a statement that, to the best of my knowledge, I am the only Irish resident director of the company, how does the statement of that fact lead a director, such as the fictitious Pat Rabbitte, to say he has been defamed?
It would be understandable if a person resigned because the company was engaged in fraudulent activity, yet section 43(9) states:
.if a person ceases to be a director of a company, and at the time of that cessation–
(a) he or she is resident in the State, and
(b) to his or her knowledge, no other director of the company is resident in the State,
that person shall, within 14 days after that cessation, notify, in writing, the registrar of companies of that cessation and the matter referred to in paragraph (b).The directors do not have to say they are resigning because they believe somebody is cooking the books or engaged in money laundering, the company is a sham or people lied to establish it. They are only required to notify the registrar of their cessation as director and whether, to their knowledge, no other director is resident in the State. How could a lawyer say in court that the mere statement of that fact is defamatory to some unknown resident director? Perhaps others on this side of the House may understand that.
The Minister of State owes the House further elaboration of the arguments put forward by the Law Society. I did not receive its submission and I do not know whether copies were sent to Deputy Rabbitte or Deputy Perry. Having prepared a submission for the Minister, the society should know it would be a good idea to furnish a copy to the Opposition. This legislation is not political – we all want to agree to changes that improve company law. It was a mistake on the part of the society not to furnish me with a copy of its submission and I will advise it of this.
The Minister of State owes the House an elaboration of the rationale behind the Law Society's argument for including only this aspect of its submission in this amendment. I understand the society made a long submission. I did not hear the Minster of State refer to it previously so I presume he has only incorporated this aspect in the legislation. If so, we are owed more of an explanation as to how the great lawyers of the land would be able to construe defamation out of a statement by a resigning director that, to his knowledge, he is the only Irish resident director. Not even the most meticulous analysis of such a declaration could show it to be defamatory.
What happens to a company that is left without a bond or a resident director? Is there an onus on someone to resubmit a new name of a director or to enter into negotiation to replace the resident director with the bond? On reading the Bill, it does not indicate to me that as soon as a director resigns the company folds and must close its doors. This is another reason the Minister of State's explanation is still not clear. If it were the case that as soon as a director resigned and there was no director resident in Ireland the company shut down and a notice appeared in the newspapers stating that the company was being closed down, perhaps at that stage implications for a person would begin to be defamatory. The Minister should give a better reason for including this section if no action is taken immediately after a director resigns that could be construed as defamatory.
I thank the Minister of State for the illustration he has given. Deputy Owen's questions are entirely reasonable because it still is not apparent why the action of resigning could leave the director open to defamation actions. I can understand how a situation could give rise to defamation whereby the last resident director is resigning and required to notify in the fashion set out here, and if he or she were to say in a letter that the other members of the board, when they fly back to London or whatever, are meeting behind his or her back and have been up to no good and because of various nefarious purposes he or she is resigning. However, if the only action here is to advise of the fact of resignation, I am not clear on how defamation arises. Are we being overly punctilious or is there a substantive argument? What is the answer to Deputy Owen's first question? What sort of company in the modern world would not know the domicile of the members of the board of directors? I had the unique privilege in recent weeks of having a number of boards of directors appear before me. They were a bit hazy on some issues but they were not hazy on the domicile of the directors, whether it be in Monaco or Australia, or outside or within this jurisdiction. There did not seem to be a problem about this; everyone knew where they stood on the issue. Is it a reasonable presumption that members of the board would know the domicile of their colleagues on the board? They might not know their entire curriculum vitae but one would think it a reasonable assumption that if one is joining a board, even if this is for the purposes of decorating the notepaper, one would know who they are joining and so on. I am not sure that a great deal turns on this at the end of the day. This is not nearly as important as the earlier decision to capitulate to the banks in terms of the lessor and leasing issue. There must be a more substantive argument to support this proposal, otherwise we are now becoming so punctilious that we provide for every eventuality. I would like to once again hear the Minister of State's views on this.
Perhaps the Minister of State will read the submission from the Law Society.
I made it quite clear earlier and I want to make it clear again that one can only be prevented from becoming a director of a company if he or she is debarred under section 160 of the Companies Act, 1990 or is declared bankrupt. The same applies throughout Europe.
There are nine pages in the submission received from the Law Society which is dated 16 June and was received on 20 June. Section 47 reads as follows:
The Committee welcomes the long overdue implementation, even with amendments, of legislation to assist honest directors keep the companies registration office details up to date where the company has failed to do so. That said, we have some important reservations on the subject of the amendments to the principle approved by the Oireachtas 9 years ago that directors should be entitled to notify their resignations.
The first reservation concerns the obligation on a director to seek to state who the directors are at the time he comes to notify his having resigned or otherwise ceased to be a director.
Therefore, in the subsection (11A) to be inserted, at subparagraph (f2>b)(i) delete "are officers of the company" and insert instead:
"were officers of the company at the time the director or secretary, as the case may be, ceased to be director or secretary of the company"
The second reservation concerns defamation. Where a resigning director is giving notice of a resignation it is possible that he or she will be doing so in circumstances where there is an insolvency or other adverse circumstances. [ I have already referred to that].
Therefore, insert a new subsection (11C) (renumbering accordingly):
"Nothing in any documentation forwarded to the registrar in conformity with subsection (11B) shall of itself be or be deemed to be defamatory."
I do not think Deputy Rabbitte's point about directors knowing the addresses of their fellow directors is relevant. What is wrong with what is being proposed? We are proposing that the resident director should notify the Companies Registration Office at the same time as that person notifies the secretary of the board of the company of which that person is a director that he or she is no longer the resident director of the company. Otherwise how will the Companies Registration Office know this person has resigned?
The amendment says, ".. subsection (9)(b) shall not, of itself, be regarded as constituting defamatory matter.”.
Subsection 9(f2>b) to my knowledge-—
Deputy Rabbitte is probably correct. We probably are being over cautious but that is the reason for the amendment. We want to keep in line with section 47 of the present Bill. Under section 43(14) the Companies Registration Office can move to strike off the company. If there is a resignation and there is no resident director to the knowledge of the Companies Registration Office, then they can move to strike off the company. This provision enables a more smooth, effective and professional dealing with the matter. It puts the onus on the resident director to ensure that if he or she resigns they will notify the Companies Registration Office. If they do not do so, they are liable jointly and separately with the company for anything that goes wrong.
That is not what the amendment says.
It is already included in the Bill. I am making the point that what is proposed is perhaps cautious and overly careful. It puts the onus on a resident director whom we want to know exists. When he or she resigns we want the Companies Registration Office to be aware at all times of the registration. I see nothing wrong with this.
The Minister of State is missing the point; I am not questioning section 43(9). This is included in the Bill and I accept the need for subsection (9) which states, "Without prejudice to anything in section 195 (as amended) .. if a person ceases to be a director of a company and, at the time of that cessation (f2>a) he or she is resident in the State, and (f2>b) to his or her knowledge, no other director of the company is resident in the State, that person shall, within 14 days after that cessation, notify in writing, the registrar, etc. etc.". We have no problem with this but I wish the Minister of State would understand our confusion. He keeps saying that there is nothing wrong with asking people to make a submission on resigning. No one is questioning this. Given what the Law Society said, what advice did the Minister of State take? The amendment refers to "a notification in writing to the registrar of companies of the matter referred to in subsection (9)(b)”. That subsection reads: “to his or her knowledge, no other director of the company is resident in the State”. The amendment effectively states that, if a person sends a letter stating that, to the best of his knowledge, he is the director resident in the State, it shall not be regarded as constituting defamatory matter. Who says that it does? What use does the Law Society believe could be made of that simple, straightforward statement by another director who happens to be resident in Ireland? Is it all supposition? If I say I am, to my knowledge, the only director resident in Ireland but there happens to be another and our company is engaged in fraudulent activity, does the society assume my resignation and the fact I say I know of no other resident director can be used in court by the other director saying I have defamed him?
I do not understand. I could understand if such a stipulation were included after a clause requiring a director to give in writing his reasons for resigning and to outline if accounts had been written or made fraudulently, but to include it in this manner makes no sense. The Minister of State may say it may do no harm, but why include it if it is not needed? It gives the impression that a simple statement of fact that a person does not know there is another resident director is defamatory. That is turning law on its head. I am sorry if that is all the Law Society said in its statement about it, but it would not have been included without the Minister of State having had more discussion about it. Perhaps his officials have had more discussions and understand there is more to it. Perhaps the Law Society said to them that the act of resignation and a declaration of the nature referred to could be used in a defamation case. If the Minister of State could tell me that, I would be satisfied, but I am not aware of it.
We have difficulty in understanding the purpose of this amendment. There could be a situation where the Minister for Enterprise, Trade and Employment might send in an inspector to a company and, this country being what it is, the resident director, because he is a loyal member of a golf club or cumann—
It could be a branch.
It could be a cumann.
He has used that word.
—is tipped off that trouble is coming and, therefore, resigns. Is it possible that an injustice could be done to the remaining directors now that we are ringfencing the director who resigned from any action in the area of defamation, the purpose of which we have difficulty in understanding? Could the other directors be disadvantaged? Do we have to roll them in cotton wool or is it possible to explain why the director who resigns needs this type of protection?
We want to keep sections 43 and 47 in line with each other. In addition, the purpose of this is to ensure that, in so far as we can, we copperfasten the law, regulations and systems to tie down IRNR companies. As a result of this Bill being passed, the law will require such companies to have a bona fide resident Irish director. We are now obliging that director, if he or she resigns, to notify the Companies Registration Office of his or her resignation. If that happens, the companies registrar will automatically notify the company secretary that the Companies Registration Office has received the resignation, that, as the company no longer has a resident director, it will be struck off and that it has a certain number of days to reply. That should result in the board of directors being summoned to a meeting to discuss the matter, and they would probably consult their lawyers and auditors which would result in a response. If someone at the meeting said that he was now resident having declared for tax in Ireland the previous year, how are other directors to know that is the position?
How is it defamatory?
Yes, how is it?
The director who claimed he was now resident in Ireland would have to prove to the Companies Registration Office that that is the case and there is nothing to stop them from taking an action against the director who resigned claiming that he or she tried to undermine them and the company. The legal suggestion from the Law Society is that this could happen.
We did not have meetings with the Law Society. We received its submission, the team dis cussed it, they had their consultation, they talked to me, I agreed with what they were doing and the measure is now in place. We saw merit in the measure. We believed there may be a point to it. Furthermore, we thought it would be good to put the onus on the resident director to notify the Companies Registration Office that he was resigning. We saw a great deal of merit in that and saw no reason not to do it.
We are not questioning that.
It is tied in to good legislation.
We are trying to understand on what basis would the unknown resident director claim he had been defamed. If the director who resigned had lied and knew another resident director existed, then that is a straightforward situation. We want to know why we are protecting them. If I were a director and the Minister and her inspectors intended to investigate my company—
The Minister would not, but she would send in a good team.
—and I decided that I would get out fast and run for the hills by resigning, and if I said in my letter of notification that, to the best of my knowledge, I was the only resident director—
I presume that would be said as resident director of the company.
Yes.
Such a person is supposed to be the resident director.
Yes, and such a person is supposed to declare that, to his or her knowledge, no other director of the company is resident in the State. Such a director could resign and state there is no other resident director in the State, which could lead to publicity. For example, they could leak information to the effect that they resigned because the company was in trouble. If I were in the situation of having resigned and lied in saying that I thought there was no other resident director, I would receive additional protection from this amendment. It could happen that I could be taken to court by the other resident director, but I could claim under this new subsection that saying I was the only resident director protects me from the case taken against me. It could cosset a director who is "doing the dirty" on his or her fellow directors. That is a possible scenario and, if I were a lawyer for the other resident director, I would be annoyed if this section prevented me from suing the person who lied.
I am unhappy about the amendment, but we have probably discussed it sufficiently for the benefit of barristers who may have to make a case for a resident director against a director who lied. People fall out—
They do, and they fall in.
—and they do nasty things to each other, especially if a visit from the Minister and her team of inspectors is imminent. Perhaps there is a better reason for this amendment than the Minister of State is able to explain. I am dissatisfied with the explanation I have received. I have some experience of reading law, having served in the then Department of Justice where I questioned everything. This amendment is superfluous.
I accept Deputy Owen has a huge amount of experience; I have a little myself. In the interests of good law, compliance and ensuring communication between the resident director and the Companies Registration Office and in the interests of the structures and systems we operate, we should accept this amendment.
Amendment agreed to.
Amendment reported.
We now move on to amendment No. 27 which arises out of committee proceedings. Amendments Nos. 28 and 29 are consequential, therefore, amendments Nos. 27 to 29, inclusive, may be discussed together, by agreement. Is that agreed? Agreed.
I move amendment No. 27:
In page 34, to delete lines 32 to 48 and substitute the following:
"(8) For the purposes of section 43 , a person is resident in the State at a particular time (‘the relevant time') if—
(f2>a) he or she is present in the State at—
(i) any one time or several times in the period of 12 months preceding the relevant time (‘the immediate 12 month period') for a period in the aggregate amounting to 183 days or more, or
(ii) any one time or several times—
(I) in the immediate 12 month period, and
(II) in the period of 12 months preceding the immediate 12 month period (‘the previous 12 month period'), for a period (being a period comprising in the aggregate the number of days on which the person is present in the State in the immediate 12 month period and the number of days on which the person was present in the State in the previous 12 month period) in the aggregate amounting to 280 days or more,
(f2>b) that time is in a year of assessment (within the meaning of the Taxes Consolidation Act, 1997) in respect of which the person has made an election under section 819(3) of that Act.".
The issue with which we are dealing here is the definition of when a person is to be regarded as resident in the State for the purposes of section 43. I indicated on Committee Stage that I would examine the adequacy of this definition prior to Report Stage in the light of a particular matter which had been brought to my attention. It had been pointed out to me that our definition did not contain the facility available in tax law to elect to be resident in the year of arrival and that the absence of this provision was likely to cause difficulties for seconded personnel arriving in Ireland from abroad who would be tax resident but would not be eligible to meet the company law requirements in the year of their arrival. Having consulted with the relevant parties in this matter, I have decided to table an amendment to subsection 8, the effect of which is to include in the definition the facility available in tax law of electing to be resident in the year of arrival. The definition now essentially corresponds with the definition in taxation law in this country.
Amendment Nos. 28 and 29 are consequential technical amendments to section 44(9), arising from the amendments to the definition of residency in subsection 8. I commend these amendments to the House.
It is probably a fair proposition that if people are paying tax in this jurisdiction, they should be regarded as resident if they elect to be so – in this legislation for the purposes of being a resident director. I examined section 819 of the Taxes Consolidation Act, 1997, which relates to residence for tax purposes. Section 819(3) seems to be a particular sub-category which states that notwithstanding subsections 1 and 2, an individual who is not resident in the State for a year of assessment and to whom paragraph (f2>b) applies may at any time elect to be treated as resident in the State for that year and, where an individual so elects, the individual shall, for the purposes of the Acts, be deemed to be resident in the State for that year. Presumably, that relates to someone coming to this jurisdiction from another jurisdiction who wants to work here but does not have the required number of days which would confer residency under the Acts. Under section 819(3), such a person can elect to be a resident of the State for tax purposes. The Minister is saying that similarly, such a person should be eligible to be the resident director and I find it difficult to argue with that.
Amendment agreed to.
I move amendment No. 28:
In page 34, line 49, to delete "subsection (8)(b)” and substitute “subsection (8)(a)(ii)”.
Amendment agreed to.
I move amendment No. 29:
In page 35, line 4, to delete "subsection (8)(b)” and substitute “subsection (8)(a)(ii)”.
Amendment agreed to.
I move amendment No. 30:
In page 38, between lines 3 and 4, to insert the following:
"(14) In this section ‘appointment' includes a purported appointment and cognate words shall be construed accordingly.".
This amendment relates to a technical point I raised on Committee Stage which I thought the Minister might have taken on board. If one is permitted to appoint 25 directors and a 26th director is mistakenly appointed, that appointment is void. Therefore "appointment" should also refer to a purported appointment which was not really an appointment in the first instance.
The Deputy's point was well made on Committee Stage and I asked the parliamentary draftsman to examine the amendment proposed by Deputy Rabbitte to section 45. Subsection (9) states that an appointment of a person as a director of a company, made after the commencement of this section shall, if it contravenes subsection (1), be void. The draftsman believes this to be sufficiently clear and, therefore, Deputy Rabbitte's amendment is unnecessary.
Amendment, by leave, withdrawn.
I move amendment No. 31:
In page 38, line 23, after "letter" to insert ", where he is satisfied that the letter has been received,".
This is somewhat of a belt and braces matter. I moved this amendment on Committee Stage and the Minister said he would consider it. I wanted to ensure that the letter notifying people would actually arrive and that its receipt by the relevant person would be acknowledged. On Committee Stage, the Minister did not feel this provision needed to be included. Did he reconsider this matter? On Committee Stage he said: "We have done other wonderful things but it may still be relevant . the registrar's letter must be sent and if it is a registered letter, the registrar will be satisfied it has been duly delivered." I thought it would constitute an injustice if a letter was sent by registered post and was signed as having been received but was not actually received by the person in question. I was concerned that the deadline might have come and gone before the person received notification of it. I made the point that the postal service is not always as reliable as it might be.
I do not intend to go out on a limb over this but I would like to know whether the Minister is satisfied that this provision does not need to be included. I am sure he and his officials went over all the points made on Committee Stage to ensure that no injustices would be created by sending people a letter informing them that they would be struck off or that something which might prove embarrassing to them was due to be published in Iris Oifigiúil.
We considered this situation since the Committee Stage debate. Letters must be sent by registered post, as stated in lines 15 to 16 of page 38. We are satisfied that this amendment is unnecessary because letters will be sent by registered post and, once issued, should be delivered and accounted for.
I want to make a point in regard to charitable and community based companies whose boards of directors might not meet very frequently. Most companies are limited by guarantee. I am aware of a case where a community based company was struck off because the secretary had resigned and the relevant correspondence was not passed on to the board of directors which would not meet as frequently as that of a normal trading company. Is there any derogation in that area? Community based companies, perhaps set up for the purpose of community development in an area, may meet only once or twice a year. Is any leeway given to companies which are not commercially driven but which have a company structure for litigation purposes?
The difficulty is that many people form companies and only then realise the exigencies and responsibilities placed on them as a result of the formation of the company. Once a company is formed, there is no soft option for anybody.
Amendment, by leave, withdrawn.
Amendment No. 32 in the name of the Minister arises out of Committee proceedings.
I move amendment No. 32:
In page 42, to delete line 39 and substitute the following:
"shall be considered by the registrar.
(11D) No additional information referred to in subsection (11A)(f2>b)(i) that is included in a notice of resignation or other documentary proof referred to in this section which is forwarded, under and in accordance with the foregoing provisions, to the registrar of com panies shall, of itself, be regarded as constituting defamatory matter.
(11E) Any person may give notice (accompanied by such proof of the matter concerned as may be prescribed) to the registrar of companies of the fact that a person holding the office of director or secretary of a particular company has died.'.".
This section is designed to overcome difficulties which would have arisen if section 195(8) of the 1963 Act, as inserted by section 51 of the Companies Act, 1990, were to be commenced. On Committee Stage I indicated that I would look further at this provision in advance of Report Stage arising from a submission made to me which was still under consideration when Committee Stage took place. Having considered the matter further, I now bring forward two amendments for consideration. The purpose of the first amendment, 11D, is to offer protection in instances where a notice of resignation is given and may give particulars of the officers appointed to the company but because the notifying former officer has left the company, this information may not always be 100 per cent accurate. The second amendment, 11E, is self-explanatory. I commend the amendments to the House.
We are back to constituting defamatory matter. I assume this is the extra part of that about which we had such long discussion. At least, in this instance, it makes a little more sense. The Minister will recall I said that if somebody is accused of defamation and had elaborated on the reason for resigning, one could see some argument for including a clause that that would not be defamatory. Again, I have a problem with it. The amendment states: "No additional information referred to ... that is included in a notice of resignation ... which is forwarded, under and in accordance with the foregoing provisions, to the registrar of companies shall, of itself, be regarded as constituting defamatory matter." What exactly does "shall, of itself" mean?
Again, let us take the hypothetical director who abandons the sinking ship before the inspectors close in and who sends their notice of resignation with much documentation maligning somebody else in the company. Are we knowingly giving them the protection of the law in that they can say what they like to make themselves look good when the inspectors come in to look at this company which is going down the Swanee? It seems that an unfair extra protection is being given to one person – the first person to resign or a person who resigns – perhaps leaving others to fight a battle when the person who resigns might be the most guilty. By giving this extra protection to one person, it is imbalanced in favour of that person and against the person who might claim defamation. Have his advisers looked at that element of what he is doing?
It is as relevant here as in the earlier part but at least there is more reason to talk about defamation when a more elaborate complaint is made. There probably could be something in that which could be defamatory if it was proven to be untrue. Why did the Minister decide to give the weight of protection to the first person out of the sinking ship, if that is what is happening?
The point is very clear. Section 11D says that any additional information referred to in subsection (11A) – in other words, information which is included with the notice of resignation – the lodging of the documents in themselves cannot be regarded as constituting defamatory matter. In other words, the act of resigning and forwarding the documentation, as of themselves, will not defame anybody. Again, it gives an opportunity to comply. If the resident director complies, lodges and makes the information available to the Companies Registration Office, it means the notification going to the Companies Registration Office will have to give prescribed information. That has still to be done by regulation after the Bill is enacted. In other words, we have to decide exactly what prescribed information will be once the Bill is passed. That will be taken care of by way of regulation.
I am sorry to appear pedantic and to correct the Minister but he appears to be saying, although it is not what the amendment says, that the import of this amendment is that the act of sending in information will not be constituted as defamatory. The amendment states: "No additional information ... [moving down to the active verb] shall, of itself, be regarded as constituting defamatory matter." It is not the act of handing it in which is not defamatory; it is the information in the matter which one hands in.
Of course.
The Minister seemed to say that the act of handing it in shall not, of itself, be considered defamatory. The act does not matter but rather the information being sent in.
The information contained in it.
With respect, that is not what I heard the Minister say. The additional information being sent in is being cleared of being allowed to be used in any case of defamation taken by this unknown director or other directors who may still exist in the company. We are talking about other directors who are not resident but are directors of the company who might be brought into this so-called defamation action in respect of something which a director has lodged. I assume this refers to the situation about which we talked earlier where the sole resident Irish director offers resignation and goes on to give more information as to why he or she has done so. In that instance, it could be claimed they were defaming all the other directors and that the information cannot be used in an action of defamation. Is that what the Minister is saying?
Yes.
So it is not the action but the information itself. Does that mean the person who wants to take a defamation case has to go outside to find information? I could draw the analogy of the tribunals. We cannot take a case to court based on somebody saying something at the tribunals.
That is right.
The Garda or whoever wants to take a case must go independently and get other information to prove that somebody must face a criminal charge. If I, as a resigning director, give much information in one of these reports alleging wrongdoing by other directors of the company, it is protected by this law. If Deputy Rabbitte or another director wants to take a case against me because of what I said, they will have to make me say it somewhere else. Is that right?
They have to have other information or else they must make the person say it elsewhere. Other information may come to hand which they would be able to use. It does not have to be exactly this information.
If I was doing this, I would include everything in that information so it would have this protection. I would say all I wanted to say about the other directors if I wanted to protect myself.
Nobody is ever certain of everything.
Amendment agreed to.
Amendment No. 33 arises out of Committee proceedings. I propose that we hear the Minister on amendment No. 33. As there is a number of amendments to amendment No. 33, we will not put amendment No. 33 until all the amendments to that amendment are disposed of. Members have been circulated with a list of the related amendments. Is that agreed? Agreed.
For the benefit of Members, amendments Nos. 1, 4, 7 and 8 to amendment No. 33 in the name of Deputy Rabbitte will be taken together. Amendments Nos. 2 and 3 will be taken individually and amendments Nos. 5 and 6 will be taken individually. Amendment No. 33 will not be put until those amendments are disposed of.
The justification for our attitude to these amendments can only be shown by explaining our own amendment. It is hard to debate this without moving amendment No. 33 and having the amendments to that moved.
The Minister of State is to move amendment No. 33 and the other Members will then move their amendments. Depending on those amendments we will then put the question – once we have made a decision on these eight amendments.
My response is extremely lengthy and is based on the amendments to amendment No. 33, which have not been moved, so I feel at a disadvantage.
The Minister of State should not feel at a disadvantage.
We will discuss them all together.
Can the Minister of State circulate a script?
I only have one script.
And we are to remember all of this?
I will take it gently. I move amendment No. 33:
In page 44, to delete lines 1 to 39, and substitute the following:
"53.–(1) Section 20 of the Companies Act, 1990, is hereby amended by the substitution in subsection (3) for ‘any such criminal proceedings as are mentioned in section 21(1)(f2>a) or (1)(f2>b)' of ‘any proceedings for an offence mentioned in section 21(1)(f2>a)'.
(2) Section 21 of the Companies Act, 1990, is hereby amended by the substitution for subsection (1) of the following subsection:
‘(1) No information, book or document relating to a body which has been obtained under section 19 or 20 shall, without the previous consent in writing of that body, be published or disclosed, except to a competent authority, unless the publication or disclosure is, in the opinion of the Minister, required-—
(f2>a) with a view to the investigation or prosecution of any offence, being an offence—
(i) under
(I) the Companies Acts;
(II) the Central Bank Acts, 1942 to 1998;
(III) the Exchange Control Acts, 1954 to 1986;
(IV) the Insurance Acts, 1909 to 1990;
(V) the Taxes Consolidation Act, 1997; or
(VI) regulations relating to insurance made under the European Communities Act, 1972;
or
(ii) entailing misconduct in connection with the management of the body's affairs or misapplication or wrongful retainer of its property;
(b) for the purpose of assessing the liability of a person in respect of a tax or duty or other payment owed or payable to the State, a local authority (within the meaning of the Local Government Act, 1941) or a health board or for the purpose of collecting an amount due in respect of such a tax or duty or other payment;
(c) for the purpose of the performance by a tribunal (to which the Tribunals of Inquiry (Evidence) Acts, 1921 to 1998, apply) of any of its functions;
(d) for the purpose of assisting or facilitating the performance by any Minister of the Government of any of his functions;
(e) for the purpose of assisting or facilitating any accountancy or other professional organisation in the performance of its disciplinary functions with respect to any of its members;
(f) for the purpose of the performance by the Irish Takeover Panel or any stock exchange established in the State of any of its functions in relation to the body or any other person who, in its opinion, is connected with the body;
(g) for the purposes of complying with the requirements of procedural fairness, to be made to—
(i) any company in relation to which an inspector has been appointed under section 14 or any person required by the Minister to give any information under section 15, or
(ii) any body in relation to which a person has been authorised under section 19 to exercise the powers conferred by that section or any person named in a report prepared by a person so authorised;
(h) for the purpose of complying with any requirement, or exercising any power, imposed or conferred by this Part with respect to reports made by inspectors appointed thereunder by the court or the Minister;
(f2>i) with a view to the institution by the Minister of proceedings for the winding-up under the Principal Act of the body or otherwise for the purposes of proceedings instituted by him for that purpose;
(j) for the purposes of proceedings under section 20 or 160.'.
(3) Section 21(3) of the Companies Act, 1990, is hereby amended—
(a) by the deletion in paragraph (f2>g) of ‘and', and
(b) by the substitution for paragraph (f2>h) of the following paragraphs:
‘(h) the Central Bank, and
(f2>i) any authority established outside the State in which there are vested—
(i) functions of investigating or prosecuting an offence similar to an offence referred to in paragraph (f2>a) of subsection (1),
(ii) functions of assessing the liability of a person in respect of a tax or duty or other payment owed or payable to the state in which it is established or any other authority established in that state or of collecting an amount due in respect of such a tax or duty or other payment, or
(iii) functions which are similar to the functions referred to in paragraph (f2>c), (f2>d), (f2>e) or (f2>f) of subsection (1).'.
(4) The amendments effected by this section shall apply in relation to the publication or disclosure, after its commencement, of information, books or documents which have been obtained under section 19 or 20 of the Companies Act, 1990, whether before or after that commencement.".
My explanation in respect of this amendment is somewhat long so I ask the House to bear with me while I explain the reasons for the changes and the different approach which is now proposed in respect of section 21 of the Companies Act, 1990. Deputies will recall that section 53 of the Bill was introduced by way of amendment on Committee Stage. When introducing the amendment I explained in some detail the reasons for the various changes to section 21 of the Companies Act, 1990, which I was then making.
In summary, what was being done was to extend the list of competent authorities to which disclosure may be made pursuant to subsection (1) of that section. Section 21 of the Companies Act, 1990, provides for the publication or disclosure of information that has been obtained under section 19 or 20 of that Act. Essentially, this arises under section 19 as a result of the Minister directly requesting or authorising an officer to obtain information from a company as a preliminary step to determine if any irregular activity may have been carried on, or under section 20, as a result of entry and search, on foot of a warrant issued by a district justice.
The sections in question contain very specific detail as to the matters that may be examined and the procedures to be followed. Arising from the debate on Committee Stage and the subsequent debate in this House on 29 and 30 September 1999 in relation to the motion on the Ansbacher investigation, we have re-examined section 21 in detail. Arising from that examination, I am bringing forward a comprehensive amendment to section 21 of the Companies Act, 1990, which is now under consideration.
Essentially, I am focusing primarily on the amendment of section 21(1), rather than section 21(3), which had been the focus of the previous amendments provided for in section 53. In doing this, the intention is to identify specifically not only the parties to which information may be disclosed but also to more clearly identify the reason for which disclosure to such parties may take place.
The first amendment to be made in subsection (1) of section 20 of the 1990 Act is consequential on the subsequent amendment to section 21 (1)(f2>a) and simply substitutes a correct cross reference. The opening clause of replacement subsection (2) repeats the existing provision with the addition of a specific reference to "the opinion of the Minister", determining if disclosure is appropriate. This has always been the practice and reality, but it is now being explicitly stated in law. In these circumstances, I cannot accept Deputy Rabbitte's amendment No. 2.
Paragraph (f2>a) substitutes a new paragraph for paragraphs (f2>a) and (f2>b) of section 21(1). At present these two paragraphs permit disclosure of information to the Director of Public Prosecutions and to the Garda Síochána with a view to the institution of proceedings on the basis of information obtained under section 19 or 20. The paragraphs are now extended by making it clear that publication or disclosure can be made where it is required with a view to the investigation or prosecution of any suspected offence under any of the legislation specified. Furthermore, the specified references are extended to include breaches of the Central Bank Acts, 1942 to 1998, and the Taxes Consolidation Act, 1997. This latter addition will achieve the same objective as was being provided for in section 53 by adding subparagraph (i) to section 21(3) of the Companies Act, 1990.
While I appreciate the intention of Deputy Rabbitte's amendment No. 3 to this paragraph, in fact section 23 of the Companies Act, 1990, contains a specific definition of what the term "the Companies Acts" means. In that section it is defined as meaning the Companies Acts, the Companies Bill of 1963 and every enactment, including this Bill, which is to be construed as one with that Act. Given that the present Bill, by virtue of section 1, will be construed with the earlier Companies Acts, it is not necessary to make the insertion proposed by Deputy Rabbitte in this instance.
The proposed paragraphs (f2>b) to (f2>g) add a further number of circumstances to section 21(1) of the 1990 Act for which disclosure can be made. By virtue of the addition of the proposed new paragraph (f2>b) to section 21(1), publication or disclosure, which is required for the purposes of assessing the liability of a person in respect of a tax or duty, or other payment owed or payable to the State, a local authority or a health board is now provided for. Paragraph (f2>c) adds the performance by a tribunal to which the Tribunals of Inquiry (Evidence) Acts, 1921 to 1998, apply. This is equivalent to the new paragraph (f2>m) which was being added to subsection (3) by section 53, as had been originally proposed by Deputy Rabbitte.
The next addition is for the purposes of assisting or facilitating the performance by any Minister of the Government of his or her functions. Again, this is essentially replacing paragraph (d), which was being added by section 53, and is self explanatory. While I understand the intention behind Deputy Rabbitte's amendment No. 5 to paragraph (f2>d), and amendment No. 6, which relates to paragraph (f2>i), the amendments which are being made in the present substitute section 53 are to provisions contained in the Companies Act, 1990; in other words we are textually amending a masculine only Act. The drafting convention in such circumstances is to continue to use the masculine only. The Government decision that legislation be cast in gender neutral language was only taken in 1993.
The next addition to section 21(1) – paragraph (f2>e) – is for the purpose of assisting or facilitating any accountancy or other professional organisation in the performance of its disciplinary functions with respect to any of its members. Again, this replaces paragraph (f2>k), which was being added to section 21(3) by section 53 but is more tightly focused.
The next addition is the inclusion of the Irish Takeover Panel or any stock exchange established in the State in respect of the performance by such body. Paragraph (f2>j) of subsection (3), which was being added by section 53, had included the stock exchange and we are now including the Irish Takeover Panel in the category of bodies to which disclosure can be made when this is required in relation to carrying on its functions. Paragraph (f2>g) of substituted subsection (1) provides for the essence of paragraphs (f2>n) and (f2>o) which were being added by section 53 to subsection (3) where this is necessary for complying with the requirements of procedural fairness. Paragraphs (f2>h) and (f2>i) repeat paragraphs (c) and (f2>d) of the existing section 21(1). Paragraph (f2>j) repeats the existing reference to section 20 in 21(1)(f2>e) and now provides that publication or disclosure can be made for proceedings under section 160 of the Companies Act, 1990. This deals with proceedings for the disqualification of directors of companies. It is designed essentially to enable the Minister to refer an authorised officer's report to the DPP and for the DPP to refer it onwards to the Garda, with the ultimate view of bringing proceedings under section 160 of the 1990 Act for the disqualification of directors where this is warranted.
I will deal later with amendments Nos. 1 and 4 tabled by Deputies Rabbitte and Owen to subsection (2).
Subsection (3) provides for the addition of one competent authority to those specified in the existing section 21(3) of the Companies Act, 1990. This is essentially the same amendment as was being provided for in section 53, subparagraph (f2>i) in respect of an authority established outside the State which exercises functions of investigating or prosecuting an offence, or which are otherwise similar to those referred to in the specified paragraphs of the amended section 21(1). Otherwise, the list of competent authorities remains as in the existing section 21(3) of the Companies Act, 1990. In relation to Deputy Rabbitte's amendment No. 8 to the new subsection (3), the existing reference to "any court of competent jurisdiction" in section 21(3) of the 1990 Act remains as I have just indicated, namely, unaltered by virtue of my current amendment. Consequently, the need for the first part of the Deputy's amendment does not arise. As I have also already indicated, the second part of the Deputy's amendment is catered for by the new section 21(1)(f2>c) of my amendment.
Subsection (4) is essentially self explanatory and is designed to ensure information that is currently in the possession of the Minister, whether gathered before or after the enactment of the amendment, can be made available to any of the parties if this is warranted. It is necessary, however, to point out that each such party or person to whom confidential information is disclosed will themselves be bound by the secrecy provisions. Some comments have been made in respect of this provision and I will deal with them later.
Turning to amendments Nos. 4 and 7 tabled by Deputies Owen and Rabbitte, I can confirm that the question of the designation of either House of the Oireachtas, or a committee appointed by either or both Houses, or a number of variations thereof, as a competent authority has been the subject of very detailed consideration by us at all levels. My decision in this instance not to propose or accept such an amendment was very much influenced by the manner in which use has been made of the existing provisions and the ongoing investigations under Part II of the Companies Act, 1990. A number of factors lead me to the conclusion that it would not be appropriate to include either House of the Oireachtas or a committee of the House. At present sections 19 and 20 provide a statutory basis for intervention by the Minister to uncover on a confidential basis information relating to a company which can subsequently be used in company law, criminal or other investigations. They are purely information gathering mechanisms which enable the Minister to make a more informed judgment on what action is appropriate in a particular case. There may be many persons named in such company information, but unless the persons are past or present officers or employees of the company or have been in possession of the company's books and documents, an authorised officer, appointed by the Minister under section 19, has no legal right to question such persons. Some of these persons may have a perfectly reasonable explanation for their association with the company, notwithstanding perceived illegality on the part of the company or its officers. Because of his or her limited powers, an authorised officer may be unaware of those explanations in presenting the information available to him or her to the Minister. The statutory prohibition on publication of this information enables this preliminary investigation process to remain intact, because it shields potentially innocent parties from possible public opprobrium.
There is not even a legal requirement on an authorised officer under section 19 to advise the company or any of its officers of the content of the information available before he or she concludes his or her examination. Such a requirement may, however, arise after the Minister receives the information in question. If, for instance, the Minister decides to proceed with the appointment of inspectors, the High Court will order that the relevant documentation be transmitted to the company and other appropriate parties to allow them to oppose the ministerial application. Similarly, if inspectors are appointed and undertake a wide-ranging series of interviews of persons named in the authorised officer's report, the persons involved will have a full opportunity at that stage to make known their association with the company's activities. It is possible to have such a restricted role discharged by an authorised officer without compromising procedural fairness, because the information is not publishable and because the report, conclusions and opinions of an authorised officer have no legal status.
Having assessed the information made available, it is the Minister who decides the next steps. It is that decision that is recognised in law. If an authorised officer's report was capable of being published, it would irrevocably alter the entire structure of a section 19 examination. To avoid injustice being done to the character and reputation of potentially innocent parties, who may be indirectly associated with a company in which potential wrongdoing may have taken place, section 19 exercises would have to be transformed into full-blown inspector-type investigations. An authorised officer would have to be given the power to address parties not directly associated with the company before finalising his or her report. This would prolong the preliminary investigation stage which is intended principally to establish in the first instance if an inspector's inquiry into the company's affairs is warranted. If that were the consequence, the advantages of the section 19 preliminary investigation, which is conducted on a very cost-effective basis at present, would have disappeared, and I am not prepared to remove a valuable instrument of initial inquiry from our armoury of investigating suspected corporate malpractice. If this instrument were not available we might never gather sufficient information to warrant a more thorough inquiry, whether that be the appointment of inspectors by the court to conduct a general inquiry of the company's affairs, or an investigation mounted by other relevant authorities. In any event, I do not consider it appropriate that the Minister or his or her authorised officer should have unfettered powers to summon persons to attend for interview. The appointment of an authorised officer is made for reasons of administrative convenience, because the Minister cannot be personally expected to undertake such examinations of company books and documents.
It would not be appropriate in my view that the Minister or an authorised officer acting on his or her behalf should have a general power to question a company's suppliers or customers on their commercial relationship with the company. It is also the case, of course, that information obtained pursuant to section 19 or 20 may include commercially sensitive corporate information. Companies being investigated under the Companies Acts have a general expectation that their rights to confidentiality and-or privacy will be properly respected. The balance which is at the heart of the provisions of the 1990 Act is that companies permit access to their books and records to the Minister and authorised officer on the basis that the relevant information will be kept confidential by the Minister and his or her Department, other than in exceptional cases. This give and take between the regulator and the regulated companies would break down if there were a substantial possibility that information on the companies was readily publishable. There would likely be regular challenges involving High Court judicial reviews of ministerial decisions to initiate section 19 examinations and injunctive proceedings, preventing disclosure of section 19 information if the risk of public disclosure under Oireachtas privilege existed. In short, companies would see that their commercial interests would be capable of being sacrificed on the altar of political expediency and, accordingly, would not be prepared to lend co-operation with the preliminary investigation process envisaged under section 19.
In this context, the House should know that sections 19 to 21 and related provisions of the Companies Act, 1990, are being challenged before the Supreme Court at this time on the grounds that, inter alia, they are contrary to the Constitution in that they fail to have any or any due regard to a company's right to confidentiality and-or privacy; that they fail to protect and vindicate a company's right to fair procedures, natural and constitutional justice and equality before the law, and that they constitute an unwarranted and unjustified interference with the property rights of a company. Acceptance of any amendment which would enable publication to take place would also substantially weaken our Supreme Court defence.
Based on experience to date, many company investigations suggest that breaches of law may have taken place. It is entirely reasonable that the Minister should be able to notify other authorities of such wrongdoing so that they can perform their own respective roles in supervising the activity of persons disclosed in the report of an authorised officer and take corrective action. The amendments which I have made to section 21(1) and which I have just explained in detail will facilitate this process. It was never envisaged that this preliminary information would be disclosable to this House or a committee thereof. In this regard, a distinction can be drawn in respect of disclosure to other competent authorities which would only happen where such authorities could be expected to take action.
It has been suggested publicly that the Government, in resisting publication of the Ansbacher report, is acting inconsistently with the substance of this amendment. It has at all material times been the intention of the Government in proposing an amendment to section 21 of the Bill on Report Stage to give the terms of the amendment retrospective effect in so far as the purposes mentioned in section 21(1) or the list of competent authorities stated in section 21(3) were concerned. To do so does not raise any constitutional problem.
At no time has the Government argued that the prohibition in the Constitution in Article 15.5, which states that "The Oireachtas shall not declare acts to be infringements of the law which were not so at the date of their commission", prevents the Oireachtas from changing with retrospective effect the purposes for which material gathered under the confidentiality obligations set out in section 21 may subsequently be used. The Government's position is different. The Government has taken the view that it is not open to the Government to publish, in the sense of throwing information into the public domain, any report furnished by an authorised officer who has invoked the powers set out in section 19, if the effect of doing so was to name and shame individual citizens to whom an opportunity had not been given effectively to defend their reputations and good names.
Any report, therefore, which summarised information gleaned under section 19 and which contained seriously adverse conclusions drawn by an authorised officer for the purpose of advising a Minister on the issue of applying to the High Court to appoint inspectors, could not be absolved retrospectively from the obligation to vindicate the constitutional rights of citizens by some legislative wave of the wand. Furthermore, section 19 powers would be seriously compromised if an Oireachtas committee were free by law to make public the contents of any report based on their exercise. This is specifically envisaged in the amendment put down by Deputy Owen.
If, for example, Oireachtas committees were given the power to publish files on current Garda investigations in the pursuit of some name and shame strategy in respect of crimes of major public interest, it would completely undermine the capacity of the Garda Síochána to investigate such crimes or to record the results of their investigations for the purpose of prosecution. If suspects in criminal investigations knew that any Garda file concerning them was liable to be made public to an Oireachtas committee, those who conducted the investigation would be bound to act wholly differently and almost in a quasi-judicial fashion when compiling their reports.
Even as things stand, inspectors who are obliged to afford due process to persons and bodies under investigation are still not free to publish their reports without the permission of the High Court. The High Court, in turn, is obliged, in considering whether it should make public the conclusions of inspectors appointed under the Act, to take into account the constitutional rights of persons which might be affected by publication and to balance the common good with individual rights.
The notion of allowing an Oireachtas committee to conduct a parallel investigation to that being carried out by High Court inspectors is misconceived. The inquiring role of an Oireachtas committee is no different from that of the inspectors. The Minister cannot simply sacrifice investigatory powers under the Companies Act to some name and shame agenda of individual Members of the Oireachtas who have absolute privilege in respect of the utterances they make in either House of the Oireachtas or committees of the Oireachtas.
In short, the Government's objection to pursuing a name and shame strategy advocated by some Opposition Members entailing the use of a committee of the Oireachtas lies not in the prohibition mentioned in Article 15 of the Constitution but with two other considerations: first, the legal impossibility in the case of Ansbacher of pretending that the report furnished to the Tánaiste by her authorised officer could simply be thrown into the public domain while at the same time protecting long established constitutional rights of fair procedure and due process for individuals named in the report and, second, the serious damage that would be implied for powers of investigation under the Companies Act if every investigatory report had to be compiled on the basis that it would be made public under the absolute privilege accorded by the Constitution to the proceedings of Oireachtas committees.
We must remember that the Supreme Court, in the Haughey decision, was concerned to ensure that the powers of the Committee of Public Accounts would not be abused to damage an individual under investigation without affording him or her fair procedures. Fair procedures in the Ansbacher context could not be achieved retrospectively by changing the law to make public a report which many might read as a damning indictment of some persons named in it and obliging those people to pick up the pieces by making their defence for the first time in public to charges and conclusions which were never put to them in private. None of the competent authorities envisaged by the Government amendment can engage in name and shame tactics. All of them will receive the information on the basis that it will only be used for the discharge of their official functions and then only in a way which, one way or the other, allows fair procedures to persons mentioned in any report.
I favour publication of the results of completed investigations in due course, following proper conformity with constitutional procedures and due process. For these reasons, I have no intention of relaxing the present strict limitations against publication and effectively reversing the law in order to permit publication of sections 19 and 20 material. In light of the foregoing, I am unable to accede to the amendments proposed by Deputies Rabbitte and Owen or any variation thereto.
With regard to amendment No. 1, tabled by Deputy Rabbitte, I do not accept that section 21 should be amended to permit the Information Commissioner to determine whether confidential company information should be publicly disclosed. I am aware from recent press reports that the commissioner has recommended that section 21 should be included in the Third Schedule to the Freedom of Information Act, 1997. The effect of such a change could enable confidential corporate information to be published by the commissioner.
As I previously indicated, our experience with the operation of section 19 examinations of company books and documents, which are protected by the secrecy provisions of section 21, is that a wide prohibition on disclosure is necessary. These examinations are intrusive to the company concerned and its officers must be assured that the information gathered will have a high degree of protection from disclosure. If that assurance cannot be offered by the Minister and his or her Department, the company concerned may well decide to resist the conduct of the examination either through the courts or otherwise. Such an outcome would defeat the process of preliminary investigation which is envisaged in section 19. Such an outcome would also be counterproductive to the public interest of seeking to uncover corporate malpractice and of applying the rigours of the law to those found to be in breach in due course.
It is already our experience that the strict prohibition on disclosure in section 21 is not enough. Two companies have already gone to great lengths to question the bona fides of the Minister and his or her Department in their compliance with their statutory duty under this section. If a public interest test were to determine whether information were to be disclosed, every company which is the subject of examination would believe that publication of its corporate affairs would be the inevitable outcome of being subject to a section 19 examination.
I thank Members for their patience while I explained the various changes in amendment No. 33 and my reasons for not accepting the eight amendments proposed to it by Deputies Owen and Rabbitte.
Could we seek the Minister of State's indulgence to allow this section to be recommitted? Having proposed a new section on Committee Stage, the Government has now rewritten it.
I am ready to co-operate with the House.
The Chair favours that course of action. The Minister of State has moved his amendment and spoken on the eight amendments proposed to it. There are restrictive rules on debate on Report Stage of a Bill so the Chair believes the best course is to recommit.
Bill recommitted in respect of amendment No. 33.
Do Members wish to discuss the eight amendments to amendment No. 33 together? There will be separate decisions on each. Is that agreed? Agreed.
Deputy Rabbitte should bear in mind that once he moves amendment No. 1 to amendment No. 33, he can speak to amendments Nos. 1 to 8, inclusive, but separate decisions will be made in respect of each amendment.
I move amendment No. 1 to amendment No. 33:
In the first line of subsection (2), after "1990," to insert "shall be added to the Third Schedule to the Freedom of Information Act, 1997, and".
Where does one start? What we have heard from the Minister of State amounts to a Second Stage speech. I appreciate the trouble to which he went and the conscientious manner with which his advisers addressed what is a subject of great public interest. It is a pity we are asked to respond to this off the top of our heads on Report Stage of a Bill because it is easy to play politics with the subject, given the environment in which we are debating it. I accept it would be irresponsible not to give weighty consideration to some of the arguments advanced in the Minister of State's densely worded statement.
The Minister of State is on least firm ground in respect of my amendment No. 1 to amendment No. 33, which relates to permitting the Information Commissioner to adjudicate on this. I have not seen the report and I gather from what the Minister of State said he has not seen it either. He referred to press reports. I have a report from The Irish Times on this aspect, which states:
The Information Commissioner, Mr. Kevin Murphy, has recommended that the law under which the names of Ansbacher account holders are being withheld by the Government should be changed.
Mr. Murphy argued in June that issues of privacy or prejudice to an investigation should be adjudicated on by him under the Freedom of Information Act, rather than dealt with under the Companies Act. Concern that the change would give rise to a large number of judicial reviews was not a proper reason for maintaining secrecy, he said.
The Information Commissioner has given a good deal of thought to this issue. The effect of my amendment would be to insert in section 53(2) the phrase, "Section 21 of the Companies Act, 1990, shall be added to the Third Schedule to the Freedom of Information Act, 1999.and is hereby amended.", etc. The import of that simply means that the Freedom of Information Act would override the existing position.
The Minister of State, in his cogently argued and detailed speech that runs to 34 pages – which is very unusual in a Report Stage debate – dismissed the arguments of the Information Commissioner and my amendment on the basis that the effect of such a change could enable confidential, corporate information to be published by the commissioner. That seems to be a value judgment, which suggests the Information Commissioner could be less responsible than the Minister and her agents. I do not know what the Minister can adduce in favour of that proposition. It seems most unlikely that the Information Commissioner would conduct himself or herself in such a fashion as to wantonly put into the public domain sensitive, commercial information that would be likely to damage a company. I do not consider that is likely to happen.
The request would be made under the Freedom of Information Act and the Minister would decide whether he or she wanted to accede to that request, given the particular circumstances of the case. If the Minister decided it should be released, it would be released and that would be the Minister's decision. If the Minister decided to resist, I argue – as provided for in my amendment – that the Information Commissioner should evaluate the merits of the case. Whatever argument the Minister of State may have against that proposition, I respectfully suggest the one he advanced is wrong – that the Information Commissioner would be likely to act in an irresponsible fashion by releasing into the public domain sensitive, corporate data. I do not believe that would happen. I am dealing with this matter because it is the subject of the first of the subsidiary amendments. If the Minister of State dealt with the matter, I failed to pick it up.
Subsection (4) of amendment No. 33 reads:
The amendments effected by this section shall apply in relation to the publication or disclosure, after its commencement, of information, books or documents which have been obtained under section 19 or 20 of the Companies Act, 1990, whether before or after that commencement.
The Minister of State can protest if I am reading that subsection incorrectly, but it seems to suggest that once this section is enacted, such disclosure or publication may take place before or after the commencement of the section. In other words, it may take place retrospectively, in that events that happened prior to the enactment may be published or disclosed under this section.
I do not know whether the Minister of State inhabits the same House as I, but I thought it was the subject of feverish debate inside and outside this House for more than a week when the Government from the Taoiseach down – I remember specifically a "Morning Ireland" performance by the Government Chief Whip and one by the Taoiseach in the House – resisted any notion of retrospective capacity in this regard. It was stoutly argued by the Government that one simply could not do this, but the Minster of State, Deputy Treacy, said: "I wish to make it clear that it has, at all material times, been the intention of the Government in proposing an amendment to section 21 of the Bill on Report Stage to give the terms of the amendment retrospective effect .".
The Minister of State will have to tell me—
Read on.
It continues, ". in so far as the purposes mentioned in section 21(1) or the list of competent authorities stated in section 21(3) were concerned. To do so raises no constitutional problem."
That is not what the Minister of State, Deputy Brennan, said on radio.
I accept that debate on political issues, on matters of great public moment, is not always grounded in a detailed grasp of company law at the time.
The reaction of the man and woman in the street to the notion that some of our most esteemed citizens withdrew from this economy and salted their money offshore for the purposes of tax evasion, which was the generality of the contention, should be reflected in this House. I accept that sometimes it is reflected in a manner which is not rooted in a detailed grasp of company law.
There was no doubt about the way the Government responded. It said this retrospection was not possible or constitutionally feasible. If Deputy Owen has time while I am talking, I am sure we could find the record of that. That is the reason the Minister has gone to great detail in presenting 34 pages of argument.
The Deputy is being over-generous because there are only 20 pages.
There are 34 pages in my copy. The Minister's copy must have larger type.
We are wrong because for some reason the Department's copy starts at page 15.
I did not want to overload the Deputies.
That was a devious plot.
I am not ungrateful for the fact that the matter has been treated seriously. However, this is a political U-turn. To tell us now that it did not raise any constitutional problem and that it was always the Government's intention to give retrospective effect boggles the mind. It beggars belief that this can be reconciled with the position the Government has argued up to now.
I do not recall anyone in this House arguing that this information should be put into the public domain in a manner contrary to law. As I understand it, arguments were made on this side of the House that the law should be changed, with retrospective effect, to facilitate this information becoming public in an orderly fashion. If, for example, that meant the persons involved being advised of the intention to so do, that would be complied with. That was the intention and it was to that argument that the Government replied the law could not be changed retrospectively. We now find out the law can be changed retrospectively.
If we did not have the Ansbacher controversy and we were discussing this in the context of the reform of company law, the Minister would have to explain to me, having put on the record his formal statement which was helpful and worthy of detailed consideration, why he decided to do a total about turn. One cannot glide over his amendment—
Perhaps the Deputy could point out the about turn so I can respond.
When we considered this matter on Committee Stage the Minister lengthened the list of competent authorities to whom disclosure might be made. He has now made that list of competent authorities contingent on the Minister's opinion that this information should be conferred on them. The Minister asked me to point out the about turn. Section 53(2) states that no information may be "published or disclosed, except to a competent authority, unless the publication or disclosure is, in the opinion of the Minister, required with a view to the investigation or prosecution of any offence, being an offence" under the various Acts, such as the Taxes Consolidation Act, 1997, the Exchange Control Acts, the Companies Acts etc. Provided the Minister is of the opinion, the information may now be referred to these competent authorities, whereas on Committee Stage it was feasible to publish this information to these competent authorities, regardless of what the Minister thought. There was no question of a subjective test at that stage; it was an objective test and the information would automatically go to a tribunal of inquiry.
We had dealt here with the ongoing example of the Moriarty tribunal. A significant amount of money has been allocated to support the sole member of that tribunal in inquiring into certain matters. The Tánaiste is engaged in separate overlapping inquiries and has received a report in that regard. The only logical conclusion that can be drawn is that she is bound to be possessed of information that is pertinent to the work of the Moriarty tribunal. Up to now, that may not have been made or put at the disposal of Mr. Justice Moriarty. The change the Minister of State made on Committee Stage and which we welcomed on this side of the House would have permitted the transfer of that information to the Moriarty tribunal.
The Minister of State will probably say it can still be transferred to the Moriarty tribunal provided the Minister agrees. I do not know if the Tánaiste or the Minister of State is the Minister in question.
Both of us are involved. I was the first person to bring in the authorised officer. When it goes up another line, it goes to the Tánaiste. The Tánaiste is the person responsible at inspector level and I am the person responsible at authorised officer level.
We are dealing with the Tánaiste in this case. Given the Tánaiste's public pronouncements on this matter, one presumes the only decision she can make in this regard is that she is of the opinion that the matter should be transferred to Mr. Justice Moriarty. However, there is no guarantee that would be the view if a different Tánaiste or Minister was appointed tomorrow morning or if it was a different issue. The Minister of State should not shrug his shoulders or wave his hands at me because it is a serious material difference. The Minister of the day may take the view, for whatever reason, that it will not be so transferred to such a tribunal of inquiry. This also refers to other competent authorities.
The Minister of State has changed the orientation of the amendment because it is now governed by the requirement to be in line with the opinion of the Minister. As long as the Minister is of that opinion, this range of competent bodies may get this information, otherwise they will not. That is a retrogressive step. I am glad Deputy Owen has moved that we recommit to discuss some of this. We are in an unusual position. If this had been in the original Bill—
We also found ourselves in this position on Committee Stage where a new section was tabled and we got our minds around that. Now another new section is replacing that one.
There is no doubt about that and if it were in the original Bill or in the Bill on Committee Stage we would be discussing paragraphs (f2>h), (f2>c), (f2>d), (f2>e), (f2>f), (f2>g) and so on as individual items within the context of the overall framework. It makes it difficult for us. I am not objecting that this is a statement of coherent philosophy from the Department in terms of the overall issue. I still believe it does not affect some of the specific matters I have raised such as, for example, the Information Commissioner and the fact that the entire orientation of the law will be changed in as much as it requires the assent of the Minister.
I stand firmly by amendment No. 1 to amendment No. 33. I do not know how Deputy Owen is minded of it but it should be pressed to a vote.
Which amendment is that?
Amendment No. 1 to amendment No. 33.
The Deputy's amendment?
Yes. As regards the amendments thereafter, amendment No. 2 to amendment No. 33 deals with the point "in the opinion of the Minister" and there is a head-on conflict between the Government and the Opposition on that one. We will deal with that as it arises. I accept the Minister's point on amendment No. 3 to amendment No. 33. I am not making a big issue about amendments Nos. 5 and 6 to amendment No. 33. I will, however, be telling the Tánaiste that the Minister resisted the insertion of the word "her" and all the rest and he will have to take the consequences of that.
Amendment No. 7 to amendment No. 33 is an entirely different matter. It is against this amendment that the Department marshals the main thrust of its fire power in arguing that you could not possibly have a committee of the House seized of this information. That is something we will come back to when we deal with the detail of the amendment. Deputy Owen's amendment No. 4 to amendment No. 33 is quite similar. I am prepared to accept what the Minister says about the first part of amendment No. 8 to amendment No. 33. Clearly what he is saying is that the court of competent jurisdiction is already in the original Act. That is not a problem.
The Minister stated in his speech: "Before concluding, it is only fair to say, as has been indicated previously, that I favour publication of the results of completed investigations in due course following proper conformity with constitutional procedures and due process." That is a far more carefully drafted sentence than might appear at the outset. One might read it or hear it on television. Anyone who is reduced to watching company law on television has a very boring life, but RTE already provides for that as by the time it broadcasts "Oireachtas Report", at 1.30 a.m., there will not be too many watching company law.
I fear we will not make our names out of this.
I am afraid not, but in so far as they were watching, they would say the Minister favours publication of the results. That is what strikes you about it. This goes back to the many commitments the Tánaiste has given that she cannot wait to tell us what she knows. People will read or hear that and ask what we are complaining about, did the Minister not say he favours publication? Favouring publication is different from saying he will publish. He is not saying that, he is saying he favours publication in due course following proper conformity with constitutional procedures and due process. Given people's expectation in respect of the controversial Ansbacher issue, there may be many impediments that could be raised within the rubric of that sentence. I do not accept that this means the Minister will publish. It is a statement of intent at this time and no more than that.
I thank the Chair for facilitating that initial response. I want to come back to my amendment No. 7 to amendment No. 33 which, together with that of Deputy Owen, is being attacked by the substantial arguments advanced by the Department.
It is hard to know where to begin. If I had more time I could argue something on every page. The general broad point the Minister seems to be making in his statement is that he has changed the orientation of the amendment he tabled on Committee Stage and has turned it around. On Committee Stage the Minister tabled, very belatedly, a simple, straightforward amendment to section 21(3). It did nothing more than extend the list of competent authorities that were in the original Act, paragraphs (f2>a), (f2>b), (f2>c), (f2>d), (f2>e), (f2>f), (f2>g) and (f2>h). The Minister added in a new paragraph (f2>d), (f2>e), (f2>f), (f2>g), (f2>h), (f2>i), (f2>j), (f2>k), (f2>l), (f2>m), (f2>n) and (f2>o) and said, simply and cleanly, "the purpose of this amendment is essentially to widen the definition of competent authorities for the purposes of section 21(3)". There was no mention of any other section or subsection, yet in this amendment the Minister has gone much further. Not only has he not extended the list of competent authorities there is one general bringing together, as he indicated in section 53(3)(f2>b) where it states:
by the substitution for paragraph (f2>h) of the following paragraphs:
‘(f2>h) the Central Bank, and
(f2>i) any authority established outside the State . functions which are similar to the .functions.
In his first amendment on Committee Stage he did not propose a provision similar to that contained in section 53(4). He did not bring in an amendment that had the same import as section 53(4), which is the section that is making this new amendment retrospective. There was no mention of it on Committee Stage and no effort was made to change the law.
What page is that?
Page 7. On the Companies Act, 1990, the Minister said in his speech that the opening clause of replacement section (21)(1) repeats the existing provision, with the addition of a specific reference to "the opinion of the Minister" determining if disclosure is appropriate. This has always been the practice and reality but it is now being explicitly stated in the law.
I will give the Minister my interpretation of this. He says this has always been the practice and reality and he will now explicitly state it in the law. I do not believe that to be the case. Section 21(1) of the Companies Act, 1990, does not refer to "in the opinion of the Minister". It clearly states that no information, book or document relating to a body which has been obtained under section 19 or 20 shall, without the consent of that body, be published or disclosed, except to a competent authority. It does not require the Minister to decide because she does not have to give an opinion, only as to whether the publication or disclosure is required at section 21(1) – (f2>a), (f2>b), (f2>c), (f2>d) or (f2>e). The reason those who drafted this section omitted "in the opinion of the Minister" is the Minister is included in the list of competent authorities.
When this section was drafted, if the Minister was to receive this report and had the right, in his or her opinion, to decide who else was to receive it, it would not have been necessary to list the Minister as a competent authority to receive the report. The Minister for Enterprise, Trade and Employment was listed as a competent authority. That may be a complex argument but it begs the question, why in 1990 did the Department, the draftsman and the Attorney General decide to include the Minister as a competent authority if, as the Minister says, the Minister could always decide what to do with the information? Why did he or she have to be listed as one of the competent authorities if it was automatically assumed he or she was the main competent authority?
By adding the words "in the opinion of the Minister", the Minister has changed the basis of this section. In the Minister's amendment on Committee Stage, there was no question – a Minister relevant to the subject matter of the report or the information was listed as a competent authority and he or she could get that information once it was relevant to them. It referred to the Minister for Finance or any other Minister of the Government in whom functions stand vested, the performance of which could be assisted or facilitated by the publication. The Minister can now decide he or she will withhold information from another Minister. The Minister may decide he or she does not like someone or someone is not entitled to have information about their Department in case it is detrimental and some action could be taken to take corrective action before the hammer falls. The Minister has the power to decide whether a person is a competent authority. The draftsman and the Minister are missing the point of this section. It is supposed to list the people who receive these reports and I do not believe that is the case.
As Deputy Rabbitte already mentioned, the Minister said "I wish to make it clear that it has, at all material times, been the intention of the Government in proposing an amendment to section 21 of the Bill on Report Stage to give the terms of the amendment retrospective effect in so far as the purposes...". On Committee Stage, the Minister did not explicitly state his intention that this legislation would retrospectively apply to reports already in the process of being carried out. When some of the Ansbacher names – particular names from a particular section of society – were selectively leaked we were told the ground rules could not be changed after the process had begun. I still do not know who leaked them or for what purpose, one can only make a personal assessment. The implication was that if Mr. Ryan investigated a person and asked questions, that person answered them on the basis of section 21 of the Companies Act, 1990 and all that was implied in that section. So, in giving answers and saying "yes, I did this" or "yes, I did not pay tax" or "yes, I gave people money", they were doing it on the basis that they knew that report might end up with a competent authority; the Minister, a person authorised by the Minister, an inspector appointed under the Act, the Minister for Finance, an officer authorised by the Minister for Finance, any court of competent jurisdiction, a supervisory authority and the Central Bank. In answering those questions six months ago or yesterday, those people were doing so on the basis of the 1990 Act. The Minister said he could not expect the set of rules to be changed when people gave answers to questions based on another set of rules and they would have had to be told beforehand.
It was my interpretation of what the Minister said in this House on Committee Stage that amendment No. 38 and the new section inserted in the 1990 Act would be relevant to inquiries carried out after the Act came into force. That is the only way the Government can sustain the argument it made a few weeks ago that it could not introduce retrospective legislation and change the ground rules for people who had co-operated with an inspector in an investigation. The Minister did not give any indication on Committee Stage that this legislation would apply to reports that had not been lodged with the Minister but were still being prepared. The only mention by the Minister in this regard on Committee Stage was, "We have added in ‘all of these', thereby removing all impediments for the future." That is the only terminology which made me believe this would become law and would only refer to new reports prepared under section 19 relating to inspectors' reports. The Minister did not at any stage say otherwise. I think I have proved that was the Minister's intention because subsection (4) contained in this amendment refers to "books or documents which have been obtained under section 19 or 20 of the Companies Act, 1990, whether before or after that commencement". I would like the Minister to admit that at the very least, his Committee Stage amendment was flawed because it did not contain that section. He seemed to imply that was his intention.
I take exception to the tone of some of the Minister's contribution. For example, "The Government has taken the view that it is not open to the Government to publish, in the sense of throwing information into the public domain...". Perhaps that is supposed to be a reference to serious parliamentary requests from this side of the House to ensure the leaking of names did not lead to people using it as a defence against prosecution. We wanted a legal process whereby names could be put in the public domain. If only some of the names came out, those people could never be prosecuted because they would have the protection of being able to challenge any evidence that had already been leaked. I object to comments like "throwing information". I also object to the tone in which the Minister said:
The Minister [meaning Deputy Harney, because I assume the Minister of State has not taken on the mantle of talking about himself in the third person] cannot simply sacrifice investigatory powers under the Companies Act to some name and shame agenda of individual Members of the Oireachtas.
That is not the import of my amendment. Its import is to add to the group of people or the purposes for which the Minister, in the opinion of the Minister, might decide to pass on information. She does not have to, no more than she has to pass it on to the tribunal or for the purpose of assisting or facilitating the performance of any Minister of the Government or any other functions. She can ignore that whole menu if she wants to, but equally she could pick anyone or everybody out of that menu and say they are all entitled to have this information for the purposes of their own good use. I cannot understand why the Minister will not accept – particularly when one has the words "in the opinion of the Minister" there as a safeguard – that a committee of the Oireachtas would not be a competent body to be added to this list. Then it would be a judgment for the Minister to decide. I cannot immediately provide an example of a time when I think the Minister might decide it is appropriate to send it to a committee of the House, but there may come a time. Who would have thought five years ago that Deputy Jim Mitchell's Committee of Public Accounts would be doing the job it is doing and in such a way?
Having not inserted any amendment into the legislation when first published, having introduced a late amendment on Committee Stage to add to the competent authority list, and having now turned himself completely on his head by removing that amendment and inserting a new one, what will we have in a week's time? Will the Minister of State suddenly decide he has made a mistake by leaving something else out? Now is the time to copperfasten in this list any possible advantage there may be to having a different form of extra competent body to whom the Minister may want to send a report.
Neither I nor my party ever stated that we wanted names thrown into the public domain in a name and shame game or agenda. We wanted to make sure that there was fairness and equity about what was happening. A very small number of people have been given Mr. Ryan's report, yet from that small group some names managed to be leaked. Nobody knows who it was but only 15 copies of the report were distributed. It is fair to say that the Minister and her officials had the report for a full six weeks before it was handed on to anybody else, and there was never any question of anything coming out from that report. That happened after the list began to be widened. I want to say that to the officials in the Department of Enterprise, Trade and Employment, lest they think I might be saying they leaked it.
The Government has turned its own arguments on their head. It persisted in saying it could not change the ground rules on the basis of which Mr. Ryan's report was gathered. If the Minister wanted to, she could change the law to make the report available publicly. The argument she and the Minister of State used was that one cannot change the playing pitch after the game has started. The Minister is doing that now, however, for the remaining 13 reports in the Department. Perhaps it is more than that now, but according to the reply to the last parliamentary question I tabled, 13 investigations were continuing. Some of them have been completed while others are half way through. There are still probably five or six in train. When this Bill becomes law, even people concerned with those reports already in the process will be subject to the legislation. That is retrospection no matter what way one looks at it. I want to hear what the Minister of State has to say about the points that I and Deputy Rabbitte have raised. As Deputy Rabbitte said, the Minister of State has maintained his gracious firepower to knock amendments Nos. 4 and 7. He rubbished them as if it was "name and shame" and we wanted to break all the laws in the land and did not care what the inspectors had done, nor what the High Court or anyone else would do. That is grossly unfair because nobody on this side of the House demanded any exposure of names without the law being changed. That is where we came up against a brick wall. We were told one could not change the law retrospectively. The Minister of State, Deputy Brennan, said so to the 750,000 people who listen to "Morning Ireland." Other Ministers continued to sell that line, but where is it now? Based on that argument the Minister of State is as naked as the day he was born.
Not quite.
Well, he was naked when he was born.
But not now.
I will have to tell him that story.
We are all advancing at the same pace.
The Minister of State has been left exposed by all those arguments that were made over recent weeks and by subsection (4). I would like to hear how that subsection has appeared here and was not in the Minister of State's amendment on Committee Stage. I would like to hear the Minister of State's assessment of my interpretation of why the original writers of the 1990 Act did not insert the words "in the opinion of the Minister". I am sure some of the Minister of State's officials were around at that time. Is it not because they added the Minister in as a competent authority? For once they actually treated the Minister in the Department in the same way as all the other competent authorities were being treated. That Minister was not given a higher level of allowability to get this report than any other competent authority that was listed. I would like to hear about that and I reserve the right to come back to the matter again.
I welcome the progress in the debate and I have listened with interest to the complex discussion on the Bill. I welcome the 34-page circular we have just received on the various amendments, including those of the Minister of State. I appreciate the lengthy explanation and clarification on this section. In light of the points raised by the two previous speakers I now await the Minister's response and clarification on those issues. I support the Minister of State's clarification that there is no intention of relaxing the present strict limitations on publication. Equally, I support the Minister of State's request that we should simply adhere to procedural fairness in all applications, that we should allow due process and acknowledge the right of individuals. I do not see any difficulties with that. The Minister of State has outlined the most appropriate and fairest way to proceed.
I appreciate some of the substantial arguments that have been made by the two previous Opposition speakers, and in particular I listened with interest to the points concerning retrospection. On page 28 of the document that has been circu lated dealing with retrospective issues, in relation to the new section 53(4) it is clearly stated that:
The Oireachtas shall not declare Acts to be infringements of the law which were not so at the date of their commission.
That relates to Article 15.5 of the Constitution. I look forward to what the Minister of State has to say in this regard. There may be some crossed lines in relation to the issue of retrospection and I look forward to the Minister of State's clarification in that regard. The House will welcome what the Minister of State is endeavouring to do. I lend my support to what I have picked up from his explanation.
This has been a lengthy debate but I wish to mention a separate issue. I appreciate the reference to the Association of Company Registration Agents. I, and I am sure others, received a lengthy submission from the Association of Company Registration Agents on the Bill and I acknowledge that the association has a tremendous fund of knowledge on many relevant issues associated with legislation in this area. I recently met a delegation of the association which acknowledged the need to improve and enhance legislation. It has practical concerns over certain aspects and would welcome an opportunity to have a line of communication with the Department, especially on this Bill and all issues relating to the industry. It would be mutually beneficial for those in the association and the Department. I ask the Minister to put down a marker in that respect.
I thank Deputies for their responses. I regret if any of the language I used was offensive to a Member or Members of the House. Deputy Owen said this matter was thrown at Members and the House received very short notice of it. However, the amendments were published 15 days ago. Deputy Owen is a parliamentarian with much experience and she will recall putting legislation through the House. One might receive 15 hours notice of amendments, or less. This material has been available for the past 15 days so nobody has been rushed into anything. I am pleased that much time was available.
We did not have the Minister's 15 page magnum opus and we needed it.
I have been in the House for seventeen and a half years and I did not ever see a Minister providing copies of such a document to the Opposition.
I acknowledge that.
I was an Opposition spokesperson and we did not even receive a shred of a document.
I do not remember 15 pages on an amendment.
Deputy Rabbitte referred to retrospection and I refer Members to what I said. With regard to Ansbacher, the argument on retrospection related to the publication of information which had been gathered under conditions of secrecy. We were legally advised that we could not publish such information. That is the position. The Deputy argued that the amendment is retrospective. However, his argument is misplaced. I have listened to such arguments for the past month but it is totally misplaced for whatever reason. This relates to current information in the possession of the Minister. It is not retrospective. Under the Constitution, the Oireachtas cannot introduce law which is retrospective. This relates to information currently held by the Minister whether gathered before the enactment of the amendment. These investigations are current.
What does subsection (4) of the Minister's amendment mean?
It states:
The amendments effected by this section shall apply in relation to the publication or disclosure, after its commencement, of information, books or documents which have been obtained under section 19 or 20 of the Companies Act, 1990, whether before or after that commencement.
The commencement of this Bill?
Yes. It will ensure that the law can deal with present and future cases.
That is not the case. It refers to publication or disclosure whether before or after the commencement of the Bill.
The commencement refers to the commencement of the section.
It refers to the commencement of the section and the Bill. However, we are dealing with current activities, reports, investigations and tribunals. It will not relate to last year or another year. We are dealing with de facto active cases that are currently under investigation. We want to ensure that we can deal with matters before us at present.
I do not wish to put the Minister at a disadvantage but I understand this relates to the information, books and documents obtained under section 19 or 20 by the Tánaiste and Minister for Enterprise, Trade and Employment in whatever case may be published or disclosed before or after the commencement of the Bill, irrespective of the date it is enacted. The provision states "whether before or after that commencement", commencement being the commencement of the section.
Is the Deputy talking about subsection (4)?
Yes.
It states:
The amendments effected by this section shall apply in relation to the publication or disclosure, after its commencement, of information, books or documents which have been obtained under section 19 or 20 of the Companies Act, 1990, whether before or after that commencement.
I assume the reference to publication or disclosure is controlled by subsection (3). It does not relate to disclosure to the public but disclosure to the competent authorities. However, that is not stated. Perhaps the amendment is not properly worded.
I understand the wording is fine.
Perhaps it should state the amendments effected shall apply in relation to publication or disclosure as allowed under section 21(3). Is that what the provision means?
I will respond to the comments already made by the Deputy and if there are any further questions, I will answer them then. With regard to Ansbacher, the argument on retrospection related to the publication of information which had been gathered under conditions of secrecy. We were legally advised that we could not publish that information. The Deputy is arguing that the amendment is retrospective, but the argument is misplaced because it relates to current information in the possession of the Minister whether gathered before or after the enactment of the amendment. It relates to current information.
About past acts.
The matters being investigated are past acts but they are not in law. We are putting this into law.
This is an important point and it is fine if the Minister wishes to take advice and reply later. There is no point using semantic language about current information. Will it be permissible to publish or disclose the report on the Tánaiste and Minister for Enterprise, Trade and Employment's desk after this legislation is enacted, provided it conforms with all the other provisions in the Bill? If so, that is not current information.
It was gathered under different conditions.
It is available before the Bill is enacted. She has it in her possession before the Bill is enacted.
It is a moot point.
The important point is that it was gathered by the inspector under a different set of rules. The Minister's suggestion would cause people to be treated unfairly. If the information was disclosed to the competent authority after it was gathered under a different set of rules, it would undoubtedly mean that somebody would be treated unfairly. That is the argument the Government made for not disclosing the secrecy aspect.
We are still not making anything an offence retrospectively. That is what retrospection in law means. We are not making an offence retrospective.
We are not talking about retrospective offences.
I am explaining what retrospection in law means. It is where the Legislature makes an offence retrospective.
We know that.
We are enabling the Minister to pass this information to any of the competent authorities in section 21.
It is no longer current information. The Minister is talking about the information that she has already.
The Deputy is talking about a specific report. I am talking about current reports and investigations collectively which are ongoing.
We are trying to understand the Bill. If we leave aside the Ansbacher case, if the Tánaiste and Minister for Enterprise, Trade and Employment has another report about which none of us knows, after the Bill is enacted, may she, if it is warranted in her opinion, transfer it to any of the competent authorities?
Yes.
That is no longer current information?
Yes.
That is information that was collated in the past.
Retrospection with regard to legislation is where something is made an offence. The Deputy is saying that because a report was submitted yesterday and a law is passed today, we are enacting retrospective legislation. However, that is not the case. We are not making anything an offence, which is what retrospection in law means. That is the legal advice available to us.
I will come back to that point.
That is fine. It does not alter the conditions of secrecy under which the information was gathered. Each of the persons to whom confidential information is disclosed is bound by the conditions of secrecy. We have been legally advised that the amendment is in order and does not amount to retrospective legislation. Although Members may wish to use the word "retrospection", it is not retrospective legislation. Article 15.5 of the Constitution states:
The Oireachtas shall not declare acts to be infringements of the law which were not so at the date of their commission.
We are prevented from doing so. The amendment to section 21 will not make any act a criminal offence; it will enable information to be given to the parties defined in the section.
The amendment no more than confirms what is done in practice. The Minister's opinion is operative in that he or she must form an opinion and make a decision.
That is misleading. The Minister of State is enshrining this in law.
The amendment proposes to enshrine in law that which is done in practice. The Minister makes the decision to disclose information to the competent authorities. That is the practice and we are enshrining it in law.
The Minister is one of the competent authorities.
In this instance she is the competent authority to make a decision. It is true this will allow Ansbacher information to go to the Moriarty tribunal and I am sure the House agrees with that.
Deputy Rabbitte suggested that judicial reviews were not a good reason for not allowing the Information Commissioner adjudicate on section 19 or 20 information on public interest grounds. Our objective is not to denigrate the Information Commissioner or the exercise of his powers. Our concern relates in part to judicial review proceedings. Acceptance of the relevant amendment to the amendment in the name of Deputy Rabbitte would render sections 19 and 20 unworkable. The public interest demands that such preliminary investigation work be allowed to uncover corporate malpractice.
Deputy Owen referred to the relationship between the competent authority and the Minister. Under section 21 of the 1990 Act, the Oireachtas decided that the Minister was a competent authority. The Minister did not take that responsibility on to him or herself; the Oireachtas decided. Otherwise, the Minister could not be a competent authority. That is the position since 1990.
Why does the Minister of State think the Minister was not involved prior to 1990?
I cannot second guess retrospectively back to 1990.
The Minister of State is not doing badly on the question of retrospection.
Deputy Owen asked why a retrospection amendment was not introduced on Committee Stage. We wanted to ensure that information currently before the Minister could be disclosed to the new competent authorities, for example, the Moriarty tribunal. We do not want somebody to contest the validity of the Minister passing information on the Ansbacher accounts or other information to the Moriarty tribunal or any other competent authority. We decided to remove this ambiguity from the section, which is why this new subsection (4) is proposed under amendment No. 33. It has been fully cleared by all of the Government's legal advisers. I am sure the House will agree it is a laudable objective.
Deputy Owen suggested that movement is now dependent on the opinion of the Minister. This has always been the position and we are including it in statute now. Otherwise, I do not know how else a decision could be exercised. Ministers are appointed to make decisions. If they do not make decisions I do not see the need for them.
Deputy Owen suggested that the rules on disclosure are being changed. The strict prohibition on publication is not changed. What has changed is that new authorities may be given information on a confidential basis. These authorities, for example, the Moriarty tribunal, must themselves act in accordance, and can only act in accordance, with constitutional procedures. Relevant information can be pointedly disclosed by the tribunal to persons mentioned in such information to obtain the other person's side of the story. It is following that process that the tribunal may disclose information publicly and the person involved will have the right of reply to the tribunal in public. Thus, the requirement of procedural fairness will be fully safeguarded in this legislation.
I have no agenda here other than to say that as a result of what was accepted on Second and Committee Stages and the questions raised on the Order of Business, we have done what we can to respond to the demands made. Within the constitutional parameters and based on the legal advice available to us, we have proposed this final amendment to take into account and encompass the many requests made for disclosure and for action to ensure that the laws can be operated and that malpractice can be eliminated from proper performance on this island.
Returning to the retrospective element, if, in amending section 21(3) by adding to the list of competent authorities, the Minister of State is not breaching the Constitution—
It is not retrospection.
That is retrospective, but the Minister of State says it is possible to proceed on that basis because it does not create an offence. What offence is being created by the amendment of section 21(1)?
Will the Deputy read out the subsection?
Subsection (1) deals with secrecy and provides that nothing shall be disclosed. The Minister of State argues that an Oireachtas committee cannot be included on the list, the Minister's wish list. It is not automatic that those listed in the amendment will receive the information. They will do so only if, in the opinion of the Minister of the day, they should. That opinion could be good or questionable. The amendment puts the matter in the hands of the Minister.
I do not accept the Minister of State's contention that the Minister decides on all these aspects. The present legislation did not need the opinion of the Minister to trigger the passing of information to the competent authority. It provided that information should not be published or disclosed except to a competent authority. This more or less obliged the Minister to provide the information to a competent authority if it was assessed that it was necessary for the purposes of instituting criminal proceedings arising out of exchange control and the other matters set out in section 21(1) of the 1990 Act.
While I accept the Minister was required to assert the view that the various paragraphs of section 21(1) of the 1990 Act were valid in terms of applicability, thereby requiring the passing on of information, it did not require her opinion that this was the case. However, the amendment now provides that her opinion is required. This means she can say that in her opinion the information should not be given to anybody. For example, she may decide not to give it to the Taoiseach, as she did on this occasion.
Does the Minister of State now accept that the Government got advice it can change section 21(3) of the 1990 Act retrospectively? This is being proposed under the amendment when it provides that anything submitted to the Minister, albeit collected under the 1990 Act, can be disclosed to all these new competent bodies if she so decides. That is retrospective.
It is not retrospective.
It is not retrospective in terms of causing a criminal offence, but it is retrospective. The Minister of State cannot second guess it.
I do not accept that.
It is retrospective. Mr. Ryan undertook an inquiry under sections 19 and 20 of the 1990 Act, which are governed by section 21, and he told certain people he was competently undertaking an investigation accordingly. It was assumed that those involved, or their lawyers, answered his questions in that knowledge. This amendment effectively tells these people that despite the fact that they answered Mr. Ryan's questions under a set of rules, the rules are changed and the information they provided will now be given to a tribunal of investigation. They had every reason to believe this would not be done when they answered the questions. It is, therefore, retrospective in that sense. It is not an offence to give the report to the tribunal, nonetheless it is retrospective because the conditions under which they answered the questions, truthfully or untruthfully as the case may be, were different from what the report will be based on.
Will the Minister accept that there is no constitutional imperative on the Government to amend section 21(1) to allow publication after the report has been drawn up? It is not an offence to allow publication of the report by presenting it to a committee of the House or to anyone else. Just because information is gathered on the basis that it was collected under secrecy and would not be made available is exactly the same argument that information was collected on the basis that the competent authorities were just A, B, C, D and E and that they will now be much wider. There is no intellectual way in which to argue that amending the rule about secrecy is in itself doing what Article 15.5 precludes, that is, "The Oireachtas shall not declare acts to be infringements of the law which were not so at the date of their commission." Amending the secrecy clause under which the information was collected is not creating an infringement or putting a crime on to somebody. Perhaps one might argue that some of the information they gave might not have been given if they knew the report would be available to a wider circle of people. However, the act of collecting it under a secrecy clause and changing it after it had been collected is not saying they committed a crime or that the Government committed a crime. That is what the Opposition was attempting to do when we proposed an amendment to the 1990 Act. The Minister of State said that the Government could not accept this, yet section 21(3) can be amended. The argument is very faulty and weak and I do not understand how the Minister of State can continue to argue that it could not be referred to a Dáil committee because the information would become public. The inference is that because the information was collected under secrecy if it went to a Dáil committee somebody might hear about it. There is a weakness in the Minister of State's argument in being able to amend section 21(3) and not being able to amend section 21(1).
I want to make it clear that it has always been the intention of the Government in proposing an amendment to section 21 to give the terms of the amendment retrospective effect. This is not what the Minister of State, Deputy Brennan, said on radio the morning he defended the Government's denial of any amendment to the law. He said it was not the Government's intention to make any retrospective change to this law. It certainly was not its intention on 21 July. At no stage did the Minister of State say on Committee Stage that the new section extending the competent authority lists would be retrospective. He said that all the new extras were being added, thereby removing all impediments for the future, not for the present but for the future. It does not take a great deal of brain power for one to interpret this to mean that when this becomes law it will be the law for the future. I do not know how the Minister of State can argue that it was always the Government's intention to make retrospective changes to the Act. I will not accept that.
I thought when we received the text that we would seek to address the serious arguments advanced. I cannot see the point of the Minister of State persisting with this manifestly ludicrous argument that this does not have retrospective effect. The matter is simple. If we take the Ryan report as the example, at the stage the information was collated the law applying was different to the law that will apply after this legislation is enacted. It is quite obvious that the law is being changed.
That is why we are here.
In respect of on whom Mr. Ryan's report can be conferred, we are doing so retrospectively. We are not saying that for every report Mr. Gerard Ryan draws up from today, the day of commencement, he may transfer it to a tribunal of inquiry, for example. We are saying that the report he has already collated under different rules, at a different time, and under a different law, may now be transferred to whatever competent authority is designated under the new legislation. I do not see the point in persisting with this argument. As I understand it – the Minister of State can reflect on this and come back to us if we have got it wrong – once we enact this legislation, and if the Minister is of the opinion that it should be done, Mr. Ryan's report may, for example, now be transferred to Mr. Moriarty.
The Deputy is correct.
Even though when the questions were asked we did not know that would be the case.
My attitude to this is that that is progress. We welcome this. If a great deal of money has been spent on setting up a tribunal of inquiry and if the Tánaiste's diligent officer has assembled information which is pertinent to the inquiry, it is entirely proper this should be referred to the tribunal for its information. Is it correct to say that this information may then be mediated into the public domain? If Mr. Justice Moriarty decides to adduce some of the information in evidence before the tribunal then that will come into the public domain in that fashion.
The Minister of State said in his speech that he has proffered the restructuring of his amendments in response to the Committee Stage debate and the subsequent debate in this House. It is important to say that no one involved in this debate, either the debate which took place in this House or on Committee Stage, suggested the redraft of the section along the lines advanced by him. In respect of subsection (2) which includes for the first time the phrase "in the opinion of the Minister", the Minister of State says, "This has always been the practice and reality". That is totally incorrect. Any competent authority which up to now had the information lawfully could take the decision to publish. Why are we now inserting the words "in the opinion of the Minister"? This has not been included in legislation except where it is for a purpose. The purpose here is that the Minister will govern to whomsoever of the competent authorities the matter is referred in future. It is the Minister's call. This is important because on Committee Stage it was not the Minister's call. If the tribunal of inquiry was to be added to the list of designated competent authorities, then the report would automatically go to the tribunal of inquiry and it would be a matter for the tribunal as to what to do with it.
Progress reported; Committee to sit again.