Joint Committee on Legislation debate -
Wednesday, 13 Mar 1985

SECTION 23.

Question proposed: "That section 23 stand part of the Bill."

Deputy Noonan (Limerick East)

This section embodies in one comprehensive provision the existing bankruptcy law relating to the arrest of a bankrupt or other person where required. Is applies after adjudication. The committee were satisfied generally with the existing arrest provisions. They emphasised that while the High Court had inherent power to commit for contempt if a witness disobeyed a summons the practice in bankruptcy is not committal but the issue of a warrant to compel attendance and the Bankruptcy Acts give power to the court to issue warrants.

Section 23 empowers the court to arrest a bankrupt about to leave the State or who has removed or concealed property or is avoiding a summons, and to bring him before it for examination. Subsection (1) includes that. It has similar provisions in subsections (2) and (3) for dealing with a bankrupt or other persons who fail to answer a summons under section 21. These subsections do not prejudice the court's power relating to contempt or to the enforcement of the attendance of witnesses.

Deputy Taylor

Is it unlawful for a bankrupt to leave the State?

Deputy Noonan (Limerick East)

He can be arrested if he leaves the State and be brought before the bankruptcy court but whether he commits an offence by actually leaving the State I do not think so. He has to have the permission of the court to leave.

Deputy Taylor

Does the Bill provide that he may not leave the State?

Deputy Noonan (Limerick East)

I do not think so. Sometimes the court would require him to hand up his passport. He would be in contempt of the court proceedings if he left in order to avoid them, and there is the power of arrest to compel him not to leave the State. If he succeeds in leaving the State I do not think we have included that as a specific offence but that could put him in contempt of court.

Senator O'Leary

Has Deputy Taylor a case in point?

Deputy Taylor

No. I would have thought that the word "abscond" rather suggests an intent to leave permanently, but one could have a bankrupt whose sister or daughter or someone was getting married in Liverpool and there would be nothing wrong with the bankrupt going over to his daughter's wedding or whatever. I do not think that would be absconding. Could that point be clarified?

Deputy Noonan (Limerick East)

The court would certainly have the power to allow the bankrupt to go abroad in that kind of circumstance if it felt it was appropriate. It seems to me the offence would be an offence of contempt if a bankrupt absconded. It might be worth looking at section 119 which deals with the absconding debtor. That is on page 43 of the Bill:

If any person with intent to defraud his creditors leaves the State and takes with him, or attempts or makes preparation to leave the State and take with him, any part of his property to the amount of £500 or upwards, he shall be guilty of an offence.

Deputy Taylor

That is fair enough. I would probably go along with that but on section 23 which says:

Where is appears to the Court at any time after making an adjudication order . . . . probable cause for believing that a bankrupt is about to leave the State. . . .

I would have some hesitation about it. Is it simply a matter of the bankrupt or a debtor leaving the State per se and that is all there is to it? The thrust of bankruptcy law, in the absence of a fraud situation — if you have a fraud situation that is one thing — but leaving aside a fraud situation, where a man’s business has gone wrong and he goes bankrupt the purport of the exercise surely is to call in such property as he has and to make an equitable distribution of it among all his creditors. The intent is not to punish him, to imprison him or to take it out on him in any criminal sense because it is not criminal activity. This is on the civil side of the court. I would sympathise with the provision in the second part of section 23 (1) “remove or conceal any of his property with a view to avoiding payment of his debts”. That kind of category would be one thing. To say that he can be arrested just because he is going to leave per se without any suggestion that he is involved in concealing any of his assets or trying to remove any of his assets or anything of that nature, is putting the thing into the criminal ambit rather than the civil ambit where I would think it more properly lies.

Deputy Noonan (Limerick East)

I think the point is when somebody is before a bankruptcy court and once an adjudication has been made, he surrenders in effect both himself and his property to the jurisdiction of the court. It will then be up to the court to decide whether for example, it would be appropriate that he would travel abroad to his daughter's wedding, as Deputy Taylor suggested. Section 119 provides:

If any person with intent to defraud his creditors leaves the State and takes with him, or attempts or makes preparation to leave the State and take with him, any part of his property to the amount of £500 or upwards, he shall be guilty of an offence.

The prerequisite for the offence is two things: first of all, that he had the intent to defraud his creditors; secondly, that he is removing part of his property to the value of at least £500. Section 127 provides the penalties for the offence. On summary conviction it is a fine not exceeding £500 — I suppose we might be amending that — or 12 months imprisonment. On indictment it is £1,000 and not exceeding five years imprisonment. If we go back to section 23 it is "with a view to avoiding payment of his debts or avoiding examination of his affairs". That is where the provision arises.

Deputy Shatter

The only point I want to make — it is not a very serious point — is, if he does leave the jurisdiction he is fined £500. Considering he has been adjudicated bankrupt, I presume it is not a massive disincentive to leaving the jurisdiction.

Deputy Noonan (Limerick East)

It is the same problem as imposing a second life sentence or a second sentence to be hanged. Capital punishment twice does not work very well.

Senator O'Leary

Presumably he then pays a penny in the £1.

Chairman

It is true to say that there is a certain need for clarification on this section. Perhaps the Minister would agree to look at it again to see if the points raised by Deputy Taylor need to be considered?

Deputy Noonan (Limerick East)

I will try to bring the different sections of the Bill which deal expressly with this point together for the purpose of clarification when I am contributing on Report Stage.

Question put and agreed to.

SECTION 24.

Question proposed: "That section 24 stand part of the Bill."

Deputy Noonan (Limerick East)

This section re-enacts in modern form in accordance with the committee's recommendations the substance of existing law which provides for the committal to prison of a bankrupt or any person who refused to answer questions or otherwise disobeys any order of the court.

Senator O'Leary

The section deals somewhat with the problem that I mentioned on subsection (4) of section 21. It talks about a lawful question. It talks about where the bankrupt or other person summoned or brought before the court refuses to be sworn or fails to answer any lawful question. It is not just "any question". It is "any lawful question". That is a help to the court in reducing the scope. The Minister might consider that word in the context of his consideration of section 21.

It is not an area of any great expertise of mine but is there not a change in the practice of the court in recent years with regard to the committal of persons to prison for an indefinite period of time? Am I right in saying that? Has the practice grown up that if a person is in comtempt he must be sent to prison for a specific length of time? I know that if a person refuses to answer questions in a court or refuses to obey, he may be sent to jail in the normal way but I think there are now circumstances in which it has been held that it must be for a specific length of time. Would the Minister look at that? I may be compeltely wrong.

Deputy Noonan (Limerick East)

There is a difference between criminal contempt and civil contempt and that is the distinction.

Deputy Taylor

I do not think so.

Senator O'Leary

The Minister is probably right. Under one category of contempt in recent years it was necessary to nominate a period of time. Where a person was charged with the offence of contempt before the court, tried and found guilty, he had a criminal comtempt; he had to be sent for a specific length of time. I am satisfied it does not apply in this case. I have no further point to make.

Deputy Shatter

My own experience of how the court operates, certainly in the area of civil contempt, is that it is quite usual for the court simply to order that a person be detained in prison until he purges his contempt, which is unlimited in time, which would require him to be brought before the court to purge his contempt. On occasions persons brought before the court add to their contempt and are sent back again and do not purge it at all. That does not apply in the civil contempt area, currently anyway.

Deputy Taylor

The section says "where a person brought before the court refuses to be sworn". There are cases where persons have a conscientious objection to be sworn and that is recognised generally in the law and such persons are allowed to affirm or give their evidence based on some sanction other than a swearing. Should provision not be made for that here as well to cover cases where persons do have a conscientious objection to be sworn?

The second point is: at the end of the section it says: "The Court may order that such person be committed to a prison to await the further order of the Court". That is rather reminiscent of the days of Louis XIV where persons were just sent off to prison and forgotten about. I am not suggesting for a moment that that would happen here. Might it not be appropriate to have an addendum there to say that the person concerned at any time may himself apply to be brought back before the court so that he could purge his contempt and agree to do now what he was put in prison to do in the first place, rather than have to await a further order of the court?

Deputy Noonan (Limerick East)

There are three points. One was made by Senator O'Leary. The idea of the lawful question is what was intended in the McAllister case that I referred to. Certainly, it does help to clarify section 21. On the first point made by Deputy Taylor, the word “sworn” would be interpreted by the court as including declarations or affirmations, which are customarily acceptable in court. The Interpretation Act covers this.

Chairman

Is that normal practice at the moment?

Deputy Noonan (Limerick East)

Yes.

Deputy Taylor

It is normal practice that a witness is given the dispensation of affirming or declaring rather than swearing but I would not be at all so sure that the word "sworn" there includes within it the alternative of affirming or declaring. In fact, I would think not. I think "swearing" means swearing and means formally taking an oath.

Chairman

Would you feel happier if the word affirming was added on Report Stage?

Deputy Taylor

Yes.

Chairman

Would that be possible, Minister?

Deputy Taylor

Or to affirm at his option.

Deputy Noonan (Limerick East)

I will examine it to see if the word "sworn" there includes other forms of declaration and affirmation. If it does not we will make the addition necessary.

Chairman

There is no problems about it?

Deputy Noonan (Limerick East)

No. The intent certainly is to include the range that is available to the court at the moment.

Senator O'Leary

In the Interpretation Act "swearing" is defined as including affirming in all cases.

Deputy Noonan (Limerick East)

I understand that in the McAllister case Judge Kenny examined section 385 of the Act of 1857 which is the basis for this section and deemed that it was constitutional. The only words that caused a problem in the original section were “without bail”. That answers that question by Deputy Taylor.

Deputy Taylor

Not really. I was not suggesting that it was unconstitutional. I was simply raising the question of whether the Minister might consider adding the option that he could apply to be brought back before the judge for the purpose of purging his contempt so that he could get out then on his agreeing to do now what he should have done in the first place rather than having to remain there to await the further order of the court, which might mean that he would be detained for an unnecessary period of time. I am not suggesting that there is anything unconstitutional about it.

Deputy Noonan (Limerick East)

I think he would have that right in any case at the moment. I do not think it has to be written in. He would have a general right to come back to purge his contempt.

Deputy Taylor

I would have thought so if it were not for the fact that it states there that he has to await the further order of the court. If the Minister can assure me that he can make an application and would be taken back when he applied or within the next convenient time thereafter, that would meet the situation.

Deputy Noonan (Limerick East)

I think the position is if he declares he is prepared to comply with the instructions of the court and answer the questions of the court he has an entitlement to come back before the court as soon as possible. It is something that is worth checking and I will check it to ensure that we are doing the proper thing.

Question put and agreed to.