Joint Committee on Legislation debate -
Friday, 24 May 1985

SECTION 61.

Deputy Noonan (Limerick East)

I move amendment No. 12a.

In page 26, lines 20 and 21, to delete subsection (3)(h) and substitute the following:

"(h) to agree a sum for costs where the Court so directs or where he considers that the amount which would be allowed on taxation would not exceed £1,000,".

The reason for this amendment is to reflect more accurately the committee's recommendation that the Official Assigneee should have power to agree costs up to a certain amount. At present the Examiner may measure a sum for costs where the judge so directs or where he considers that the amount which should be allowed in taxation would not exceed £50. As the wording in the Bill stands at present, in cases where the cost might exceed £50 taxation would be necessary. To avoid this and to reflect existing practice the new wording is being introduced and at the same time the figure is being increased from £500 to £1,000.

Amendment agreed to.

Deputy Noonan (Limerick East)

I move amendment No. 13:

In page 26, between lines 29 and 30, to insert the following new subsection:—

"(4) Notwithstanding any provision to the contrary contained in subsection (3), no disposition of property of a bankrupt, arranging debtor or person dying insolvent, which comprises a family home within the meaning of the Family Home Protection Act, 1976, shall be made without the prior sanction of the Court, and any disposition made without such sanction shall be void."

The reason for this amendment is to restrict in the case of the family home, the new power which section 61 confers on the Official Assignee to dispose of property of a bankrupt or arranging debtor without reference to the court. During the debates in both Houses and already in discussions in this sub-committee concern was expressed with regard to the effect of bankruptcy on a family home. Suggestions were made with a view to excluding it in some way from the realisation of the debtor's assets or at least to providing guidelines to the court in the exercise of its discretion under the proposed amendment. As members are aware, legislation is being prepared with a view to creating a legal presumption that a family home will in future be in the joint ownership of both spouses. The proposed legislation will, as I have already indicated, contain specific bankruptcy provision. I think that this legislation will go a long way in alleviating some of the problems referred to by Members but in the light of the discussion which we have had on section 59 this is not the final solution to the points raised.

In the meantime, in order to ensure that the interest of both spouses are taken into account, in particular where the family home is in the sole ownership of the debtor, I am putting forward this amendment so that where the assets of a bankruptcy which vest in the Official Assignee include the family home, no disposition of it can be made without the sanction of the court.

Deputy Shatter

Again for record purposes — I do not want to travel any great distance over ground which was covered — I welcome the fact that the Minister is making this amendment but I think the point again has to be made that, in making it, all he is doing is creating a situation where the court instead of the Official Assignee can authorise the sale of the family home. The legal position under the Family Home Protection Act is at the moment that if there is a bankruptcy and the home is in the husband's sole name, who is made bankrupt, the Official Assignee can then sell the home and does not require the consent of the wife under the Family Home Protection Act because the home then is not being sold by its spouse who is protected by the Family Home Protection Act. This is transferring the power to the court but it is doing it in a way which does not indicate to the court what criteria are to be applied. Presumably the court would possibly adopt the approach that the family home would be the last asset of all to be sold to discharge debt. That would be a reasonable approach. One would anticipate that. Again in the context of providing the formula we are talking about under section 59, one could expressly put that into the Bill. If there was to be a sale of the family home it was to be the last asset to be sold to meet debts. It seems that this is starting to set down some of the principles that should be applicable to a court in deciding whether or not to permit a sale. For this section to operate, we are going to have to set out expressly how we balance the interests of both the family home, the husband or the dependent spouse and the children in it and the creditors who are seeking to have the debts discharged. It could be by setting down various principles and giving a broad discretion to the courts that there is a way of dealing with this.

Amendment agreed to.

Question proposed: "That section 61, as amended, stand part of the Bill."

Deputy Noonan (Limerick East)

This section is new. It sets out the duties and functions which the Official Assignee will have in future. The committee's basic recommendation that he should have complete freedom in the administration of bankruptcies and vesting arrangements subject only to the overriding control of the court and the right of a creditor or other person to apply to the court in relation to the exercise of those powers, is carried into effect.

The Official Assignee, besides being given a general power to get in and realise the property in every bankruptcy and vesting arrangement and distribute it, is also granted detailed powers similar to those conferred under the Companies Act on a liquidator in the winding up of a company by the court. The section states that the Official Assignee may seek the directions of the court in any case of doubt or difficulty and also indicates when his powers and functions are exercisable.

Question put and agreed to.