Merchandise Marks (No. 2) Bill, 1969: Report Stage.

Before we take up consideration of the Report Stage of this Bill I should like to announce that I have ruled amendment No. 3 in the names of Senators Alexis FitzGerald and John Kelly out of order as it involves new matter on a question not effectively before the committee.

I would ask the House and the Minister to consider recommitting this section for consideration. I fully accept the ruling of the Chair on this that my references to the punishments appropriate to offenders under this Bill were not adequate to allow me to propose this amendment on the Report Stage but I think that it is open to the Minister and the House to consent to a recommittal.

Under Standing Orders any Senator has power to propose the recommittal of a Bill in respect of any amendment. It is a matter for the House to decide whether it wishes to re-commit it. Is there agreement on the question of recommittal?

I do not see any point in it. I think it was discussed on Committee and if we are going to start to recommit amendments on Report——

I understand that the Cathaoirleach has ruled it out on the ground that we did not sufficiently discuss it and if the Leader of the House is right it should not have been ruled out of order if the discussion had been sufficient.

If a motion to recommit is passed then I may call on the Senator proposing a recommittal to make a short statement of the reason for wishing to recommit and I will call on a Senator opposing recommittal to make a short statement against. I now call on Senator FitzGerald.

I do not really want to say very much about this except to say that I indicated in my observations on this matter of the penalties that I did not think they were adequate for the appropriate punishment of the offences that would be committed by anybody in breach of an order which the Minister may make on this. I must admit to having made inadequate reference to it but in column 435 I did point out that under the existing Act the provision for conviction on indictment was that the person was liable to imprisonment with or without hard labour for six months and that this was omitted from this section. I must admit that my mind was not directed very fully to the question of the type of punishment that might be appropriate to get proper enforcement of this Bill which I am sure the Minister wishes should be secured. I can only submit that it would be the right thing for this House to do to reconsider this section if someone who had at the Committee Stage indicated dissatisfaction with the nature of the penalty being imposed becomes more clear subsequently as to the type of punishment that would be most appropriate, even if he made no such reference. I am in the hands of the House but I would submit that it is not unreasonable for me to ask the House now to listen briefly to what I might say in reference to this particular penalty.

We could have no objection provided that it does not widen the debate into a free-for-all for the next two hours.

Is it agreed to recommit in respect of amendment No. 3?

When we come to it.

When we come to it.

I move amendment No. 1:

In page 4, between lines 15 and 16 to insert the following new section:—

"(1) On the sale or in the contract for the sale of any goods in respect of which the Minister has made an order under section 2 of this Act, the vendor shall be deemed to warrant that the goods have been packed in compliance with the terms of such order.

(2) A contract, whether made before or after the passing of this Act, by virtue of which a vendee would be directly or indirectly deprived of his right to obtain relief under this section shall be void."

The amendment is before the House and there is therefore no point in my reading it to the House, nor, indeed, is there any point in my repeating what I said on the Committee Stage, except perhaps to say in support of the amendment that I think I am correct in my statement of the law on this matter that, if someone delivers goods in a container not complying with an order of the Minister made under this Bill and is not fraudulent in his so doing, the person receiving the goods will have, under the existing state of the Irish law, no remedy in damages for that.

There are certain cases where innocent misrepresentation might render the vendor liable to the vendee. I do not think any such cases arise in this particular instance but a law has been introduced and passed in the United Kingdom to which, perhaps, I may be permitted to refer. This law indicates that this is a problem understood elsewhere to be very real. It is called the misrepresentation Act of 1967. It deals with this question of somebody who is innocent, that is to say, somebody who does not intend to defraud but who does, in fact, deliver goods which are in contravention of an order. The person receiving the goods must act quickly. He may be required to open the first container in a whole series supplied to him to discover that this series of containers are not packed as they should be packed. He then has the opportunity of sending the lot back but if he adopts the order he makes the mistake of not being sufficiently alert. In Ireland at the moment such a person would have no right to damages but the position in the United Kingdom is otherwise.

I shall not bore the House by reading the entire section from the 1967 Act but I shall simply summarise it by saying that the position in Britain at the moment is that such a person, if he receives goods in a container that is not packed in compliance with an order made under this Act, is entitled to damages from the man who sold him the goods. May I say at this point that the particular draft that I have made is not necessarily the most appropriate form of drafting amendment to this section; it could be done as the English have done, in a different way but they have gone on to provide in subsection (3) of the Misrepresentation Act of 1967 that any agreement whether made before or after commencement of the Act containing a provision that would exclude or restrict any liability to which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made shall be of no effect and so on. In other words, a person would have a right to damages as a result of misrepresentation even though the misrepresentation was something short of fraud.

Perhaps I should say that any lawyer is extremely slow to lay any proceedings in connection with fraud. In fact, the dicta of the judiciary impose serious burdens of responsibility on solicitors, both professionally and in conscience. Of course, the laying of any claim to fraud against a person is of a very serious nature but innocent misrepresentation is a different matter. When I put down my amendment I did not know about this provision of the Misrepresentation Act of 1967 but now that I have discovered it I am supported in my subsequent drafting on this. This is the only additional recommendation I make on the amendment.

I have considered this particular amendment put down in the names of Senators FitzGerald and Kelly and I am mindful of the statements made in this regard on Committee Stage. However, something which I find myself having to point out again is that this Bill is designed to protect the consumer but we now find ourselves involved in protecting the retailer as such against any damage that he might suffer by having had a successful claim from the consumer or as a result of an action initiated by the Minister leaving him without recourse to go back to the supplier. As I see it, this particular clause that is being advocated by the Senator is not really necessary. It has not a great deal to commend it. However, it is possible that its inclusion in the Bill might make somewhat easier the task of a trader in recovering damages and from that point of view I can accept that there are no compelling reasons why I should reject it.

On the other hand, in extending the argument in favour of the inclusion of the amendment the Senator spoke specifically today about the fact that the British had introduced a section in their Misrepresentation Act of 1967 to cover this particular eventuality. The difference here is that this is already covered, as I have said before on Second Reading and on Committee Stage, under section 17 of the 1887 Act whereby the retailer has recourse to the law if somebody supplies him with something that does not measure up to its trading description. As far as the United Kingdom is concerned, the need for its inclusion in the Misrepresentation Act of 1967 arose from the fact that the United Kingdom repealed section 17 of the 1887 Act. Despite this I am willing, at this stage, to accept the amendment.

The Senator points out that he is not fully satisfied with the drafting of the amendment and that it can be amended to read better. From that point of view, in preparation for acceptance of the amendment I have a revised version prepared by the Parliamentary Draftsman. Let me say, first of all, that the Senator's proposed wording in fact would have had the effect of avoiding the entire contract and would be applied even to contracts already made. There is specific reference to retrospection in this regard. The revised version provides only the offending clause and does not have the retrospective effect. I propose to accept the Senator's amendment in a revised form. What is the procedure in this regard?

It is a matter for the House, whether they are willing to accept this or not.

There seem to be two ways of doing this. One way would be to amend the amendment on Report Stage now and the other would be to accept the amendment which appears on the Order Paper and to adjust the matter in the Dáil. It is a matter of which would be the more convenient.

It would be more convenient if it were possible to revise the amendment as it stands now. The amendment would need to be read out.

It is open to the Seanad if it so wishes to make an amendment to an amendment. I am not quite clear as to how extensive the amendment is.

The point about this is that I spent some time looking at the pros and cons of this proposal as presented by the Senator. After a pretty fair share of discussion with my officials I eventually saw at some late stage that I should accept this. I have, in consultation with the Parliamentary Draftsman, prepared a revised amendment but it was not in sufficient time to have it entered on the Order Paper. It might be as well if I read out the amendment.

On a point of order, there is no objection from this side of the House to an amendment being entertained now. It would, as the Minister said, be necessary for it to be read for the information of the House and because of the nature of the Bill it might also be desirable if Senator Alexis FitzGerald, who was primarily concerned with this, had a sight of the amendment.

If the Minister's amendment is generally agreeable to the House the Chair feels the correct thing might be for Senator FitzGerald to withdraw his amendment. The House could then agree to take the Minister's amendment at short notice.

I certainly withdraw my amendment.

Amendment, by leave, withdrawn.

Is the House willing to take the Minister's amendment now?

Yes.

Agreed to take Government amendment.

The Government amendment is as follows:

In Page 4, between lines 15 and 16, to insert the following section:

(1) In a contract of sale of goods of a kind in relation to which an order under section 2 of this Act applies, there is an implied warrantly that the packing of the goods is not in contravention of the provisions of this Act or of an order under this Act and is not such as to occasion, in relation to the sale or importation of those goods, a contravention of those provisions.

(2) A contract of sale that has the effect, directly or indirectly, of depriving a person of the benefit of a warranty of the kind specified in subsection (1) of this section shall, in so far as it has the effect aforesaid, be void.

Amendment agreed to.

I move amendment No. 2:

In page 4, lines 26 and 27 to delete "under the Merchandise Marks Acts, 1887 to 1931, or"

Again, I made a case for this on the Committee Stage. I said to the Minister that I would consider the question of whether I would press for this amendment in the context of consideration that this merchandise marks code which goes back even earlier than 1887 has always been defective in its operation. Senator Nash made the case, that convinced me, that all those powers which are in this section, which are rather more extensive than you would find in similar Acts were appropriate to the type of operations which would be envisaged by this Bill. There are all sorts of offences under the Merchandise Marks Act, 1887, which the Minister has assured us, and which assurance I accept, will be extensively amended in due course, and I hope at an early date, which might be committed by small persons engaged in modest operations. Section 2 (1) of the Merchandise Marks Act, 1887 states:

Every person who

(a) forges any trade mark; or

(b) falsely applies to goods any trade mark or any mark so nearly resembling a trade mark as to be calculated to deceive; or

(c) makes any die, block, machine, or other instrument for the purpose of forging, or of being used for forging, a trade mark; or

(d) applies any false trade description to goods; or

(e) disposes of or has in his possession any die, block, machine, or other instrument for the purpose of forging a trade mark;

shall be guilty of an offence against this Act.

For the purposes of the Act which has since been amended to some extent, "trade description" means:

any description, statement, or other indication, direct or indirect,

(a) as to the number, quantity, measure, gauge, or weight of any goods or

(b) as to the place or country in which any goods were made or produced, or

(c) as to the mode of manufacturing or producing any goods, or

(d) as to the material of which any goods are composed, or

(e) as to any goods being the subject of an existing patent, privilege, or copyright.

We can take a particular view of the criminal code operative in this country, and the law here is British law essentially. The presumption is that the person is innocent until proved guilty and is protected by procedures which mean he is not allowed incriminate himself. It is one thing to be liable civilly but it is another to be liable criminally. Innocent men may say things which could provide evidence against themselves. They may produce books which are kept by people that have not been adequately under their control and pretend to mistakes for which they are not responsible. A whole build-up against them can create a situation which by one fact associated with another makes someone look as if he had committed a crime. I feel it is not necessary for the purposes of this Bill to have these powers which are given, in my case somewhat relucantly, to the Minister's authorised officer for this particular authorisation but I am convinced that if people are producing pre-packaged goods there is a whole series of pre-packaged containers involved, and it is right that the powers should be very strong. I should like to see the powers of the authorised officers, or whoever they might be under the new code, considered in the context of what would be these new offences. I say that as one convinced that there is a necessity to have new offences, convinced that the merchandise marks code is inadequate to protect the consumer. I do not think the Minister loses anything if he simply excises from this section the words which I have suggested, seconded by Senator Kelly, might be excised and leaves the authorised officer simply all the powers, which are already extensive, which are proposed to be given to him for the purposes of this Bill and this Bill only.

I am opposing this amendment mainly for the reason I gave on Second Reading and again on Committee Stage—that this particular piece of legislation is being introduced in an effort to protect the consumer. On Second Reading, Senator FitzGerald and a number of other Senators criticised it from the point of view that it was not extensive and suggested to me that this was just a Merchandise Marks Bill and that I had other legislation in the pipeline designed to protect the consumer. Senator FitzGerald earlier on claimed that the merchandise marks code had been notorious and that it had not been enforced. This provision to give authorised officers more power under this Bill is deliberately included in order to enable the previous Act to be enforced.

The Senator in speaking just now to his amendment made the point that it is all right to give powers to authorised officers for any of the provisions under this Bill but that he was disinclined to see those powers being extended to the authorised officers for operation under previous Acts. I am afraid I do not find the amendment acceptable from that angle. I am certainly most anxious to give that additional power to the authorised officer to enable him to enforce the merchandise marks code as it was always intended that it should be enforced. For this reason I am opposing the amendment.

Amendment, by leave, withdrawn.
Bill recommitted in respect of amendment No. 3.

I move amendment No. 3.

In page 5, between lines 28 and 29 to insert the following new subsection:

"( ) Every person guilty of an offence against this Act shall be liable to forfeit to the State every container in his order, possession or procurement, packed in contravention with the provisions of this Act."

Under the Principal Act, the Merchandise Marks Act, 1887, one of the consequences of a person being found guilty of an offence against the Act was that the offender would forfeit:

Every chattel, article, instrument, or thing by means of or in relation to which the offence has been committed.

Talking of teeth, I cannot think of anything that would bite more deeply into anyone who is engaged in the business of pre-packaging goods if the effect of his pre-packaging was that every chattel, article, instrument or thing by means of or in relation to which the offence has been committed was forfeited for the benefit of the Central Fund and of the State.

While I am opposing the withdrawal of teeth, what the Senator is seeking here is, to my mind, asking for too much. The position is that a packer can be charged again and again with an offence under this Bill if he continues to sell substandard, subweighted articles. From that point of view I do not think this is quite necessary. A moment ago the Senator was endeavouring to protect the authorised officer from too much investigation and turning the whole stock upside down and now in this amendment he is going in the opposite direction. He can argue I suppose that I am arguing in the opposite direction too but I do not think he can justifiably do this. It would be for the authorised officers to follow up those matters after prosecution to ensure that those goods or similar goods inferior in quality or weight should not be presented again. The Senator in his final words visualised the State getting very useful acquisitions as a result. I feel that if somebody is found guilty of an offence under this Bill the penalty as already spelt out is sufficient deterrent and penalty for the offence without adding to that the penalty of taking possession of all stuff which is in contravention of the Bill. I feel it is sufficient to take action against him for the original offence and if he were to continue committing the offence the penalty provisions are such that he is still liable to very serious fines and to quite serious detention. I cannot see the necessity for the inclusion of this section in the Bill.

We are creating a new offence by this Bill which is an amendment of the Principal Act. If somebody is found guilty of an offence under the Principal Act he is liable to forfeit every chattel, article, instrument, or thing by means of or in relation to which the offence has been committed. Therefore, every offence, except an offence under this Bill, will be subject to this particular clause and this particular effect. Why should an offence under this Bill be free from liability when there is liability in respect of every other offence under the Merchandise Marks Code?

I do not accept the Senator's contention in this regard. Here we have a situation where a person commits an offence and there is a penalty for so doing. This is spelled out in the Bill. We have a situation here where an official is going in to check a stock or consignment of goods and taking samples from a consignment of goods, which is a very long operation. As I understand it, under the amendment outlined by the Senator, every container has to be examined and tested to ensure that it in its own way is against the Act. It would be far better if an offender has been prosecuted, found guilty and penalised in the appropriate way that he should have the responsibility of putting his goods in order. I cannot see the necessity for this additional penalty here.

I merely want to maintain in relation to a new offence what is an existing punishment. Under this Bill we are creating a situation where this particular punishment is excluded from this new offence although the argument for the extensive powers given under section 3 is that the persons engaged will be large corporations well able to face up to the consequences of their breaches of any order made under this Bill. I find it difficult to accept the logic of that.

Is the Senator pressing the amendment?

The Senator will recall that originally he queried the justification for calling this particular measure the Merchandise Marks Bill. He said it was more appropriate to a weights and measures heading. In relation to this amendment and others, the Senator has been making points on the Principal Act and the original Act, whereas it is retailing we are specifically talking about and weights and measures aspects of this. There is not provision in that direction for the penalty or the follow up which is envisaged by the Senator in that regard. I would be happy if the Senator would not press it.

I feel we are jumping from horse to horse. I am certainly prepared to withdraw the amendment if the House consents to my doing so.

Amendment, by leave, withdrawn.
Bill reported without amendment.

Acting Chairman

Amendments Nos. 4 and 5 may be discussed together as they are related.

Government amendment No. 4:
In page 5, to delete lines 46 to 54 and to substitute the following:
"(4) Where a person is charged with an offence under this Act in relation to goods packed in a container, it shall be a defence to the charge for him to show—
(a) that he took reasonable precautions against committing, in relation to the goods, an offence of the kind with which he is charged,
(b) that at the time of the commission of the alleged offence, he had no reason to suspect that the packaging, importation or sale as the case may be, of the goods was in contravention of the provisions of this Act or of an order under this Act, and
(c) that the packing, importation or sale, as the case may be, of the goods in contravention of the provisions of this Act or of an order under this Act, was due to a because beyond his control."

Perhaps I should help the Minister by saying that I am prepared to accept his amendment and to withdraw my own.

That would be extremely helpful. It would solve a problem.

Amendment put and agreed to.
Amendment No. 5 not moved.

I move amendment No. 6:

A director, manager or other similar officer for the purposes of this section shall include any person in accordance with whose directions or instructions the directors, committee of management or other controlling authority of a body corporate or an unincorporated body of persons are accustomed to act.

I must say I consider this an important amendment. I have some familiarity with arrangements under which persons can manage to run companies and institutions of one kind or another without their names ever appearing anywhere on the notepaper. I have tried to use the language which appears in section 190 of the Companies Act, 1963. I should start off by saying that the definition of "director" which is given generally in the Companies Act, 1963 was not apparently thought by the draftsman to be sufficiently wide to take in a case where you really wanted to get the director to make a full declaration of his interest in the company. The definition of a director in section 2 of the Act states:

"director" includes any person occupying the position of director by whatever name called;

The draftsman of section 190 was concerned to have available to the shareholders of any company when they attended a general meeting, a full disclosure of the directors' interests in the company. They went on to say that for the purpose of section 190 they would give a new definition to the meaning of the word "director". In subsection (11) (a) they state:

Any person in accordance with whose direction or instructions the directors of a company are accustomed to act shall be deemed to be a director of the company;

We have all heard about guineapig directors. I am a guineapig director of a number of companies. There is no question about what my duty is. I have to do what the real director of the company tells me to do. That is my duty. Under section 190 he would be required to disclose his shareholding interest but under this section he would be a director of a company which I would be the formal director of. I would be guilty of the offence and he would not. I am suggesting that in such a case I would be fairly soon off the board and that he should, by definition of the section, be found guilty of an offence of which he was really guilty, as culpable as the person in accordance with whose directions that company was accustomed to act. As the section is drafted we have to take in not merely directors but directors, managers or other similar officers. I shall read my amendment:

A director, manager or other similar officer for the purposes of this section shall include any person in accordance with whose directions or instructions the directors, committee of management or other controlling authority of a body corporate or an unincorporated body of persons are accustomed to act.

That is to say where an offence under the Act is committed by a body corporate or an unincorporated body of persons and it is proved that it is committed with the connivance and consent of and attributable to the neglect on the part of any person, whether he appears on the notepaper or the records of the company or the committee of management or the bodies in question as a director or manager or other officer, if he is a person who gives instructions and directions in accordance with that body corporate or an unincorporated body, that person is the person who should be found guilty of the offence and liable to be prosecuted against and punished accordingly —of course, not unless he is proved guilty of the offence in question, not unless he is proved to have consented to, connived at or contributed by neglect to, the commission of the offence by the body corporate in question. I think the amendment is a useful one and I commend it to the House.

I formally second the amendment.

As in the case of the other amendments which the Senator has put down, I have looked as carefully and closely as I could at the possible justification for the inclusion of this amendment and, on examining it, and seeking all the advice I could generally in connection with it, I am opposed to accepting this amendment, on the basis that the wider definition which the Senator specifically picks out, section 190 of the Companies Act, and particularly other sections—195 and 196, which deal with the register of directors' shareholdings—is not used in the Companies Act in that section dealing with offences. From that point of view I feel that there is no necessity for including this particular provision here. Therefore I am opposed to the acceptance of this amendment on the basis that it just is not necessary.

I am silenced by the Rules of the House.

Acting Chairman

The Senator may conclude the debate.

I just want to draw the Minister's attention to the fact that the section to which I refer and which gives this definition in fact does provide for an offence. The section says:

If default is made in complying with subsection (7), the company and every officer of the company who is in default shall be liable to a fine not exceeding £50; and if default is made in complying with subsection (1) or subsection (2), or if any inspection required under this section is refused or if any copy required under this section is not sent within the proper period, the company and every officer of the company who is in default shall be liable to a fine not exceeding £100.

That includes a director and a person in accordance with whose directions a company is accustomed to act.

It is an offence if he does not put his name on the register.

The section does contain a fine and will catch the person who is responsible for the offence, a person in accordance with whose directions and instructions the company is accustomed to act, so that it is not correct to say that this particular definition of a director is excluded from sections where there are offences committed, because the very definition that I have taken is taken from a section which provides for offences and for fines against persons of this kind.

I still feel that this addition is not justified.

I am not pressing anything tonight.

Amendment, by leave, withdrawn.
Bill, as amended, received for final consideration and passed.
The Seanad adjourned at 8.25 p.m. until 3 p.m. on Wednesday, 8th July, 1970.