Before commencing I would remind Senators that during the Report Stage procedure is by way of proposition and amendment and accordingly there can be only one speech on each amendment.
Decimal Currency Bill, 1970: Report and Final Stages.
An Leas-Chathaoirleach
I move amendment No. 1:
In page 2, line 37, to add "whenever such certificate is issued or made" after "made".
I put down this amendment because I thought it was necessary for clarification. The intent is that the certificate may be issued after 15th February. I was prompted to do this because during the course of the debate yesterday, when the Minister was well represented by the Parliamentary Secretary, there was a confusion in the House as to whether or not this certificate had to be given before 15th February, 1971, Decimal Day, or could be given after it. If there is any doubt that the intention is that it should be open to a banker to give the certificate afterwards, then I think words of this kind should be inserted by way of amendment to the section.
I would argue that considerable difficulty will arise if the certificate cannot be issued after 15th February, 1971. There are a host of contingencies, natural and human, which may make it impossible to get some of these instruments into the hands of bankers in time for bankers to give the certificates which would be required under the section to render valid these documents which would have been invalid under subsection (1) of section 2. I cannot list all the different contingencies but one can conceive of strikes, lock-outs, fires, traffic breakdowns, obtuseness, even negligence, people being unaware of their obligations, people who are responsible to others failing to discharge their obligations and being thereby themselves rendered liable to the persons whose paper is now worthless because they did not in fact have the bills or promissory notes certified by the banker.
I was thinking also in relation to these documents that there are cases— and Senator Nash mentioned such in the course of the Committee Stage— where the promissory note is not in fact a matter between a banker and anybody, where in fact it is held by the debtor and is encashed on whatever date it is due for encashment, where there may be great doubt as to when this promissory note was made, where the doubt can only be put out of existence by going to the banker and getting the certificate which is required.
I therefore recommend this amendment to the House.
I should say first of all that it seems from the terms of the section, and I am so advised by the legal adviser, that there is no restriction in the section as regards the date at which the banker's certificate can be given. If there was any confusion in this regard on an earlier stage, Senators will understand, of course, that not having been present then, I cannot comment with accuracy on that, but on the basis of what Senator Alexis FitzGerald has said I assume that a certain amount of confusion may have arisen. If that is so, it may have been due to some reference to the intention that a great deal of publicity will be given to what is involved here and to the belief that the vast majority of post-dated cheques or promissory notes would have been certified by bankers before Decimal Day. But the section does not preclude such certification after Decimal Day. In such cases where it has not been done before that day, then the people concerned will have to find some other way to satisfy the banker that the cheque or promissory note was drawn before Decimal Day.
The amendment does not add in fact to the section and, on one reading of it, it could indeed be thought to cloud the meaning of the section slightly. Since it does not add anything to it I do not think there is any point in putting it in. The important point is that it should be stated quite clearly that the section does not preclude the certification of post-dated cheques after Decimal Day. This, I think, is what Senator Alexis FitzGerald wants to establish.
I spoke on this section yesterday with Senator Alexis FitzGerald and there was, as the Minister has said, some confusion in regard to the certification of a cheque drawn before the 15th February but payable at a subsequent date. Not disturbing what the Minister has said, I wonder if he would agree to accept some amendment on the lines suggested by Senator Alexis FitzGerald to illustrate beyond any doubt that a certification after the 15th February, or whenever made, would be valid. There certainly was doubt created yesterday in the minds of the Senators present when the discussion took place and I think it would relieve those doubts and put this beyond any doubt in regard to the general public, particularly the commercial community, that a certificate subsequent to the 15th February would be valid.
I, too, should like to support this amendment. In a very full informal discussion here yesterday this question was widely discussed and I feel that the case put up by Senator Alexis FitzGerald is a very reasonable one. I feel that the Minister has an obligation to ensure that a large section of the public will not be inconvenienced in this way. Is it not better to provide for it now rather than find people knocked about in a few months time? Surely the public have had sufficient trouble with their monetary and banking system this year without a few getting into difficulties next year over something that can be rectified and put beyond reasonable doubt at this stage?
An Leas-Chathaoirleach
The Chair is prepared to allow the Minister to intervene briefly.
I just want to say that there is not anything to be rectified nor I think can there be any reasonable doubt when one examines the wording at the end of subsection (3): "if it bears a certificate in writing by a banker that it was so drawn or made". There is nothing in that about the date on which this is to happen. Consequently, I cannot accept the amendment because I think it might make the section less clear in its meaning than it is now. On examination I think it is quite clear that the point which Senator Alexis FitzGerald wanted to get across does come across.
Doubt was expressed in this House yesterday from the Minister's chair that this might not be so. I think I am correct in saying that. I hope I am not incorrect.
There is some doubt about that.
The House was in doubt about it and this was the reason I put down the amendment and, with the permission of the House, I shall now withdraw it.
Amendment, by leave, withdrawn.
I move amendment No. 2:
In page 2 to insert after line 37 the following subsections:—
"(4) A banker who issues a certificate pursuant to subsection (3) shall not be liable in damages to any person unless it be proven that the certificate was issued in wilful default.
(5) Any person who makes payment of any sum to the holder in due course of a bill of exchange or promissory note which is rendered invalid by subsection (1) shall not be liable to the repayment of such sum or damages to any person because of such invalidity.
(6) Notwithstanding subsection (1), any bill of exchange or promissory note dated not earlier than the 15th November, 1970 shall be valid."
I put this down in recognition of the fact that where anyone does make a payment to anybody who is entitled to receive a payment in respect of a bill of exchange or promissory note which is rendered invalid, if my view of the law is correct, the drawer of the instrument will be entitled to look for damages in respect of payment. I know that the intentions of the banks are not to press this section, to use it to educate their customers in the importance of drawing the documents in proper order in the new currency but if someone does bring into existence a bill of exchange which is put in £sd currency, and then a payment is made by a banker in respect of that instrument, I cannot see how that person or someone who has held ownership of the bill can be prevented from recovering damages from the banker who made the payment in respect of an invalid instrument. I want to protect the banker and anyone who chooses to recognise an £sd cheque as in order on any loss he might suffer through innocent payments made to anyone in relation to this. I also want to encourage bankers to issue certificates in certain circumstances. Legal people present will know that there is a major development in the law of negligence now and I want to cite the famous Hedley Byrne case, which in fact has been followed by the High Court. This renders anybody, irrespective of whether he owes a duty to someone, liable in negligence if he does something which damages another person. There is no longer any necessity for the banker to be responsible to the customer. He is liable in negligence not only to his own customer but if he does something which damages someone else, even if he has no knowledge of the existence of that other person, the banker is liable to that other person.
Bankers are at this moment obviously an anomaly. I am not on the Irish Banks Standing Committee, so anything I say is fraught with great danger. Notwithstanding that I shall say it. Obviously the banks are now very much concerned with trying to get a coming-off day so that their accounts get turned into decimal currency on 15th February, 1971. It is very easy for them now to say: "Of course we are not going to dishonour cheques; we are going to pay them", and try to encourage people to draw them correctly. That is all very well, but some bank advisory is going to say to them at some stage: "If you do that, you will be in trouble". After the 15th February they are going to get tighter and tighter about issuing certificates. I want to encourage them so that they will have a section which will say: "We cannot be liable even if we do certify this to be in order and to have been drawn up to date."
In regard to subsection (6) which I propose should be inserted, this is for consideration merely. It is not a particularly well thought upon subsection, in my point of view; it simply recognises the fact that ordinary cheques are drawn and are honoured but do not get lodged until perhaps three months after they are drawn. This is to recognise that all these cheques, no matter when they are drawn or made—even if drawn or made next February—that they are all right if they go back to 15th November or after that date.
An Leas-Chathaoirleach
Remembering that we are on Report Stage, I would ask any Members who have any points to intervene now so that the Minister will have an opportunity of dealing with all points raised when he intervenes.
I should like the Minister seriously to consider what Senator FitzGerald has said. I think the Senator has made a valid point and I could see the possibility that the banks would be taking risks, having regard particularly to the present development in the law of negligence. I can see the banks would be taking risks. I can see this particularly where a cheque is issued to A, endorsed by A to B, by B to C, and is lodged in the bank by C. I do think that where there are bona fide mistakes every possible encouragement should be given to the banks to honour the cheques in the circumstances and a point may arise when banks will be advised by their legal advisers that it is rather dangerous to adopt the course suggested, even though you promise the Government that you will do so.
The people who are mainly concerned and for whom the amendments would provide the greatest protection are the banks. They are not exclusively the people concerned but it is quite clear they are by far the majority of the people who will be concerned. They are satisfied with the Bill. As regards the point which the Senator had in mind in relation to subsection (3) this was adverted to in the drafting of the Bill and the view expressed by the draftsman is that the use of the word "deemed" in subsection (3)—"shall be deemed to have been drawn or made before 15th February"—is sufficient protection for the banks. I also understand that the banks have adverted to this position and are satisfied that this is so, that they will be adequately protected by reason of the use of that word "deemed" in subsection (3). This being so, it does not seem to me that the amendment of that subsection is necessary. In view of the circumstances that we cannot discuss this backwards and forwards, as perhaps we could on Committee Stage, I want to say that I am not disputing the point raised by Senator FitzGerald and Senator Nash as to the consequences which could arise if there were not protection for bankers who certify. I am advised there is protection in subsection (3) and that the banks accept that they have that protection. I do not think the amendments are necessary.
Amendment, by leave, withdrawn.
I move amendment No. 3:
In page 3 to insert after line 46 the following:—
"(h) any instrument (as defined by section 14) or contract".
Would it be possible to take this amendment with the next one?
An Leas-Chathaoirleach
This is a matter for the House to decide. I should like to ask the Minister if it would inconvenience him. Is it agreed to discuss amendments Nos. 3 and 4 together? Are separate decisions required?
I think so. I would like to draw the attention of the House first to amendment No. 4 to section 14. I am very concerned with the language used in section 14. I have searched for a precedent for the words used "writings of a formal legal kind." I could not find a precedent for them. Therefore, it is fitting to interpret them according to their natural meaning. These words suggest something that is thrown into a form which would be prepared by a lawyer. Even if the document in question is not prepared by a lawyer, in practice, it seems to me extremely desirable that it is made perfectly clear by this section that any agreement which at this moment is being entered into by persons would be enforceable at law as a contract giving rise to rightful obligations even if after 15th February, it is expressed by ordinary people in the kind of currency that they have been dealing with all their lives, should be as valid as any instrument of a formal legal kind.
We all know in this House that we spend our lives making contracts without knowing that we are doing so. Every time we go in and put down 2s to buy whatever one can buy with 2s, we are making a contract. In fact, quite a substantial amount of business is done by telephone and gives rise to enforceable obligations. These transactions—the sort of case I thought of yesterday in particular of somebody who might buy a whole standing crop of timber on the basis of so many shillings and pence per whatever the standard unit of purchase might be— are going to continue to be made in £sd. There is no doubt about that. We cannot teach old dogs new tricks. This will continue for another ten or 15 years and whatever they may do when it comes to writing cheques—they are easily enough trained into that— whenever they meet the final score of what they have got to pay, the deal will be done in £sd.
It is not absolutely clear to me that there is any necessity whatever for section 14. The fact that it is thought that it is necessary to save instruments from being rendered invalid by this Bill suggests powerfully to me that there must be good reason to save other transactions which could not, under any circumstances, be called instruments. Correspondence between solicitors or correspondence between businessmen, ordinary exchange of letters, could not be called, by any stretch of the imagination, instruments of a formal legal kind because they would not in fact be such and are very often designed not to be such. Good business people do business together over years on the basis that they do not set a thing out in such a way that it would be too formal. They do not like their relationship to be put on that kind of level. I want it to be such, however, that the rights and obligations of the party are clear. If section 14 is necessary to save instruments, section 14 should also be extended to save any contract, whether oral or written, whether informal or formal.
I should now like to draw the Minister's attention to section 4. As I understand section 4 it is to help in the interpretation of cheques and other documents that are listed in subsection (3) so that there is an automatic conversion and everybody knows that if it is written in £sd it is automatically converted and we do not have this bothersome recurring decimal about which we had a discussion at one stage —the 333 has gone. If we write into a legacy, a war loan or something of that kind in a will: "I leave my £2,113 19s 3d worth of war loan" that is automatically converted by reference to this table too. Or if there is somebody who leaves an indefinite share in a residue which works out at £sd that is automatically converted too. I do not wish to press subsection (3) as much as I wish to press subsection (4). If subsection (3) is necessary to convert these odd items, we could get rid of a lot of the vagueness that may arise in the interpretation of contracts and the interpretation of wills if we have an automatic conversion by reference to this table. This table is an excellent device, if I may say so, and I think if it applied to these documents or contracts it will remove the possibility of somebody being put in a tight corner. We do not have to be too bright to realise that people in tight corners can put up very technical defences and one of the grounds on which a contract can be rendered void is vagueness. I do not know that some bright lawyer is not going to come along and argue that some contract is unenforceable because there was not an automatic conversion from £sd into decimals and maybe some benighted judge will hold in favour of the person putting up this odious defence. I would like to know what is wrong with making the amendment.
I should like to support Senator FitzGerald on this amendment. This section—I refer specifically to section 14 which was the subject of quite a lot of discussion when we considered the Bill on the Committee Stage—must be taken in conjunction with section 2. In fact reference is made to the section in section 2 and, as I understand it, section 14 sets out the instruments which shall be regarded as not being invalid after D-Day. All other instruments are invalid as provided for in section 2 (1).
May I interrupt the Senator for a moment? He may be mistaken on that. This refers to the appointed day at the end of the changeover period.
I shall read the section. Section 14 (1) (a) reads:
Save as provided for by section 2 of this Act, no instrument shall be regarded as being invalid because of its containing a reference to an amount of money in the old currency.
Section 2 states quite specifically why certain instruments are invalid after D-Day. Is that correct?
But then there is subsection (2) of section 14.
I am coming to that. The point I was making is therefore that the only documents or instruments which are not invalid are those that are set out in section 14, subclause (b). Is that correct? This point was raised with the Minister's Parliamentary Secretary and he said that the word "instrument" was sufficiently omnibus to include contracts or contractual agreements of any kind. I specifically raise the point in regard to contracts because, as the Minister himself is no doubt aware as are other Members of the House, contracts are quite a normal method of doing business. A contract may be made perhaps months in advance of the actual transaction taking place and if, by any chance, the words "instrument" or other writings of a formal legal kind do not specifically include any type of contractual documents, the contract could be declared invalid. That is why I support Senator Alexis FitzGerald. I do not think it will detract from the subsection. In fact it will put beyond any doubt whatever that this section includes anything that relates to a contract or agreement or a document of any kind, not necessarily a formal legal document.
Under section 2 cheques in the form of decimal currency are invalid if drawn in £sd after what we call D-Day or a specific date. That is primarily the intention of the Bill. It is also the intention of the Bill that no other documents or contractual relations created after D-Day shall be invalid because they mention the words pounds, shillings and pence. That is my understanding of the Bill. Section 14 goes on to say "save as provided for by section 2 of this Act no instrument shall be regarded as being invalid because of its containing a reference to an amount of money in the old currency". We have now a definition of the word "instrument".
Instrument is deemed to mean anything whatsoever creating rights or obligations other than a cheque or a promissory note. Therefore, if the definition of instrument is wide enough to include those then it is fine. It goes on in subclause (b) to define what is meant by "instrument". Under this subclause "instrument" includes wills, documents and all other writing of a formal legal kind. The introduction of the words "of a formal legal kind" there confines it to a specific class. Those words "of a formal legal kind" would not cover the whole lot. They would not cover a situation such as that mentioned by Senator FitzGerald. The timber is sold by the cube as they call it in the terms of those who deal with timber of that nature. Sometimes it is sold by the standard. The cost is 5s 3d per cube or 18s 10d per standard as the case may be. Neither would it cover a contract created by letters. In setting a bog or a meadow, for instance, so much might be paid per perch. It is most important that the word "instrument" should be defined as broadly as possible. I raised this point on the Second Reading. The Parliamentary Secretary did not agree with me. He seemed to think the word "instrument" would cover everything, but in my view it is specifically confined to documents of a formal legal kind, and all other items of a formal legal kind. If the Minister and his advisers are satisfied to the contrary, I accept this. I think they should come to a decision on this and I have the gravest doubts as to how they will decide ultimately.
If I could, perhaps, in dealing with this point try to outline something before I go into detail, section 2 provides for bills of exchange or promissory notes being invalid if drawn in £sd after Decimal Day. This provision is there to enable the banking system to handle the whole operation of a multitude of financial transactions that they could not handle if they were dealing with both currencies at the one time. Apart from those documents, there will then be a transitional period and subsection (2) of section 14 which relates to instruments, including wills, documents and all other writings of a formal legal kind, will operate only at the conclusion of the changeover period on the appointed day.
In the course of this discussion Senators do not seem to have adverted to section 13 which is the general provision covering normal contracts and business transactions, certainly the kinds that Senator FitzGerald had in mind which might be concluded over the telephone or by an exchange of letters. Section 13 provides that in those cases there will be conversion in accordance with the Schedule of the Bill. It could be argued perhaps that section 14 is not necessary at all because of the provisions of section 13, but primarily what were in mind in section 14 were documents such as wills. There are other things covered as Senators will see. Wills were one of the principal categories that were in mind because they can lead to rather difficult litigation on occasions and it was thought wise to specify particularly in regard to wills and other formal legal documents that they would not be deemed to be invalid because of containing a reference to an amount of money in the old currency. Section 14 is primarily aimed at clarifying and removing any doubts that might exist.
With regard to the kinds of informal communications, whether they be written or oral, to which Senator FitzGerald referred, section 13 is quite adequate to cover them after the changeover period. Formal contracts and so on will, of course, come under section 14. It will preserve their validity if written in £sd. I suggest to the House that these two sections cover the various problems which Senators had in mind and consequently the amendment proposed to page 7, line 5 to insert "or contract" after "instrument" is not necessary. With regard to the other amendment, I think it is amendment No. 3, I would say in relation to section 4 the purpose is to provide a standard method of conversion for cheques and similar documents which are drawn before Decimal Day in £sd and which are not paid into a bank until Decimal Day or later. The section in this case takes effect as from Decimal Day. I would suggest to the House that contracts would be out of place in this section because a contract is not the medium by which a payment is effected. If Senators will look at the various items listed in that section they will see that each of the references is to a medium by which payment is effected. Contracts are covered in section 14.
There is another matter I should mention about this particular amendment and that is that if accepted it could lead to difficulties in specific cases. It is obvious that different methods of conversion and different degrees of precision may be appropriate for different types of references. For example, if an £sd reference is a price per unit to be applied to bulk purchases, then a fairly precise conversion of the units price would be necessary. If such a unit price were to be converted by the whole new penny conversion table as would be the case under the proposed amendment, the conversion difference per unit would be multiplied perhaps many thousands of times in the course of calculation of the amount to be paid. I understand that in many cases parties to contracts have already agreed on methods of conversion.
However, pending agreement between parties to arrange otherwise, all calculations under £sd contracts can always be done in £sd leaving only the final result which is the actual amount for payment to be converted to decimal terms. In this case the actual difference would be minimal. This conversion for the amount of payment is covered by the provisions of the Bill in sections 6 and 13 which prescribe how £sd amounts for actual payment can be discharged during the changeover period and after the changeover period. Therefore, this particular amendment as I say could lead to great difficulty in certain contracts. I think it is clear that in the case of, as I said, a contract on the basis of a price per unit where you have many thousands of units, the conversion in that case should take place on the final amount due, not on each unit. That is one thing that was not adverted to by the Senator. I would submit to the House in any event that, for the other reasons I have given, the two amendments are not necessary and that the difficulties adverted to by the Senator are in fact covered.
I take the Minister's point which was made very well with regard to substituting this table in relation to bulk transactions. It could have obviously a distorting effect. I also take his point about section 13 but I would remind the House and the Minister I did say that my view of the Bill as it stands was that there was no necessity for section 14. That was my view but section 14 is there. If we dropped section 14 I would be quite happy but section 14 immediately raises a doubt as to the transactions which it does not cover. It declares those instruments which are not to be regarded as invalid and immediately raises the question of the validity of instruments which are not defined or transactions which are not within the definition of "instrument".
I want to impress on the Minister the reason why the insertion of the words "or contract" cannot possibly disimprove section 14. I know it would disimprove the Minister's day and dis-improve the business the Government must transact today in that trying to find what the intentions are in regard to the other House means that you have to go back to that House, if the Minister is disposed to accept this amendment, to get it accepted by the Dáil. But I would ask the Minister to tell me in what way the insertion of the words "or contract" can possibly damage the section. I ask the Minister to open his mind to the proposition that section 14 as it stands raises questions about the validity of transactions which are not within the definition of "instrument". I am pressing the amendment.
If I might just informally put a question to Senator FitzGerald. Do I understand his contention correctly that he is saying that because of the existence of section 14 which describes certain formal documents as being valid, there is therefore an implication that other agreements not coming under section 14 are invalid? Could I suggest to the Senator that since section 14 refers to an instrument as including wills, documents and all other items of a formal legal kind, it does not carry the implication that documents which are not of a formal legal kind and are therefore in a separate category, are invalid. If I understand the Senator correctly that is his basic objection.
That is exactly my point. There is this implication that any agreement enforceable at law and entered into between parties which does not come within the definition of "instrument" there, is not valid. If section 14 did not exist I would be content that this argument could not successfully be offered. The Legislature will be deemed to have come in to save legal transactions of a particular kind—these are transactions which fall within the definition of "instrument"—and was not concerned to save transactions that do not fall within the definition of "instrument". That is why I am pressing the Minister on this.
Is the Senator suggesting that agreements which are not of a formal legal kind come into the same category as those which are of a formal legal kind? I think this is inherent in his argument.
I am suggesting that they ought to but under the terms of section 14 they do not, and if those of a formal legal kind are saved by section 14, I can see someone arguing in the High Court or the Supreme Court that the others are not therefore valid. This must be taken as meaning that the intent of the Legislature was to render everything not saved by section 14 invalid.
Would the Senator consider the position to be better if subsection (6) were left out?
It might be better but I prefer my own amendment, I must confess.
As it appears to me, section 13 enables the conversion to be expressed in £sd, for instance, £14 and 50 pennies but first of all you must be entitled to £14 and 50 pennies. You are not entitled to £14 and 50 pennies unless you are entitled to it by reason of some contract or agreement. Section 13 is fine as far as it goes but the right must exist first. This is the weakness. Section 14 is what gives you the right under the contract. Now, I do not know whether the Minister will agree with me. I assure him that I am merely trying to be helpful. Section 13 gives a right to convert from £sd into pounds and new pence but you must be entitled to the £sd first. The contract under which you become entitled to the £sd must not itself be invalid. If it is invalid then you do not become entitled even to the £sd. Section 14, unfortunately, is narrow in particular in subsection (b). In fact if (b) were out I think it would be better or, alternatively, if (b) were worded as follows—this is what I suggested on the Second Reading of the Bill:
in this subsection "instrument" includes wills and all documents and writings which create rights or impose obligations.
It need not be of a contractual kind, a will or a codicil to a will does not create a right of a contractual kind.
Section 13 is splendid as far as it goes but there is no use in saying that something can be converted from £sd into £ and new pence unless the right exists. If the contract under which the right exists is in itself invalid then the whole thing disappears. This is what I would be afraid of.
I agree with Senator Nash. There is no use having a provision for a conversion if in fact you cannot have a valid instrument on which to claim. It is for this reason that I said I understood that Senator FitzGerald's contention was basically that, by having section 14 at all, one may be making certain agreements invalid. I have doubts as to the validity of that contention by Senator Alexis FitzGerald but my doubts are sufficiently weak to make me think that this matter ought perhaps to be looked at again.
The Senator has adverted to what are the difficulties with which I am faced. I would point out that nothing can arise under section 14 until the end of the changeover period, which cannot be earlier than the autumn of next year. I would give an undertaking to the House that between this and then I would examine this matter very closely and if any doubt whatever remains bring forward an amending measure to cover it.
I am content with that.
Amendment, by leave, withdrawn.
Amendment No. 4 not moved.
Agreed to take remaining Stages today.
Bill received for Final Consideration and passed.