This motion is a departure from precedent and, by agreement, as only two speakers are offering there will be ten minutes for each speaker and not more than ten minutes for the Minister to reply.
Clonmannon (Wicklow) Retirement Village: Motion.
I recognise the generosity of the Leader of the House but I understood it was to be 15 minutes per speaker. I do not wish to be difficult.
I am sure we can be flexible.
I would be happy to give Senator Roche some of my time as I know he has a longer contribution to make.
There is something going on here we do not understand.
I started it.
He is also the senior Member in the constituency at this stage.
Is that agreed? Agreed.
I move:
That Seanad Éireann once again records its concern at the ongoing difficulties being experienced by the elderly residents at Clonmannon Retirement Village, Ashford, County Wicklow, and requests that all Statutory Authorities, State Agencies and Departments involved to take all possible action to bring this matter to finality.
I thank Senator Ross for his generosity. I assure him I will take a bus load of voters to his convention on Sunday week, although I do not think he will need it.
The facts of this matter have already been put on record in the House in five separate debates. Those debates had two specific purposes — to highlight the issues and to press the Minister for Enterprise and Employment and his Department to use company law to relieve the suffering of the residents in Clonmannon. It may seem strange that company law should be used in this case, but when the Clonmannon problem arose it became clear there was only one way to solve it — to seek a full investigation through company law and, ultimately, to seek the liquidation of the companies that were operating there.
To an extent, the first of these objectives has been achieved: we have highlighted the plight of the surviving residents of Clonmannon. We must recall that no fewer than 11 people have died since this dispute started. Unfortunately, the second of our objectives has only been partially achieved. The response which we have received throughout this long saga from the Department of Enterprise and Employment and from successive Ministers can be described as disappointing to say the least. Where actions were expected we got, first, a series of prevarications. It took almost a year to get the Department of Enterprise and Employment to advise the then Minister that it was appropriate to put an official, designated under section 19, in place and to examine the affairs of these companies.
That official appointed reported to the Minister, who is in the House tonight, on 10 March. The report was published last month and the actions which have flown from that report are, in my view, disappointing. We have had a referral of all the papers in this case to the Director of Public Prosecutions. That gives a fair indication that something is seriously wrong. We have had the Minister's agreement that all the papers will also be referred to the Revenue Commissioners. I made substantial allegations of fraud, tax avoidance, tax evasion and excise duty abuses in Clonmannon. Those papers have also gone to the Revenue Commissioners. We have also received the assurance — almost inevitably — a committee has been appointed to consider such further action as is needed for retirement homes. It is widely accepted that there is a lacuna in the law and that we do need to extend the Health (Nursing Homes) Act, 1990. The reality is that we seem to be still in something of a bind: we have not had effective action nor have we had an effective response. The Minister has, in effect, passed the buck to two other statutory agencies and is not fully exploiting all the possibilities which are available to him under company law and of which the Minister of State present is fully aware because he worked hard with me on the company law Bill committee a number of years ago.
It seems that there are three possible reasons the Minister might be reluctant to take action in the courts on this case. The officials may be too timid or too fearful of a rebuff in the High Court, as happened to their original efforts in the County Glen case. If this is the excuse, it is not good enough. Company law gives the Minister certain powers. The Minister should not simply sit on his hands; he should not wait for the Revenue Commissioners to act; he should not wait for the Director of Public Prosecutions; he should act to the full extent of his statutory capacity and should operate in parallel with those two statutory agencies. The report was made to this Minister and he should act on it in addition to making the referrals — which he has done and which are welcome — arising from it.
The Minister has suggested that he is reluctant to go for liquidation because of the additional hardship that this could conceivably heap on the surviving residents at Clonmannon. He should set to one side any fears he has on this account. Through their solicitors, Joynt and Crawford, the residents of Clonmannon have already written to one of the Minister's Democratic Left colleagues to explain, as I have repeatedly done to the Department, that it is their wish that the Minister should act and to make it clear they believe no greater harm can come to them through a liquidation than they have already received at the hands of the management of these companies. The residents feel, as I do, that it is impossible that nature could throw up more than one such set of unprincipled thugs like the people who run Clonmannon in any one generation. What has happened in Clonmannon is unspeakable, by any measure of human activity.
The third possible reason for the Minister's inaction would seem to be that he is hoping the Revenue Commissioners and the Director of Public Prosecutions will do the work for him. This is what I call the Pontius Pilate scenario. What we have seen thus far from the Minister of State, Deputy Rabbitte, is a classic piece of buck-passing, which will have the effect of removing from public scrutiny the quality and the validity of the official response to the report of the public official appointed under section 19 of the Companies Act. The fact that the Minister has chosen to publish his own sanitised version of the report — I understand fully and accept his rationale for so doing — means that the public will never have the full facts on the systematic fraud which has been a feature of the operations of all the companies associated with the Clonmannon retirement village.
The fraud goes back over a long number of years: it is not a recent event. It will mean that the evidence of fraudulent trading, abuse of company law, tax avoidance, failure to meet social welfare returns, asset stripping, common theft — including common theft from a corpse — and excise fraud is shielded from the public eye. That is not what any Member of this House, or this Minister, would wish to be the case. The Minister has the power and, in my view, the obligation under company law to take action and not to pass responsibility to other statutory bodies. As far back as last December, I wrote to the then Minister, Deputy Quinn, and I put it to him that, if the Minister for Enterprise and Employment is provided with prima facie evidence that any or all of the circumstances touched on in section 8 of the Companies (Amendment) Act, 1990, exist in a case, the Minister has a statutory obligation, and not a discretion, to apply to the courts and present the evidence. This Minister has been provided with copious evidence of systematic and continuous fraud. Even though the investigating official comes to the conclusion that not all the allegations have been sustained, it is my view that the Minister has the obligation to present the facts in this case to the courts, so that a court can exercise its jurisdiction under the Act before further loss is caused to the unfortunate residents of Clonmannon.
The residents have invested so much of their life savings in a retirement village which, at the outset, we all saw as some kind of idyll and which has become, in reality, a nightmare. I suggest that the Minister of State, Deputy Rabbitte, show some of the steely resolve he showed while in Opposition and that he use the statutory powers he has under company law to provide the relief to the unfortunate residents of Clonmannon that every civilised person in this country would wish for.
There is no question but that prima facie evidence of fraud has been produced. The fact that the Minister has sent the documents to the Director of Public Prosecutions speak volumes. It is worth recording some of the evidence provided to the examiner, and I do so only by way of summary. The examiner was provided with written evidence regarding transactions involving cars — a Mercedes 190, a Mercedes 560, a Mercedes diesel, a Rolls Royce, a minibus, a Ford Escort and a Bentley Mulsanne. We have provided the Minister with the names of the current owners of those vehicles, with the names and telephone numbers of the garages that handled the transactions, with evidence that transactions took place, through the accounts of one of those companies, which were illegal and fraudulent and which avoided paying excise duty. We also provided the Minister, the Department and the investigating official with evidence that assets were illegally transferred between companies for the purpose of preparing a fraud.
We pointed out, in evidence that was supported, that one company was closed to be replaced by another in the classic Lazarus fashion. We also pointed out that there were no professional audits carried out. False books of account were prepared. I take some pleasure from the fact that one of the professional bodies responsible took serious action last week against a person who was purported to act for an auditor, under the law of this land, for these companies. We also pointed out and provided physical evidence of the encashment of cheques outside this jurisdiction as a means of fraudulently converting cash away from the company and as a means of avoiding accounting for cash. We provided evidence of false returns to the Revenue Commissioners: evidence that two separate sets of books were kept for the nursing home at Clonmannon.
We provided evidence that company meetings were not properly convened according to company law; there has been a court judgment on this matter. We produced evidence of false documentation being produced in a court action — a most serious matter — and, again, the professional body involved is taking a serious view of the actions of the accountant in this case. I believe the accountant will be struck off; I hope the accountant will be struck off. We provided evidence of a series of actions where creditors and small traders were systematically milked by the Clonmann companies and by the Corneill families. We provided evidence of criminal trespass. We provided evidence that goods in cottages where people had died were stolen. I personally provided testimony that when an unfortunate lady died, the manager of this estate sat in the room with her body, ate the tea that had been delivered to her and, when he left, £300 was missing from the room.
I provided evidence of blatant breaches of planning law and Wicklow County Council accepted that this is a fact. I provided evidence of false declarations to the Valuation Office. The management of the company delivered these valuations and suggested that bungalows being transferred between individual companies were valued at only £10,000 each. As late as last week an advertisement appeared in one of our local newspapers advertising these bungalows for £35,000.
The question must surely arise: what special immunity does the thug who runs Clonmannon have? How is it that an individual can run a coach and four——
Acting Chairman
I remind the Senator that he is in a privileged Assembly.
I am aware that I am in a privileged Assembly.
Acting Chairman
People may be identified from what the Senator is saying.
I have not mentioned Mr. Corneill all that often but I will refrain from doing so for the balance of my contribution. However, everybody knows the thug involved. The question that must surely arise is: what special immunity does this individual and these companies have? If a constituent of mine went into a shop and stole a packet of cigarettes, he would find himself before the court and could end up in jail. Why do we tolerate what has happened in Clonmannon? Why is this extraordinary scandal continuing 18 months after we first highlighted it?
Is the Minister of State, Deputy Rabbitte, aware that one of the companies, Home Affairs Limited, has been struck off the register of companies in the last ten days? This means that the company is now in the charge of the Minister's Department. That company was declared insolvent by Amorys, the company's solicitors, in a letter to residents of Clonmannon in 1992. Subsequently, that insolvent company. Home Affairs Limited, — and I provided evidence of this — was involved in illegally transferring major assets to the company. Hilltop Catering Limited. The directors of both companies are the same. The addresses however in the case of Hilltop Catering Limited are outside the jurisdiction, in the Channel Islands which, incidentally, is the place to which some of the cheques disappeared.
Home Affairs Limited has substantial tax liabilities which have not been discharged. Due to ministerial inaction, the assets of that company have been illegally transferred. The Minister and the Administration have a responsibility to the taxpayer and the residents of Clonmannon to retrieve these assets. The harsh reality is that the Clonmannon affair is a growing scandal. It is a cancer in our society which we should cut out. The management deserves to be behind bars and anybody who, through inaction, sustains that management should accompany it. Will the Minister use all the existing powers under statute and the Companies Act? The Minister is fully aware of those powers because he debated them at length when the legislation went through committee a few years ago. I ask him to use all available powers in addition to going through the DPP and the Revenue Commissioners.
Those statutory bodies will take a long time to reach any conclusion and we will never know the basis of it. However, the Minister is entitled to take this matter to court which would facilitate an early liquidation. I understand fully that the Minister would not, and indeed I would not, wish the route of liquidation to be used as a means of settling disputes. However, there has never been and there is unlikely ever to be a dispute as unique as this. This is one off and we should use every power and every statutory agency to bring the scandal to an end.
I intended to ask at the outset if I could give two minutes to Senator Dan Kiely as he has some connection with the estate and wants to say a few words.
Acting Chairman
You have now used 50 per cent of Senator Ross's time. I call on Senator Ross.
I will be able to accommodate Senator Kiely. I congratulate Senator Roche on several things but mainly for leading the charge on this issue and for championing it conspicuously over a period of 18 months. Tribute should be paid to him for not only exposing it but for continuously pressing Ministers on all sides, when it was not so easy for him to do so, on an issue of great importance in Wicklow. At times when he was in Government, he had to take a stand on it. He was not popular with his own people for doing this but he did so fearlessly. He is now doing so in a possibly easier position but with a great deal of energy.
The disturbing features which he so eloquently spelt out to this House are in themselves extremely important. However his main point is that while what has been happening is unforgivable, it is impossible to explain to the people in Clonmannon the delay in taking action. I impress on the Minister of State that this is an emergency. We do not understand why redress has taken so long. It is a terrible reflection on the apparatus of this State that we cannot solve what is after all a human problem.
The problems which Senator Roche addressed so well concerning difficulties with books and cheques and the dubious practices are subsidiary to the health and welfare of the people affected by what is going on there. They are important in themselves. This matter has gone to the DPP and should not provoke a great deal of specific comment in this House but that is far less important than the problems of the old people who have been affected.
The people of Clonmannon and any elder citizen in this State are entitled to a certain amount of comfort and security in their later years. The people of Clonmannon have been deprived of this and have been living in fear for a significant length of time. Their savings have been eaten up in a situation which they believe is out of control. In Leinster House they see ministerial impotence accompanied by what they perceive as ministerial unwillingness to tackle the problem. That is not fair but that perception exists and we have done absolutely nothing to remedy it. The people have seen the matter debated in this House several times but have seen little action. They have seen numerous committees set up and inspectors appointed to report. They now see the matter going to the DPP. I ask the Minister, in light of the stress and the extraordinary number of fatalities which are probably not unrelated to this, to regard it as an emergency and act on it now. That is a simple plea. It is a human problem and not really a problem for the courts at all.
I thank Senator Ross for allowing me a few minutes because this is a very serious issue. The general public would not have known of this if Senator Roche had not highlighted it. I for one would not have known anything about this very serious problem. Senator Roche mentioned that 11 people have died since this was highlighted. Many of the residents are under huge stress and strain and something will have to be done to rectify the situation. I call on the Minister to use all the resources and avenues available to him to bring this to a conclusion on behalf of the residents. I congratulate Senator Roche on highlighting this matter not only for the current Minister but continuously and without fear for the past 18 months. Something must be done immediately to draw this to a conclusion.
In responding to the various issues raised by the Senators on this unfortunate case, I want to say that my sympathies lie with the residents, or more particularly the residue of the residents, who have been abysmally treated. At this stage in their lives and having, as they thought, prudently organised their affairs to cater for their declining years, they have for a variety of reasons been caught in a terrible bind.
The affair has been well recorded both in contributions in this House — indeed as recently as 9 March last — and by various reports in the media. These contributions give a flavour of what has happened in Clonmannon. In addition, my colleagues, the Minister for Health and the Minister responsible for Housing and Urban Renewal have been apprised of the concerns of the residents as to their unfortunate situation.
It is important to put the contribution of my Department in context. I do not have any responsibility, in any shape, make or fashion, for the regulation of retirement homes, nursing homes or sheltered accommodation. Neither do I have any responsibility for issues of contract law or lack of provision of services, if such is being contended, either by the health board or the relevant local authority. However, lack of responsibility does not connote lack of sympathy or awareness of what is happening.
The unvarnished facts of the matter are that neither I nor my Department, notwithstanding our best efforts and great intent, can remedy the difficulties in Clonmannon. In so far as I have responsibility, I am only too happy to exercise it in the public interest. The Clonmannon dispute has raised issues in three areas: the level of compliance by the companies involved in the ownership and management of Clonmannon with their duties and obligations under the Companies Acts; what is still the central issue, questions relating to performance and enforcement of the service contracts between the village residents and owners of, and service providers at, the village; and the position of the residents of the village today, many of them very old and infirm and all of them people who entered into their contracts believing them to be arrangements that would give them a place of refuge and access to a range of services to the elderly.
Senators will be aware that my colleague and the then Minister for Enterprise and Employment, Deputy Ruairí Quinn, commissioned a report into the company law aspects of this matter last October. I recently received that report and following extensive thought and advice, including legal advice as to how to proceed, decided to disclose the report to the Director of Public Prosecutions and the Revenue Commissioners for such actions as they feel appropriate.
The report conducted under section 19 of the Companies Act dealt with, and could only deal with, the first issue I referred to earlier. The other issues are for other Ministers and statutory authorities as well as for individual action by the residents themselves. I must say that I am inhibited in what I can say in relation to what I learned from the section 19 report, or indeed in disclosing other actions, if any, flowing from my reading of the report. I am inhibited from disclosing what is in the report for one very good reason. The Oireachtas in its wisdom decided that a report such as the one I received may only be published to competent authorities or with the prior approval of the companies concerned. I sought the permission of the companies concerned to publish the report. The companies have declined to permit the publication of the report. Senators will be aware of the import of the legal advice I received by means of the papers that were lodged in the Oireachtas Library on Monday, 24 April last.
I am concerned that, regrettably, it was not possible within the terms of reference specified in section 19 of the Companies Act, 1990, to solve the type of problems presented in the substantive dispute between the residents and management of Clonmannon village. Moreover, I am also of the view that there is no legislation within the remit of my Department which could rectify the position to the satisfaction of either party to the dispute. However, I feel it is open to me to indicate my deep unhappiness with the current and, indeed, past state of affairs in Clonmannon. The House should be aware that convictions were obtained by the Registrar of Companies in relation to breaches of the Companies Acts, both against the companies concerned and, importantly, against a number of its directors.
I am advised that the Eastern Health Board has been providing for some years a public health nursing service to those residents requiring it, in the same way in which it would provide a service to any other elderly person residing at home in the area. The residents similarly receive general practitioner care and the board has not received any recent communications from general practitioners requesting any special items for residents in the retirement village. The board's environmental health staff have from time to time carried out inspections and submitted reports-recommendations to Wicklow County Council. I gather that the Minister for Health has asked that Clonmannon be checked on the current position regarding risk to public health.
Registration of retirement villages should, in the view of my colleague, the Minister responsible for Housing and Urban Renewal, Deputy McManus, help to prevent another Clonmannon in the future. She holds the view — Senator Roche and Senator Ross probably concur and I would have sympathy with it — that operators of retirement villages should be regulated. The more fundamental issue relates to the Nursing Homes Act. The apparent anomalies in relation to complexes that formerly had a nursing home require a review, and as such any views on this matter might be better addressed to the Minister for Health. I draw Members' attention to the activities of the working group which is currently reviewing the implementation of the Health (Nursing Homes) Act, 1990 which is expected to report to the Minister for Health shortly.
Liquidation has been presented as the solution to the Clonmannon problem. Liquidation is the formal closure of ownership of a particular enterprise, in this case the Clonmannon companies. In itself liquidation does not provide new ownership or remedies for past or current difficulties. In my position, cause and effect must be looked at, and I am sure this House will recognise that. The effect that I wish to avoid as a Minister is uncertainty as regard the future of the elderly residents of the retirement village. They have suffered too much uncertainty to date. Half solutions or precipitate solutions are no solutions, especially as regards the future for the villagers.
Moreover, if we go for liquidation, it must be clearly understood that neither I nor my Department will have care responsibilities for these people in a post-liquidation situation. I would be within my rights, as has been argued, to petition the court to seek the official liquidation of some or all of the companies on "just and equitable" grounds, the public interest in effect. However, I must ask myself would the public interest, justice and equity in the broadest sense be secured by this course of action in this case? From this point of view there are a variety of matters that should be considered in examining this option.
Creditors have their rights to petition the courts where they feel it is appropriate to do so. There is no doubt that the affairs of the two companies concerned have not been well administered, to the possible detriment of the residents of the bungalows, and are to a substantial extent a public scandal in that the filing of statutory documents and the retention of required documentation has not been adhered to.
However, the other aspect of liquidation is to what extent it is the public interest. The most recent case in which my Department was involved, County Glen pie, does not present the same features as arise in Clonmannon. The courts would not lightly be convinced that compulsory liquidation was in the best interests of all affected parties.
In the event that the companies involved in Clonmannon are liquidated, what would happen to the residents? This is not a matter for company law, but since there is a considerable number of elderly residents involved, the outcome is, for obvious reasons, crucial. What we have to ask ourselves is whether on balance official liquidation is really a viable option and ought to be proposed on the public interest grounds of justice and equity.
Finally, I repeat my view that company directors have their care and duty responsibilities under company law. I continue to ask myself whether the saga as it has unfolded in Wicklow is in line with the proper running of a limited liability business. I suggest it is not and take it that this House and the proposers of this motion concur.
May I respond?
Acting Chairman
The Minister has concluded the debate.
Question put and agreed to.
Acting Chairman
When is it proposed to sit again?
It is proposed to sit at 10.30 a.m. on Thursday, 18 May.