Special Committee Companies Bill, 1962 debate

Mr. J. Lynch

I move amendment No. 39 :

To delete subsection (1) and substitute :

" () Where a company acquires any property which is subject to a charge of any such kind as would, if it had been created after the acquisition of the property, have been required to be registered under this Part, the company shall cause the prescribed particulars of the charge, verified in the prescribed manner to be delivered to the registrar of companies for registration in manner required by this Act within 21 days after the date on which the acquisition is completed so, however, that if the property is situated and the charge was created outside the State, 21 days after the date on which the prescribed particulars could, in due course of post and if despatched with due diligence, have been received in the State, shall be substituted for 21 days after the completion of the acquisition as the time within which the particulars are to be delivered to the registrar."

The reason for it is explained in the brief circulated.

Mr. Sweetman

There are also some other things as well as dropping the instruments. I think it is now going to affect more than was affected before. Is there anything else other than judgment mortgages included for the first time ?

Mr. J. Lynch

No, nothing else.

Chairman

There is one matter I want to raise on the section. The section provides that where a company acquires any property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered, it is necessary to furnish the necessary details. The point I want to raise is the possibility of the existence of a charge on the property of which the company might not have noticed as, for instance, of burdens affecting registered land without registration?

Mr. Sweetman

Section 47 ?

Chairman

Section 47, and there may be other examples of it. That is one that springs to mind. I am suggesting that it should perhaps apply only where the existence of the charge is known to the officers of the company.

Mr. J. Lynch

I doubt if any serious liability would devolve on the officers of the company if they did not know or could not know about a charge on property that they purchased.

Major de Valera

What you are really doing is putting a penalty on them for not investigating in regard to anything they acquire.

Mr. J. Lynch

There would be a penalty in the event of their not registering it. The penalty subsection says " if default is made in complying with this section . . . the company shall be liable to a fine . . ." I should imagine it would be easy for a company charged with failing to register to show that they did not know or, by the exercise of reasonable prudence and diligence, could not have known.

Major de Valera

Is it possible for a company to mortgage by equitable deposits?

Mr. Sweetman

It is.

Major de Valera

And you have to register?

Mr. Sweetman

Yes.

Chairman

As a general principle, I am not very happy about a situation where you can put a company or an individual in a situation that he has to defend himself against something he should not have to defend himself against.