This repeats Section 215 of the Act of 1908.
SECTION 298.
Question proposed : " That Section 298 stand part of the Bill."
As I understand it the court has power to examine the conduct of the directors and compel them to restore money or property. Has the court power to award damages for, say, breach of contract? I do not think it has and I do not think it had under earlier legislation. In bankruptcy, the bankruptcy court has power to carry out an examination and to award damages and I think we should consider whether or not we should give this power, if it is not there already. It is a power which might save a great deal of expense. It might mean that in a summary way in a clear case the court might be able to award damages without the necessity for lengthy costly proceedings.
In what kind of circumstances do you visualise this arising?
It could arise where a director has not been guilty of misfeasance or breach of trust but may have been guilty of breach of contract with the company and where rather than have the liquidator obtain leave to institute proceedings against the director, he could be brought up and examined and the court could assess the damages at the hearing and determine that the director would pay £X damages. I think this is in the bankruptcy code but I do not think it is in the power of the court controlling winding up. It might be worthwhile considering whether we should give such power to the court. I could see certain circumstances in which it might be unfair to utilise it, where it would be necessary to have a full hearing. I think, however, we could rely on the court to exercise proper discretion of such a power.
There is a long list of case law on this section. I do not know what the case law contains or whether it suggests, in any way, that the proposal of Deputy Costello is desirable.
As I understand it, this section is used where there is misfeasance or breach of trust to bring up the director, have him examined and have an award made against him, but it does not cover the sort of case to which I have been referring and I wonder whether or not it might be desirable to do so. As I said, I think the bankruptcy judge has this power and if he has it, I think we could give it with safety to the judge in control of companies being wound up.
It is a point worth considering and I shall certainly do so.
Question put and agreed to.