Special Committee on the Companies (No. 2) Bill, 1987 debate -
Tuesday, 9 Jan 1990

SECTION 86

Question proposed: "That section 86 stand part of the Bill."

Mr. J. Bruton

Section 86 allows the court to exempt any person or class of persons, any group of shareholders, etc., from the disclosure order here. No guidance is given anywhere as to the basis on which the court might exercise discretion. It looks, therefore, as if what will happen in practice is that this section will be handed over to the courts and over a period of years case law will be established to determine when the court is likely to make an exemption and when it is not. In the meantime, people will not know what the law is.

This is a point I have made before, it is unsatisfactory and there should be some attempt in this section to indicate the opinion of the legislature as to the circumstances in which the court should exercise this discretion which the legislature is giving the court. This would appear to be a policy matter and policy is a matter for the legislature, not the courts.

Mr. O'Malley

The Deputy will be aware that the policy is not contained in just the single section alone. The section is there for the purpose of setting out the court's jurisdiction. The policy is contained in the Bill as a whole and in particular, in so far as this section is concerned, in Chapter 3. A reading of Chapter 3 as a whole shows what the legislature feels should be the general principles of policy. Part IV shows what the general principles of policy should be.

Mr. J. Bruton

With due respect, it does not. This entire part is procedural. It sets out the procedures whereby certain rights may be exercised but it does not set out the policy considerations underlining the creation of those rights. Therefore, the courts will have to make policy, which is not their function.

Mr. O'Malley

The policy of the section is perhaps best expressed in parts of section 83. Subsection (2), for example, says that any person who has a financial interest in a company may apply to the court for a disclosure order in respect of all or any of the shares or debentures in the company. Subsection (5) says that the court may make a disclosure order only if (a) it deems it just and equitable to do so and (b) it is of the opinion that the financial interest of the applicant is or will be prejudiced by the non-disclosure of any interest in the shares or debentures of the company. The policy is contained in those two subsections and a lot of the rest deals with how it is applied, how it is complied with and how it is investigated and disclosed.

Mr. J. Bruton

If that is the case, is it not appropriate to say in section 86 that the court may exempt in whole or in part from the requirements of the disclosure order any person etc., if it is satisfied that it is just and equitable to make such an exemption and is of the opinion that the financial interest of the applicant will not be prejudiced by the non-disclosure of the information concerned as a result of the exemption? In other words, the policy considerations which apply in section 83 should apply in the same sense to an exemption which might be granted under section 86 from the rights which are conferred generally under section 83. There is no reference in section 86, in regard to the exemptions, to the provisions of either subsection (2) or subsection (5) of section 83.

Mr. O'Malley

It has to be assumed that they read the chapter as a whole.

Mr. J. Bruton

I do not think we should assume things. It is our job to pass legislation and not to assume what judges might or might not do. The law, as it is laid down by the legislature should be clear.

Mr. O'Malley

If that requirement is to be set out in each of the sections it will make them extremely long and unwieldy. We are entitled to assume the type of things that courts have habitually assumed, which is that these underlying matters need not be repeated ad nauseam in each section.

Mr. J. Bruton

It would not require an enormous effort. First, this consideration of what the court may do to either grant a disclosure order, or exempt someone from a disclosure order, only arises in sections 83 and 86. It will not apply in every section. I submit that that is not a problem. It seems that it would not be a big difficulty, for the sake of clarity, to have a cross reference in section 86 to the considerations to have "in the light of the considerations mentioned in section 83 (2) and sections 83 (5)".

Mr. O'Malley

If it was done that way it would not be unwieldy and it certainly could be considered.

Mr. J. Bruton

Thanks very much. That is all I wanted.

Mr. O'Dea

Subsection (5) refers to a person whose interests are affected. Should that read "financial interests"? Is it intended to confine that to financial interests, or is it intended to have it wider?

Mr. O'Malley

It is wider than financial.

Question put and agreed to.

SECTION 87.

Question proposed: "That section 87 stand part of the Bill."

Mr. O'Dea

I have one query here. Section 87 (1) states that the applicant shall cause notice in the prescribed form of the making of a disclosure order together with a copy of the order to be sent by registered post to the company at its registered office. Subsection (3) deals with a situation where the address of that registered office is unavailable. In those circumstances, the notice and the copy of the order have to be sent to the Registrar of Companies. Subsection (2) states that the applicant shall cause notice of the making of a disclosure order to be published within seven days and circulated in two daily newspapers which circulate in the district in which the registered office of the company is situated. What about that requirement when the office is unavailable?

Mr. O'Malley

The two daily newspapers would have to be two daily newspapers which circulate in the city of Dublin.

Question put and agreed to.