The company here may apply to the court for an order directing that the shares in question be subject to restrictions under section 16. Does that mean that they cannot be sold? This section, as I understand it, allows the company to apply for a restriction, in accordance with section 16, on the sale of shares of a company, if there is an investigation going on under section 73. What sort of restrictions are we talking about here?
SECTION 77.
Question proposed: "That section 77 stand part of the Bill."
They are set out in section 16 (2):
So long as a direction under subsection (1) in respect of any shares is in force—
(a) any transfer of those shares, or in the case of unissued shares any transfer thereof, shall be void;
(b) no voting rights shall be exercisable in respect of those shares;
(c) no further shares shall be issued in right of those shares or in pursuance of any offer made to the holder thereof; and
(d) except in a liquidation, no payment shall be made of any sums due from the company on those shares, whether in respect of capital or otherwise.
Would the Minister look at this restriction, which is essentially a restriction on property rights, in light of the various court decisions that have been made in regard to the constitutional right and guarantees of property, to see whether, in any sense, the restrictions imposed here, which virtually take away the rights of property in the shares, at least temporarily, are constitutional?
That question refers back to section 16. We are dealing with it now under section 77. We are talking about the exercise of these powers by the court only and not by the Minister. Section 16, in so far as it allows the Minister to do these things, would raise other questions. The possibility of its being unconstitutional if the order can be made by a court is, of course, non-existent because a court has a right to make decisions under the Constitution that affect the property or person of citizens. A Minister has a right too, but he has not by any means the same unfettered right. The question Deputy Bruton raises goes to the root of the Ministerial aspect of section 16 rather than to the judicial aspects that arise in section 77.
I do not want to prolong this but the court would be making this decision pursuant to sections 77 and 16: the court is not making the decision in vacuum. It would not be able to make the decision without those sections conferring it with the power. The question I am asking is, is the Minister satisfied that these restrictions are constitutional in so far as they are provided for in this Bill?
The Constitution vests unlimited jurisdiction in the High Court. Therefore, any legislation which purports to grant to the High Court the right to make a decision in relation to somebody's property cannot of itself be unconstitutional. It might be unconstitutional for different reasons, but it is not unconstitutional for that reason because the High Court has unlimited jurisdiction.
That is a sufficiently magisterial statement to intimidate me into silence.
Subsection (4) states:
A person shall not be guilty of an offence by virtue of failing to comply with a notice if he proves that the requirement to give the information is frivolous or vexatious.
A person may be able to demonstrate that the company has already got this information, that it has been given by another party who could be compelled under one of the preceding sections to name other people who are shareholders in the company. What about that sort of situation?
Would that be sufficient to bring the requirement under the heading frivolous or vexatious or should that sort of information be excluded on other grounds? Should this sort of requirement be withdrawn? Should there be some subsection whereby if a person communicates to the company that it already has this information from, say, another party, to a concert agreement, that would bring it under the heading of frivolous or vexatious?
This subsection does not cover the point the Deputy is talking about. If, for example, one party to a transaction gave certain information that the company had reason to believe might not necessarily be true, and then went and asked the other party to give them the information, I do not think it could be regarded as frivolous or vexatious. The fact that information has been given already should not necessarily preclude the company from seeking to get the same information from a different party if it has reason to believe that it may get a different answer from the other party. It would then obviously have to investigate the matter further to see which, if any of them, was telling the truth.
I take the Minister's point but I had in mind the situation where the company has no reason to believe that it would get any different information from another party, in other words, where there is no reason for the company to think the information communicated by the first party was incorrect in any way.
It is very subjective. It depends on what a company believes the person is going to tell them. If they believed they were going to get the same answer, it would seem to border on the vexatious to ask for it again. On the other hand, one wants to give them a reasonably wide power. These are all public companies and I do not expect that they will exercise this power in a frivolous way. If they did, then it is good to have subsection (4) as a defence to somebody who is perhaps getting a bit sick of being asked frivolous or vexatious questions.
Personally I am happy to see subsection (4) there for the reasons I referred to earlier — I was afraid these powers could be used vexatiously.
Question put and agreed to.
Sections 78 and 79 agreed to.
SECTION 80.
Amendments 94 and 95 are consequential on amendment No. 108, and we have a late amendment to that amendment by Deputy Bruton. Is it agreed to take amendments Nos. 94, 95 and 108 together with amendment No. 1 to amendment No. 108? Agreed. Before we proceed I would like to make the point that additional amendments were received from Deputy Bruton just before the meeting. It would be more helpful to the committee if members were given a better opportunity to consider amendments in advance of meetings. I have the power to accept amendments without notice and in this instance I am prepared to accept the amendment but, in future, I would prefer if amendments were submitted well in advance. To this end it would be beneficial if the committee would now agree to set a deadline in respect of receipt of amendments for future meetings. I would suggest two working days before any particular meeting for the tabling of amendments, for example, for a Tuesday meeting they should be submitted to the Bills Office not later than the previous Thursday.
In fairness, we have already accepted an oral amendment as a result of the diligence of Deputy O'Dea and that was not the only one. Another day the Minister made an oral amendment. I think that two working days is too restricting. We are not going to have another go at this and perhaps, one day would be sufficient. It is fair to say that to prepare for these committees is not the only thing members have to do with their lives. To some extent perhaps it is only on the morning of the meeting that one has the time to look at the material properly in a concentrated fashion and it may well be only at that time that a particular amendment occurs to you. I hope the Chair will not feel bound to reject amendments if they seem to be reasonable just because they happen to arrive late.
I accept the thrust of what the Deputy is saying. I will amend it then to one working day. I think that is reasonable.
Subject to your discretion.
I will retain my discretion at all times. In this instance we have agreement in relation to your amendment, which is fair enough. If there was a problem about it — we had that difficulty with other members — yourself and the Minister would be well briefed on it, but not the rest of the members. Subject to my discretion I would ask that amendments arrive one working day before future meetings. If a meeting is to take place on a Tuesday, I am asking that amendments arrive by noon on Monday. Is that agreed? Agreed.
I move amendment No. 94:
In page 73, subsection (2), line 38, to delete "10 pence" and substitute "15 pence".
These three related amendments in my name have to do with the amounts which can be charged by companies for inspection of their share registers, copies of the register concerned and so on. The first of these, No. 94, is a very straightforward amendment and is designed simply to align the price to be charged for a copy of any part of the registers which are required to be held under sections 54 and 72 of the Bill. The register held by virtue of section 54 relates to directors' and secretaries' holdings and the register under section 72 relates to shareholdings in excess of 5 per cent of public companies. There is no reason a different price should be charged for a copy of either. It is simply an oversight and this amendment will rectify it.
The other two amendments, Nos. 95 and 108, have to do with keeping the legislation as up to date as possible. Turning to amendment No. 108 first, there are several instances in the 1963 Act and in this Bill where people can inspect company documents of various kinds in the company's own office, take copies of them and so on. While it is reasonable to allow the company to charge a certain amount for providing these copies to recover the costs involved, setting down the maximum charges in the Act itself is not I think the best way of legislating. For example, section 119 of the 1963 Act allows for public inspection of a company's register of members on payment of a maximum of one shilling and for copies to be taken on payment of six old pence for every 100 words, I think it is reasonable to keep these kinds of maximum charges up to date by allowing the Minister to make appropriate Statutory Instruments, and that is what subsection (1) of the proposed new section 90 would do. Giving the Minister this power necessitates the consequential deletion of section 80 (5) of the Bill which would have allowed the Minister to vary the charge in that particular section. Amendment No. 95 makes the necessary deletion. It has also been suggested to us that the present basis on which companies can charge for copying registers and so on, in other words, so much for the 100 words, is somewhat unwieldy and should be changed to a charge per page or some other more convenient system. I do not think the Bill is the place to legislate for such minutiae nor have we decided on a particularly better basis for the charges involved. What I am proposing, therefore, is to give the Minister the power to alter the basis on which companies might charge for copies of or extracts from its various registers and that is what subsection (2) of the new section 90 would do.
I have an amendment down which you. Chairman, very kindly allowed to be discussed which relates to amendment No. 108. Under it the Minister may increase the charges by order if inflation takes off and 15p is no longer a relevant charge. The Minister is taking the power here to increase it to 100p or 200p or whatever he chooses. It seems to me that there should be some relationship between what the Minister would set as the charge and the actual cost involved for the company in supplying the information. Rather then give the Minister total unfettered discretion to set the fee at any figure he likes — which could change the actual effect of the legislation if it was exercised in a particular way — he could actually negative much of this section if he set the charge at too high a level — I am proposing that we include, after the reference to the Minister being able to act by order, the words "by reference to the actual costs involved". I hope that the Minister can accept that.
I have no objection in principle whatever to it, obviously it is simply a question of how you express it. Nowadays, the actual cost of copying one of these documents is the cost of putting it into a Rank Xerox or a copying machine. The old system which is reflected in the 1963 Act was per folio of 100 words because a scrivener was paid so much to write out 100 words. I think we should get away from that system, and that is what I am proposing, because it is no longer relevant. Therefore I think the way you should cost it now is by reference to a page. Whether there is one or a thousand words on the page the cost of copying it is the same. I have no objection to those words being inserted except I hope they will not cause problems. I presume it will be done by referring to what the general cost of copying a page is at a given time.
All this does is set the terms of reference under which the Minister must act in deciding whether to increase the charges. I hope the Minister could accept it and obviously if there is a problem he can come back.
What I would be prepared to do is accept the amendment as it stands, but if some more precise wording occurs to us in the meantime perhaps we might change it on Report Stage.
I think the amendment is useful because as the Minister will be well aware this charge is already in hand in local authorities even for the xeroxing of planning or other information that you require. The charges are not simply for the paper and the xeroxing but for the entire cost of the personnel employed. If local authorities have a standard set, I think it is only reasonable that companies might have an opportunity to meet some of these costs as well.
Amendment agreed to.
I move amendment No. 95:
In page 73, lines 53 and 54, to delete subsection (5).
Amendment agreed to.
Section 80, as amended, agreed to.