Section 145 is the beginning of Part VIII of the Bill. Before we commence consideration of the sections in it, perhaps the Minister would wish to give the Committee a general outline of the provisions of this Part.
Part VIII of the Bill contains a number of important provisions dealing with the role and duty of receivers. As with the other Parts of the Bill all the provisions are important in their own right but in these introductory remarks on this Part I might highlight three for particular mention. When we come to discuss individual sections we can go into more detail as and when required.
The first section I wish to mention is section 145. This replaces 315 of the Principal Act and specifies who cannot be appointed as receiver. This is consistent with the approach adopted in relation to liquidators and also to appointments of examiners under Part IX. Section 146 extends the number of persons who can seek court directions in relation to the performance of their functions by a receiver. In the past the lack of such a right was an aspect of company law that attracted some criticism.
At this point I would like to mention section 147 which places a statutory duty on the receiver selling property of a company to which he is appointed to obtain the best price reasonably obtainable. That is as much as I wish to say at this point by way of introduction to this Part.
I move amendment No. 207:
In page 117, line 24, to delete "was", and substitute "has". This is a typographical error.
This is simply a drafting amendment correcting a mistake in the current text.
Just as with the position in relation to liquidators, does the Minister not think it wise to insert some qualifications for people holding the position of receiver? While nowadays we are all for not protecting vested interests and so on, there comes a point at which, if one wants people to undertake certain tasks, one should be satisfied that they have certain qualifications. We have gone to a lot of trouble in this section stipulating who should not be appointed a receiver. There is no mention at all of the basic qualifications a person should hold in order to be appointed a receiver. Would the Minister consider inserting on Report Stage some provisions outlining basic qualifications required of any person wishing to act as a receiver?
No, Deputy. I understand a similar debate took place on a previous section in relation to liquidators. Obviously the arguments are similar. We are not prepared to consider that provision in the context of this Bill.
I am inclined to support Deputy Barrett's point of view that some such qualification should be provided or inserted. I understand that in Britain qualifications are required of receivers. I wonder why we do not follow that example. I understand that section 314 of the Principal Act excludes a body corporate from acting as a receiver. Does that continue to be in force? Has the Minister considered whether a body corporate should be allowed act as a receiver and, if not, to state the reason she has not decided to agree?
That provision is not being changed. I am advised that no representations were made to have it changed. If the Deputy would like advance arguments I might have them considered for Report Stage. I should like to hear them.
The argument would be that many other people act in business in a corporate capacity doing other forms of work whether that be supplying plumbing to a house, building houses, supplying motor cars or whatever. In the case of someone acting as a receiver, at present I understand it is the individual receiver who must take on the job; even though he may be a member of a partnership or a member of a company, in acting as a receiver he does so in his individual capacity. This means that, in effect, his personal assets and so on are exposed in respect of anything he does wrong. I do not see anything necessarily wrong with that in the sense that, obviously, such people now have to take out personal indemnities and so on to cover themselves against any provision under which they might be caught.
One advantage of allowing bodies corporate to act would be that so long as the company was properly capitalised — possibly one would have to require it for it to be properly capitalised to allow them to act so that there would be funds available — if you like that would bring this function more into line with the types of provisions applicable in respect of other functions. I am not sure of this but I have a feeling that bodies corporate are allowed to act in that capacity in other jurisdictions, possibly in Britain. Perhaps the Minister would confirm whether I am correct in that?
I concur with Deputy Bruton's views in relation to the appointment of a body corporate. The whole of this Bill imposes obligations on receivers, liquidators and other individuals. We spoke earlier of the difficulties of policing. I maintain that the higher the standards one stipulates be applicable to people appointed to these positions — say a receiver or liquidator — the lesser will be the chance one will have to resort to the provisions of this Bill in order to deal with wrongdoings on the part of such people. Should such arise one also has a better chance of appointing people who would have the means to met personal liability in that event. There is no provision in this Bill stipulating that a receiver should have means so that, in the event of his failing in his duty — resorting to section 166 — he would be personally liable. A person may have no means, may not have professional indemnity insurance. Therefore one might be wasting one's time following him. It is important that one stipulates requisite standards so that one is satisfied that people in such positions know the law, are capable of interpreting it, are capable of performing the task we want them to do in a professional manner.
It is rather extraordinary that recently we introduced an Insurance Act which imposes all sorts of obligations on people who call themselves insurance brokers. For example, they must have bonds, have professional indemnity cover, they must behave in a certain fashion; they must do X, Y and Z. Here, we are talking about the appointment of receivers but we do not say that individual — or individuals if Deputy Bruton's point was taken on board — must have certain qualifications, have certain means available to them to meet potential liabilities, must have knowledge. All we say is that you cannot be a parent, a spouse, a brother or sister or a child of an officer of the company, or have been a person who was an officer of the company 12 months prior to the commencement of the receivership, be an undischarged bankrupt or be a person who is a partner of or in the employment of an officer or servant under the company. We are taking this precaution about protecting vested interests too far. It is in the interests of the ordinary members of the public that such people have basic qualifications. I would not be so cold as to say that any such person would have to be a qualified chartered accountant whatever, but you should satisfy certain requirements in relation to duties that you are going to ask to be performed. People in time will find loopholes in what is outlined here and that we will not have thought of, or are not thinking about them at present. I ask the Minister to seriously consider on Report Stage, both in terms of the receiver and the liquidator, having some sort of basic standards or qualifications built into this so that we can be satisfied that they are people of substance and that they can meet any liabilities that eventually fall on them.
There is no point in having a section in the Bill empowering the court to impose personal liability on some individuals who have no means to meet the liabilities they may be responsible for. It is time we had a look at this and I ask the Minister again not alone to consider Deputy Bruton's point but to consider the point I am making in relation to qualifications.
I propose that we adjourn at 4.30 p.m.
We will allow the Minister to reply first. It is up to the Minister.
In relation to the points made by Deputy Bruton about corporate receivers, the law here does not provide for that — he is correct — nor does it apply to corporate directors. That is different in the United Kingdom where there is provision for corporate directors, and I presume corporate receivers. I do not think this is the end of all company law reform, although I accept that Deputies have spent so much time at this they might not be so enthusiastic about getting into it too quickly. A line had to be drawn somewhere between what was included and what was not. I think the matters referred to by Deputy Bruton perhaps will be appropriate on another day in the context of other legislation.
In respect of the adjournment, we will be here until 6 o'clock and I think we should try to dispose of as much of this Bill as we can.
I have no objection.
What are the objections to writing into the legislation some basic qualifications for the appointment of a receiver? A receiver in selling the property of a company should exercise all reasonable care to obtain the best price obtainable for the property at the time of sale, and in order to satisfy that requirement the person in question should have some qualifications. This Part of the Bill refers to the duty of the receiver to prepare a statement of affairs. Surely we should have somebody who is qualified to do that. We all know what we are talking about, we all know who is appointed receiver in the majority of cases.
I wonder whether the people we know are usually the receivers in ease of the accountants in company ease-outs.
We are not writing in anything here in relation to qualifications. That is what bothers me. I do not wish to delay the meeting or to be awkward or political; I am just asking a simple question in relation to the necessity to have basic qualifications. Otherwise, even with all the policing that is necessary in this legislation, we are going to make life far more difficult for ourselves. Unless we are satisfied that somebody is qualified to do a job, that he is a person of substance, and that he will have insurance protection in the event of personal liability and at the end of the day that the creditor is the one who will benefit from this. The Bill could become a bit of a joke because in terms of policing it will be extremely difficult.
The matter should certainly be given serious consideration in the future. In fairness, it is hard to argue against some of the points made by Deputy Barrett. It is a question of trying to decide what qualifications are appropriate. Does one require qualifications like being a solicitor or an accountant, or would being an auctioneer suffice? The idea is to try to avoid arriving at a closed shop and restrictions that would close off the appointment of a receiver to so many. However, I accept the principle of the points being made by Deputy Barrett and I think they deserve considerable examination.
I asked whether receivers are required to have a particular qualification in the UK.
I am advised that that probably is the case, that they have to satisfy certain securities and so on.
My recollection is that they are required to have certain qualifications. I, with others believe we should not be imitating slavishly what the British do. It might not be as difficult as it sounds for the Minister to come up with appropriate qualifications if she looked at the qualifications in other jurisdictions to see if there is anything there we could follow. We should go for the most liberal set of qualifications consistent with having some qualifications.
I agree. There is merit in what the Deputy is saying and it deserves consideration and examination.