Dáil Éireann Debate, Tuesday - 25 October 2011
138 Deputy Peter Mathews asked the Minister for Finance further to Parliamentary Question No. 39 of 13 October 2011, the reasons the courts could refuse to approve the transfer of an asset or liability of a relevant institution to another institution; and if he will make a statement on the matter. [31460/11]
View answerPart 5 of the Credit Institutions (Stabilisation) Act 2010 ("CIS Act") provides power to the Minister for Finance to transfer assets and/or liabilities of a "relevant institution" i.e., an institution within the scope of the CIS Act to another institution subject to the approval of the Court. Part 5 of the Central Bank and Credit Institutions (Resolution) Act 2011 provides similar powers to the Central Bank in relation to the assets and/or liabilities of an "authorised credit institution" i.e., an institution within the scope of the 2011 Act to another institution subject to the approval of the Court. The Court would of course consider each case on its merits. It is not the role of the Minister to speculate on the way in which the Court would exercise its statutory functions. However I can highlight a number of provisions of the legislation that are pertinent, which may be of assistance to the Deputy. Section 34 of the CIS Act provides that once the procedures in section 33 of the Act in relation to a proposed transfer order have been completed, the Minister shall apply to the High Court for a transfer order. Section 34 (2) provides that if the Court is satisfied that the requirements of section 33 have been complied with and that the opinion of the Minister under section 33(2) was reasonable and not vitiated by any error of law, it shall make a transfer order on the terms of the proposed transfer order. Section 34 (5) provides that the Court may make a transfer order on terms varied or amended from those in the Minister’s proposed order where the Court is satisfied that (a) there has been non-compliance with any of the requirements of section 33 or that the opinion of the Minister under section 33(2) was unreasonable or vitiated by an error of law, (b) it would be appropriate to do so, and (c) to do so is necessary for any purpose of the Act.
Subsection 33(2) stipulates that the Minister may make a proposed transfer order only if, having consulted with the Governor of the Central Bank, the Minister is of the opinion that, having regard to any adverse consequences that may arise as a result of the transfer order, in relation to the interests generally of the creditors of the transferor or, where the transferor is a subsidiary or holding company, in relation to the interests generally of the creditors of the transferor or the relevant institution concerned, making a transfer order in the terms of the proposed transfer order is necessary to secure the achievement of a purpose of the Act specified in the transfer order. Subsection 33(2A) provides that nothing in subsection 33(2) requires the Minister to consider the possible adverse consequences of the transfer order concerned on the interests of a particular creditor or class of creditors of the transferor or relevant institution, as the case may be, or to consider any submission made by a creditor on behalf of that creditor, a class of creditor or creditors generally. The Deputy may also wish to note that section 36(1) of the CIS Act provides that the relevant institution which is the subject of a transfer order, or a member of it, may apply to the High Court, within a specified period, to have a transfer order set aside. Sections 36(3) and 36(4) provide that, on an application under section 36(1), if it is satisfied that there has been non-compliance with any of the requirements of section 33 (proposed transfer orders) or that the opinion of the Minister under section 33(2) was unreasonable or vitiated by an error of law the Court will set aside the transfer order or, if the Court is satisfied that it would be appropriate to do so, having regard to any report referred to in section 34(3) [i.e., a report prepared by the Central Bank] and that to do so is necessary to achieve any purpose of the Act, make an order varying or amending that order in the manner it considers appropriate.
Part 5 of the Central Bank and Credit Institutions (Resolution) Act 2011 contains similar provisions to those outlined above.
