Agricultural Credit Bill, 1977: Committee Stage (Resumed).
Question again proposed: "That section 20 stand part of the Bill."
The point was being made that the provision whereby the Minister for the Public Service controls the operation of the pension fund or alterations in its constitution, and subsequent alterations of it, is one which seems, according to the Minister of State at the Department of the Public Service to have only been applied in one or two cases which he can recall, Nítrigin Éireann being one. I should like to know if it is the policy of the Minister for the Public Service that in all legislation a provision like this be inserted. If so, will he state if this provision was in the Shannon Free Airport Development Bill yesterday?
My main point is that if it is justified to control pension funds in the public service in the way that this Bill does, it should be done once and for all in one Bill for all pension funds in the public service. If that was done we would have uniformity. We would not have, as in the present case, State bodies which have been the subject of legislation in recent years being subject to control because the Bill afforded an opportunity for the introduction of control while other State bodies, for some reason or another, have not required legislation governing their activities and are not subject to control because no opportunity arose.
I believe the Minister of State should reconsider this issue as I understand he has responsibility in this field himself and come to a conscious decision to deal with all State bodies once and for all in relation to this issue or else abandon the exercise. We should not continue in this piecemeal fashion of dealing with one body now and one body at some other time. I should be glad if the Minister of State would respond on that point.
The answer to the first part of the Deputy's question is that it is the policy to have such provisions introduced. It is certainly the policy of the Government to control pay and pensions for all bodies. The ACC pension fund is a contributory scheme, 50 per cent contributed by the staff and 50 per cent by the company, and the company guarantee the pension fund.
Would the Minister of State respond to Deputy Bruton's question by telling us if it was included in yesterday's Bill?
That could be possible but it does not arise under this Bill. It is the intention to have the provision in each Bill when the opportunity arises. It may have been overlooked in some Bills.
Could the Minister of State answer the other point I put to him as to why this is not done comprehensively and once and for all for all State bodies rather than having a piecemeal situation where some bodies are covered and others are not?
There is a point there but that is a bigger question. The position is that where it was possible to introduce such a provision this has been done. In other cases where it has not arisen so far, the Minister for the Public Service has been in touch with the boards concerned to ensure that they keep within Government guidelines.
Does the Minister accept that some semi-State bodies can get away for four or five years?
That is not so. As I said, the Minister for the Public Service has been in touch with them.
He has no authority over them when there is not a provision in the Bill relating to that organisation. Therefore, he can make recommendations but he cannot ensure that the recommendations are implemented. It is right to say that some State bodies are controlled completely by legislation while others are not.
Will the Minister of State say what his policy is in relation to pension funds?
A general question of policy in relation to that matter will arise on the section.
If I may make a respectful submission to the Chair, we are being asked to give power to the Minister to regulate pension funds. Before giving him that power the House is entitled to know what his policy is and how he proposes to exercise that power. I submit that that is relevant. The House should have such information before a decision is taken. Therefore, I am asking the Minister of State what guidelines he is giving this year to State bodies within his control in relation to pension funds. Is there any standard rate of contribution? Is there any standard rate of benefit for different grades? Is there any recommended level of relativity between contributions and benefits within which the Minister is insisting that the State bodies stay?
The policy is to move towards uniformity in pensions. That is why this provision is necessary. This means that the board, if changing the pensions or superannuation will have to approach the Department of the Public Service. That Department is gradually moving towards a uniform pension scheme.
Uniformity at what level?
I do not understand the Deputy.
If there is to be uniformity in pensions they have to be uniform in some form. If one is trying to move the level of benefits down among some State bodies who are considered to be overgenerous and up among other State bodies considered to be undergenerous there must be some standard towards which one is moving.
Uniformity in regard to contributions and benefits.
I should like to know what level of contribution and benefit is considered to be a desirable uniform level.
The Deputy must appreciate that other State bodies are not under discussion here.
I realise that. The Minister of State has stated that he is anxious to move the ACC, in the exercise of the powers he has under this Bill, towards what he describes as a uniform level of pensions which will apply throughout the public service. This is a proposal to exercise a power under the Bill in relation to the ACC, to move it in a direction, and we are entitled to know what that direction is before we grant the power to the Minister. For that reason I have asked the Minister of State to tell the House what the uniform level of pension is. Presumably there is some body which he considers to be at the right level. He should tell the House the name of that body so that other bodies will know whether they are going to be brought down or up. For instance, does he wish to bring it to the level of contributions in the civil service? Is it that he does not want any body to be giving more to their employees than civil servants are getting? I am helping the Minister of State now.
I do not know because this is not a pensions Bill.
The Minister is taking power in relation to pensions.
I accept that but it is not a pensions Bill and the details raised by the Deputy are pertinent to a pensions Bill.
When will we get a pensions Bill? The Minister of State has said he is going to do this piecemeal and that seems to indicate that we will never get a pensions Bill.
Most of the pensions of employees of State bodies are controlled by statute or are controlled through the memorandum of association. The remainder are the subject of consultation between the Minister and the body concerned. The purpose of this is to have a uniform pensions scheme.
The Minister of State nodded when I said it was probably the case that he was seeking to move pensions of State bodies towards the level obtaining in the civil service, but a nod does not appear in the Official Report.
They are all public servants.
The Minister of State should tell the House what level is the uniform level to which the Minister is seeking to bring all State bodies?
It would not be incumbent on the Minister of State to make reference to what happens in other State bodies. Under this Bill we are dealing with one group.
I have no interest in other State bodies and I am solely concerned about what the Minister of State proposes to do with the ACC. He has said that he proposes to bring the ACC to a uniform level and I want to know what level ACC pensions are to be brought to with the exercise of the power we have been asked to grant to the Minister.
That is not an answer. The Minister of State told us that it would be a uniform level but that might not be acceptable. "Acceptable" is a valued judgment, but "uniform" is precise.
Uniform and acceptable within the context of the public service.
What level is it proposed to bring these pensions to?
I repeat that they will be uniform and acceptable in the context of the public service.
I believe it is the intention to have it at the maximum level and there is no intention of bringing anybody down. There is no danger of any cuts being made.
There are many different levels and I should like to know what the uniform one will be.
The Deputy can be sure that it will be the maximum one.
One cannot be certain about that. The Minister of State should answer my question.
The answer to the Deputy's question is that it can only be decided as part of the review of pension schemes as a whole.
In view of the unsatisfactory nature of the Minister of State's reply I cannot accept the section.
There will be no worsening of conditions.
The Minister of State will not tell us how he proposes to use this power.
I will use it to create uniformity.
Due to the failure of the Minister of State to answer our question we cannot accept the section because we do not know where we stand.
It is a matter for the Deputy whether he opposes the section or not but I want to rule that it is quite irregular to press the Minister of State for information that is not available yet.
What is the purpose of parliamentary debate if it is not to get information? If the information is not available it is the fault of the Minister. If the Ceann Comhairle was to adopt a precedent in relation to rulings here that a Minister could not be pressed for information that was not available preliminary democracy would not amount to very much.
I am not concerned whether the Minister is being pressed or not; I am concerned about the rules of debate. The Deputy cannot keep insisting on getting information that may or may not be available or is not relevant to the section.
The corporation have a superannuation scheme which, in accordance with the memorandum of association, is subject to ministerial approval. It is governed by a trust deed. For the purpose of overall supervision and co-ordination of superannuation in the public sector it is necessary to provide for ministerial control for any future change.
I am not satisfied that the Minister has answered my question but because the Ceann Comhairle does not wish me to pursue the issue I will not do so. The Minister of State has told us that it was a uniform policy to take powers of this nature governing pension funds but I should like to draw his attention to the fact that in the last Bill dealt with here, that in relation to SFADCo, control was taken over the remuneration and allowances of the chief executive of the company but there is no power similar to that sought by the Minister in section 20 of this Bill concerning pensions.
From my experience in Government I know that all Bills are circulated to all Departments so that the Bill dealing with SFADCo must have had the approval of the Department of the Public Service but yet they did not insist on the inclusion of any control on pension funds in that Bill. They have insisted upon and obtained such a control in the Bill before the House. In other words there is not, as the Minister claimed earlier, a consistent policy being applied. There is one rule for ACC employees and a different one for the employees of SFADCo. Why is this inconsistency being allowed to take place?
It is the intention. There may have been cases where it was overlooked.
If it is the intention can I have an assurance from the Minister that an amendment will be introduced into the Bill dealing with SFADCo to ensure that uniformity is applied?
We can do that. It may be that there was no necessity to have it in that legislation. I will check the matter and inform the Deputy.
Question put and declared carried.
SECTION 21.
Question proposed: "That section 21 stand part of the Bill."
I would like to have an explanation from the Minister of the import of this section.
It enables the corporation to submit sealed certificates of debts due for the purpose of legal proceedings for the recovery of loans. Such certificates are valid for one month from the date of the certificate and they are acceptable as evidence of the debt. Officials of the corporation do not have to attend the court in question. It is sufficient for the legal representative to do so.
Is this certificate only evidence in court proceedings or could it be evidence outside the court proceedings?
It is only for legal proceedings.
Why is it necessary for the evidence to be in this form? Should it not be sufficient for the corporation officials to go to the court and swear that the debt is as stated?
It saves the officials going to court.
If the officials do not have to go to court and this is accepted as evidence there is no opportunity to cross-examine anybody representing the corporation as to whether the debt exists. Is that a satisfactory situation?
That is the position. It is there since 1947.
I know it was questioned in the debate in 1947 and this issue was debated at length by the late Deputy Hughes. He felt that this was an onerous position, that all that was needed was for the corporation to say that the debt existed and that if such a certificate was issued the unfortunate individual, who was the recipient of this statement from the corporation, had to go to court and prove he did not owe the money even though the corporation did not have to go to court. They could just send on a bit of paper.
Deputy Dillon on that occasion said that if the Agricultural Credit Corporation were to issue a certificate that the Captain of the Guard, who was a Mr. Byrne at that time, owed the Agricultural Credit Corporation £1 million he would have to appear in court to prove that he did not even though the ACC did not have to appear in court. There is some doubt regarding the equity of this proceeding. I realise that as this has been law since 1947 and if there was any abuse of the power contained herein by the ACC we would have heard of it. I have not heard about any abuse and I concede that point in advance to the Minister. This is the first time the existence of those powers has been the subject of review for 30 years and I wonder if we should have a little more justification of the necessity for this apparently rather severe power?
The position is that the farmer or debtor is well aware of the proceedings long in advance of their reaching the court and this has not created any problem whatsoever. There has not been any objection to it since 1947.
In the event of a dispute between the borrower and the lender is there any provision whereby the former can ask that the ACC attend court in person?
That would be a matter for the court proceedings and the judge in question.
Can the judge order the ACC under the present provision to attend the court here?
That would be a matter for the judge.
That is not a fair answer.
I am prepared to accept that the Minister of State is not a judge. In the event of a dispute can the court order a member of the board of the ACC or a member of the staff to attend at the hearing?
That is a matter for the court.
This provision seems to be completely one-sided. I feel there should be some provision in this Bill whereby in the event of a dispute the person in question can request the attendance of a member of the staff of the ACC to iron out the dispute.
That would be a matter for the courts.
Would the Minister of State agree that in order to safeguard the person who is the recipient of this document of evidence of debt by him to the corporation, there should be some provision in the Bill as to notice to the person in question, that he would have one month's notice that he was to be hauled before the court to answer an allegation by the corporation that he owed them money? It seems to me that there is no requirement at all to give notice to the person concerned so that even if he wanted to cross-examine the ACC he would not have the opportunity of making such a submission in time.
Of course he would. This would be a last resort situation. The ACC will not be running into court every day of the week with sealed certificates.
We are dealing with what is the proper form the law should take governing the relations between the citizens and bodies such as the ACC. I have heard this argument put forward time and time again and I probably used it myself when I was sitting on the same bench as the Minister of State, that of course people will behave reasonably and of course this is the last resort. That does not stand up in law. There is no legal requirement on the ACC to behave reasonably. This section stands on its own. There is nothing in it which says that the powers contained in section 21 shall only be exercised after the ACC have done (a), (b), (c), (d) and (e). There is not even anything in the section, whether or not it is worth a lot, that the ACC shall behave reasonably in the exercise of this function. I ask the Minister to consider inserting a provision that notice must be given and also inserting a provision along the lines he has stated—he is the best man to draft this as this is his suggestion—that this power would only be exercised as a last resort.
This is a matter which, as I said, is a last resort situation. The particular individual would be well aware of the attitude of the ACC in collecting their money long in advance of any such certificate being issued and long in advance of any such certificate being produced in court. There is no question of the citizen in any way being misinformed of what is happening.
I have not the slightest doubt of either the bona fides of the Minister or the ACC in this matter at this point in time. I want to make it clear that I am not questioning that. I am questioning the unqualified power which is being given in this section to the ACC for an indefinite future period. That is a different thing. We are living in a very free and healthy society at the moment where powers of this nature can only be exercised subject to check. I want to be sure that the Bill will be so drafted that at any future time protection will exist regardless of the political complexion of the society in which the law will then be operative.
First, I would be satisfied if the Minister would give us an assurance now of his intention to introduce an amendment on Report Stage to the effect that the powers contained in section 21 will be tempered by a provision as to notice. If what the Minister has said is true, that is, that the person concerned will know already that he is liable to have this proceeding operated against him, such provision should not cause the ACC any additional trouble. Presumably they would be giving the notice anyway, but it would be an additional protection to have the provision in law. Secondly, we would welcome an assurance of the introduction of an amendment to provide that the powers will be exercised only in a last-resort situation or after other proceedings have been exhausted. The Minister may be in a better position than me to draft such an amendment. He knows the various other proceedings that the ACC can go through before reaching what he described as a last-resort situation in which the powers of section 21 would be exercised. I would ask the Minister to draft an amendment for the purpose of ensuring that these other proceedings must be gone through first and I should be grateful if he would let us know now whether he would be prepared to act on those lines.
We do not see any necessity for change in this section. The provision has been there since 1947 and has not caused any problem for anyone. All it provides is that the certificate is evidence of debt. The matter that would be discussed in the court would be a matter for proceedings in the court.
For the information of both Deputies D'Arcy and Bruton, we have checked the SFADCo Bill and found that pension control is already provided for in paragraph 5 of the Schedule to the 1959 Act.
There is a distinction here between controls as to the setting up of the existing fund and controls as to subsequent change. Can the Minister say whether the controls in the 1959 Act apply to both matters.
We cannot go back on the section.
There was control in 1959 for the setting up of a fund but that is different from saying that any subsequent change is subject to control.
The Deputy had an opportunity of discussing that on the SFADCo Bill.
I am not satisfied that the section as it stands is adequate to afford sufficient protection.
Question put and declared carried.
SECTION 22.
Question proposed: "That section 22 stand part of the Bill."
In regard to the provision that it shall be lawful for the ACC to make such alterations in their memorandum and articles of association and that such alterations shall be in a form approved by the Minister, there are a few points I wish to make. This legislation was drawn up primarily to make credit available to farmers and, in particular, to those farmers who need funds in order to develop their farms; but, as I have said here on previous occasions, the ACC have not been discharging that function as it should be discharged.
Down through the years the situation has been that many of those farmers who are facilitated with credit by the ACC are people who could very well do without such credit. But they seek this credit for their agricultural pursuits so that they might avail of any subsidised rate and also in order not to disturb their capital invested elsewhere. The type of farmer we should be helping is the one who has no resources to help him to develop his farm. It is impossible for some small or even medium-sized farmers to convince the ACC of their credit worthiness. The first obligation of the corporation as a State agency should be to farmers in this category.
The section refers to the alteration of articles of association and memorandum. The point the Deputy is raising might be raised more appropriately on the Fifth Stage.
This legislation is designed to make available money to farmers for development work but I contend that the ACC have not been discharging that function and have refused loans to farmers who in my opinion should have qualified for credit.
I am not endeavouring in any way to curtail the Deputy's statement but I wish merely to point out that a Second Reading type of speech, the type he is making now, would be more appropriate to the Fifth Stage.
In those circumstances I shall not pursue the matter. It is sufficient that I have made my point.
If the Deputy has misgivings about the ACC's operations we shall be glad to forward details of these misgivings to that body. However, I assure the Deputy that 75 per cent of the ACC loans are for amounts of less than £5,000.
I would recall the very welcome assurance given by the Minister last evening that a copy of the memorandum and articles of association of the ACC will be lodged in the Dáil library so that they can be persued by Members of the House. This gives meaning to section 22.
Can the Minister give us any information about any recent change in the memorandum and articles of association of the ACC or of any proposed change therein? It is desirable that the House have a general indication of the way in which these powers are likely to be exercised. In particular can he say if any change in the memorandum will be necessary to achieve the objectives outlined by Deputy Murphy?
So far as I know there has not been any change since the 1975 Act. This provision is merely enabling the ACC to make changes in order to cater for amendments to the legislation as provided in this Bill. Examples are the increase in share capital and in the borrowing limits.
At an earlier stage on this Bill, on section 9, we discussed the provision whereby the ACC, in addition to being a credit-giving institution, could undertake to promote, engage in or participate in the management or supervision of a scheme or project. I should like to know whether the full exercise of those powers is covered in the memorandum and articles of association. I understand it is not sufficient for the ACC to be given that sort of power in the enabling legislation. For the power to be exercised by the corporation it will need to be contained in the memorandum and articles of association.
On the points raised by Deputy Murphy, are you allowing further discussion?
Only if it can be related to the section: I could not allow a general debate on the section. If the Deputy is concerned about the general purport of the Bill in so far as it would be altered, it is possible——
I would be concerned about the question raised by Deputy Murphy.
This is rather general to the Bill as a whole. It could be just as appropriate to any section as to this one. There will be opportunities on the Fifth Stage.
I presume that we can raise this matter on the Fifth Stage. I am anxious to speak on this matter but since it is out of order at this stage I presume we can speak again.
The Deputy may speak once on the Fifth Stage on the general concept of the Bill.
No. I am now putting the question.
Question put and agreed to.
SECTION 23.
Question proposed: "That section 23 stand part of the Bill."
It is appropriate to raise at this stage the fact that section 23 does not confer any powers; it merely defines the terms that will be used in subsequent sections which will confer powers.
There is reference to a recognised bank and I understand that the powers contained in this part of the Bill are powers that can be used not just by the ACC but by other banks as well. It is almost an accident that this part is contained in this Bill at all; it would be equally appropriate in a Bill on banking. I am not qualified to discuss this matter, though perhaps the Minister of State is. I should like to know what policy is applied in deciding what is a recognised bank which will be able to avail of these powers. There are a number of credit-giving institutions which might wish to take a chattel mortgage as security for a loan given to farmers or landholders, yet these powers are granted only to recognised banks. I should like to know which banks are recognised banks.
There is reference here to recognised banks and we are agreeing in advance to the meaning of section 25.
Yes. I should like to know which are the recognised banks, who decides what banks are recognised and what criteria are used.
The Minister may appoint a bank to be a recognised lender for the purpose of enabling it to avail of the chattel mortgage provision in Part III and, equally, the Minister may withdraw such recognition.
I should like to know the criteria which the Minister applies in deciding whether a bank is recognised or not. Are all the associated banks recognised by the Central Bank automatically recognised under this Bill or is there any difference?
They must hold a licence from the Central Bank.
If they hold a licence from the Central Bank, does that confer recognition, virtually automatically, under this Bill?
It does. There are 15 recognised banks in all.
In effect, it is the Central Bank that decide and if the Central Bank are satisfied the Minister will be satisfied too.
The Minister gets advice from all sources.
He does not always accept the advice of the Central Bank.
This we know through the cost to the Irish taxpayer in relation to the Irish Trust Bank. I should like to have an assurance from the Minister of State that he will pay close heed to the advice of the Central Bank and that he will not give these very wide powers to banks which are not responsible and not recognised by the Central Bank.
These powers can be given only to a licensed bank.
I consider that this is one of the most useful sections in the Bill and I want to say a few words on the use of the section by the ACC. One could describe it as the more flexible side of the policy of the ACC. It is based on the creditworthiness of the borrower. Through the years most moneylending institutions were very security-conscious and were anxious to secure every penny given to the borrower. This has been removed and it is a welcome development.
I believe that the question of borrowing for the buying of machinery should be examined. In a great many cases lending institutions who operate hire purchase, as well as the ACC, charge abnormal interest rates. I have always believed that the creditworthy farmer should be in a position to use his machinery as chattel to borrow money. I am prepared to accept that once the machinery is paid for it can be used as chattel to borrow money. We have not yet accepted that a borrower, instead of using the HP system, should be able to buy a tractor or other machinery and use it as a chattel to buy that particular machinery.
If I buy a new tractor, the ACC will tell me that they use the HP system. This should be changed. The creditworthy borrower should use that as a chattel and borrow at lower interest rates. The HP interest rates are abnormally high, not particularly so with the ACC but certainly with some outside companies where the rates are as high as 26 per cent. They fool people by saying 10 per cent but that really means 25 per cent or 26 per cent. People think they are paying 10 per cent but it is actually 26 per cent when paid on a monthly basis. I would ask the Minister to encourage the ACC to change their present HP system for people who are creditworthy and allow them to borrow money for machinery on a chattel basis, whereby a new tractor can be put against the money at a different interest rate and not at HP terms.
I will have your views conveyed to the ACC.
Hire Purchasé is a very lucrative side of the operations of the ACC but people are becoming wise about interest rates and they are able to decide where the benefits lie. I believe that the ACC will lose money as a result. At present some of the commercial banks are using the system about which I am speaking. It would be in the ACC's interest to adopt this system.
Again, I do not mean to curtail the discussion but I would remind the Deputy once more that this is a definition section, as the Deputy knows, and the Deputy will have an opportunity of referring to the terms which occur in subsequent sections in their proper context.
I am dealing with the word "chattel". It is a question of asking the ACC to widen their powers where chattel mortgages are concerned because this is a very useful benefit particularly where small farmers are concerned.
I agree with practically everything Deputy D'Arcy has said and I would like the ACC to facilitate the small farmer in the purchase of machinery. The ACC are providing a splendid service. Rates of interest are very important.
Again, I must remind Deputies that these terms will occur in subsequent sections.
I thought it would be no harm to mention that because it is very important.
There will be opportunities to do that later.
Could the Chair indicate at what stage in the discussion the points made can relevantly be raised?
These words occur in several sections. It is not for me to enter into the terms of the debate other than to rule. The definition section is merely an interpretation section.
Every Bill has a definition section.
It seems odd that the ACC should implement this kind of policy in regard to chattel mortgages and the Minister of State should, if he can, give us an indication as to why this policy is adopted by the ACC.
I will take up these points later.
Perhaps the Minister of State would let us have some information on this on Report Stage.
What specific information does the Deputy want?
Information as to why this policy is adopted in relation to hire purchase where chattel mortgages are concerned. Repayments are on a hire purchase basis.
It is a question of not being allowed to buy a new tractor on a chattel mortgage basis. As Deputy Callanan said, the ACC are reasonably fair but the majority of lending agencies attached to the commercial banks are very unfair because they charge exorbitant rates of interest ranging from 30 per cent down to about 15 per cent. In this area there is room for development in the ACC if that body adopt the right policy.
Question put and agreed to.
Section 24 agreed to.
SECTION 25.
Question proposed: "That section 25 stand part of the Bill."
There is nothing in this section which says that a recognised bank must be a licensed bank. The Minister of State said earlier that only licensed banks could be recognised but, in theory, it looks as if the Minister could recognise any bank he likes and give it these extensive powers.
Subsection (3) says:
The Minister may withdraw the recognition of a bank as a recognised bank and he shall thereupon give to the Minister for Justice notice of the withdrawal.
Is there any obligation on the Minister to notify a bank as to why he is withdrawing recognition?
I am sure the bank would be well aware of the reasons.
Possibly, but surely there should be an obligation on the Minister to make the reasons known.
Every bank currently recognised will continue to be recognised.
That is not an answer. There is no obligation on the Minister and overnight he could inform a bank it will no longer be recognised and there is no obligation on him to say why.
There is no provision because I presume there is no necessity for it.
I can see a necessity for it.
Would the Minister of State not agree that this seems to be a rather extreme power to put in the hands of a Minister? It is exercised at the Minister's total discretion. Would the Minister of State not agree that a statement of the reasons should be supplied and that statement lodged in the Library if the power is being exercised by virtue of an agreement on the part of the Houses of the Oireachtas?
Coming back to the point about licensed banks, there is nothing here which says they must be recognised. The Minister could, if he so wished, recognise at his own total discretion some back street moneylender and give him all these powers. There should be protection against the arbitrary exercise of this sort of power. I do not suggest the Minister would act in other than a responsible way. That is not the issue. The issue is whether the law is properly drafted to meet every possible contingency and every possible policy that might be adopted by every possible occupant of this Ministry. I would ask the Minister to give an indication that he is prepared to confine this recognition to licensed banks because that will ensure that the Central Bank will be involved and that recognition will be granted only if the Central Bank okays, so to speak, the bank. That would rule out back street moneylenders, and where the Minister withdraws the certificate of recognition he must supply to the bank and to the Library of the Houses of the Oireachtas a statement of the reasons for that withdrawal.
The Attorney General in 1975 ruled that no organisation may engage in banking unless it is a licensed bank under the Central Bank Act, 1977. The Attorney General also stated that the taking of chattel mortgages is banking, therefore it would only be through licensed banks.
I do not wish to dispute the wisdom of the then Attorney General who is now a distinguished member of the Bench, but he was only the Attorney General and his ruling is just the opinion of a lawyer; it is not statute law and it is not binding. We are concerned not with interpreting the law or giving an opinion on the law, but with making law, which is quite different and more important. The Attorney General's interpretation is not necessarily sufficient. I have not seen the ruling in question so I cannot comment on whether it is well founded or not, but knowing the person in question, I would imagine it is. That does not meet the case I have made for some protection against the arbitrary use of these powers in the Bill.
The section is quite clear. It states that the Minister for Finance may appoint a bank to be a recognised bank. I have outlined what banks there are and what banking is. I see no reason to change the section.
How are the subsidiaries of such a bank dealt with under the Bill. Are they under scrutiny? Are they entitled to operate as a subsidiary of the bank apart from the fact that the bank has the licence to carry out a chattel mortgage? Can they work as a subsidiary on their own using the licence of the mother bank so to speak?
Not unless they themselves are licensed.
We know perfectly well that the majority of the commercial banks have subsidiaries which are operating hire purchase. Are they licensed on an individual basis or are they using the licence of their bank?
They are completely different units. They are separate business enterprises.
I would like clarification on that.
In so far as they are not banks, recognition does not arise under this section.
They are subsidiaries of the banks who have already got the licence. I would like to know if they are operating under the licence of their bank or under individual licences?
The Deputy is talking about hire-purchase companies which are not banks.
They are subsidiaries of the banks.
The Minister would not be responsible for that.
A section here can be used by the subsidiaries of the banks. The banks may be the recipients of the conditions but they would apply to their subsidiaries who as a result may not be under scrutiny at all.
I am not sure of the relevance of the question of subsidiaries of banks.
I think section 1 is relevant here.
If such bodies were to engage in banking, those hire-purchase subsidiaries would have to become licensed as banks.
Although he has not satisfied me, the Minister has satisfied himself that there is adequate protection against banks which are not licensed banks becoming recognised under this Bill. We can argue that again at a later stage. The Minister has not met the case made by my colleague, Deputy O'Brien in relation to a statement of the reasons for the withdrawal of recognition being supplied to the bank and to the Library of the Houses of the Oireachtas. I would be grateful if the Minister would say what objection he could have to such a reasonable suggestion.
I have no objection, but we do not think it is necessary.
Mr. O'Brien
I do not suggest that the present Minister would do something like what I have referred to. Nevertheless we must take into consideration that the present Minister will not be there forever. We will have new Ministers, and some Minister could have a personal grievance against a bank. In fairness to the banks, for their protection and for the protection of the people, there is nothing wrong with having included "that the Minister after reasonable explanation on notification to the Houses of the Oireachtas".
There may not be, but we do not think it is necessary.
We just cannot assume that arbitrary powers of this nature will be exercised in a reasonable fashion. We must assume the opposite. We must assume at all times that powers given to Ministers under statute will be exercised in an unreasonable and unfair fashion. If we do not have that assumption as the basis for approaching legislation we will not build in the proper protection. There is not adequate protection here against the arbitrary exercise of this power by some Minister in the future. When the Minister says, it is not necessary, I presume that is a reference to its not being necessary under the present Minister, because the present Minister is a reasonable man. That is not an answer to the point I am making. We are enacting legislation which will last. If one reads back through history over the last 30 or 40 years we can recognise how countries became totalitarian under the apparently legal forms, by legislation that was enacted. Powers were given but they were used for different purposes than originally intended so as to create a totalitarian situation. Germany is a very good example. We must be very careful to impose a proper check on such legislation. The Minister could paralyse the banking system, by withdrawing recognition from all banks and could prevent them from operating in the normal way without reason. If the Minister wants to paralyse the banking system he has extensive powers to do so. Such powers should be checked. I submit that the Minister should consider my amendment carefully between now and Report Stage.
It is not necessary, because the banks can always contest the Minister's decision and the courts are available for all.
There is a possibility that the Minister might adopt the attiture adopted by the Taoiseach yesterday in relation to a matter of this nature by saying that the Government must be satisfied, that if the Government are not satisfied that a certain thing is being done right, they do not have to explain why they are not satisfied, they just decide. That is too fresh in our memories for us to accept that.
The courts are there for all.
Question put and agreed to.
SECTION 26.
I move amendment No. 5:
In page 16, line 37, after "Oireachtas" to add "and any fees received pursuant to this section shall be paid into or disposed of for the benefit of the Exchequer in such manner as the Minister may direct".
This is a standard provision to cover the assignment of fees to the Exchequer and in the present instance the Minister for Justice with the consent of the Minister for Finance fixes fees for the registration and inspection of chattel mortgages.
Could the Minister give the reasons for this amendment?
It is just to confirm the procedure already applying to the fees received.
What funds is the Minister talking about?
Stamp duty on chattel mortgages and so on.
Is that all that is involved by stamp duty on chattel mortgages?
I would like to be sure of that.
The Minister as well as sanctioning the expenses involved must sanction any fees being charged by the courts to enable these chattel mortgages to be registered. That is a desirable provision. It is a good thing that there is some central control on a matter of this nature. I would like to inquire——
On the amendment, yes. What are the fees at the moment?
They were fixed in 1928 at 1s., now 5p.
In respect of this sort of issue——
Sorry Deputy, this sort of thing should be dealt with on the section rather than on the amendment.
No, the Minister is now taking powers——
It is all in the section. If the amendment is agreed we will let Deputy Bruton in on this.
Amendment agreed to.
Question proposed: "That section 26, as amended, stand part of the Bill."
I will deal with the point I was going to make on the amendment first. The fact that the fees concerned were set in 1928 illuminates something that is common throughout the public service, that fines and fees are never revised until perhaps very much later than they should have been to take account of inflation. The result is that for people who are obtaining services from the Exchequer or who are committing offences against the law of the land the penalties they pay are not increasing as fast as the level of taxation, although these people are receiving services or committing offences and therefore are morally liable to have the costs imposed on them increased.
There is a strong case for the Minister to introduce a fines and fees Bill which would bring together the fines and fees under all legislation, and such a fines and fees Bill should be introduced in the House every two or three years to make sure that fines and fees in general throughout the public service are appropriate to the level of inflation or deterioration of money values in the intervening period. If such were done revenue could be obtained over a wide range of Government activity and thus the burden on the ordinary taxpayer who has to pay the cost of these offices would be reduced. The ordinary taxpayer who has no interest in the register of chattel mortgages is now paying a much larger proportion of the total cost of that office than he was in 1928 when the fees were originally set. In other words, we have had a drift in policy whereby that office from being originally more or less a consumer service which was paid for by the consumer has gradually become a public service paid for by the taxpayer who will be gaining nothing from it. This is an example of a shift in the burden of taxation which is occurring solely because fine and fee values are not being adjusted to take account of inflation. We have this creeping change in the burden of taxation over time and it should not be allowed to take place. I was urging this when I was in Government. I urge the Minister that, as we have a Finance Bill which changes taxation every year, there should be a fines and fees Bill which changes fines and fees throughout the public service on a regular basis so that it would not be necessary to wait until, for instance, there is a Bill dealing with the courts of law to change the fees in this case. There should be an ongoing process of fee change and fine change also, because maximum fines in many cases of offences are still the same as they were set in the 19th century. I would be glad of the Minister's comment on this. I am aware that he cannot give me an answer immediately.
In answer to the very valid points the Deputy has raised, and I hope they are noted, I did say that the fees were fixed in 1928 at 1s. They range from 1s. to 5s.
Could I ask the Minister for State to elucidate the point? I am glad to have this information. Is it necessary to have a change in the law to change the fees or can they be changed by order?
In that event there is no excuse for them not having been altered. The Minister for Justice is responsible and I would like the Minister for State to draw his attention to the matter. In fact, the Minister for Justice should be proposing this and not a member of the Opposition.
I will convey the Deputy's views to the Minister for Justice.
After all, he is going to get the revenue and not we. I would like to refer to section 26 (6) whereby:
(6) The contents of any register of chattel mortgages shall not be published or disclosed nor shall any copies thereof or any part thereof be issued to any person except that——
There are two cases here in which I query the permission being granted to inspect the register of chattel mortgages.
(a) a recognised lender may at any time by requisition under the hand of the solicitor or law agent of such recognised lender require the county registrar to inspect the register and to provide the recognised lender with certified copies of any entries therein relating to the stock of any person named in the requisition;
We have 15 recognised lenders according to the Minister. Any one of those could under this provision require the county registrar to have provided to the bank the full details of the chattel mortgages of any person in the State even though the bank had no dealings with that person or there was no proposal that they would have dealings with that person. For instance, a bank who wanted to build up a file on everybody in the state so that the bank would know exactly the credit-worthiness of everybody in the state regardless of whether they had any direct personal concern with the credit-worthiness of that person, could go through the electoral register and send a notice to the county registrar saying, "We want to know the situation of every one of the people on the attached list". They could send to the county registrar the electoral registers for all constituencies and the county registrar would be obliged to supply them with certified copies of all entries relating to everybody in a constituency. That is not appropriate, because the credit-worthiness of a person and whether any property such person may have is subject to chattel mortgage are matters of great privacy. We have a tradition in this country of not disclosing matters of this kind to one's neighbour or to other people. This power is a dangerous one and as I have said, we should be suspicious at all times in passing legislation of this sort and we should be suspicious of the Minister.
I would be a great deal more suspicious of a wide variety of banks exercising powers of this sort because we do not have direct control over them. They are not acting on behalf of the Minister and their activities cannot be questioned by the Oireachtas whereas the Minister's can. Yet we could have a recognised bank looking for an abstract of the entire register regardless of whether they had any interest in the people concerned.
Under paragraph (c) the Ministers for Finance and Agriculture may obtain information in regard to the entire register. We are aware that the Revenue Commissioners will be ininterested in the situation of farmers from the point of view of tax, and the Revenue Commissioners are subject to the Minister for Finance. Is it not possible under this provision for the Minister for Finance to authorise one of the Revenue Commissioners to go along to inspect the register in relation to a number of farmers and that people would know immediately the credit position of farmers? I do not sympathise with farmers who try to evade tax but I insist that we should know whether this power can be exercised in the way I have suggested.
Another question arises on subsection (8) under which the Minister for Justice may make regulations in regard to maintaining the secrecy of the register. I suppose we have there an assurance that the Minister for Justice can prevent the possible abuses I have mentioned but, not knowing what is contained in these regulations, we have not got that assurance. Therefore I should like the Minister to tell us about regulations the Minister for Justice has made in this matter. It is no use laying such regulations before the House. They should be subject to debate in the House and the normal 21-day sitting rule should not apply. I suggest there should be an amendment to subject the matters contained in subsection (8) (h) to the assent of both Houses of the Oireachtas.
On subsection (6) (a) and (c) in relation to access to the register, we must agree there is some protection there. If banks were not given this freedom they would not be in a position to discover if properties concerned in loan applications were already mortgaged. There must be some provision so that banks can know whether properties in respect of which loans are being sought have been already mortgaged. The EEC are proposing more open registers on a national scale. The powers here are no greater than those given under Revenue Commissioner statutes.
I accept the Minister's point that if there is a loan application the banks must know the credit situation. However, I fear that under these provisions banks could make inquiries about people regardless of whether they had loan applications and they could accumulate a large dossier on people in a certain area. That would be an abuse of this power and it is possible under the law as it stands. Therefore I suggest there is a good case for an amendment to limit the powers in this respect to inquiring into the operation of a particular borrower only.
I do not think that would cover it because it could be claimed everybody is a potential borrower.
Banks should not be allowed to use this provision to enable them to inspect the register and to get information on every person in the State. I suggest it should be possible to draft an amendment limiting the power to cases where there have been applications for credit. I suggest that the power should be restricted to instances where the bank could produce the loan application in the applicant's handwriting. Such an amendment would not interfere with the operations of the banks who could say that the applicant must give a written request that he has looked for credit. The Minister did not deal with my point about the regulations which have been made by the Minister for Justice.
I have not got them but they are available.
Can the Minister give us an outline of the type of regulations that have been made—what they cover? Do they cover the type of abuse I have referred to and would they prevent such abuses?
I have not got them but I will consider the point made about laying them before the House. I am sure the regulations are available but, before we agree to the section, we should have some general indication as to whether the regulations meet the point I have made.
Before Deputy D'Arcy comes into the debate, I want to point out that there was only one amendment on this section and it has been agreed to. Amendments can be taken on Report Stage if they are raised.
This is a very natural request. When you read the section and study it, you see the powers given to any money-lending institution. They can request the registrar to give information without giving reasons. Deputy Bruton is making a very reasonable request if it is not already covered by the Department of Justice. Any moneylender can ask the registrar to give him a list of a number of persons in his area about whom he wishes to get information on chattel mortgages. He can build up this dossier for himself. There should be some restrictions whereby he would have to give some reasons as to why he is asking for such information. This is very important. The section should not be agreed to until we have such assurances. I would not be prepared to agree to it until we have an assurance that it is covered by the Minister for Justice.
I am not sure whether it is covered by regulations in the Department of Justice. We will have the matter examined and let the Deputies know. I want to repeat that, in all fairness, lenders are entitled to protection as well.
Fair enough, but so are borrowers entitled to protection. Any borrower who is exposed to such circumstances whereby any licensing bank can get such information without giving reasons is in danger.
Without wishing to be hard on the Minister, he should have this information. He should be able to tell us whether protection of this nature exists. This is a very important point. If it is covered by the regulations made by the Minister for Justice, we are satisfied. The Minister has not been able to tell us that it is. He has not given us any indication that he would be prepared to introduce an amendment at a later stage to cover this matter if it is not covered by the regulations of the Minister for Justice. The House is entitled to an assurance from the Minister, or to the information. We have got neither yet. I am looking now at section 26 (10) which refers to regulations made under section 24 of the Agricultural Credit Act, 1947, which will remain in force when this Bill is enacted. I should like to know what regulations are covered under section 24 of that Act.
Could I suggest to the Deputy that he might put down an amendment on Report Stage and the Minister of State would have this information for him then? The matter can be considered by amendment on Report Stage.
I know that, but we are entitled to this information before we agree to the section as it stands.
Section 24 (1) of the 1947 Act provides that a register of chattel mortgages shall be set up in every circuit court office and shall be there kept and maintained in accordance with this section and the regulations made thereunder. It is quite a long section.
This is more or less section 26 again.
I want to know what is covered in the regulations made under section 24.
The regulations made by the Department of Justice.
Are these the regulations made by the Department of Justice and referred to in subsection (10)?
It is the same thing again.
The regulations referred to in subsection (10) as having been made under section 24 of the Agricultural Credit Act 1947 are the same regulations that we are referring to in subsection (8)?
That was not clear. The Minister still has not been able to tell me what the regulations are.
I have not got them with me. I have told the Deputy that three times. I will get them for him.
Is section 26, as amended, agreed to?
Question put and declared carried.
SECTION 27.
Question proposed: "That section 27 stand part of the Bill".
Perhaps the Minister would give us some indication of the main purposes of the section.
It sets out the various obligations and restrictions relating to the movement or sale of stock which are imposed on a mortgagor while any money secured by the mortgagor remains due and the penalties for breaches of the mortgage conditions. The maximum penalty for such breaches has been increased to £500 as compared with £100 at present.
This is known as a specific chattel mortgage. We have a floating chattel mortgage and a specific chattel mortgage. This provision applies only to a specific chattel mortgage. Would the Minister inform me what it is and when it is used?
It is already covered in the definition.
It is not properly covered in the definition. What type of borrower is the Minister using the specific chattel mortgage on?
In practice as distinct from in the definition.
Anybody who has a proposal, I presume.
Any borrower can look for a specific chattel mortgage.
I do not think the Minister's information is accurate. This is a specific chattel mortgage so it is for a specific borrower. Section 27 (1) provides that "a specific chattel mortgage shall... " This is not for any borrower.
The word "specific" relates only to the specific chattel mortgage, not the specific type of borrower. Any kind of borrower will qualify.
When do you apply a specific chattel?
There is a floating chattel mortgage and a specific chattel mortgage.
We are dealing with a specific chattel mortgage only here.
When do you apply a specific chattel mortgage? It is absolutely different from a floating chattel mortgage. I should like to know when a specific chattel mortgage is applied.
On the date the specific chattel mortgage is——
A specific chattel mortgage applies to specified chattels and a mortgage is given for that list of specified chattels.
That is the kind of loan issued.
But why specified? There is a floating chattel mortgage in operation at the moment.
If you want to get this kind of loan on something you have to specify what you are going to get the loan on.
I am afraid I have to differ with the Minister. This is a special section for special borrowers. There are certain provisions in it with which I cannot agree.
It covers every single type of borrower.
Does this section cover every chattel mortgage in the ACC?
Every specific chattel mortgage.
Does it cover every specific chattel mortgage?
Is the Minister right in saying that?
Every specific chattel mortgage.
I am not quite certain that the Minister is right. There are certain provisions here with which I do not agree.
It would be better if the Deputy made his case and then the Minister may wish to reply to the points raised rather than having a continuous question and answer session. The Deputy is entitled to deal with any point relevant to section 27.
Section 27 (3) states:
If the mortgagor under a specific chattel mortgage—
(a) sells or otherwise transfers the ownership or possession of stock which is the subject of the mortgage without having given to the mortgagee at least 7 days' previous notice in writing of his intention to effect the sale or transfer, or
(b) having sold or transferred the stock or any part thereof, does not within 7 days after the sale or transfer pay to the mortgagee all sums secured by the chattel mortgage or such lesser sum as the mortgagee may in writing agree to accept,
As far as I am concerned, this provision is backward thinking. There will be a certain amount of interference by the ACC in the running of farms. If there is a chattel mortgage on 30 or 40 cattle a farmer will be required to get authority from the ACC to sell seven or ten cattle. That does not make sense. Am I in order in raising this matter now?
The Deputy may raise any question that is relevant to section 27.
Subsection (3) also states:
... the mortgagor shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £500....
I do not believe that the regulation is being carried out at the moment. I think the Minister is wrong when he states that this applies to all chattel mortgages.
I said to all specific chattel mortgages. I repeated that three times.
I do not like to contradict the Minister but he said it applies to all chattel mortgages.
On several occasions I said it applies to all specific chattel mortgages.
What is a specific chattel mortgage and to whom does it apply? What is the difference between a floating chattel mortgage and a specific chattel mortgage?
Perhaps the Deputy would make his points and I shall bring in the Minister when he has finished.
It would clarify matters for me if I could see the difference between a floating chattel mortgage and a specific chattel mortgage and if I could be told to whom a specific chattel mortgage applies. I should like to know the need for this.
It is to make it easier for the borrower.
Perhaps the Minister would elaborate?
It is there quite clearly in every section. However, in reply to the Deputy's query regarding the difference between a floating and specific chattel mortgage, a specific chattel mortgage is for specific stock or machinery. A floating charge is one that is taken on the stock from time to time on the land. A farmer could buy in cattle and have a floating charge on them. He could sell some of them and buy more and the floating charge transfers to the new cattle
I wish to inquire about the conditions laid down in subsection (1). I take it that they are enforceable in civil law between the borrower and the lender whereas if the conditions laid down in subsection (2) are breached they are criminal offences. It is only in respect of matters contained in subsection (2) that a fine would arise. While accepting that subsection (1) (b) is a matter to be interpreted at civil law between two parties who would be more or less equal with no question of prosecution, I am wondering if the concept of fair and reasonable value as to the price at which goods must be sold is easily defined. Are the courts able to satisfy themselves relatively easily as to what is fair and reasonable value?
That is a matter for the courts. There is plenty of scope here.
Deputy D'Arcy raised a question regarding a specific chattel mortgage and a floating chattel mortgage. I think this is an advantage to the borrower. Am I correct in assuming that if I want to borrow for a specific item I get a mortgage on that item alone? If I buy machinery and have a mortgage on that, my interpretation is that I have a specific mortgage on that item and it does not affect the rest of the farm.
The Deputy is correct in his interpretation.
A floating mortgage is an entirely different matter. A specific mortgage is for a specific item, whether stock or machinery, and a mortgage is taken on that only. That is very important from the point of view of farmers. I can see the point of the ACC having a check on a specific matter such as that to make sure that the person concerned does not dispose of what is mortgaged. This does not affect the rest of the farm. I should like the Minister to let me know if I am correct in my interpretation.
Question put and agreed to.
SECTION 28.
Question proposed: "That section 28 stand part of the Bill."
I should like some information regarding the type of regulations the Minister for Justice has been making as to the prescribed form contained in subsection (1) (b). Subsection (4) states:
The Minister for Justice may make regulations in relation to any matter referred to in this section as prescribed and "prescribed" in this section means prescribed by such regulations.
Where there is a specific chattel mortgage subsection, (1) (b) states:
... the mortgagee may serve on the sheriff (or, if there is not a sheriff, the county registrar) of the county or county borough in which any of the stock comprised in the chattel mortgage is situate an order in the prescribed form requiring him to proceed in accordance with this sub-section....
I am wondering what kind of form is required. I realise this is very specific information and it may not be easily available to the Minister.
I will give the Deputy a copy of the Act afterwards.
Another point was raised here when this Bill was discussed before—the sale of goods which have been seized. I think it is relevant to this section. It was suggested that the sale should always be by auction to ensure that the full value was obtained. However, there is provision whereby, if the auction is not successful, they may sell privately. I suppose there is a slight danger they could be sold for under their real value in that situation.
In those cases they are all sold to discharge the debts and other expenses incurred.
It is a question of whether or not the county sheriff knows sufficiently well how to sell them to get their maximum value. Not being a businessman he might not sell them on the best market, for example, on as good a market as a farmer would sell them. We all appreciate that county sheriffs, for their sins, are lawyers. They might not know the cattle market as well as others and might not know as well how to sell them or get the best value for them.
In the majority of cases the threat of seizure might be sufficient.
I know that but we are talking about a situation in which seizures take place. In those circumstances obviously it is desirable that the best value be obtained so that the maximum amount of the debt can be discharged from the sale of the goods, from everybody's point of view.
I have no amendment to make. I would merely ask the Minister to ensure that, in so far as he can, wisdom will prevail, that good market knowledge prevails on the part of sheriffs selling goods to ensure that the best value is obtained.
I am quite happy that the people concerned would be in touch with the ACC, they being the relevant authority, to ensure maximum return.
Question put and agreed to.
SECTION 29.
Question proposed: "That section 29 stand part of the Bill."
There is an interesting provision here saying that so long as any money remains owing for principal or interest or costs on the security of a chattel mortgage, the mortgagee may between the hours of sunrise and sunset on any day on which a civil process may be served.... In other words a civil process must be served between sunrise and sunset. I knew of a person some years ago who used to arrive home and, seeing the process server at his door, would look at his watch—he always used to carry around with him, because he was that sort of man, a little form which told him the official time of sunrise and sunset— wait at the corner of the street until ten seconds after official sunset, then march in and the process server had to go home; there was nothing he could do. That man continued on that merry way for the duration of his life. He was able to do quite well, moved house a few times and was never really caught.
I wonder what is the justification for stipulating between the hours of sunrise and sunset. I suppose it is because one does not want people being disturbed in the middle of the night. But the situation I have described is not a desirable one and should not be allowed to happen, that people should be able to evade their proper obligations in that way.
Again I have no remedy to suggest. I wonder would the Minister consider the matter and see if something could be done. I realise that primarily it is not a matter for him. It is concerned with the whole question of debt collection which applies not merely to chattel mortgages but to all forms of civil process. It is an area of law which might be examined. Perhaps— and I say this very tentatively because there may be consequences—it should be referred to the Law Reform Commission to examine whether the debt collection procedures are fair to borrowers. There is the danger that some people quite unscrupulously can get away with a great deal in this field. Of course, the result of their activities is that their interest rates, expenses and so on are much higher on legitimate borrowers who do not force lenders to go to all the lengths necessary in order to comply with the terms of the law. I should not like to see any change made in the law which would be detrimental to genuine borrowers having difficulty. Perhaps a body such as the Law Reform Commission or the Committee on Court Practice and Procedures might examine this to see whether such matters as the hours of sunrise and sunset and other matters of law could be scrutinised to ensure that they are in line with modern practice.
I note the Deputy's points. The hours between sunrise and sunset are recognised as civilised hours for dealing with these kind of things.
Question put and agreed to.
SECTION 30.
Question proposed: "That section 30 stand part of the Bill."
Perhaps the Minister could give us some indication of the purpose of this section.
This section deals with the effect of the floating chattel mortgage. While money remains due on the security of such mortgage it creates a floating charge in the mortgagor's stock for the time being on the land to which the mortgage relates. It imposes an obligation on the mortgagor to keep his stock at a level equivalent to the value of the stock at the date of the mortgage. As I said earlier, he can sell some of that stock and replace them provided he keeps the level up to the floating charge amount.
Question put and agreed to.
SECTION 31.
Question proposed: "That section 31 stand part of the Bill."
Could the Minister explain this section. Is it a question of changing over floating chattel mortgages to specific ones?
Yes, specific to floating.
Could the Minister elaborate somewhat on that.
This section contains a provision whereby a mortgagor can have a floating chattel mortgage converted into a specific chattel mortgage. If the mortgagor defaults in payment or is in breach of other conditions of the mortgage the mortgagee must take an inventory of the stock on the land, serve notice in writing on the mortgagor declaring that the chattel mortgage has become fixed and within seven days send a copy of the notice and the inventory to the circuit court office or offices where the mortgage is registered. The floating mortgage becomes fixed from the date of service of the notice. All the provisions relating to specific mortgages then apply to it. The Deputy was correct in inferring that it was conversion from floating to specific chattel mortgages.
Question put and agreed to.
SECTION 32.
Question proposed: "That section 32 stand part of the Bill."
This section reads:
A chattel mortgage shall not prevent or restrict the lawful seizure of any stock comprised therein or affected thereby by a duly authorised officer distraining or levying under the Income Tax Acts or a rate collector distraining for rates or a landlord distraining for rent.
Am I correct in interpreting this to mean that this gives landlords suing for rent, rate collectors, or income tax people priority over the proceeds as well as the ability to initiate the proceedings? For instance, if a machine is sold for £1,000 and £1,100 is due in income tax does that mean that the whole £1,100 of income tax must first be paid to the Revenue Commissioners before the rights of the ACC or the recognised bank can be considered? Of course, if that is the case, they will get nothing.
It is only in relation to a seizure process that they can take precedence over a chattel mortgage.
What happens to the proceeds of the seizure?
That is a different question.
If there is a seizure the items will be sold and there will be proceeds. Therefore, it is relevant to inquire what will be done with the proceeds and who will have priority in relation to the proceeds.
The idea is to give priority to whoever seizes first.
There is a provision to give priority to the rates and to the income tax.
That is correct, and the rate collectors.
Therefore the ACC will have no right in such a situation.
Is the Minister happy with that situation?
They are happy and we are happy.
The ACC are happy. Is the Minister happy?
Why is the Minister happy with that situation?
It is normal for the Revenue Commissioners and the rate collector to take precedence over other mortgages.
Suppose the recognised bank moves first and they have brought it to the stage where the goods are being seized, at that stage can the Revenue Commissioners demand income tax first?
No. They are there first and that is that. This gives precedence to those who get there first.
Is this notion of first come first served not slightly dangerous in that it gives people an incentive to move fast to get their goods? Would it not be appropriate to establish a clear statement of priority so that seizures will be initiated in a regular fashion?
I understand that only certain people can seize without bringing the case to court. Can rates and income tax be seized without going to court?
It is clear that if these people seize first they can sell and take the proceeds. Any other debtor, such as a bank, would have to go to court, but income tax and rates can be seized without a court order. Am I correct in thinking that only those two debtors can make a seizure before the ACC?
That is why I am asking the Minister to give me a priority in relation to the proceeds.
We dealt with that matter in an earlier section. The ACC can serve an order on the sheriff without going to court.
I gave an example of machinery worth £1,000 and the ACC going to court, and said it appeared that whoever moved first would get the lot. I wonder whether there should be some priority set or some process whereby the proceeds are shared as in a case of bankruptcy.
I presume that that would be the end result. The position here is that a chattel mortgage does not prevent the Revenue Commissioners and the rate collector from getting what they are owed.
It leaves the matter open.
What else would they get?
Suppose the stock is sold and realises more than they are owed, what becomes of the balance of the proceeds?
The previous owner of the stock gets it.
Question put and agreed to.
Sections 33 and 34, agreed to. to.
SECTION 35.
Question proposed: "That section 35 stand part of the Bill."
This section creates an offence for failure to disclose. I take it that it would be for the bank to report a failure to disclose to somebody who would presumably prosecute. There is not a clear statement of the body or bodies responsible for initiating a prosecution. Can the bank initiate a private criminal prosecution? If not, there should be a provision whereby it would be reported to the Minister for Finance who would prosecute on their behalf.
They would have to go to court.
Who would go to court and would it be a private prosecution such as a person prosecuting his neighbour for breach of any law? It is unusual for the law to provide for private prosecutions, particularly in view of the ambiguity in relation to some cases in that the case may be taken over by the Attorney General or the Director of Public Prosecutions at a certain stage and from that stage on the expenses are met by the State rather than the prosecuting party. Given that this section creates a criminal offence, there does not seem to be an enforcing authority to ensure that the law is abided by.
It is a point that needs to be clarified. We will examine the matter and give a reply on Report Stage.
Question put and agreed to.
SECTION 36.
I move amendment No. 6:
In page 22, line 52, before "Acts" to insert "(Ireland)".
Amendment agreed to.
Question proposed: "That section 36, as amended, stand part of the Bill."
I should like an explanation of the need for this section. This section stands on its own. It has nothing to do with chattel mortgages or anything else in the Bill. It is generally concerned with prohibiting bills of sale of stock, regardless of whether the owner of the stock is in any sense concerned with agricultural credit or has any interest in the ACC. How did this sort of provision, a general provision of law rather than one in relation to agricultural credit, get into the Bill? I should like to know the considerations of public policy behind this. Why is it considered desirable to prohibit bills of sale of stock outright?
By and large chattel mortgages have replaced bills of sale since the initiation of the 1927 Act. It is just a question of repeating it here.
Why is it necessary to do away with bills of sale? It might be desirable for some party, instead of giving a chattel mortgage, to give a bill of sale instead. I presume there was a good reason and I would be obliged if the Minister would tell the House.
They felt a chattel mortgage scheme was a better one.
I am sure they did but in what respects?
I am sure after going through chattel mortgages for the last hour or more that the Deputy can see that many aspects of it are much better than a normal bill of sale.
Unless I had the Act dealing with bills of sale before me I would not be in a position to tell the Minister which is the better from any point of view.
It is felt it worked better since 1927.
I had hoped that the Minister would clarify this matter.
The reason for the section is that we would not have two types of systems running concurrently.
Question put and agreed to.
Section 37 agreed to.
SECTION 38.
Question proposed: "That section 38 stand part of the Bill."
Would the Minister explain this section?
It merely provides that charges on land given before the commencement of this Act will continue to have effect.
Question put and agreed to.
SECTION 39.
Question proposed: "That section 39 stand part of the Bill."
Where are these charges registered? Are they registered at the Registry of Deeds or the Land Registry?
The Land Registry for registered land.
And unregistered land at the Registry of Deeds?
I understand that since the Act dealing with the registration of title was passed there was a desire on the part of successive Governments to have the maximum amount of land in the country registered at the Land Registry and not the Registry of Deeds. Rather than having deeds, which could be anywhere, conferring title of land I believe it was the desire to have one place where all charges affecting land and all information relating to title would be contained. Can the Minister give any indication as to the progress of registration of title in this fashion? What proportion of the land of the country has been registered?
That hardly arises on this Bill. Another Minister is involved with that matter. The Deputy could obtain that information if he tabled a question.
If the Minister cannot give me the information I will not press the matter and I agree there is another Minister involved.
I should like to raise a matter in connection with the question of priority of charges in favour of the corporation. This provision in relation to priority charges on deeds can be selfishly administered. It does not apply to the corporation alone; it applies to banks also.
This part of the Bill deals with the ACC only.
Where a priority charge is taken on land and where the amount charged could be four times the amount of the value of the land is any consideration given to the fact that a figure should be put on the amount of the charge to allow other charges to be put there later?
Is the Deputy talking about the limit of the priority?
It was £10,000 and it is now proposed to increase it to £25,000.
That may not make provision for every case.
That is the limit they can go to. If they are caught for £75,000 they only have a priority for £25,000.
Is the Minister satisfied that that covers all cases?
Naturally, it would not cover all cases. I am sure there are more substantial borrowers from the ACC than that limit.
That is correct. This should be looked at. This section can give a lot of trouble particularly in relation to the buying of land. The ACC were selfish in certain cases where they had a priority charge. They will not allow a borrower to have a second charge taken out in the banks and at the same time they will not give some people sufficient money for their needs. It is wrong to make a law that prevents a borrower having a second charge other than by agreement with the ACC.
I am not sure of the point the Deputy is making.
The borrower should have rights as far as the priority charge is concerned. It seems that the rights are all with the lender. When he gives a priority charge he is then in control of the man's security.
The borrower has nothing to do with this. It is a priority limit for claim by the ACC.
I am making the point that the limit is not sufficient. There is no bother in farmers having borrowings of up to £200,000.
We are satisfied that the change being made is sufficient.
(Cavan-Monaghan): This is a very far reaching section. Subsection (1) states:
(1) Where a charge in favour of the Corporation for the repayment of a loan is registered as a burden affecting registered land, then, subject to subsections (2) and (3), the charge (including interest and the costs and expenses of all legal proceedings instituted by the Corporation for the purpose of realising the amount at any time owing on foot of the charge) shall as against the land be in priority to and shall override any equitable claim against the land.
It seems that people who might not have notice of this registered charge and who would have equitable claims against the land if equities had not been discharged or if there was an equitable deposit of deeds someplace might have this equitable claim wiped out. To be fair to the Minister, we are dealing with a highly technical area. When one speaks about equitable deposits and claims one is getting into a very technical area; but at the same time if this is doing what I, a general practitioner, think it is, it is going very far. It seems to me to be discharging equities the handy way or discharging equities without, in effect, going through the ordinary procedure which the Land Registry would normally require, that is notice to anybody who might have an equitable claim against the land. If it is proposed to do away with the rights of people who have equitable claims without notice to them it is going too far and is unfair. If the Minister has not the information now perhaps he could clarify the position on the Report Stage.
This section is making the thing more flexible and is enabling the ACC to give loans without having to check out all the claims that might be against the particular land. We are placing a ceiling on the amount they can claim as a priority.
(Cavan-Monaghan): That is my complaint. It could wipe out with the stroke of a pen without a proper investigation the claims of other people who might have a claim against the land. If an insurance fund is being established to compensate people whose claims might be affected that is all right, but if there is no such insurance fund to compensate those people it is an infringement of the rights of property.
It seems to me that if A is registered as owner of land subject to equities and if one of the equities is the right of a next of kin of a previous owner to a share in the land that next of kin is protected by what is known as the equity note. It seems to me that this section means that the ACC take the other person in priority to the person whose claim is protected by the equity note. If that is the case it is very high handed and is an infringement of the right of the next of kin who has a claim on the land. If that is not so I would like an explanation on it.
The ACC had this power for the last 30 years and no claim has ever been made by equity claimants to them. I believe that an equitable claim is extinguished by the Succession Act after 12 years. It is a matter for those people to keep themselves informed.
(Cavan-Monaghan): I am surprised to hear the Minister saying that they had this claim for the last 30 years. I have not been practising since 1973 and perhaps I have become a bit rusty. I am surprised to hear that this power had been there since 1973.
(Cavan-Monaghan): The Minister might as well argue to me that, because it is a rare thing for a claim to be made against a bond given to a person who has taken out a grant of administration, the bond should be abolished altogether. I believe that would shock the community. I believe that provision is going too far. It is all right to take a short cut but there should be an insurance fund to protect the interests of the person whose rights have been taken away without notice to him.
After 30 years we have had no such claim. If the person claiming has an equitable claim and if that person has noted that with the Land Registry he is protected.
(Cavan-Monaghan): That is the whole point of the equity note.
I see Deputy Fitzpatrick's point of view. Even though the ACC get loans without having to go to all the bother of whether or not equities are discharged and all the other things that one has to go through to become the registered owner of a holding of land, I am afraid that in the west of Ireland that there are so many people who are not registered owners of their places that very few people would be able to get loans from the ACC. Do the equities not guard the person who has a charge, even though the ACC give the loan and they are supposed to get the charge on it? I believe that nothing can get past the Land Registry in regard to the registered owner. I believe that if the case went to court the Land Registry and the equity charges that would be against the State would still hold against the ACC. It is a good thing to have the short cut in the Bill so that one has not to go to all the bother which one had to go through to get a loan from the county council to build a house. One had to become the registered owner of one's place before one could get the loan. If one had to wait for all that to get an emergency loan to do something a lot of people would be left without the loans.
I believe if this was tested in court that the Minister would win out on the equities all the time if anybody had a charge against the land. I believe that land registry is the way to become the registered owner. I do not believe anybody can take precedence over the registration. This is a short cut that has been there and according to what the Minister says there has not been any trouble. If anything is done to destroy this short cut a number of people will not be able to get loans.
(CavanMonaghan): I agree with Deputy Callanan and the Minister that if the right is registered on the folio there is no problem. It is there and nobody is seeking to take it away. Let us take the case of A who was registered as owner of some land subject to equities and notwithstanding that he is so registered his brother, who had to go to England to earn a living and is only there four or five years, might own onethird of this farm and there is not any word about him on the folio. A goes to the ACC to get a loan of £10,000 and the farm is worth £15,000. The ACC look at it and say: “You are the registered owner and we are not worried about equities. We will give you £10,000 and your brother can go to hell. We are not a bit concerned about whether or not he has a claim.” It is not even necessary to notify the brother in England. Under this section his claim takes second place to the charge in favour of the ACC for £10 000. I know that it might be impossible to get in touch with the brother and that if we were to serve notice on the brother it might hold up the thing in a ridiculous way and it might cause undue delay. I believe an insurance fund should be established as there is in the Land Registry in the case of mistakes made by the registrar of title or some of his civil servants. That insurance fund should be extended to cover cases such as those I have in mind. I do not consider that unreasonable.
I do not know how the Deputy can talk about a man who is registered in the Land Registry as owner of land and then somebody else who is in England.
(Cavan-Monaghan): That is the point.
Why is one registered? Surely the other person has no claim at all.
(Cavan-Monaghan): That is the difficulty. I am talking legal language. A person can be registered subject to equities.
If that is the case the ACC priority does not apply.
(Cavan-Monaghan): It does because it is an equitable claim.
Where there is a caution noted on the folio of the Land Registry it does not apply.
(Cavan-Monaghan): There is no caution in this. It is a claim that is protected by the equity note. That is the problem.
That point has been made by the Minister. I contend that if, for instance, a place worth £15,000 was put up for sale and if the ACC had advanced £10,000 towards the farm, in the event of there being a claim for equity, a brother of the owner who, as Deputy Fitzpatrick mentioned, might be residing in England would have to get his share.
(Cavan-Monaghan): After the ACC had got theirs.
The ACC would get two-thirds while the brother would get a third. However, it is not for me to argue with the Deputy, who is a legal man. I am an ordinary individual whose education is limited perhaps, but as a public representative I have come across many cases of the type we are talking of and I know that if there is anything on a folio, the person concerned has a claim.
(Cavan-Monaghan): I would ask the Minister to look into this. What is not understood is that there is in the Land Registry an absolute title. If there is an absolute title the folio means what it says and the registered owner is registered against all comers, but there is also a limited title or a title subject to equities. The title that is subject to equities means that A is registered subject to the rights of anybody who has claims against that land and can prove them. If one wishes in those circumstances to have the equity note discharged one must put in affidavits, tracing the title way back—it used to go back for 40 years but perhaps it is not quite so long now—and serving notice on anybody who can be claimed. Then one gets an absolute title. What I am afraid this is doing is confirming the taking away of those claims that are protected by the equity note.
(Cavan-Monaghan): With respect, it is.
The Deputies must not argue the case across the Floor.
(Cavan-Monaghan): I am all in favour of cutting out red tape and delays, but the sensible way to get around this matter is to extend the insurance fund in order to protect the rights of anybody whose property is taken away by reason of this section.
I disagree entirely with Deputy Callanan that, in the instance I took, the ACC would have to pay first the brother living in England or elsewhere. The very opposite is the effect of this section which means that that outstanding claim can be ignored and that the ACC would have to be paid first. In the event of anything being left over the brother living outside the country could claim it. It would be reasonable to extend the fund which would have to be contributed to by the State, presumably. We are told, though, by the Minister that the experience is that these claims very rarely arise. Therefore, there should be little objection to extending the insurance fund.
While it may be said that similar provision to that contained in this section has been in existence for the past 20 years or so without causing any trouble, now that we are reenacting the legislation, the time is opportune to review it and to improve it in order to copper-fasten the rights of genuine owners.
I apologise both to the Chair and to the Deputy for my interruptions but I still contend that in the event of a man not having absolute title it is the ACC who are in trouble in the event of somebody making a claim against an estate that is being sold. In other words, this section would not take precedence over an absolute title in the event of a sale. Therefore, the ACC are running that risk in facilitating people while not ascertaining the position regarding possible claimants to a holding. As a public representative I have seen how these cases work out in practice. They could prove to be bad bargaining on the part of the ACC.
(Cavan-Monaghan): The position would be exactly as Deputy Callanan thinks it is if this section were not in the Bill, but the very object of the section is to destroy the right of the outstanding claimant who is protected by the equity note. So far as the ACC are concerned their mortgages take priority over equitable claims. I am in favour of that so that loans may be facilitated because for the one claim that might arise, hundreds of transactions could be delayed. I am suggesting to the Minister that he should provide for the protection of claims of genuine equitable owners if their rights are destroyed and that that should be done by the insurance fund.
Everybody seems to agree that the section is geared to allow more flexibility between the ACC and the borrower but we must agree also with the necessity of protecting the ACC. While one would go as far as possible in protecting the rights of ownership of everybody, the points being raised may be covered partially by the next section. In these circumstances I propose to leave the section as it stands.
(Cavan-Monaghan): I have made the case as clearly as possible and I suggest that the Minister reconsider the situation between now and Report Stage.
Question put and agreed to.
SECTION 40.
Question proposed: "That section 40 stand part of the Bill."
I understand that this section is designed to provide some measure of protection for people with an equitable interest in land in respect of which the ACC have a priority charge and that it provides also that the corporation will have priority in respect of other lands apart from those in respect of which the priority charge exists. That is the effect of subsection (1). Subsection (2) makes provision for the ACC to repay money to equitable claimants. In what circumstances would the ACC repay money to equitable claimants? I note also that they will pay interest on the repayments at rate applicable to the charge. I should like a little more interpretation of that. Obviously, the appropriate rate of interest would be one which reflected the real depreciation in the value of money from the time at which the equitable claimant became entitled to something in the possession of the ACC and the time of payment. There is the danger that the rate applicable to the charge, whatever that may mean, might not reflect the true situation of inflation.
Section 40 (1) provides:
A priority charge on registered land which is not a permanent improvement charge on the land shall as between the mortgagor and equitable claimants (other than the mortgagor) against the land be deemed to be charged on all and every (if any) estate and interest in the land to which the mortgagor was at the date of the registration of the priority charge or becomes at any time thereafter beneficially entitled in indemnification of all equitable claims against the land by equitable claimants other than the mortgagor.
I should like to know the reason for the exclusion of a permanent improvement charge amongst the priority charges covered. I should be interested to know the thinking behind that.
It remains with the land. That is the reason the permanent improvement charge is left out. It is not the ACC who pay the claimant—it is the mortgagor. I refer the Deputy to line 50, subsection (2).
I think I misread subsection (2). The Minister has not answered my question about the rate. How is the rate decided? I should be glad if he would explain the sort of situation in which a mortgagor would pay money to the corporation under subsection (2). How would the situation arise in which a mortgagor, who would presumably be another person who had lent money to the person who owned the land upon which the ACC had a priority charge, would have to pay money to the ACC? How would that arise and why?
If he proves his claim, he proves it with the mortgagor.
We are talking about money paid to the corporation by somebody else.
If money had been paid to the corporation which was subsequently proved to have been due to somebody else, then the mortgagor in the first instance would have to pay. He would not get it back from the ACC. Section 40 (2) provides that any money paid to the corporation out of an equitable claimant's interest in the land shall be repaid to the latter by the mortgagor.
(Cavan-Monaghan): Am I correct in thinking that the effect of section 40 is to try to confer as wide as possible a right on an equitable claimant whose estate has been gobbled up by the ACC under section 39?
(Cavan-Monaghan): All that presupposes that there is something left when the ACC are finished. It reinforces my opinion that we should have the insurance fund. Deputy Callanan thought that section 40 proved that what I was saying is correct, that the ACC have priority under section 39 and section 40 is there to provide that as between the owner whose rights have been taken away by the ACC and the man who originally got the loan, the equitable claimant can follow to his heart's content the man who originally got the loan and the remainder of the land, that is, provided the ACC have not sold the farm leaving nothing behind. That is all the more reason why the simple device of the insurance fund should be included to protect this man and prevent him from chasing hares or moonbeams which he may never be able to catch.
There is a slight difference between what is referred to in this section and in the other section. I understand that if anyone else has a mortgage on the land the ACC have the first claim. This is well known. One must give deeds to the ACC and anyone else who gives a loan is a fool. I mentioned the cooperatives yesterday when talking about what the ACC could do to help. One does not get money from the ACC without giving the full deeds of all one's property. We were talking earlier about someone who was not known to the ACC who had a claim on the land. Anyone who gives a loan without getting the deeds is taking a calculated risk. My deeds were with the county council while I got a county council loan. I had no security; it was given away. One does that of one's own free will and this is were the difference lies. We were talking in one instance about someone who had not full title and then we were talking about someone who gave a loan without getting security in the form of deeds. I am open to contradiction but I think that is the position.
(Cavan-Monaghan): I think we are back to section 39.
(Cavan-Monaghan): Section 40 is in ease of the man whose rights have been destroyed. Deputy Callanan is speaking about a mortgagee, somebody who lent money to the man with less than an absolute title.
(Cavan-Monaghan): No. I am talking about someone who owns the land, who has a share in the land, and whose rights have been taken away. That is the difference between us.
What is the rate of interest applicable to the charge?
It is the rate of interest at the time.
At the time the loan was given.
At any given time there are a number of rates of interest. There is the bank rate and the ACC rate and rates for different types of loans.
It is the rate the ACC will charge at the time of the loan.
Question put and agreed to.
Section 41 agreed to.
SECTION 42.
Question proposed: "That section 42 stand part of the Bill."
I understand there are some new provisions here, provisions slightly different from those contained in section 42 of the 1947 Act. I would be grateful if the Minister would outline these.
Section 42 (1) provides that, where a person in occupation of land which is subject to Land Commission payments, charges his land in favour of the corporation, the charge shall be in priority to all other burdens on the land with the exception of specified payments due to the Land Commission, the Commissioners of Public Works and other bodies. A typical case arises where the Land Commission have decided to allot a particular holding to an individual and have permitted him to start using the land, subject to the payment of a rent, before he is finally registered as owner of the land, a process which may take several years. This section enables such a person to borrow money on the security of the holding allotted to him in the period before he becomes the registered owner.
Subsection (2) provides that the priority conferred above will not apply if, at the date of registration of the ACC's charge, a caution appears in the Land Registry as affecting such land. Section 43 will come into it. The ACC's priority in such cases is also subject to a cash ceiling, vide subsection (3).
There is a "c.f. 1947, section 42". Where that "c.f." appears before the reference to the section of the previous Act there is, as I have indicated, a slight change.
There is no change in substance.
There must be, as otherwise it would be just a matter of quoting the section of the Act without a "c.f.".
The wording is tightened up. That is all. The substance is not changed in any way.
A very important aspect here is where the occupier of land allotted by the Land Commission may not become the titled owner for several years. This causes a great deal of trouble. What system is the Minister devising to enable such an occupier to borrow money on foot of his becoming the titled owner in ten or 12 years' time? What will the Minister give him? He has no title. All he has is a folio number.
His papers are held by the Land Commission. Will the Minister allow the ACC to put a charge on these papers?
I have already stated what the position will be. Once the lands are allotted the ACC will be enabled to give loans on the lands prior to the holders being registered.
What security is there? During the period the land is allotted and before the owner is registered the Land Commission have power to resume the land if it is not being properly worked. If the Land Commission were to exercise that power the ACC would be washed up. I know in practice the Land Commission does not exercise the power very much, but the power is there. Will facilitating the grant of credit in the way suggested not lead to a potential conflict between the ACC and the Land Commission and possibly discourage the Land Commission intervening where they would otherwise intervene because of the ACC having given a loan?
Where the Land Commission give an exchange of land—say, they take 30 acres from a man and give him 50 acres somewhere else— there is no security and that man cannot borrow at all.
He can borrow from the ACC.
I have had experience of this on numerous occasions. The man has nothing in his possession. He has no documents. He will own the land in five or seven years' time.
I know a case where a man cannot get a loan from Limerick County Council to build a house.
That is different. Here the ACC will give a loan provided the Land Commission certify the prospective borrower is an allottee and will eventually own the land.
(Cavan-Monaghan): What this section is doing is applying section 39 to land which is not registered but is subject to the payment of an annuity. There is a great deal of such land and the fact that a person is paying an annuity does not mean at all that he owns the land. In some cases it is the auctioneer's name that goes on the receivable order if he pays the annuity, but that does not mean the auctioneer owns the land. What the Minister is saying here is that, if the land is not registered and an annuity is being paid to the Land Commission, the Land Commission will issue a certificate to the effect that the person paying the annuity is in possession of the land and then the ACC can give a mortgage. The ACC cannot take priority over all and sundry and the arguments I made in favour of extending the insurance fund to section 39 cases applies here with far greater force because the person who gets himself registered in the Land Registry, subject to equities, is likely to have some interest in the land but a person could be noted just as a squatter who had not acquired even a squatter's title.
Progress reported; Committee to sit again.
Business suspended at 1.30 p.m. and resumed at 2.30 p.m.
