Vol. 416 No. 8
6 Mr. Gilmore asked the Minister for Industry and Commerce if it is intended to introduce an amendment to the Companies Act, 1990, in view of the decision of the High Court on 25 February 1992, that part of the Act was unconstitutional; and if he will make a statement on the matter.
I should like to point out that, while the High Court in its judgment delivered on 25 February 1992 found that the power purportedly given to the High Court under the provisions of section 10 (5) of the Companies Act, 1990, to punish an alleged offender in like manner as if he had been guilty of contempt of court is unconstitutional, the court found that the remaining provisions of this subsection, if left intact and operated in conjunction with the provisions of section 10 (6) which follows, provide a convenient and constitutional machinery for dealing with a situation which may arise when persons who should do so fail to co-operate in the investigation being conducted by the inspector.
I have sought the Attorney General's advice on the High Court judgment as a matter of urgency. For my part, I will move to amend the Companies Act, 1990, if this is considered necessary.
Does the Minister agree that the relevant section of the Act, section 10 (5), would be neutered if an officer or agent of a company refused to produce relevant documents, refused to be present for questioning or was otherwise unco-operative? Would the Minister agree that there must be some deterrent to cause or encourage that person to co-operate, otherwise the value of the section could be put at risk? I understand the court is offering as an alternative that one could go to the High Court to have them arbitrate on it. This could add to the expense of the process. Some penalty or deterrent is essential.
I fully agree that a deterrent is essential. The result of the decision is not quite what I thought it was at first sight. They declared about one-and-a-half lines at the end of subsection (5) unconstitutional. The judge went on to point out that if you read subsections (5) and (6) together, without the one-and-a-half lines at the end of subsection (5), the two subsections taken together form a coherent and constitutional whole and that the enforceability provision is quite adequate. The difficulty arose from the fact that section 14 inspectors were brought in to the benefit of section 8 at the last minute on the Report Stage and the consequential thinking was perhaps not done as fully as it might have been. I think it was in response to a proposed Opposition amendment. I am not saying that all the consequences should not have been foreseen; they should have been. It was a change made at the last minute and on reflection it appears that what the court decided was right. I do not think the situation is unduly weakened. If it is weakened, we will amend the Bill. It is not as clear as it seemed at first sight that an amendment is needed. The court points out that the two subsections can be used together.
The Minister said he will amend the Bill if necessary. In the event of the necessity arising, does he envisage, having regard to the operation of the Act to date, that any further amendments may be necessary? Regarding the inspectorate process and the inordinate fees incurred in the one case that has yet come before the courts, is the Minister sufficiently concerned to believe that the Act may need amending? Could the inspectorate process be put at risk by the prospect of enormous fees to be paid by the company or by the Minister, where they cannot be recouped?
That is a separate question. This relates to subsection (5) of section 10. The Deputy is asking about section 8. As I indicated this morning, I have learned some lessons about section 8. Matters such as cost will be borne in mind in the future. In order to rectify certain problems which have arisen we do not necessarily need to amend the Act or the section. We can rectify them by better administrative practices.
The Minister says it is possible that an amendment will not be necessary. I am sure work is going on in his Department and in the Attorney-General's office in that regard. Is there any danger that in a second test case the courts may find in favour of somebody because the Act is deemed to be defective?
No. The one-and-a-half lines at the end of subsection (5) of section 10 have been declared unconstitutional, but the courts will now read the remainder of subsection (5) as a kind of composite with subsection (6) and by finding of the High Court that is constitutional. There is a different penalty and a different way of enforcing the provisions. The one-and-a-half lines that have to be taken out were held to infringe principles laid down in re Haughey in the 1971 Irish Reports which arose out of a subsection in the Public Accounts Committee Act, 1971.
