Joint Committee on Legislation díospóireacht -
Wednesday, 13 Feb 1985

SECTION 3.

Question proposed: " That section 3 stand part of the Bill."

Senator S. O'Leary

On section 3, I am comparing it with the draft Bill that accompanied the Bankruptcy Law Committee Report. That is helpful because it does give an alternative view. In a lot of cases the view will be identical but it does give in certain areas an alternative approach. Therefore, I would propose to make use of that conflict to help the Minister in explaining what is in this Bill. There are a number of definitions which are in the draft Bill which do not appear to be in this Bill." Proof of debt" appears in section 3 of the draft Bill and it does not appear in this Bill. Could the Minister tell us what the significance of that is to help us in our education in this regard?

Secondly, am I correct in assuming that the bankruptcy inspector referred to in the definitions section of section 3 of this Bill is the same person as the inspector referred to in the draft Bill in the Committee's report?

Thirdly, am I correct in saying that the creditors' assignee referred to in the definitions section of the draft Bill is the same and accomplishes the same duties and responsibilities as the assignee referred to in the definitions section of this Bill? There are three differences which I would like to have explained to me if possible to help me in this regard.

Deputy Noonan (Limerick East)

On the first point on the " proof of debt " that is included in the First Schedule in the present Bill.

Senator S. O'Leary

It is there. It is just in a different place.

Deputy Noonan (Limerick East)

It is in a different place. On your second point, the bankruptcy inspector is a new name given to the messenger of the court. A change of name was recommended by the Committee because of confusion regarding the status of the messenger. His principal duties will be the same as at present. They are listed in section 62.

Mr. S. O'Leary

The same person is referred to as inspector.

Deputy Noonan (Limerick East)

Yes. The creditor's assignee in both cases is the same person.

Deputy Woods

An arrangement, would the Minister explain this?

Deputy Noonan (Limerick East)

There is an arrangement under the control of the court. This is a procedural remedy whereby in order to avoid the stigma of bankruptcy and its effect on his status, standing and credit, a debtor who is unable to meet his liabilities with his creditors may with the consent of a majority of them carry a private arrangement under the control of the court. The procedure is being retained under the Bill.

Deputy Woods

Does it go so far as to provide for a scheme of arrangement?

Deputy Noonan (Limerick East)

Part 4 of the Bill, Sections 87, 88, 89, 90 and right down along to 109, all those sections deal with the particular scheme of the arrangement under the control of the court.

Deputy Woods

So that, by and large, it takes into consideration the submissions which were made by the Institute of Chartered Accountants and others in relation to the nature of the arrangement, or could the Minister tell us how far it goes in that direction?

Deputy Noonan (Limerick East)

Representations made by outside interests such as the body referred to bye Deputy Woods referred to arrangements outside of the court, whereas these arrangements are arrangements under the control of the court. What is done here is a modernisation of the present situation. The procedure is being retained under this Bill but it is being modernised. The proposal to which Deputy Woods referred was discussed with the CCAB-I representatives but it has a defect that it allows publication of the debtor's insolvency, and would mean that there would be two systems for arrangements in bankruptcy law — one totally administered by the court as in the Bill and another the CCAB-I scheme partially so. So, we have not followed their proposals for that reason but we have modernised the arrangement which is in existing law and retained it in the Bill.

Deputy Woods

The Consultative Committee of Accountancy Bodies proposed that the bankruptcy legislation should provide for a scheme of arrangements as an alternative procedure in bankruptcy. Essentially, what the Minister is saying is that he is not making provision for that scheme for the reasons he has given.

Deputy Noonan (Limerick East)

That is correct.

Question put and agreed to.