I move amendment No. 40 :
In subsection (1), page 67, line 25, to delete " by which the judgment mortgage was created " and substitute " required for the purpose of registering the judgment as a mortgage ".
This is a drafting amendment.
SECTION 102.
Amendment agreed to.
Question proposed: " That Section 102, as amended, stand part of the Bill."
This is a new section. What is the necessity for it?
There was no registration required before. Under the Judgment Mortgage Act of 1850, a creditor who has recovered judgment for a sum of money may convert the judgment into a mortgage covering any land owned by the debtor. Where the conversion takes place, Section 99 does not apply as a charge is not created by the company itself. It is accordingly provided under Section 102 that the person converting the judgment should send two copies of the relevant affidavit to the company which must then file one copy with the Registrar within three days for registration.
A judgment creditor has to do it at the present time. He registers in the High Court. He does not do it in the Companies Office. Obviously, it is a good provision.
It is a good provision that it should be registered in the Companies Office. I am thinking that it should be registered not by the company but by the companies Registrar.
The judgment creditor gives notice to the company. He has to give two copies to the company and the company has the obligation to send one along to the Companies Office. I am rather inclined to the view that the judgment creditor should have put upon him the duty of registering himself.
That is more or less the general principle with all mortgages.
Except that the general principle in this Bill is that anything which would affect anything to do with the company carries the obligation that it be filed in the Companies Office.
The reason for putting the obligation on the company is to preserve uniformity in this Part. The obligation to file information such as this in other sections is on the company. If we change this, it will be necessary to re-write many of the other sections.
Again we are putting quite a stringent penalty on judgment creditors if they do not comply with this. Many of them will not know about this obligation. I suppose it is their job to know the law but I wonder is it a bit severe ? Many persons may without realising it decide to register their judgments as mortgages in the ordinary way and may not file the affidavit as provided by this section.
Except that in the ordinary case when a person has recovered judgment, it is reasonable to presume that he is advised about the requirement. The practitioner involved would be expected to know the requirements of this section.
I suppose it is an assumption we should make.
I can see the insurance rates on solicitors' indemnity policies going up.
In relation to the ordinary debenture, the case made there was that the debenture holder would register if he wanted to. As I understand it, there is no provision here for the judgment creditor to register if he wants to. Even if the judgment creditor went off and registered in the Companies Office, there is still an obligation on him to give two copies to the company so that the company may register also.
It seems that the procedure works like this. A judgment is obtained against a company. We are dealing with companies registered in the State. Therefore it is certain that before judgment is obtained the company has notice of the proceedings. That is a fair assumption. If they have notice of the proceedings, it is their duty to follow it right through to judgment and therefore they have notice of the judgment. If they have notice of the judgment, it is up to the company again to see what steps must be taken if a judgment mortgage is registered. They will not have judgment against them every day. It should be a normal precaution after a judgment has been registered as a mortgage to file an affidavit. Why should you put the onus on the creditor to furnish the company with an affidavit ? Should not the company itself have notice of these facts?
No.
The trouble is that at that stage the company may throw its hat at its operations.
In which case why penalise the mortgagee further?
As I understand it, we must examine it from the point of view of the fraudulent company. If the fraudulent company does not go along and register a judgment mortgage, although it has got two copies from the general creditor, the officer is liable to a penalty of £100, but supposing the judgment was not for £100, but for some thousands of pounds, it means that the fraudulent company would be able to go and perhaps get credit elsewhere to an extent in excess of the penalty clause provided here. Surely we should do as is done at present in relation to debentures, the person lending the money making sure that the proper notice is given by going and registering the debenture ? Similarly in a judgment the person trying to follow his money should have the responsibility, if he wants to follow this, of chasing the office.
I think so.
As the position stands at present, a company does not get notice of a judgment mortgage being registered.
That is true.
It is not really practicable to say that the company can check up because you do not know when it is going to be registered and you could go along each day and check to see if the judgment has been registered as a mortgage.
You can check from time to time.
We could put the obligation on whoever registered judgments in the High Court.
I do not think you need put an obligation on him. Could you not make it permissive ?
Of course he may not know he is dealing with a company that will be liable under the Companies Acts.
Is not the situation under Section 99 that if the lender does not register, then his security is void ?
Yes.
If the judgment creditor is in the same position as the lender, if he wants to secure his money this way by a charge on the lands——
But it is not going to be void.
I know it is not but I think it should be. It is going to help the fraudulent company. The best way is to follow the exact procedure at present by which the person chasing his security has the obligation. If he does not do it, he loses his priority and registration.
You would have to provide that he loses his judgment.
Is not the point of bringing this on to the file to ensure that the priority will be preserved of a general mortgage and yet notified at the same time to the public at large?
I do not think the priority is affected at all.
It is not as it is here, but is that not what is intended?
No. The intention is to make sure that the registration officer's file is complete for the purpose of——
For the purpose of everybody knowing what the situation is and for the purpose therefore of being able to assess their priority when they come along to see if the company is worthy of being given further sums.
Yes.
Therefore, if the file is not complete the fraudulent company can go and get some credit which it might not get if the judgment were registered. Therefore on that basis is it not more likely that if you put the obligation on the person who is trying to protect his money, you will get a more complete file in the case of a fraudulent company ? I am using that term in its widest sense. Could the Minister tell me the paragraph?
Page 58, number 154. It is clear that the Committee envisages the company itself and not in ease of creditors, that this was to give notice to the companies. Half way down it says that the judgment mortgage is not created by the company and the company may be unaware that a judgment against it has been converted into a mortgage. They considered that a strong case for the registration of judgment mortgages in the Companies Registration Office has been established.
It goes on to say :
We recommend that a section should be inserted in the new Act requiring every creditor who converts a judgment obtained by him against a company into a judgment mortgage to present a copy of the affidavit by which the judgment mortgage was created to the Companies Registration Office within 21 days after this affidavit has been filed in the Court in which the judgment was obtained, and the Registrar of Companies should enter the judgment mortgage in the Register of Charges kept in the Companies Registration Office.
That has not been carried out by the draftsmen.
One of the reasons was that with that arrangement the company's register of charges would not be complete at all.
If you look at paragraph 154 which I had not read recently, you will see that the report is recommending exactly what I am saying should be done and the draftsman has deliberately abrogated the Committee's recommendation——
We recommend that a section should be inserted in the new Act requiring every creditor who converts a judgment——
and so on——
to present a copy of the affidavit by which the judgment mortgage was created to the Companies Registration Office.
I admit quite frankly that I did not know that I had such weighty support. Having regard to what we said here and having regard to that paragraph in the Committee's report the Minister will agree that the burden of proof is on him. Perhaps he would like to examine it.
It seems quite clear that that is the recommendation.
The Minister made a suggestion earlier that perhaps the obligation to notify the Registrar of Companies might be imposed on the Registrar of Deeds and Titles. Is there any objection to that?
I suppose in a sense if the intention would be to conform to the recommendation of the Committee, it would be better not to go too far afield. I agree with Deputy Sweetman.
It seems to me to be an excellent suggestion.
That is what I thought.
I am all for it. Perhaps the Minister might examine it.
I will do that.
It is dangerous to think out loud sometimes.
There is one small point in line 24, it says " shall cause two copies (certified to be correct copies)" I presume certified by the person furnishing the copy?
I should say by the court. The only certifying officer is the proper court officer. I do not know that there is any other means of certifying unless by the duly authorised officer of the court.
Can you not have a solicitor's certified copy of an order? I am not sure.
My practice leads me to think that a certified copy is one certified only by the court officer. A solicitor could certify a document which is not of proceedings in court.
You very often see copies of probates, for example, certified by solicitors—an entirely incorrect practice, let me add.
This is a copy of an affidavit.
I know.
It is not an official document in the sense that it has been prepared by the solicitor.
There is also the point, if I may just raise it—I do not know whether it is one worth considering or not—that it requires that a company shall within three days of receipt of such copies deliver one of such copies to the Registrar of Companies. It is just possible they may get mislaid and he may have a copy and might not have the one delivered to him. I do not know whether that is worth considering or not. He would not be complying with the section unless he sent one of the ones which had been delivered to him.
The Minister will look into those points ?
Yes. I would not be too keen on spelling out exactly by whom a copy is to be certified as correct. However, it is something worth, looking at.
The normal phraseology for a copy certified by the court is " an office copy ". " An office copy " means a copy certified by a court office, not certified by a private office, so to speak. So I understand. I know one solicitor practising who adopts that definition.
Question put and agreed to.