HL Deb 25 April 1972 vol 330 cc278-84

2.54 p.m.

THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Drumalbyn.)

On Question, Motion agreed to.

House in Committee accordingly.

[THE EARL OF LISTOWEL in the Chair.]

Clauses 1 to 9 agreed to.

Clause 10 [Amendment of Industrial and Provident Societies Act 1967]:

LORD DRUMALBYN moved Amendment No. 1: Page 6, line 36, leave out ("the") and insert ("any").

The noble Lord said: This is a drafting Amendment which is necessary to make the reference to the provisions of the Industrial and Provident Societies Act 1967 completely accurate. Clause 10 of the Bill refers to Section 4(1) of the Act which requires information about floating charges created by registered societies to be delivered to the registrar of friendly societies. The Act requires a copy of the Instrument creating the charge and a note of such particulars relating to the charge as may be prescribed. In fact, the second document is not sent and cannot be sent because particulars have not yet been prescribed. Nevertheless, the possibility remains that particulars to be contained in such a note may be prescribed in the future and accuracy requires that Clause 10 should refer not to "the" document but to "any" document. I beg to move.

On Question, Amendment agreed to.

Clause 10, as amended, agreed to.

Clause 11 [Power to appoint receiver]:

LORD DRUMALBYN

I beg to move Amendment No. 2, which is a drafting Amendment.

Amendment moved— Page 7, line 29 (incorrectly numbered 31), leave out ("receivers") and insert ("receiver").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD STOW HILL moved Amendment No. 3: Page 7, line 32 (incorrectly numbered 35) leave out ("Scottish").

The noble Lord said: I hope your Lordships will allow me to move this Amendment which stands in the name of my noble friend Lord Hughes and to which the noble Lord, Lord Drumalbyn, has been so kind as to add his name. It deals with a small point and I hope that the Committee will not think I am indiscreet in venturing into the field of Scottish law in which I am wholly inexpert. I do so, and did so, on the advice and suggestion of a very distinguished Scottish lawyer who sits in another place, Mr. King Murray. It was represented by him to me that the expression "a Scottish firm" which appears in the text of the Bill as at present drafted would be an expression which would be ambiguous to Scottish lawyers. What is a "Scottish firm"? Does it mean a firm, the contract creating which was entered into in Scotland or does it mean a firm, the partners in which are Scottish? What does it mean? It was put to me that it was ambiguous and it seemed to me that it was not altogether clear in its import.

I am encouraged by the fact that the noble Lord, Lord Drumalbyn, has added his name, to think that he agrees that there is a case for making a change which would have the result of converting the expression "a Scottish firm" into the expression "a firm according to the law of Scotland", which so I am advised could give rise to no ambiguities in the minds of Scottish lawyers.

That is the case for Amendment No. 3. It is also the case for Amendment No. 4. If the Committee will allow me, I shall, when that Amendment is called, treat this argument as an argument for supporting that Amendment. It is also the case for Amendment No. 5 which does something slightly additional. Perhaps I might add a word on that Amendment when it is called. I beg to move.

LORD DRUMALBYN

I am grateful to the noble Lords, Lord Stow Hill and Lord Hughes, for putting down this Amendment. It resolves a slight difficulty which the noble Lord, Lord Hughes, raised at an earlier stage. The noble Lord, Lord Stow Hill, has put a very ingenious formula which I think covers also the intention of the noble Lord, Lord Hughes, which was raised earlier. I am glad for that reason to add my name to the Amendment.

On Question, Amendment agreed to.

LORD DRUMALBYN

I beg to move Amendment No. 4.

Amendment moved— Page 7, line 32 (incorrectly numbered 35), at end add ("according to the law of Scotland").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

3.2 p.m.

LORD DRUMALBYN moved Amendment No. 5: Page 7, line 32 (incorrectly numbered 35), at end insert— ("() A body corporate or a firm according to the law of Scotland which acts as a receiver shall be liable to a fine of £100; and an undischarged bankrupt who so acts shall be liable on conviction on indictment to imprisonment for a term not exceeding two years, or on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding £500 or to both.")

The noble Lord said: This Amendment appears inadvertently under the names of the noble Lords, Lord Hughes and Lord Stow Hill. This was not the intention. As noble Lords will have noted before, this Amendment appeared before the Amendment of the noble Lord, Lord Hughes, but it has been altered in order to bring it into line with Lord Hughes' Amendment, so perhaps he may subsequently endorse the coupling of his name with this Amendment.

The point is perfectly simple, Clause 11 provides that certain persons—namely, a body corporate, an undischarged bankrupt, and a firm according to the law of Scotland—shall be disqualified from being appointed as receiver. But it does not provide any sanction against a disqualified person who acts as a receiver in contravention of this provision. The Amendment repairs the omission. The penalties adopted in the Amendment are the same as those in Sections 366 and 367 of the Companies Act 1948 for the same offences under that Act in respect of receivers of English companies. I beg to move.

LORD HUGHES

It was a pleasure to see my name on the same list as that of the noble Lord, Lord Drumalbyn, and nothing in what he has said about the Amendment in the slightest diminishes my pleasure.

On Question, Amendment agreed to.

Clause 11, as amended, agreed to.

Clauses 12, 13 and 14 agreed to.

Clause 15 [Powers of receiver]:

LORD DRUMALBYN

This is really a drafting Amendment, I beg to move.

Amendment moved— Page 10, line 24. leave out ("over") and insert ("as respects").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

Clause 15, as amended, agreed to.

Clause 16 [Precedence among receivers]:

LORD DRUMALBYN moved Amendment No. 7: Page 12, line 36, after ("charge") insert ("to such extent as may be necessary to enable the receiver second mentioned to exercise his powers under section 15 of this Act").

The noble Lord said: I beg to move Amendment No. 7. Subsection (4) of Clause 16 provides that the powers of a receiver shall be suspended by the appointment of another receiver, and as from the date when that other receiver is appointed in respect of a floating charge which ranks higher than the floating charge in respect of which the first receiver was appointed. However, a part of the property subject to the lower ranking charge may not be subject to the higher ranking charge. The Amendment is designed to make it clear beyond doubt that the powers of the receiver first appointed are suspended only in relation to the property subject to the higher ranking charge. The first receiver may continue to exercise his powers in relation to the property not subject to the higher ranking charge.

On Question, Amendment agreed to.

Clause 16, as amended, agreed to.

Clauses 17 to 20 agreed to.

Clause 21 [Disposal of interest in property]:

3.7 p.m.

LORD DRUMALBYN moved Amendment No. 8: Page 16, line 35, after ("to the purchaser") insert ("or disponee").

The noble Lord said: This clause gives a receiver dealing with property subject to an encumbrance the power to sell or otherwise dispose of that property free from the encumbrance. Where such a sale or disposal is carried out the receiver is required to issue a document of transfer to the recipient. As drafted, the clause refers to this recipient only as a purchaser. In the case of a disposal by the receiver other than by sale, the recipient will be not a purchaser but a disposee. I beg to move.

On Question, Amendment agreed to.

Clause 21, as amended, agreed to.

Clauses 22 to 27 agreed to.

Clause 28 [Interpretation of Part II]:

LORD DRUMALBYN moved Amendment No. 9: Page 23, line 5, at end add: ("(4) Any default in respect of any of the provisions of this Part of this Act, which is punishable by fine alone, shall be prosecuted summarily, and the provisions of section 49 of the Companies Act 1967 shall apply in relation to the proceedings as they apply to proceedings for offences punishable by fine alone under Part I of that Act and under the Act of 1948, and any such fine shall be a maximum fine.")

The noble Lord said: A number of clauses of the Bill—for example Clauses 22(5) and 24(2)—make a person liable to a fine in the event of his failure to comply with the relevant provisions, but no provision has been made for the taking of legal proceedings. The Amendment provides that any default which is punishable only by a fine shall be prosecuted summarily and in accordance with the provisions of Section 49 of the Companies Act 1967. That section deals broadly with the place at which proceedings may be taken and the limitation of time within which the action must be taken. The Amendment is essential to give effect to the penalty provisions in the Bill. I beg to move.

On Question, Amendment agreed to.

Clause 28, as amended, agreed to.

Clauses 29 and 30 agreed to.

Clause 31 [Interpretation]:

LORD DRUMALBYN moved Amendment No. 10: Page 23, line 42, leave out second ("and") and insert ("or").

The noble Lord said: The definition of "ancillary document" in this clause refers to a document executed by the debtor and the creditor in the charge. In practice, documents which in some way affect the terms of a charge may be granted by either the debtor company or by the company's creditor. For example, a creditor might provide that subject to certain conditions the interest rate as provided for in the existing charge would in future be at a lesser rate. There is no practical reason why such a document should be executed by both parties. The clause as drafted imposes an unnecessary restriction by requiring an ancillary document Ito be executed by both the creditor and also the debtor. This appears to us to be unnecessary. I beg to move.

On Question, Amendment agreed to.

LORD DRUMALBYN moved Amendment No. 11: Page 24, line 28, at end insert ("'register of charges' means the register kept by the registrar of companies for the purposes of Part IIIA of the Act of 1948").

The noble Lord said: The expression "register of charges" which appears in Clauses 13(4), 14(4) and 22(5) has not been defined. It is necessary to repair this omission and to include a definition of the expression in this clause. The provision that the registrar shall keep a register of charges is in paragraph 106D(1) of the Schedule to the Bill. The Schedule will become Part IIIA of the Act of 1948. I beg to move.

On Question, Amendment agreed to.

3.10 p.m.

LORD DRUMALBYN moved Amendment No. 12: Page 24, line 44, leave out subsection (5).

The noble Lord said: I beg to move Amendment. No. 12. The subsection applies Section 440 of the 1948 Act to the provisions of the Bill. Section 440 does two things. First of all, it defines the meaning of any provision which states that a company and every officer of the company who is in default shall be liable to a default fine". The meaning is that the company and every officer shall be liable to a fine of an amount not exceeding the sum specified in the provision for every day during which the default continues or, if no amount is specified in the provision, to a fine not exceeding £5 for every day during which the default continues. Secondly, Section 440 defines the term "officer who is in default". The clause makes the fine a continuing fine—that is, one for every day during which the default continues; and it provides a defence for officers of the company by stating that an "officer who is in default" means an officer who knowingly and wilfully permits or authorises the default. None of the penalty provisions in the Bill is in terms which would permit Section 440 to apply to it. When the penalty is a continuing one it is stated explicitly in the provision to be such a penalty; and where a defence is required. the defence is explicitly provided. For that reason, this provision is not required.

On Question, Amendment agreed to.

Clause 31, as amended, agreed to.

Remaining clause agreed to.

Schedule agreed to.

House resumed: Bill reported with the Amendments.