HL Deb 27 March 1980 vol 407 cc1112-6

212 After Clause 45 insert the following new clause:

"Interpretation

.—(1) In this Part of this Act— guarantee" includes indemnity, and cognate expressions shall be construed accordingly; money-lending company" means a company the ordinary business of which includes the making of loans or quasi-loans or the giving of guarantees in connection with loans or quasi-loans; recognised bank" means a company which is recognised as a bank for the purposes of the Banking Act 1979; relevant company" means any company which—

  1. (a) is not a private company; or
  2. (b) is a subsidiary of a company which either is itself not a private company or has another subsidiary which is not a private company; or
  3. (c) has a subsidiary which is not a private company;
services" means anything other than goods or land.

(2) For the purposes of this Part of this Act

  1. (a) a quasi-loan is a transaction under which one party ('the creditor') agrees to pay, or pays otherwise than in pursuance of an agreement, a sum for another ('the borrower '), or agrees to reimburse, or reimburses otherwise than in pursuance of an agreement, expenditure incurred by another party for another ('the borrower ')—
    1. (i) on terms that the borrower or a person on his behalf) will reimburse the creditor; or
    2. (ii) in circumstances giving rise to a liability on the borrower to reimburse the creditor;
  2. (b) any reference to the person to whom a quasi-loan is made is a reference to the borrower; and
  3. (c) the liabilities of a borrower under a quasi-loan include the liabilities of any person who has agreed to reimburse the creditor on behalf of the borrower.

(3) For the purposes of this Part of this Act, a credit transaction is a transaction under which one party ("the creditor"

under which one party ("the creditor"),—

  1. (a) supplies any goods or sells any land under a hire-purchase agreement or conditional sale agreement;
  2. (b) leases or hires any land or goods in return for periodical payments;
  3. (c) otherwise disposes of land or supplies goods or services on the understanding that payment (whether in a lump sum or instalments or by way of periodical payments or otherwise) is to be deferred.

(4) For the purposes of this Part of this Act, the value of a transaction or arrangement is—

  1. (a) in the case of a loan, the principal of the loan;
  2. (b) in the case of a quasi-loan, the amount, or maximum amount, which the person to whom the quasi-loan is made is liable to reimburse 1114 the creditor;
  3. (c) in the case of a transaction or arrangement, other than a loan or quasi-loan or a transaction or arrangement within paragraph (d) or (e) below, the price which it is reasonable to expect could be obtained for the goods, land or services to which the transaction or arrangement relates if they had been supplied at the time the transaction or arrangement is entered into in the ordinary course of business and on the same terms (apart from price) as they have been supplied or are to be supplied under the transaction or arrangement in question;
  4. (d) in the case of a guarantee or security, the amount guaranteed or secured;
  5. (e) in the case of an arrangement to which subsection (3) or (4) of section (Prohibition of loans, etc., to directors and connected persons) above applies, the value of the transaction to which the arrangement relates less any amount by which the liabilities under the arrangement or transaction of the person for whom the transaction was made have been reduced.

(5) For the purposes of subsection (4) above, the value of a transaction or arrangement which is not capable of being expressed as a specific sum of money (because the amount of any liability arising under the transaction is unascertainable, or for any other reason) shall, whether or not any liability under the transaction has been reduced, be deemed to exceed £50,000.

(6) For the purposes of this Part of this Act, a transaction or arrangement is made for a person if—

  1. (a) in the case of a loan or quasi-loan, it is made to him;
  2. (b) in the case of a credit transaction, he is the person to whom goods or services are supplied, or land is sold or otherwise disposed of, under the transaction;
  3. (c) in the case of a guarantee or security, it is entered into or provided in connection with a loan or quasi-loan made to him or a credit transaction made for him;
  4. (d) in the case of an arrangement within subsection (3) or (4) of section (Prohibition of loans, etc., to directors and connected persons) above, the transaction to which the arrangement relates was made for him; and
  5. (e) in the case of any other transaction or arrangement for the supply or transfer of goods, land or services (or any interest therein), he is the person to whom the goods, land or services (or the interest) are supplied or transferred.

(7) This Part of this Act, except sections (Substantial contracts, etc., with directors and others to be disclosed in accounts), (Particulars of amounts out- standing to be included in accounts) and (Further provisions relating to recognised banks), does not apply to arrangements or transactions entered into before the appointed day but, for the purposes of determining whether an arrangement is one to which section (Prohibition of loans, etc., to directors and connected persons) (3) or (4) applies, the transaction to which the arrangement relates shall, if it was entered into before the appointed day, be deemed to have been entered into after that day.

(8) For the purposes of this Part of this Act it is immaterial whether the law which (apart from this Act) governs any arrangement or transaction is the law of the United Kingdom, or of a part of the United Kingdom, or not."

213 After Clause 45, insert the following new clause:

"Consequential repeals and savings

'.—(1) Section 190 of the 1948 Act (prohibition on loans to directors) shall cease to have effect.

(2) Section 197 of the 1948 Act (particulars in accounts of loans to officers, etc.) and section 16(1)(c) of the 1967 Act (particulars in the director's report of contracts in which a director has a significant and material interest) shall, except—

  1. (a) in relation to accounts and directors' reports prepared in respect of any financial year ending before the appointed day; and
  2. (b) in relation to accounts and director's reports prepared in respect of the first financial year ending after the appointed day but only in relation to loans and contracts entered into before the appointed day which do not subsist on or after that day, cease to have effect."

214 After Clause 45 insert the following new clause:

"Application of ss. (Substantial contracts, etc., with directors and others to be disclosed in accounts) to (Transactions, etc., excluded from ss. (Substantial contracts, etc., with directors and others to be disclosed in accounts) and (Further provisions relating to recognised banks)) and (Power to increase financial limits) to (consequential repeals and savings) to unregistered companies

. Section 435 of and Schedule 14 to the 1948 Act (which provide for the application of certain provisions of that Act to unregistered companies) shall have effect as if sections (Substantial contracts, etc., with directors and others to be disclosed in accounts) to (Transactions, etc., excluded from ss. (Substantial contracts, etc., eith directors and others to be disclosed in accounts) and (Further provisions relating to recognised banks)) and (Power to increase financial limits) to (Consequential repeals and savings) above were provisions of that Act and were included among the provisions of that Act specified in that Schedule which relate to accounts and audit; and the reference in the last entry in column 3 of that Schedule to provisions applied by virtue of the foregoing entries in that Schedule shall be construed accordingly.

Viscount TRENCHARD

My Lords, I beg to move that the House doth agree with the Commons in Amendments Nos. 212 to 214 en bloc.

Moved, That this House doth agree with the Commons in the said amendments. —(Viscount Trenchard.)

On Question, Motion agreed to.