HL Deb 27 October 1981 vol 424 cc1033-5

144 Clause 63, page 67, line 38, after ("company") insert ("or with the receivership or management of the property of a company").

Lord Mackay of Clashfern

My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 144, and I should like to speak also to Amendments Nos. 145 to 159 en bloc as well as Amendments Nos. 205, 214 and 235. These amendments are principally to Clause 63. Clause 63 is designed to strengthen the existing powers in the Companies Acts 1948 and 1976 which enable a court to disqualify a person from taking part in the management of a company. These amendments make further small improvements to it. Perhaps I can deal with them fairly briefly.

Amendments Nos. 144 and 145 bring certain misconduct in the course of acting as receiver within the grounds for a disqualification order. Amendment No. 146 extends the grounds on which disqualification orders can be made to include not only breach of duty to the company, but any breach of duty as officer, liquidator, receiver or manager of the company. Amendment No. 147 is a drafting amendment. Amendments Nos. 148 and 149 widen the scope of the disqualification order to debar a person from acting as a receiver and from involvement in the promotion or formation of a company. Amendment No. 154 is consequential.

Amendments Nos. 150 and 151 prevent the courts from using retrospectively their new power to disqualify a person in respect of conduct as a liquidator or receiver. Amendment No. 152 will prevent the longer period of disqualification—up to 15 years—being applied in respect of certain acts committed before the appointed day. Amendment No. 153 specifies that a person may seek leave to form or promote a company from any court with jurisdiction to wind up companies. Amendments Nos. 155 and 157 restrict the definition of "default order" to defaults involving the submission of returns to the Registrar of Companies. Amendment No. 156 is very technical. Amendment No. 158 will enable a disqualification order for persistent default to be applied for by the liquidator or a past or present member of any of the companies against which the offences or defaults have been, or are alleged to have been, committed.

Amendment No. 159 provides that orders and applications for orders made before the appointed day under Section 28 of the Companies Act 1976, which is to be repealed, shall be treated as orders and applications under Section 188 of the Companies Act 1948. Amendment No. 205 will bring the coverage of the disqualification from managing companies, which is provided by Section 187 of the 1948 Act to undischarged bankrupts, into line with the amended Section 188 by including promotion, formation and liquidation as activities from which such persons are debarred. Amendment No. 214 is consequential to Section 29 of the 1976 Act which requires the courts to notify the Secretary of State of the details of disqualification orders. Amendment No. 235 is consequential. I beg to move.

Moved, That this House doth agree with the Commons in the said amendment.—(Lord Mackay of Clashfern.)

As an amendment to Commons Amendment No. 144:

144A At end insert ("or any indictable offence which in the opinion of the court renders him unfit to manage or otherwise control the affairs of a company").

Lord Ponsonby of Shulbrede

My Lords, I beg to move Amendment No. 144A as an amendment to Amendment No. 144.

Moved, That Amendment No. 144A, as an amendment to Commons Amendment No. 144, be agreed to.—(Lord Ponsonby of Shulbrede.)

Lord Davies of Leek

My Lords, can we have a rational statement as to why the Government refuse what appears to me to be a reasonable insertion in a Companies Act? There are so many people who play about forming companies and who go bankrupt. We hear of cases week in and week out. Although we are going through this so quickly, as with the slaughter of the innocents, I would like a rational answer. I do not intend to delay the House.

Lord Mackay of Clashfern

My Lords, I hope that my answer can be rational and brief and, incidentally to that, I do not wish to slaughter any innocents. The situation is that the Companies Act provisions generally deal with offences which are committed in connection with the affairs of the company. This amendment proposes an enlargement of that to indictable offences which, in the opinion of the court, render them unfit to manage or otherwise control the affairs of a company, whether or not that offence is itself committed in connection with the affairs of a company. One can see that that is a reasonable proposal. We think that that is part of a larger exercise and we feel that it would be right to await the general review of the law on insolvency which is being undertaken by the committee under Sir Kenneth Cork. That is why we do not think it right at this stage to amend this Bill by adding still further to its manifold provisions.

Lord Ponsonby of Shulbrede

My Lords, I thank the noble and learned Lord for that explanation and beg leave to withdraw the amendment.

Amendment to the amendment, by leave, withdrawn.

On Question, Motion agreed to.