Alan Shatter (Dublin South, Fine Gael)
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I will take each amendment as it arose. On proposed amendments Nos. 4, 5 and 10, I consider these requirements already to be adequately covered in section 2(3), which provides that the court "shall have regard to such matters as it considers appropriate". The Deputies might note this point in particular because the provision continues by stating "and in particular shall have regard to the following" and then lists them out in paragraphs (a) to (e) of section 2(3). Basically, however, the court can consider any matter it determines to be appropriate. It is not limited to those which have been provided for in particular. This gives a court a broad discretion to determine to what it should have regard. Furthermore, in respect of the conduct of mortgagees, section 2(3)(d) already provides that the court shall have regard to "the conduct of the parties to the mortgage in any attempt to find a resolution to the issue of dealing with arrears of payments due on foot of the mortgage". As I noted on Second Stage, it already is clear that courts are taking the behaviour of the parties, including mortgagees, into account when ruling on proceedings. I made reference earlier this afternoon to the courts exercising discretion even without either this legislation or the insolvency legislation being in place, whereby judges simply adjourn cases for periods. However, in the context of taking into account the behaviour of the parties, there is the example of the recent case of Irish Life and Permanent PLC v. Duff, in which the High Court refused to order repossession, at least partly on the grounds that the bank had not complied with the provisions of the Central Bank code of conduct on mortgage arrears. Nothing in this Bill changes that approach if the courts regard that to be, in the context of an individual case, an appropriate matter to which have regard. Consequently, this already is occurring without the enactment of the legislation or indeed without the insolvency legislation having come into operation.

One further point I wish to make on amendment No. 10 relates to the proposal in paragraph (c) that the court should consider whether, when a personal insolvency arrangement, PIA, has been rejected by creditors, the mortgagor has been given adequate opportunity to appeal the substantive decision of the mortgagee to reject the proposal. This amendment completely misunderstands the way in which the PIA process works. As I have stated many times, it is a voluntary process and where the necessary approval of creditors cannot be obtained on the proposal, the process then ends. There is no appeal to the court in this regard. There exists a possibility that the mortgagor could, through his or her personal insolvency practitioner and where time permits under the protective certificate period, propose a new arrangement which could meet with the approval of creditors.

I cannot accept amendment No. 9 for a number of reasons. The amendment seeks to rewrite provisions of the Personal Insolvency Act, which is not the purpose of this Bill. Overall, the amendment is poorly drafted, confused or somewhat disingenuous as to its intentions and is not acceptable. The select committee should be aware that the protection to a mortgagor proposed by this Bill is to require that the court allow for a personal insolvency arrangement to be considered where, for example, none previously had been attempted, as with the requirement now in bankruptcy petitions, and not that the court should direct a first or a new PIA and effectively determine its outcome. Once a PIA proposal has been rejected by the creditors' meeting and no subsequent proposal is made during the protective certificate period, the personal insolvency practitioner's role ends as a mediator or negotiator for the debtor. However, members should remember that where a proposal is rejected at a creditors' meeting and where the protective certificate period still exists, this does not stop a personal insolvency practitioner making a different proposal that creditors may accept. Therefore, once a proposal has been rejected and where there is no other proposal that can properly be made within the timeframe, the personal insolvency practitioner has no standing whatsoever in the repossession process and the law does not provide for the court to appoint him or her as an officer essentially to force a settlement on creditors as such a practitioner cannot do that.

The amendment ignores the fact that the personal insolvency legislation is designed to allow agreed settlements to be reached as an alternative to court-ordered settlements. It is my view this amendment would overturn this carefully calibrated approach. I must add the Deputy's proposed provision that a PIA proposal should only offer to repay the current value of a property would represent a huge interference in contractual and property rights and would be likely to be subject to swift challenge in the courts. The amendment makes no reference to the repayment capacity of the debtor, which it seems essentially would be determined by the current value of the property. This would have obvious negative consequences for banks, other financial institutions and ultimately for the taxpayer. I believe this amendment could encourage delinquent behaviour on the part of all debtors, nearly 90% of whom are repaying their mortgages, in order to get their mortgages reduced to present value. This would seriously risk a complete collapse of the property market and would threaten the solvency of the financial institutions and the economy. Finally, I consider that this amendment would run the risk of turning every proposal for a PIA into a costly preliminary to repossession.