Niall Collins (Limerick, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Minister of State, Deputy Kathleen Lynch for taking this issue. It is a matter that has been widely reported, including in the Irish Examiner yesterday and today and in many other publications in recent months, including the Daily Mail and the Sunday Independent. Families throughout this country are struggling with the heavy burden of mortgage debt and, as we know, desperate times provoke desperate measures. Under the weight of severe financial pressure, many people are facing the grim prospect of having their family home repossessed. We have debated these issues on several occasions in the Chamber. The Land and Conveyancing Law Reform Act, for instance, strengthened the banks in terms of their ability to instigate repossessions. We have seen reportage in recent days of the first cases coming through under the provisions of the Personal Insolvency Act. It remains a problem, however, that the banks are at the centre of that process and effectively have a veto on debt resolution proposals.

As a consequence of the desperate circumstances in which people find themselves, a highly dubious property trust has emerged claiming to be able to save people's homes on the basis of a lacuna in the law of which, apparently, only the people operating the trust are aware. They have consistently refused to enlighten anybody as to how it works. In the year to date, it has been reported, up to 2,000 people, many of them high-profile business people, came into contact with the trust and, in a last-ditch attempt to remain in control of their debt-laden properties, have engaged with it. They put their faith in this mysterious property trust, known as the Rodolphus Allen Trust, which claimed it had found a way to split mortgages from properties. In exchange for this promise of protecting people's properties, the trust is charging an administration fee in the order of €200 to €250 and a per folio charge of up to €100. There have been reports of up to 200 people turning up at signing-on sessions.

These were aided and facilitated by a notary public, who has since seen the light of day and desisted from being involved. As the Minister of State is aware, the trust has also made claims of up to hundreds of millions of euro from receivers and banks, which are working through some of these distressed properties. The trust has also written to people claiming the rent rolls on commercial properties.

In August a mob - that is the best way of describing it - was led by the trust to a stud farm in County Kildare and took over the property. The people involved then withdrew from the property and it was eventually taken into possession by the receivers. All of this has been high profile and widely reported. The individuals at the centre of the trust are highly mobile, moving from one end of the country to the other and moving out of the jurisdiction. While it is not our business, it is a fact that similar organisations have been operating outside the jurisdiction, in the North in particular.

It was reported yesterday that the head of the trust was arrested and this brings the matter into sharp focus. There are several questions which I am keen to put to the Minister of State and I will follow them with supplementary questions. What action has the Government taken to inform vulnerable debtors of the activities of this trust and similar trusts? Has the Government reviewed the Consumer Protection Act 2007? Is the Act capable of dealing with this type of activity? Has the Department of Justice and Equality or any other Department been in touch with the Garda Síochána and the Revenue Commissioners, two relevant agencies in this matter, given the high profile nature and the sums of money involved. In the case of at least one of these trusts it is estimated that in excess of €600,000 has been taken from people in cash payments; there are no cheques and there is no traceability, it is all cash and there is no accountability.

Kathleen Lynch (Cork North Central, Labour)
Link to this: Individually | In context | Oireachtas source

The Deputy should note that the Minister for Justice and Equality was keen to take this issue himself but he is in the Middle East in his capacity as Minister for Defence. The Deputy will accept that as legitimate. I will go through the reply as quickly as I can but before I do I wish to point out that people who find themselves in desperate situations are inclined to resort to sometimes desperate solutions. We should not forget that.

I thank Deputy Collins for raising the issue. The Government has brought forward significant modernisation of the law to address the problem of over-indebtedness, primarily through the enactment of the Personal Insolvency Act 2012 and reform of the Bankruptcy Act 1988. The Personal Insolvency Act established three new debt resolution mechanisms: the debt relief notice, the debt settlement arrangement and the personal insolvency arrangement.

In the context of today's debate, the personal insolvency arrangement, PIA, has been the most significant development. The PIA will enable the agreed settlement of all unsecured debt and secured debt up to €3 million, a cap which may be increased with the consent of all secured creditors. The PIA provides for the negotiated resolution of secured debt in a court-sanctioned process that provides for certainty for creditors and hope and relief for debtors. The PIA does not only cover mortgage debt; it is effectively a form of personal examinership that can comprehend debt arising from trading or business activities, including agricultural activities.

To protect the constitutional rights of all concerned and to prevent potential actions for judicial review, the Act provides for enhanced oversight by the court of the new debt resolution procedures. This court involvement has the significant benefit to the debtor of providing protection from enforcement actions by creditors, either through the negotiation period or during the lifetime of the arrangement. Trust law allows for the legal title of land to be held by trustees not for their benefit but rather for the benefit of the beneficiaries of the trust, a point that relates specifically to Deputy Collins's question. The beneficiaries are said to be the beneficial owners and the property must be used for their benefit rather than for the benefit of the trustees. The trust mechanism may be used in family situations where, for example, the intended beneficiary is a minor or is otherwise incapable of managing the property. Trusts are also commonly created in the context of wills where the testator may leave property to his or her spouse for life and afterwards to his or her children. The creation of trusts for charitable purposes is also common.

The Property Registration Authority is the State authority which manages and controls the Land Registry and Registry of Deeds. I am advised by the authority that in recent months over 500 applications for the registration of notices of certificates of acknowledgement of the living man's claim of right were received in the Land Registry. Based on the third party witness common to all these documents, it appears they originated in the trust in question. The notices of certificates of acknowledgement appear to be applications to record on a State register the acknowledgement of the living man. Freemen on the Land is one of several groups, originating in Canada and the USA which advances the notion that the legal person and living person are two distinct entities. Under the belief system, the living person is not bound by law or court rulings unless and until the living person or freeman contracts to accept such law. Obtaining an entry on a State register of the recognition of the living man or freeman on the land is often a first tactical step within these groups. These applications were all rejected by the Property Registration Authority.

Catherine Byrne (Dublin South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Thank you.

Kathleen Lynch (Cork North Central, Labour)
Link to this: Individually | In context | Oireachtas source

I will finish presently but this is a matter of concern to us and, as Deputy Collins said rightly, people who are desperate are being sucked into this.

In so far as the Registry of Deeds is concerned, the documents presented for registration were not deeds within the meaning of section 32(1) of the Registration of Deeds and Title Act 2006. Therefore, no registration could be made in the office. In so far as the Land Registry is concerned, the registers, which are maintained in that office, must consist of information required to be recorded under the Registration of Deeds and Title Acts 1964 to 2006 and be authorised by the land registration rules 2012. The applications received in these particular cases did not constitute applications for an authorised entry on the folios of the register and were not in a form prescribed by the land registration rules 2012. I gather the Property Registration Authority has not received any applications from any other trust of this nature.

Niall Collins (Limerick, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We are all agreed that at the heart of this issue there are vulnerable people and, basically, they are being exploited. It is a major fraud and a scam being perpetrated throughout the country. By any yardstick, given the amount of reportage on the matter, there seems to be no oversight whatsoever from any State agencies, an issue of major public concern and one we should be concerned about in the House. Since some of these people are vulnerable they want to remain private. None of them is coming forward to make complaints to An Garda Síochána.

It is noteworthy that some of the individuals operating these trusts - I have no wish to call them trusts - tried to align themselves to the political establishment. They contacted people in the Houses of the Oireachtas and sought meetings. One such person was my colleague, Senator Thomas Byrne, who met them. As a result of meeting them he was so alarmed that he wrote to An Garda Síochána and made an official complaint. Regrettably, he got back a reply, a copy of which I have, stating that it was not a formal complaint. However, he put a complaint in writing and it is high time that paper stopped shuffling around the desks of An Garda Síochána at a high level and that the force took the issue seriously.

The Minister of State has outlined in clear terms what trust law provides for. She stated that these people are trading on the notion of a distinction between the living man and the freeman. It does not stack up. We need to hear from our agencies of State but above all we need to hear from the Government. What exactly is the Government going to do in this regard? How many other operations exist? Are there up to half a dozen similar entities operating in the country? At the heart of this is mass fraud and misrepresentation. Vulnerable people are being targeted and are effectively being taken for a financial scam but no one seems to be concerning themselves about it.

As I stated, Senator Thomas Byrne wrote officially to the Garda Síochána-----

Catherine Byrne (Dublin South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Sorry Deputy, you have gone over your time.

Niall Collins (Limerick, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----and got a one-line response to the effect the Garda cannot act on it.

Kathleen Lynch (Cork North Central, Labour)
Link to this: Individually | In context | Oireachtas source

I believe all Members are agreed on this matter and it is not as though the Garda is doing nothing on this issue. There was a high-profile arrest recently and Members should be conscious that it was simply an arrest. Members also should be conscious that if charges are to be brought, they must go on to be proved.

Niall Collins (Limerick, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Yes, but that was not for the activity.

Kathleen Lynch (Cork North Central, Labour)
Link to this: Individually | In context | Oireachtas source

No, I understand that perfectly but the Deputy must admit it did bring a degree of attention to the particular issue. I do not believe one can ever enact laws that will protect people who are quite desperate from making decisions for themselves and clearly, this is what is happening. A debate like this one today will alert people to the fact that this is not a viable option. I believe that is as far as one can go. However, I do not believe that other so-called trusts are operating in the country to the same extent as is this particular one. As the Property Registration Authority has noted, no applications have been made other than through this living man and freeman testimonial. This should provide some degree of comfort but that said, the Minister for Justice and Equality has a meeting on a monthly basis with the Commissioner. I am sure this is a subject that will arise in their discussions and I also will ensure it is drawn to his attention. While I do not believe he needs this, I will ensure it happens, as there is a real need to start telling people they are throwing good money after bad in this respect.