Wednesday, 27 July 2011
Criminal Justice Bill 2011: Committee and Remaining Stages
Feargal Quinn (Independent)
I move amendment No. 1:
In page 30, after line 48, to insert the following subsections:
"(3) Any judgement or order against a company disobeyed may by leave of the court, be enforced by—
(a) sequestration against the property of the company,
(b) attachment against the directors or other officers of the company, or
(c) sequestration against the property of such directors or other officers.
(4) An application may not be made, in the foregoing circumstances, for attachment against directors or other officers or for sequestration against their property unless the judgement or order of the court to which the application relates has contained a statement indicating the liability of such persons or of their property to attachment or sequestration, as the case may be, should the judgement or order be disobeyed by the company.
(5) In this section "attachment" and "sequestration" have the same meaning as they have in rules of court concerning the jurisdiction of the High Court and the Supreme Court.".
This amendment is self-explanatory. When I became involved in preparing the Construction Contracts Bill, which was introduced in the House last year and which I hope will become law in the next few months, my attention was drawn to the number of contractors and developers who had not paid subcontractors. I assumed it was comparatively easy for the subcontractor to get the money he or she was owed if the contractor had the money but I discovered that in many cases the contractor had money but that the payment of subcontractors was not being enforced.
The proposed new subsections seek to cure what many subcontractors and suppliers call white collar crime - companies ordering goods and services and hiding behind the protection of limited liability and not honouring their debts. What I recommend in this amendment is already in law but it is contained in secondary legislation; it is provided in the rules of the Irish High Court, Order 42, rule 32. What I propose in this amendment will highlight this rule by moving it into primary legislation, which is a recommendation of the statutory Company Law Review Group that goes back to 2007. This expert group has already recommended that this be provided for in the new companies Bill 2012.
Companies that are solvent and pay their debts have nothing to fear from this proposal. However, if a company is successfully sued in the District, Circuit or High Court and a High Court order is obtained requiring it to pay and it does not do so, it will be in contempt of court. If it continues to disobey or fails to cease trading, technically under Irish company law, as it currently stands, if one cannot pay a Bill of more than €1,300 within 21 days and the debt is not disputed, one is regarded as being insolvent and a creditor can have one's company wound up by the court. The proposed new subsections would send a very clear message to the corporate community, namely, to pay its bills or if it continues to trade in perhaps a reckless fashion and ignores a court judgment, it will face attachment and committal and risk having its personal property seized for failure to pay company debts.
The business community desperately needs greater protection here. It cannot wait until the companies Bill is eventually enacted which may not happen for another year or two. There is an opportunity to introduce this provision in this legislation; it is already down on paper in the rules of the Irish High Court and, therefore, it is capable of being introduced at this stage, although I can understand why the Minister may not be enthusiastic about accepting it today.