Thursday, 14 October 2004
Land Bill 2004: Committee Stage.
I move amendment No. 1:
In page 3, subsection (1), between lines 9 and 10, to insert the following definition:
"'Land Purchase Acts' means the Land Purchase Acts as defined by the Land Law (Commission) Act 1923, together with any subsequent Act which provides that it is to be construed as one with the Land Purchase Acts;"
I welcome the Minister to the House. This is the only amendment you are allowing me to move today, a Chathaoirligh, but I will address that later. The purpose of this amendment is to correct an omission in the Bill, namely, the definition of "Land Purchase Acts", which is what we are talking about.
The Senator is proposing to insert a definition of "Land Purchase Acts" using a definition contained in the Land Law (Commission) Act 1923, which refers to a definition in the Irish Land Act 1909. As I am sure the Senator is aware, this Government is part of the regulatory reform process. It is committed to removing the elements of pre-1922 legislation from the Statute Book. It is premature to insert a definition which relies on legislation that may be repealed in the near future. I should also mention that in previous enactments the phrase "Land Purchase Act" has been used without definition, and there is no reason to insert a definition on this occasion.
The Bill does not define what we are discussing now and, as the Minister rightly said, we were talking about the old Land Act, changes that occurred in the past and changes that are likely to happen in the future. My amendment simply proposes to define clearly what the Minister is about to do.
According to the legal advice available to me, there is no necessity for this amendment when we are removing pre-1922 legislation from the Statute Book. There is definition and cross-referencing in the legislation and, therefore, the amendment is not necessary.
I move amendment No. 3:
In page 3, subsection (2), line 35, after "effect" to insert "and shall cancel any existing entry to the contrary effect".
This amendment deals with the discharge of land purchase annuities. This is a drafting amendment. It is not sufficient for the Registrar of Titles to simply make a new entry in the register on the passing of the Act. The registrar should be required to cancel existing entries to the effect that a land purchase annuity is payable.
I have been advised that the amendment is unnecessary as it is Land Registry practice when cancelling a land purchase annuity on a folio to automatically cancel any previous entries in that category. As a professional, the Senator must be acutely aware of that.
I move amendment No. 6:
In page 4, subsection (3), line 17, after "discharged," to insert "such date being not later than 31 January 2006".
In her Second Stage speech the Minister clearly indicated that she wanted to move this legislation within six months. It will probably take two or three months to go through the Houses and she is allowing only a six-month timeframe thereafter within which people must comply. Six months is not sufficient. Next year we will be using a new payment system for farmers, the single farm payment, which will not be due until the end of next year. There should not be any onus on farmers to pay until those payments arise because in the interim there are no facilities for farmers to get payments due to them from the Department.
I accept the Minister's point regarding people who make an effort but the officials may not accept that and there will be a difficulty later on. There should be a definite timeframe for farmers to pay the arrears so that they can benefit from this offer.
I raised that issue in the Second Stage debate on this Bill. I understood the Minister to say in reply that once the process is initiated by the person's solicitor, or whoever is acting on his or her behalf, that would be adequate and it would move forward from there. I am concerned by Senator Coonan's suggested closing date of 31 January 2006. In some cases one may not be able to come within that timescale because of difficulty with title and so on, and the goal would not be achieved. One of the benefits of the scheme is that all payments would be processed as quickly as possible. I do not disagree with the Senator but setting a closing date may create a problem he does not envisage.
I am concerned at the confusion in the House on the need for a clear title and in some cases to take out grants of administration. My Department does not require clear title for redemption of an annuity. Those annuitants, however, who need to raise finance to avail of the offer may need to show clear title in order to obtain a loan. These people need to ensure their title is now in order. In the event that it is not in order they should act without delay and instruct their solicitors. On the enactment of the Bill I intend to introduce a scheme bringing forward the buy-out. I anticipate the scheme will commence in the spring of next year for six months to the end of autumn 2005.
There is no need to extend the scheme beyond the latter half of 2005 because individuals will have the best part of 12 months from now to organise the title and finances. I cannot predict interest rate movements in the future but I am aware that annuitants may obtain commercial loans below the annuity rate now paid. It would be imprudent for individuals to delay in taking up the offer as there will be no decrease in the amount tabled and interest rates may rise. On this basis I appreciate the concerns expressed by both Senators, particularly as we know it is in the nature of Irish people to leave dealing with such matters until the very last minute. We will ensure that people showing true form legally, through a solicitor, will be dealt with favourably.
The Minister has clarified the point somewhat but she needs to do more work on it. Next year, under the new system, the farmers will not have been paid by the time her deadline arrives. For the sake of the extra few months she should give the farmers that co-operation. Many of them are struggling to survive in farming and many farmers have left the land over recent years. We should not make it harder for them to survive on the land. I appeal to the Minister to ensure they will have received their single farm payment for 2005 before the deadline. This will make it easier to pay; it is all about money.
The Senator is absolutely right. It was of grave concern to me that a few farmers had very large arrears and considerable land holdings too, although I doubt the Senator is speaking of them. There are 15 annuitants with arrears in excess of €20,000 and a further 34 with arrears between €10,000 and €20,000. In total, 49 cases owe €1 million. That is a considerable sum of money. We have had two previous opportunities for a buy-out. We are all sincere in saying that if someone is under pressure we will try to facilitate them. That is why there were two previous buy-outs and a large reduction was given last time. There is a write-off for the small landholders as they are in most need of care. Few of these land holdings are in disadvantaged areas.
I appreciate the Senator's concern but while there are difficulties with title, as we all know, the fairest way to deal with people under pressure is to ask their solicitors to advise the Department that they are dealing with this and are anxious to participate in the scheme. I will keep a watching brief on this. We have spoken about this in the Department and it is the best way to deal with it. Many of those with considerable arrears would have been receiving their grants over the years and the best solution is for them to deal with this at a commercial level. The annuities were paid at 11% but one can raise a commercial loan for much less.
My amendments Nos. 4 and 5 were ruled out of order because there was a possible charge on the Revenue. However, I was not suggesting that any of the arrears be written off and I do not see a finance deficit in the proposal in one of my amendments. I asked that the Department agree a schedule with farmers for the payment of arrears to give them some time to pay the arrears and bring them up to date. This applies particularly to medium-sized farms which are experiencing some financial hardship. In order to avail of the scheme they must pay their arrears in full. Much of the arrears payment comprises interest accumulated over the years. I am not suggesting that the arrears should be written off but that there be a timeframe and a plan for payment.
We have considered this matter on the basis of the issues raised on Second Stage and would like to bring the matter to finality. All Members of both Houses would agree that we have moved on. The Land Commission has been gone for more than 20 years. We want landowners to be landowners, which is the best way to deal with the issue. It is on this basis that we are trying to impress on people the need to deal with the issue as quickly as possible. On the last occasion we had an adjustment of repayments to give a reduction of 10% and still we find ourselves in this situation. With the legislation passed heretofore, the sincere expectation was that people would get their affairs sorted out. Unfortunately, this has not happened. Concerns have been expressed at the way we allowed arrears to build up. As the Senator knows, many people would not be particularly enamoured with that situation. On this basis we need to introduce this legislation.
I move amendment No. 7:
In page 4, line 20, to delete "Department" and substitute "Minister".
The Department of Agriculture and Food is not a legal entity. The Minister is the sole legal corporate body and, accordingly, the section should refer to moneys due by the Minister to a person and not by the Department. I am sure the Minister will look favourably on the amendment.
I am too nice for that. Just in case there is any misunderstanding, I have been advised that in hardship cases, rescheduling can be provided for repayments.
My Department is the competent authority for purposes of EU funding. As many of the payments to farmers have been partially funded by the Exchequer and co-funded by the EU, the advice of the Office of the Parliamentary Counsel is that the Department is the correct legal entity.
I accept the Minister's response and will withdraw the amendment on that basis. However, we need to be cognisant of this matter. At some stage in the future the interpretation will be made on the basis of European law. If a legal stand-off occurs between somebody and the Department, the sole legal corporate entity would be Minister as opposed to the Department.
The Minister has proposed that the Department would be able to hold back payments due to farmers to offset against arrears of land annuities. Farmers should be subject to the same laws of the land as everybody else. The system of revenue sheriffs exists for those who do not pay their way. It is grossly unfair to introduce this legislation giving power to the Department to take farmers' money. This is robbery of another kind. This touches a nerve concerning collections of money for land down through the years. The Minister should seriously reconsider this proposal. The other legal systems for collection of moneys due should be used and farmers should be treated in the same way as every other citizen.
This procedure will only be used as the last resort. We have taken the opportunity over many years to deal with these issues, which were unsatisfactory, and we certainly would not do this in a haphazard way. Consultation would have to take place with the relevant landowner and farmer. We hope never to have to go down that road. However, it is a legal provision that can be invoked if necessary.
I move amendment No. 10:
In page 4, subsection (1), lines 29 and 30, after "payments" to insert "recoverable".
Some arrears of annuities may not be recoverable. For example, the arrears might be statute barred or could have been discharged under section 2 of the Bill. In such cases the arrears should not prevent the giving of a certificate for the purposes of section 5 of the Bill.
I am glad the Senator has clarified the background to this amendment. As the Senator knows, the insertion of the word "recoverable" could be construed to mean all payments, future and past, which would have a legal implication and might not be sound. I do not propose to issue a certificate as outlined in section 5 of the Bill unless all arrears of annuities are paid up to date. However, in light of the potential for the amendment to be misconstrued, I ask the Senator to withdraw it.
I move amendment No. 11:
In page 4, subsection (1), line 31, to delete "not more than" and substitute "on or after the day which is".
This is a drafting amendment designed to remove an ambiguity in the subsection. As the subsection is drafted, the certificate of the Minister must be dated not more than four months prior to the date of the instrument. This is somewhat ambiguous as it could be open to the interpretation that the certificate must be dated prior to the instrument and also not more than four months prior to it. My amendment makes it clear that it is perfectly in order to produce a certificate, which is dated after the date of the instrument.
I intend that the date of the instrument affecting the property transaction shall not be more than four months after the date of the certificate. I believe the wording from the Parliamentary Counsel is clear and concise. I am happy with the legislation as it stands.
I move amendment No. 12:
In page 4 between lines 32 and 33, to insert the following new subsection:
"(2) The Minister shall, on application by a person entitled to a certificate under subsection (1), issue such a certificate as soon as practicable after such an application.".
There is a strange omission from the section in that while an individual is required to produce a certificate issued by the Minister under section 5(1), the Minister has no obligation to issue a certificate to persons entitled to one. We have had many debates about bureaucracy and red tape in the area of agriculture. I believe this would be a move in the right direction and would inject some balance into this section of the Bill.
The word "practicable" is open to interpretation. It is my firm intention to issue certificates without delay. I am sure the Senator will be aware that the numbers requiring such certificates will be very small as this only refers to those who have an ongoing annuity of more than €200 per annum. At present only 2,300 such persons exist and this number should be considerably reduced after the proposed buy-out goes ahead. We have discussed this matter to ensure no delay will be caused in the Department. My view is that we should issue these certificates immediately on a turnaround basis.
While I accept what the Minister said, I would be happier if the legislation specified an obligation on the Minister to issue the certificate, irrespective of who is the Minister. While I accept her sentiments in this respect, having such an obligation to issue a certificate gives a firm base. We can allow for situations whereby the intention may be to issue a certificate as soon as practicable based on the resources available to the Minister, but if no obligation is specified, the same efficiency in issuing the certificates might not necessarily exist.
I am advised that if we did not issue a certificate or delayed a certificate, to which a person is legally entitled, the farmer would have recourse to a judicial review. Bearing in mind the numbers, I believe this will not present a problem. While the practicalities of it could be implored and impressed upon the Minister if a problem exists, I do not anticipate such a problem.
This is something we need to be mindful of in other areas. As far as I know, this is the second of two Bills introduced by the Department in the past two years. We need to try to make legislation more user-friendly. It is important that it should be easier for ordinary lay people to interpret legislation. Departmental civil servants should be obliged to be fair and balanced in their interaction with farmers and other sectoral groups. I appreciate the Minister's response and I will withdraw my amendment on that basis. When the Department of Agriculture and Food is producing legislation in the future, perhaps it will consider the insertion of a provision that will oblige the Minister to interact with the Department's customers — in this case, farmers — in a fair and practical manner.
I appreciate the Senator's intention to impress on the Minister an obligation to do something. It is the firm view of the Department that it would like to deal with this issue as quickly as possible. My officials and I will discuss the best way to transmit the message in the context of an information campaign. I agree that legislation can be confusing, especially for those who are not accustomed to dealing with it. I suppose that is why solicitors and barristers are employed and fights take place in the courts. I will try to stress the importance of ensuring that information which is made available to farmers is as clear, concise and readable as possible. The Department is anxious to address this matter as quickly as possible.
Section 5 requires those who are registering a land transaction, as defined in this section, to furnish beforehand a clearance certificate to the Land Registry to confirm that no arrears of annuities are due to the Department. Clearance certificates will be issued by my Department. Under section 5(2), as currently drafted, the Land Registry does not require that a certificate of clearance in respect of annuity arrears be furnished in the case of a site transfer of one hectare or less.
One of the Bill's main objectives is to reduce the level of arrears of annuity payments that has developed in recent years. The amount of such arrears is approximately €5 million at present. Amendment No. 13 will ensure that farmers who do not avail of the buy-out scheme and have not maintained annuity payments in the past will be obliged to discharge all outstanding arrears where they are receiving capital from the sale of a portion of their land.
I am conscious that farmers with annuity arrears may make voluntary transfers with no consideration passing. A site may be transferred from a farmer to his son or daughter, for example. In such circumstances, my Department will, as in set-off situations, discuss the annuity arrears position with the farmer concerned before deciding to issue a clearance certificate to the Land Registry. The House should note that if there are no annuity arrears, the clearance certificate required will be issued to the annuity holder without undue delay. Annuity holders are obliged, just like all mortgage holders in the State, to ensure that their financial circumstances are in order at all times. The proposed amendment will ensure that we meet the overall objective of the Bill, which is to reduce the number of annuity holders with arrears. I ask the House to accept the amendment.
I assure the Senator that it will not be a problem where no capital is involved. We are not tying people up. I simply gave an example of how this section might manifest itself. Those mentioned by the Senator, such as nephews or grandsons, will be covered under section 5.