Dáil Éireann - Volume 214 - 02 March, 1965

Committee on Finance. - Vote 18—Miscellaneous Expenses.

Minister for Finance (Dr. Ryan): I move:

That a supplementary sum not exceeding £32,500 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1965, for certain Miscellaneous Expenses, including certain Grants-inAid.

There are two items in the Supplementary [1189] Estimates which I should like to explain. First of all, an Insurance Compensation Act was passed in 1964 to deal with any company that might go bankrupt and to provide that those who were assured with that particular company before it went bankrupt would get certain compensation in respect of any claims that might arise. A fund was established under that Act and the Minister for Finance was to contribute £30,000. As well as that, that fund had income by way of levies from non-life insurance companies, whether foreign or Irish, and there was a provision that one could borrow. We had to pay £30,000 into that fund which was taken out of the Contingency Fund and I am now asking the Dáil to repay that amount to the Contingency Fund. The Fund is under the control of the Accountant of the Courts of Justice and money can be paid out only by court order. I may tell the House that so far no money has been paid out, even to the Equitable Insurance Company which is the only one that came up under it.

Mr. Sweetman: Would the Minister explain why?

Dr. Ryan: I believe no account has been verified yet for payment.

Mr. Sweetman: I am afraid the Minister has not been properly briefed by the Minister for Industry and Commerce. I will explain why.

Dr. Ryan: That was my information the last time.

Mr. Sweetman: I am not doubting the Minister's sincerity in any way. Why was the Minister asked to do this? Why was this not done by a Supplementary Estimate for Industry and Commerce?

Dr. Ryan: The Deputy is aware that where money is urgently needed, and the Dáil is not sitting, it has to be paid from the Contingency Fund and then repaid to the Fund and, therefore, it is appropriate that I should take the Estimate.

Mr. Sweetman: The Minister said none of it has been paid and, therefore, [1190] it cannot have been urgently required.

Dr. Ryan: We had to pay it into the Fund.

Mr. Sweetman: I am afraid it was done for the purpose of codding the Minister into defending this.

Dr. Ryan: I do not think the Minister has any worry about defending this at all.

The second item is in regard to the National Anthem. Deputies may not be aware that in 1933 some proceedings were threatened in court against a theatre by the author and representatives of his partner in setting the song to music. They had threatened proceedings against this theatre for playing the National Anthem without permission to use it. At the time the Government stepped in and purchased the rights from the author, Mr. Peadar Kearney and from his partner, Mr. Michael Heaney, who was dead at that time but whose representatives were there, and for £1,000 they bought the rights. That appeared to be the end of the matter at the time. The intention in buying out the existing rights was to free the Anthem of vested interests and make it freely available for performance. That, as I said, appeared to be all right until recently it was realised that the right which was bought would lapse between 1967 and 1993. That was as a result of the Commercial Property Protection Act, 1959 which gave a right for 25 years after the person's death. That is all the person could dispose of, for 25 years after his death, but his legal representatives would be entitled to benefit from the performance of this song and music between that and 1993; in other words for 25 years. When we realised this we had to set about buying the rights between 1967 and 1993. Eventually, we secured an agreement with the representatives of both Mr. Peadar Kearney and Mr. Michael Heaney and bought the rights for £2,500. When the Estimate was introduced some of the newspapers said that we had to be quick about this because the time was running out. It was not exactly that, because there were a few years to [1191] spare, but the bargain was eventually made and one of the conditions was prompt payment. That is why we had to pay for it out of the Contingency Fund and I am asking Deputies to replenish the Fund in that amount.

Mr. Sweetman: Whoever made that condition in relation to the second item knew the devious ways of Government Departments, including the Department of Finance, in letting things run for a very considerable period. When there was such an urgent necessity for payment it was perfectly proper that it should have been paid out of the Contingency Fund and, of course, it is perfectly right that we should now reimburse the Fund in respect of subhead J. However, it is not in relation to that subhead that I want to make some observations on this Supplementary Estimate but in respect of the first one. I do so mainly in the light of observations that the Minister for Industry and Commerce made in this House on the 10th February, 1965, particularly at column 112 of the debates for that day, debates which we had initiated by reason of a motion this Party had put down complaining of the manner in which the claims of policyholders in the Equitable Insurance Company Limited had been dealt with.

Let me say at the beginning that, like the Minister for Finance in his personal capacity, I in my personal capacity have some connection with insurance but I got none of the information to which I am about to refer from those insurance contacts. I got it because quite accidentally I happened to be concerned in another case on a later day on the court list and happened to hear some comments in relation to the administration of the Equitable Insurance Fund. The Minister for Industry and Commerce made it clear, when he was discussing this matter in the House on the 10th February, in the reference I have given, that he did not really know what delay was involved. I want to suggest that there are only two possible explanations for that statement. I do not believe for a minute that the Minister [1192] for Industry and Commerce made a statement like that knowing it to be a deliberate lie. Either he had not read his brief or the brief was not properly submitted to him. This money is asked for under section 4 of the Insurance Act, 1964 and is being made available by section 4 to the Fund for the purpose of making payments out of the Fund under the authority of section 3 of the Act.

Section 3 of the Act is the section that authorises the payment of moneys where there is an insolvent insurer and where the liquidator makes the proper application to the courts in the liquidation matter. “Insurer” is defined as meaning an insurance company or syndicate holding an insurance licence to carry on an insurance business. The plain fact of the matter is that the Act was badly drawn and that the legislation was muddled in its presentation to the House and that the delay has arisen because section 3 was so badly drawn that no payments could be made under it without the Minister having to resort to a subterfuge.

An “insurer” is defined in the Act as being a person who has a licence from the Minister for Industry and Commerce. The Minister for Industry and Commerce had terminated—and properly so—the licence of the Equitable Insurance Company Limited. The effect of that termination meant that section 3 was entirely nugatory and that nothing could be done. The court directed the attention of the Minister for Industry and Commerce to that fact.

The whole purpose of the Minister's reply in the Dáil on 10th February was to put the blame on the liquidators and the court. In fact, there was nobody to blame for this delay but the Department of Industry and Commerce itself. What had to be done in order to get over this botch made by Industry and Commerce? When they came here to this House with this imperfect Bill, a new licence had to be given. We are now in the extraordinary position that in order to pay claims under the Act, the Minister has had to grant a new licence to an insolvent company, the Equitable Insurance Company Limited. He has had to [1193] grant a licence to carry on the business of an insolvent company, which is in the course of liquidation.

It seems to me to do that, to grant a licence to an insolvent company solely for the purpose of getting around bad drafting in an Act, is the wrong way to go about business. It would have been much fairer, much more honest and much more reputable if the Government had come to the House and said: “When we were drafting this Bill, we made a mistake. We did not intend to apply it. It was only where a person had an existing licence that the fund could be used for payment in this way. Accordingly we want to change it.” If they had, there would have been unanimity in the House in five minutes and there would not have been this Supplementary Estimate in order to hide that some of those licences had been given to an insolvent company to carry on insurance business, perhaps with the undertaking that though the licence is given, it will not be used. I am quite certain it will not be used because the liquidator and the court will not allow it. It seems to be a crazy way of doing business.

It was because I had accidentally become aware of this that I suggested to the Minister for Finance that it is done in this way to avoid having to explain to the House that it was due to the vagaries of the Department of Industry and Commerce in relation to this matter. I may say when I heard that had been done and a licence had been granted to an insolvent company, I first refused to believe it. I then made some further inquiries and I was assured that it was true. I was told the reason why it was true. It was that without the grant of a new licence to an insolvent company, no payment would be made to the policy holders. That was the cause of the delay. It is not the fault of the liquidator in any way or the fault of the court but the fault of the Government and the Department concerned.

It is only fair in relation to people who cannot defend themselves in this House to say that they have not asked me to say a word about it. It is only to put matters right that this subterfuge has been adopted to get around [1194] the expressed though wrong statement in the legislation, that there will be no further delay, that people who are affected will be paid and that they will not have to wait until Tibb's eve.

The Minister acknowledged that when he said that not one single claim had been paid to anybody because of the insolvency of the Equitable Insurance Company. Is that not an appalling state of affairs? It is ten months after the company was put into liquidation. It was in May that the order of the court was made, putting the company into liquidation. That is ten months and not one payment has been made. It seems to me that this payment should be taken entirely out of the sphere of the Contingency Fund and should be made one for the Vote itself.

The Minister knows that in section 4 of the Act there is no time limit provided in relation to the making of the grant of £30,000. It merely says the Minister will make it. Therefore, he would only have put the money into the fund if he believed it was going to be paid out forthwith. There was no immediate payment, as the Minister knows. I am afraid the idea of dealing with it in that way was to avoid the Department of Industry and Commerce having to have the facts disclosed to this House as they would have been if it had been dealt with by a Supplementary Estimate for that Department.

Dr. Ryan: I do not know whether Deputy Sweetman is correct or not in his information about this particular fund. There is one thing I am quite sure of, that is, that the Minister for Industry and Commerce is not afraid to face the music if he has done anything which is not correct. I am quite sure he is not afraid to come along and face the music about this matter.

Vote put and agreed to.