Wednesday, 21 July 1971
Seanad Eireann Debate
An Cathaoirleach: Before we take up consideration of the Committee Stage of this Bill I should like to indicate that I have ruled amendment No. 4 in the name of Senator Robinson out of order as not being relevant to the subject matter of the Bill.
but excluding deposits with a trader from persons employed by him in his trading business or from  his customers in the normal course of his trading business and deposits or instalments in respect of the letting or selling of goods under a hire-purchase agreement or a credit-sale agreement...
Do I understand that to mean that the Central Bank can now engage in the business normally carried on by the associated banks or non-associated banks? Anybody with a banker's licence can do these things? Is that correct?
Mr. Colley: No. The point the Senator is making is correct but not under this subsection. It is under another section which allows the Central Bank to carry on the normal business of a bank. Perhaps when we reach that I can explain why. What it is intended to cover is such business as, say, dealing with changing of foreign currency and various activities of banking which do not come within the definition of accepting deposits payable on demand or on notice, which is the primary business of banking. As the House knows, banks engage in various other types of business, such as investment banking, etc.
Mr. Russell: Perhaps I could raise this under another section. Again on section 2, it says on page 4, “securities ‘means’” and it goes on to enumerate them under subsection (a) “shares and the share capital of any body corporate” etc. Does that include rights to bonus shares that might be issued or rights issues that might be issued by a company? Is that included in the rights? In other words, if the bank accepts securities does it also, by accepting securities, obtain the right to any bonus shares issued to those securities or rights issues?
Mr. Colley: It would be included in the definition of securities. The question of whether the bank would acquire the right to them is a separate question, depending on the circumstances of a particular transaction. But it would include such bonus shares or rights issues.
Mr. Colley: It is true that until they are issued they are not property. But when they are issued, they could form property coming within the definition of securities in this section. That does not mean that automatically the bonus shares would accrue to the bank if the bank were holding the shares on which the bonus shares were issued. It does not mean that. Such a question could only be decided in each individual case depending on the nature of the deposit with the bank.
Dr. Belton: May I frame it in another way? In regard to the rights of bonus shares on foot of shares that the bank holds as security, could the individual who lodged those securities dispose of those bonus shares while the securities were lodged at the bank? The  securities were also lodged at the bank; that is the point.
Mr. Colley: We may be at cross purposes here in the sense that what the Senators are visualising is a deposit of securities with a bank, say, as security for an overdraft, and in respect of those securities the issue of a bonus share. That is a different situation. I think it comes under section 34. This definition is the same as that contained in the Unit Trust Bill and it covers all investments generally regarded as securities in business and commerce. But the question of what constitutes security in the sense that the Senators mean is, I think, appropriate to section 34.
Mr. Russell: Then the House cannot  have an opportunity of annulling that order until some future date. I may be wrong, but I would re-word that to say “The twenty-one days that the House shall sit after the order or regulation is laid before it”. Which comes first, the regulation or the sitting of the House?
Mr. Colley: The regulation. This is the normal procedure in relation to the laying of orders and regulations before the Houses of the Oireachtas. What is envisaged is that such an order can be made at any time. It is laid before the Houses of the Oireachtas and at any time within 21 sitting days, either House may annul the order, but in the absence of such annulment, it continues in force. This is the normal procedure, and it is not envisaged that there would be a motion to the House to be passed and then the order is made.
Professor Quinlan: On a point of information on section 4 following on Senator Russell's query, if a motion is put down by a Private Member to annul an order, has that to be taken within 21 sitting days to comply with this regulation?
Mr. Colley: As I say, I cannot pronounce on the interpretation of the Standing Orders, but my understanding is that the practice that has been followed is that in such cases the motion is taken within 21 days.
Professor Quinlan: There is a restriction on the carrying on of banking business. We all recognise the necessity for this type of restriction but coupled with it are the promises that have been held out at various stages that the amalgamations of the banks were to ensure more efficient service with a consequent reduction in duplication and redundancies. Has any progress been achieved or has the Minister hopes that the present Bill will speed up the rationalisation of our banking services?
Mr. Colley: No, I could not say that is so, because the amalgamations to which the Senator refers have already taken place. There is provision in a later section in the Bill which covers various contingencies, legal and otherwise, that can arise, in the event of a merger or amalgamation. I cannot say, however, there is anything in this Bill which would effect what the Senator has in mind.
Professor Quinlan: But I take it that Government policy, as enunciated when the other banking legislation was going through, is that the Government desire to rationalise the banking service. At that stage it was held that there was an obvious need for rationalisation in small towns where there are two or three different banks represented. It was a Government aim to try to do something about that. My theory is that is still the Government's aim. Is there any means of speeding it up or has the present Bill anything to offer?
Mr. Colley: It is still the aim. Under this Bill the Central Bank would be issuing licences to the various banking bodies and it can apply conditions to these licences. I do not visualise the Central Bank applying conditions to licences for existing banks, assuming they are issued, say, on 1st January next, which would oblige banks to close down certain branches which now exist. It may be that such would develop in the future. This would be a consideration which the Central Bank would bear very much in mind in the event of an application from people who are not already carrying on banking in this country. In other words, it is possible that the provisions of this Bill may in the future assist in that rationalisation, but I would not like the House to think there is likely to be an immediate change in the situation in that regard on the passing of this Bill.
Mr. Colley: No. To my knowledge and to the knowledge of the Central Bank there are not. I have a qualification to add to that. Within recent months some individuals have sought and obtained banking licences. Whether they are carrying on a banking business is not known at the moment. As far as is known no individual is at present carrying on a banking business.
Subsection (1) of this section shall not apply in relation to the Agricultural Credit Corporation, Limited, the Industrial Credit Company, Limited, the Post Office Savings Bank, a trustee savings bank certified under the Trustee Savings Banks Acts, 1863 to 1965, a building society, an industrial and provident society, a friendly society, a credit union, an investment trust company or the manager under a unit trust scheme in respect of the carrying on of the business of the scheme.
What would be the position with regard to co-operative societies or co-operative banks? Is there any provision to add to this list? This is a stated list, and I do not quite see where an agricultural or industrial co-operative bank would fit in under this section. It is not unlikely that you might have a farmers' co-operative bank. Are they covered in this section or are they required to take out a licence the same as any other bank?
Mr. Colley: Ordinary co-operative societies come under industrial and provident societies which is in the list of societies exempted. The reasons for these exemptions is that all of these are controlled by separate legislation, apart from unit trusts where the legislation is in the process of being enacted at the moment. In the case of a co-operative or farmers' bank on the enactment of this Bill, any body, be it co-operative or otherwise, which applies for registration as an industrial and provident society to carry on a banking business would probably—I am not speaking with certainty—be refused registration as such and told to obtain a licence under this provision because they would be carrying on a banking business. If they were registered without a licence under this they would be subject to the statutory control that applies to industrial and provident societies. In other words, any body carrying on something in the nature of a banking business that is not subject to the provisions of this Bill will be subject to other legislation.
Professor Quinlan: I wonder has the Government got any policy on encouraging or otherwise the formation of an agricultural co-operative bank? Some bodies have been speaking about that in recent times. Arising out of the experience of the bank strike the necessity for it is there, especially for the members of the agricultural community.
Mr. Colley: We have provision in the section for exemption of such things. It is possible to think of the names of things like restaurants and so on which would contain the word “bank”. Provided the people concerned are not holding themselves out as carrying on a banking business, or are not in fact carrying on a banking business, they can get exemption under this section. SECTION 9.
An Leas-Chathaoirleach: Amendments Nos. 1 and 2 are related. It is suggested that they might be taken together.
Mrs. Robinson: They might be taken separately.
An Leas-Chathaoirleach: It is a matter for the House.
Mrs. Robinson: I move amendment No. 1:
Before subsection (4) to insert the following new subsection:
“( ) Where an application for a licence is refused the Bank shall forthwith notify the person who has applied for such licence of the refusal and the said applicant may, within thirty days after the date on which the notification is given to the applicant, appeal against the refusal to the High Court whose decision shall be final and unappealable.”
I move this amendment because I think it is necessary in the granting of licences that there would be some appeal to the courts if there is a refusal to grant the licence. I was astonished when I read the Bill as a lawyer—I read it very much as a lay person in relation to banking— that this provision was not inserted in the Bill. The procedure under section 9 for the granting of a licence says:
The Bank shall not refuse to grant a licence without the consent of the Minister and unless it is satisfied that the grant of the licence would not be in the interest of the orderly and proper regulation of banking.
Does the Minister not grant his consent unless he agrees on these terms? If one concedes, as I am sure the Minister will concede, that the licence to carry on a banking business is very much a property right and that it is proper that the Central Bank should control the granting of licences, however in the event of a dispute about this rather subjective criteria “unless it is satisfied that the grant of the licence would not be in the interest of the orderly and proper regulation of banking” there should be an  appeal to the courts on the lines I have set out in my amendment:
Where an application for a licence is refused the Bank shall forthwith notify the person who has applied for such licence of the refusal and the said applicant may, within thirty days after the date on which the notification is given to the applicant, appeal against the refusal to the High Court whose decision shall be final and unappealable.
I should imagine that, when this appeal to the High Court took place, the High Court would be slow to displace the judgement of the Central Bank; but there might be a case where a proper appeal would lie. It is not sufficient to fall back on a possible challenge to the bank's action, or the Minister's action, on the grounds of constitutionality or on the grounds that a proper discretion was not exercised, and put the person being refused the licence in a very difficult legal position as to whether any action lay. For the rare case where there might be a dispute about the granting of a licence there ought to be recourse to the courts.
This was my view on reading the Bill, and I was confirmed in that view merely by looking at two other Bills, which I think are analogous to this Bill which passed through the Seanad in this session. The first of these is the Employment Agency Bill. Section 5 (2) of this Bill, in relation to the Minister granting licences, says:
Where the Minister refuses to grant a licence under this Act to an applicant for such a licence he shall notify the applicant within 21 days of his decision and the applicant may appeal to the High Court against the Minister's decision.
That is the facility I would grant to banking concerns that wish to apply for a licence under the Central Bank Act.
The second provision—in honesty, the provision from which I borrowed the whole idea of inserting an appeal to the courts here—is the Unit Trust Bill. I refer to section 3, subsection (3) of the Unit Trust Bill, which relates to the registering of a unit trust scheme which states:
 Where an application to register a unit trust scheme in the register is refused the registrar shall forthwith notify the manager and the trustee under the scheme of the refusal and the manager or trustee may, within 30 days after the date on which the notification is given to the manager, or the trustee, as the case may be, appeal against the refusal to the High Court whose decision shall be final and unappealable.
If we are prepared and consider it proper to give this right of appeal to the courts in respect of unit trust schemes and of employment agencies and, I would submit, many other similar schemes—I am referring only to Bills which have gone through the Seanad—I cannot understand why, in relation to banking business, where the Central Bank have the discretion not only in respect of the granting of licences but in respect of imposing conditions on the granting of the licence, we would not provide in this Bill for an appeal to the courts. Therefore, I would ask the Minister to accept this amendment.
Mr. O'Higgins: I should like to say a word in support of this amendment. It is eminently reasonable that, whenever the doing of anything, particularly the granting or refusal to grant, a licence, is dependent upon the opinion which is formed by the body that has authority to grant or withhold the grant of a licence, there should be some appeal from the opinion or the point of view formed by the granting authority. It is, after all, a question of an opinion of deciding whether or not the grant of the licence would be in the interest of orderly and proper regulation of banking. There may be two points of view about that. If a particular point of view is taken by the Central Bank, with the concurrence of the Minister, no licence will be granted. If the other point of view is taken by the Central Bank, then a licence will be issued. Senator Robinson's amendment is to provide for the case where you have two points of view, either of which may be taken and that the one taken is the one against the applicant. The suggestion is that in such circumstances there  should be machinery for an appeal.
Section 9 of the Bill sets out a very watery type of appeal in as much as it provides for the making of representations to the Minister. The Minister is a politician—most people in this House are politicians—and we all know that it does not require a solemn section in a Bill to tell a person that he can make representations to a Minister. If he does not make them himself he will get a Deputy or a Senator to make them. I do not think anything is added to the rights of the person whose application has been refused by writing into section 9 of this Bill that within 21 days, or whatever the time is, he may make written representations to the Minister.
If an amendment on the lines of that suggested by Senator Robinson is accepted by the Minister, then the position of the applicant would be genuinely safeguarded against the possibility of error. I am not for a moment suggesting that the power vested in the Central Bank, with the concurrence of the Minister, to withhold the granting of a licence, would be used in a mala fide way by the licensing authority as it would be; it is open to error and there may be two different points of view taken in those circumstances. It seems to me that it is reasonable that an appeal should lie and that the appeal should not lie to the Minister for Finance but should lie to some independent authority that can view the matter in a completely detached independent, judicial manner.
The suggestion here is that it should be an appeal to the High Court. I think that is an excellent idea. If the Minister feels that this type of appeal machinery for one reason or another would not prove workable, that it might be too time consuming or that it might impose an unnecessary burden on the High Court, then the Minister should put forward some other suggestion of his own which would apply the principle of this amendment, that is that the appeal should be to an independent authority, independent of the Central Bank, independent of the Minister for Finance.
Mr. Russell: I, too, should like to support Senator Robinson's amend-purchas  ment, or a similar amendment, for several reasons, some of which have already been mentioned by Senator Robinson and some by Senator O'Higgins. The phrase “in the interests of orderly and proper regulation of banking” is repeated several times in this and subsequent sections. It is not a new phrase. “Orderly marketing” is a phrase that one comes across from time to time in the commercial world. It generally means, in essence, that the most orderly type of marketing is a monopoly. When big corporations want to regulate orderly marketing they generally buy up their smaller competitors or force them out of business. I am always a bit nervous of this expression in any legislation. It has not been defined anywhere in this Bill, what “orderly and proper regulation of banking” means. The Minister's Parliamentary Secretary, in his very comprehensive address to the Seanad before we discussed the Second Stage of the Bill, went to great pains to underline the fact that this Bill had been brought in in the interests of the welfare of the people and in the interests of proper banking arrangements. I am not satisfied that the Central Bank, as I understand it, will be in competition with other banks. I think there is provision in this Bill to permit the Central Bank to be not alone a banker's bank, but to be a bank for the public also and to make loans. I think I am correct in that, and if that is so tremendous power is being given to the Central Bank to grant licences to its own competitors.
That power is too great, even though the Minister will have the final say. The Minister, undoubtedly, will be influenced very greatly by what the Central Bank's advice will be. I should like to think that there would be some other court to which a person or a corporation having an appeal on constitutional grounds could apply, such as the High Court. There is a good deal of merit in this amendment and I would ask the Minister to consider it favourably.
Dr. Belton: I, too, should like to support this amendment. The board of  the Central Bank will be made up of people who are expert in banking, but there may be, as Senator Russell has said, some clash of interests involved in this. With all respect to various Ministers of any party in the present, the past or in the future, we will get Ministers for Finance whose expertise in finance may not be as good as that of members of the board of the Central Bank. Therefore, the reliance of the Minister will be more or less on the advice given by the Central Bank. It may be given by his own technical advisers in his Department, but the technical advisers in the Department, too, may not have any greater expertise than those in the Central Bank.
Therefore, there should be some other resort, some other court, at which even those who plead the case may have recourse to documents and papers and the advice of experts. It may not be the High Court, but the High Court seems to me to be the logical one from what I can see. As Senator O'Higgins has said, if there is any other method or any other court of appeal, I think it should so be available because I feel, like Senator Russell, that too much reliance may be placed by any Minister for Finance on what the Central Bank would think.
In effect, the judgement given by the Minister would nearly always coincide with the wishes of the Central Bank, not because he is doing anything which he considers wrong or not through any ignorance or lack of ability on his part, but because many Ministers for Finance have not been trained in such matters and may not have the expertise that the board of the Central Bank would have. This amendment, if adopted, would be a safeguard. There should be another court to which an appeal could be made, be it the High Court or something of that nature.
Mr. Colley: First of all, I should like to make it clear, in regard to the point raised by Senator Russell, that although there is provision in a later section which would enable the Central Bank to carry on the normal business of banking, there is no intention whatsoever to have the Central Bank carry on commercial banking. The  main purpose of that provision is to allow for one of the things that is being done, which is the transfer to the Central Bank of the various Government accounts at present handled mainly in the Bank of Ireland.
This is one of the functions of a Central Bank and it is one which we want to see the Central Bank carry on. I should like to make it clear that the Central Bank can by no means be regarded in the same light as any commercial bank. It is the organ which controls, and after the enactment of this Bill will far more rigorously control, the whole operation of banking in this country, and in that role will act as trustees for the community. That is the role of the Central Bank.
Mr. O'Higgins: If they are carrying the Government overdraft will they not be a commercial bank?
Mr. Gallanagh: The country's overdraft.
Mr. Colley: That is the first point that I wanted to make clear. The second one is this: Senator Robinson referred to two other enactments, the Unit Trusts Bill and the Employment Agency Bill, In both of those cases the circumstances in which a licence may be granted or refused are either set out in the Bill or are to be specified by regulations. The court, therefore, will be concerned on appeal only in satisfying itself as to whether or not the Minister concerned has complied with the statutory requirements. This is the same, I think, under both those Bills.
Given the importance of banking, the rapid changes which are taking place at present in the nature of banking business and the public considerations that are involved and that can arise, I do not consider that it is feasible to set criteria for licensing in a rigid statutory framework. Senators have referred to the fact that we talk about the interests of “the orderly and proper regulation of banking”. Accepting this amendment would in effect mean that the High Court would decide what constituted “the orderly and proper regulation of banking”, the whole point of this Bill is that we are placing on the Central Bank  the responsibility for ensuring the “orderly and proper regulation of banking” in this country. This is a responsibility which requires a great deal of expertise in the field of banking and this is a very wide field indeed.
It is unrealistic to expect that any court, the High Court or otherwise, could possibly have the kind of expertise necessary to decide this in the interests of the community. That is not to say that a person's right of recourse to the courts is being taken away. In this connection I would say that what Senator O'Higgins said in relation to representations to the Minister would be true if that word “representations” was to be interpreted in the normal way. However, here, that word means a great deal more.
The Supreme Court has laid down in the Marts Act case that seemingly arbitrary powers must be exercised by a Minister fairly and judicially. Under this section a refusal can only be grounded on the orderly and proper regulation of banking. The applicant must be informed in writing of the reasons why the Central Bank wish to refuse a licence and must also be informed of his right to make representations to the Minister within 21 days. The Minister must consider the case made only on the basis of the reasons put forward by the Central Bank and the representations made by the applicant.
The Supreme Court judgement makes it clear that the reasons for a refusal must be stated in such a way as to enable the applicant to challenge the decision in court. For example, should it appear that the Minister has taken into account matters which he was not permitted under the section to take into account, the applicant could apply to the court to declare that there has been an unconstitutional use of a constitutional power under the Act. The right of recourse to the court therefore remains under this section, but the onus of proof falls somewhat more heavily on the applicant.
There is another aspect of this that has to be considered. The reason for refusal could well be information of a very delicate kind. It should be realised that in cases of this nature inquiries are  made about the applicant both in this country and abroad. A great deal of information is obtained frequently through other central banks who, by the nature of their business, have a great deal of knowledge and expertise in this field. There is no doubt that if it were thought that information of this kind would be likely to be produced in court by our Central Bank the availability of this information would cease. Other central banks, and similar bodies from which information could be obtained, would not co-operate in giving that information if that was the case.
In the event of an application to the court by an applicant who claimed that the power provided in this section had not been constitutionally used it would probably be possible for the Central Bank, by cross-examination, to produce the kind of evidence I am talking about. As long as it was not our Central Bank who were disclosing the sources of the information obtained I do not think any great harm would be done. We must remember that the whole object of this licensing system—it is the keystone of this Bill—is to protect the public. That is the role of the Central Bank. We must not hamstring the Central Bank in carrying out that function.
To accept this amendment would be leaving it to the High Court to decide what constituted the orderly and proper regulation of banking and it would seriously diminish the Central Bank's discretion. The onus of proof, if the amendment were accepted, justifying its position, would be shifted significantly on to the Central Bank. As I have indicated, there could be considerable practical difficulties involved if we were to do this. A licence to carry on a banking business is not comparable to a certificate of suitability or personal fitness. More than personal good character and financial solvency are involved. In some cases quite delicate and confidential inquiries have to be made into the background of the promoters as to their financial standing, their expertise and the nature of their business operations both here and abroad.
It is very important to realise if we  were to accept this amendment, with the consequence I have outlined, almost certainly the kind of information which at present can be obtained by the Central Bank, particularly abroad, in the interests of protecting the community would cease to be available. This is far too high a price to pay.
I would also like to point out that there could be cases of a refusal to grant a licence on grounds related to economic and financial judgements. For instance, there could be the view by the Central Bank, which might be confirmed by the Minister on representations being made to him, that there were too many banks or that there were too many banks of a particular class, having regard to the volume of business available. I do not think that kind of decision is one on which we should ask the courts to adjudicate.
In all these circumstances we would be losing much of the protection which we want to provide for the public in this Bill if we were to accept this amendment. At the same time my not accepting the amendment does not take away the right of recourse to the courts by an applicant in the circumstances which I have outlined.
Mrs. Robinson: I should like to thank the Minister for his reasoned reply. However, I do not think he has dealt with some of the reasons why this amendment has been introduced. First of all, he referred to the two Bills I mentioned; the Unit Trusts Bill and the Employment Agency Bill. I think the Unit Trusts Bill is a closer analogy to this. Despite what the Minister said in regard to regulations, the terminology in the Unit Trusts Bill is extremely similar to the criteria for the granting of a banking licence. It is noticeable that in the Unit Trusts Bill we are dealing with the Minister, whereas in the Central Bank Bill we are dealing with the bank “with the consent of the Minister.” Apart from that procedural difference, I think, they are quite similar.
Section 3 (1) of the Unit Trusts Bill states:
Upon application to the registrar in accordance with this Act by the manager and trustee under a unit trust scheme, the registrar shall register  the scheme in the register if, but only if—
(a) the Minister is satisfied, after consultation with the Central Bank of Ireland and after consideration with that Bank of the relevant information in the application, that the competence in respect of matters of the kind with which they would be concerned in relation to a unit trust scheme and probity of the manager and trustee are such as to render them suitable to act as manager and trustee respectively, under the scheme.
It then provides that the manager of a scheme is a body corporate and there are various other procedural provisions. The main thing is that it lays down the same type of test as for banking. They have to be suitable persons for carrying on such a business. There is a very close analogy to banking in that Bill. This is the test when an appeal is made to the High Court.
There is no question under the Unit Trusts Bill, which we have passed in the Seanad, that the High Court would be unable to cope with this type of criteria. The circumstances of a licence being granted or refused, under this Bill are analogous to the registering or non-registering under the unit trust scheme. In that case we thought it necessary in particular circumstances to allow an appeal to the High Court. The Minister will accept that an appeal to the High Court would be very rare, that there would have to be very good reason for it; it is an expensive exercise in anybody's business and to be refused by the High Court is something that a banking concern would not welcome. If there was any ground at all for refusing the licence, then it would not be disputed in the High Court. It would be in very exceptional circumstances that their right would be tested in it.
I accept that the Minister did not find it feasible to set out the requirements for granting a licence. On the next amendment I shall have something to say about the requirements for revoking a licence. That will be very relevant to some of the points that we have made. However, in relation to his point that the object and the keystone of the Central Bank Bill is to protect  the public, I accept that this is one of the important ones and one with which I have great sympathy.
Surely the object of a Central Bank Bill is also to promote a climate of commercial stability and commercial openness in this country, in both Irish banks and other banks set up here? I know that this may be something surprising coming from me: it is not a line that I normally take. However, in a Central Bank Bill we must think in terms of creating a climate of commercial stability. One of the ways of doing it is to guarantee to those who are applying for banking licences that, if they feel they have been unjustly refused a licence, they will know they will have a statutory recourse to the courts.
In the last analysis, a manager of a unit trust scheme comes into the country to set up a unit trust scheme. This is just as personal and important as banking and will involve investment by the community which requires the protection of the public, and this was emphasised during the debate on the Unit Trust Bill. The protection of the public is at least as important in the case of unit trusts as it is in the case of banking, and yet the argument does not seem to have been sufficiently persuasive to allow this appeal to the court.
I ask the Minister to reconsider the possibility of accepting this amendment on the grounds that it would obviously be a rare line of action by somebody who had been refused a licence. As he said himself, it would normally be the proper role of the Central Bank to refuse them. It would be on very rare occasions only that there would be an appeal to the court, but it would benefit commercial stability in the country and would not be contrary to the protection of the public, as we saw in the Unit Trusts Bill. It would be a very fair opening to somebody who had been refused a licence.
Mr. O'Higgins: I think I am right in suspecting that the real argument the Minister has against acceptance of this amendment is the possibility that the sources of information to which he has referred might dry up, if there was any possibility of the information, or the sources, being bandied about in open  court. I may be wrong; perhaps the Minister thinks that the other reasons which he gave are equally strong. Personally, I do not. That is the one point which the Minister is seeking to guard against by his refusal to accept this amendment.
I should like to suggest to him that that situation could be dealt with very simply by providing that an appeal to the High Court would be held in camera, that there would be no question of the public being admitted in the same way as relates to income tax appeals at present, or to revenue appeals in the Circuit Court. It would be heard in camera and there would be no question of publishing the proceedings or the evidence given before the court. If that were adopted as a modification to the amendment which has been proposed, it would obviate completely any possibility of the ill-effects which the Minister foresees, that is the drying up of the sources of information.
That is the only strong point he made when he was refusing this amendment. For example, he spoke of the High Court not having the kind of expertise which would be required to decide on questions of orderly and proper regulation of banking. What is the alternative the Minister is giving?
Dr. Belton: The Minister has it.
Mr. O'Higgins: Senator Robinson suggests that a judge of the High Court, a person experienced in many matters, should be asked to adjudicate in the event of an appeal. The Minister's alternative is that he—or whoever happens to be Minister for Finance— should be in the position which this amendment suggests should be given to a judge of the High Court. What is a Minister for Finance? I am not talking personally: I am quite sure that the Minister realises that. Essentially, a Minister for Finance is a political figure. He is a person who finds himself as the political head of the Department of Finance because he is in politics and is a member of a political party that has been successful at the polls. He may have no qualifications, good, bad or indifferent, to give any decision one  way or the other on questions affecting banking, or on matters affecting finance generally.
The present Minister for Finance was a member of my profession before he became Minister. His predecessor was a member of a profession once removed from mine. Before he became Minister for Finance his predecessor was a member of the medical profession. There have been medical doctors who find themselves in the position of Minister for Finance. What particular expertise have any of these to decide on questions of the orderly and proper regulation of banking? Surely a qualified judge of the High Court who, by his training, is practised in weighing up the evidence that is put before him, both on behalf of the Central Bank and on behalf of the applicant, is in a much better position to give a reasoned and a balanced view and judgement on the question than is the political head of the Department of Finance.
I should like to make it absolutely clear again that I am not talking personally, and I am not talking about either present or past Ministers for Finance, when I say this. I have made the point that the Minister for Finance is the political head of the Department of Finance. As political head of the Department of Finance, a future Minister for Finance may find himself pulled politically with regard to a decision which he might be required to take under section 9 of the Central Bank Bill in relation to an application. He may find himself pushed politically by his own party as regards the decision he should come to. At least that danger would be eliminated if the say was taken away from the politician and given to the judge on the bench. The danger to which the Minister has adverted, that is, the sources of information drying up, can be guarded against completely by the simple device of making it known in the Bill that any hearing of an appeal before a judge of the High Court will be in camera, and that none of the evidence will be published, and that no member of the public who is not concerned in the case will be allowed into court to hear the evidence. If that were known and the Central Bank were in a position so to  inform their sources of information there would not be any question of the sources of information drying up.
I feel that the Minister is in an unfortunate position on this amendment. He probably recognises that there is a very good and a very strong case for the amendment, but he does not want to alter his Central Bank Bill at this stage and so bring it back to the other House. I am sure the Members there would not welcome the Bill being returned to them at this stage, even if it were only for the purpose of acquiescing in an amendment made by this House. Nevertheless, we would not be facing up to our responsibilities as Members of the Oireachtas, and the Minister would not be facing up to his responsibility as Minister for Finance, if we or he were to allow considerations such as that to affect our judgement on the question posed on this amendment.
I feel that there is a very strong case to be made and I feel that a very strong case has been made for this amendment perhaps not in the identical terms in which it is moved but at least in principle. I strongly urge the Minister to reconsider his attitude to it.
Mr. Gallanagh: We are opposing this amendment. While I respect the Leader of the Opposition, I must say that we must oppose this because of several factors. There must be a realisation of one fact, which is that the Minister for Finance does not just legislate on a party political basis. A Minister for Finance must legislate for years to come. To say that we have had several Ministers for Finance of different categories and then at the same time to ask a High Court judge who is also a solicitor to legislate——
Mr. O'Higgins: I have never known a High Court judge to be a solicitor.
Mr. Colley: The next worst thing.
Mr. Gallanagh: The Senator says a High Court judge has the ability to legislate and he has the ability to decide, and because our Minister for Finance is a solicitor he says that he has not this ability. This is not very sensible. I shall just discount it and  leave it at that. For the Senator to say that he would let a High Court judge decide, and object to the Minister for Finance, who is a solicitor, is ridiculous.
Mrs. Robinson: I should like to say to Senator Gallanagh that, if his point is valid, why did he not raise it on the Unit Trusts Bill. The procedure that I have brought forward here is precisely the procedure that exists in relation to unit trusts, which involve community money and which involve people investing in them and which involve registering, which is the same as granting a banking licence. The Minister is the operative person in it. In a rare case there is an appeal to the court. This is not a slander on the Minister or it is not denigrating the position of solicitors in comparison with High Court judges. It is purely an offering of this facility in the rare case where a statutory appeal to the High Court might be justified. If this is valid in relation to unit trusts I do not see why it is not valid in relation to banking business.
Dr. Belton: The Minister has almost convinced me in his arguments about the transfer of information which may be confidential. I quite see his point that the element of confidence enters into this. The more publicity that will be given about an application to the Central Bank for the establishment of a bank the less likely such relevant and important information will be given by sources from which such information of a confidential nature might normally be expected to be had.
After considering the point of the Minister's argument in attempting to reject Senator Robinson's amendment, Senator O'Higgins produced a method of doing it, which is to appeal to the High Court in camera. That may not be satisfactory to the sources of information which the Minister referred to but if the Minister will insist on this he should then let it go the full way and cut out any appeal to the Minister at all, because an appeal to the Minister involves not alone a Minister's knowledge but the knowledge of officials of his Department. Therefore, that means the confidential information goes beyond the Central Bank. If he wants to  be completely logical in the rebuttal of Senator Robinson's argument, the information should not even go to the Minister, because by going to him he and his officials will know of it. The difference between the Minister plus his officials knowing it and the difference between it being held in High Court in camera is another consideration. If he wants to be really logical about keeping this confidential information sacrosanct, he should remove this appeal to the Minister completely.
Mr. Colley: First of all, what is involved here is not a matter of law. If the question were, should there be more investment banks, for example, this is not a matter of law. This is a matter of policy. A Minister for Finance, whatever his background or profession, is involved in the formulation of policy. It is not the business of a High Court judge to formulate policy. It is not a function of a High Court judge to make a decision on such a matter, because it is not a matter of law, it is a matter of judgement in relation to policy.
Point number two is that Senator O'Higgins was substantially correct in surmising that I attach very great importance to this question of obtaining information about applicants, probably from abroad, in a confidential way from the various sources I have mentioned and to the danger of this source of information drying up. I do attach very great importance to that.
The remedy which he suggests by having an appeal heard in camera does not meet the difficulty. I thought that when Senator Belton was speaking he had realised that it did not meet the difficulty, but then I found that he was right for what seemed to me to be the wrong reasons. The reason I say that it does not meet the difficulty is this: as I pointed out, acceptance of this amendment changes the onus of proof, which means that whether the case is heard in camera or not the onus of proof is transferred to the Central Bank who, in order to prove the grounds for their objection, have to produce the evidence which is available to them.
 Even if it is in camera it is not suggested that the hearing should be in the absence of the applicant. This is the kernel of the point. The evidence and the sources of it have to be produced in the presence of the applicant.
Senators will probably recall that when I was speaking about this earlier, I talked about the Central Bank producing this kind of information in court by cross-examination. What I had in mind was that they would not thereby have to disclose the sources of their information. But hearing the case in camera does not overcome the difficulty I have outlined. I should like to make it clear to Senator O'Higgins and any other Senators who may have the same view as he expressed that my opposition to this amendment has nothing whatever to do with the possible recess of this House or the other House. It is based on the fact that I think it would be a grave disadvantage to the operation of the Central Bank and possibly a serious blow to the kind of protection we are trying to get for the public.
I understand Senator Robinson's concern in the matter. Indeed, in another Bill which was before either this or the other House, I accepted an amendment on the lines which she has in mind. I am predisposed in favour of what she has in mind. I would suggest that in this case, having regard to the great importance of banking in our system, to the changes which are taking place in systems of banking, to the influx and potential influx of people wanting to get banking licences from all parts of the world, it is essential that we be in a position, through the Central Bank, to vet these applications carefully, to get any information that is relevant to the standing, financial and otherwise, and the banking expertise of these applicants. Anything which would hinder this cannot be in the interests of the community. It may appear to be a conflict between the rights of the individual applicant and the rights of the community. I do not think it boils down to that, though if it did, I think that in this case the rights of the community would outweigh the rights of the applicant.
Assuming that an applicant was to be turned down because of lack of probity,  for example, all of us would like to see him turned down. He would have nothing to gain by this amendment. A bona fide applicant has nothing to fear from this section, but the community needs the protection of this section as outlined. I know it was not the intention of Senator Robinson or those who supported this amendment to lessen in any way the protection for the public, but I would suggest to them that if they think about what I have said they will agree that the reasons for not accepting this amendment are quite substantial and I would ask them, having considered it, to agree with me that this should not be pushed.
Mr. O'Higgins: I do not want to push the Minister too far but I should like to make one point. It would be quite outrageous if the position were intended to obtain under this section an applicant should not be told of the reasons for the refusal. The Minister seemed to be going near to that when he spoke of the difficulty about the sources being disclosed to the applicant. But the section makes it quite clear that, if the Central Bank are refusing an application, they must notify the applicant of the grounds of refusal. What is lost then by discussion of it in court?
Mr. Colley: But they do not have to notify the sources.
Mr. O'Higgins: They must notify the grounds for refusal.
Mr. Colley: Yes.
Mr. O'Higgins: The grounds for refusal may be varied. They may be contrary to the banking policy of the particular Government of the day. Possibly that would be a good ground for refusal. If there are other grounds which come from confidential sources, at least the grounds must be stated, and if the grounds are correct and valid, the near certainty is that the applicant will know from which source those grounds came. So I do not think this question of preserving from the applicant the identity of the source is of any importance at all.
The Minister made the point that a  person who lacked probity and was refused a licence on that ground would have nothing to gain from this amendment. I agree with that. He then went on to say that a bona fide applicant would have nothing to fear from the section. I agree to some extent with that, but not entirely. A bona fide applicant would have nothing to fear from the section except the making of a mistake. In order to remedy the situation if a mistake were made, the machinery set out in this amendment would be valuable.
Mr. Russell: Senator O'Higgins has made the point I was about to make and that was the question of confidence. I take the Minister's point in that regard. We all accept the fact that information of a confidential nature must be protected, especially its sources. I do not see the necessity for going outside the country if the applicant happens to be an Irish national. The procedures laid down in this section are quite simple. If the bank proposed to refuse to grant a licence, they write to the applicant telling him that they propose to apply to the Minister for permission to refuse an application. They then write to the individual and state the reasons. Whether they are prepared to state all the reasons is a moot point. I would say no. The only recourse the applicant then has is to write to the Minister. According to the section the only representation he can make is in writing to the Minister. I imagine if he is serious in his intention of trying to obtain a licence, he would refute the grounds on which the licence was refused. The Minister would then have to adjudicate on the question. The applicant would have no other recourse open to him and that seems to be one of the reasons why Senator Robinson's amendment is valid. This seems to end the case too abruptly.
I appreciate the Minister's point about the question of confidence. Of course the applicant is also entitled to have his confidence respected and he may not wish to state in a letter to the Minister certain reasons why he feels he is being refused. He might wish to make personal representations to the Minister. He might like to be repre  sented by his solicitor or lawyer in court in camera. He is refused all these courses and the only thing he is allowed do is to write a letter to the Minister saying: “I should not have been turned down because the facts as stated are not correct.” That is my reading of the section.
Mrs. Robinson: I certainly accept what the Minister said about the importance of the confidential nature of a lot of the information in relation to the decision to grant a licence or not. At this stage I should like to ask this question which I do not think has been answered so far: what is the difference between granting a licence to an applicant in relation to a bank or refusing to grant it and having the possibility of appeal to the Minister, and the registering of a unit trust scheme? In section 3 (1) (a), of the Unit Trusts Bill the Minister must be satisfied “after consultation with the Central Bank of Ireland and after consideration with that Bank of the relevant information in the application, that the competence in respect of matters of the kind with which they would be concerned in relation to a unit trust scheme and probity of the manager and trustee are such as to render them suitable to act as manager and trustee.” I would say that this is information of the most confidential nature. It could come from sources outside the country if the unit trust scheme were a foreign unit trust scheme.
I do not understand the logic behind allowing an appeal to the court in the case of granting of a licence in that case and the refusal to do so in the case of banking purely on the basis of confidentiality, accepting the point made by Senator O'Higgins which I am glad to accept. In fact, I will bring in an amendment on Report Stage that the hearing will be in camera to safeguard the confidential nature of the sources of information. I cannot see the difference, in relation to the protection of the community and the need for confidentiality, in the nature of the information which would be forthcoming in relation to the probity of a  banking concern and that in relation to the probity of a manager of a unit trust scheme.
Mr. Colley: First of all, I repeat that I do not think the hearing in camera is an answer to the problem at all for the reasons I have given. Secondly, when one is thinking of the protection of the public one should remember that in the case of a unit trust there are trustees. I am speaking without certainty on this, but I think under the unit trust scheme it would have to be a bank. The protection of the public is not solely dependent on the confidence and probity of the manager. In addition, and very important, what is involved in the unit trust situation is what is set out in the section. In the case of the present Bill, as I have indicated, matters of banking policy can come into play. This is not a matter for the court.
Mrs. Robinson: I accept that, but I would think that banking policy is a matter that can be pleaded before the court as a reason for refusing the licence. If the judge accepts that the policy reasons are very strong then he will support the refusal to grant the licence.
Mr. Colley: It is not a function of the court to decide whether policy reasons are strong or not.
Mrs. Robinson: I would say in that case they would accept the policy reasons.
Amendment, by leave, withdrawn.
Question proposed: “That section 9 stand part of the Bill.”
Mr. Russell: There is just one point I should like to ask the Minister. Subsection (5) reads:
The grant of a licence to a person shall not constitute a warranty as to the solvency of the person to whom it is granted and the bank shall not be liable in respect of any losses incurred through the insolvency or default of a person to whom a licence is granted.
 I presume that includes a corporate body too?
Mr. Colley: Yes.
Mr. Russell: The subsection says “shall not constitute a warranty as to the solvency of the person to whom it is granted”. Surely a licence would not be granted unless the bank were satisfied that at the time of the granting the licence the person or corporate body was solvent?
Mr. Colley: That is true, but that does not mean that there is a guarantee of solvency then and forever more.
Dr. Belton: Should it not have been phrased “could not guarantee the continued solvency”?
Mr. Colley: No. As Senator Russell said, what it means is the Central Bank was satisfied as to the solvency of the person.
Dr. Belton: Under his licence?
Mr. Russell: It does not read that way. It says “the grant of a licence to a person shall not constitute a warranty as to the solvency of the person to whom it is granted”. That is at the time it is granted?
Mr. Colley: Yes. There must be a distinction. Senator Russell was correct in what he said that the granting of a licence indicates that the Central Bank is satisfied as to the solvency of the licensee.
Dr. Belton: At the time it was granted?
Mr. Colley: Yes. But there is a difference between the Central Bank being satisfied as to the solvency of a licensee and a warranty that the person is solvent at that time. The bank could be wrong.
Question put and agreed to.
Question proposed: “That section 10 stand part of the Bill.”
Mr. Russell: There is just one point. I wonder have the same procedures been followed in regard to the power of the bank to alter conditions?
Section 10, subsection (2) states :
The conditions of a licence may be amended, revoked or added to and conditions may be imposed in relation to a licence from time to time by the bank if in the opinion of the bank the amendment, revocation, addition or imposition is calcualated to promote the orderly and proper regulation of banking.
Should the same procedure as in section 9 not be followed here before taking such a very drastic step? The imposing of new conditions might be tantamount to putting a licensed banker out of business if he could not comply with them. The Minister should at least be advised that it was proposed to take such a step and the same procedure followed again. What is good for the goose in section 9 should be good for the gander in section 10—to put it rather crudely.
Mrs. Robinson: In relation to the matter of conditions pertaining to the licence, I also view this provision with some hesitation. I looked at the judgement of the Supreme Court in the Livestock Marts Act case to which the Minister has already referred. I take some consolation from the judgement of the Supreme Court in that although conditions may be attached to individual licences, the attaching of conditions must be done in a justified way and must be for good reasons. Can I just quote briefly from the judgement of the Supreme Court in this case, East Donegal Co-op and others v. the Attorney General, page 95 of the Irish Law Times Reports:
It is quite true that conditions may not be uniform for all licences for the reasons already given in this judgement and are by their nature in many cases necessarily peculiar to an individual applicant. It is not, however, a valid inference that because the legislation made provision for such a scheme of administration or imposition of conditions that it authorised the exercise of that function in a matter amounting to a  breach of a constitutionally guaranteed right. The conditions must be of the character already indicated in this judgment and must be related to the objects of the Act in the way already indicated. Any condition which did not conform with these tests would be ultra vires the Act. Also for the reasons already given it is not a valid inference that because a specified procedure is prescribed for one type of situation, namely the revocation or refusal of a licence, the Minister is not bound to act in accordance with the principles of constitutional justice in respect of the imposition, amendment or revocation of conditions attached to a licence. In the opinion of the court the Act cannot be construed as unequivocably demonstrating that such was the will of the Oireachtas.
I take it from that that the conditions which would be imposed on individual licences under this Bill would have to be in conformity with constitutional justice, would have to be reasoned conditions and that these conditions, if they were proposed for unsound reasons, could be challenged in the courts? For that reason, I did not introduce any amendment in regard to the possibility of challenging the imposition of conditions. This is not inconsistent with putting in an appeal in the case of either the refusal to grant a licence or even more so, as I shall be arguing on the next amendment, in the case of revocation of a licence. I would accept the position that there is not an absolute discretion, that there is a judicial discretion which can be challenged and if necessary the Minister or the Central Bank would have to justify the conditions imposed.
Dr. Belton: I take it that two meanings can be taken from subsection (2) if it is in isolation, but following on subsection (1) I take it only one meaning can be taken from it. It means that the conditions of a licence may be amended when an application for a licence by a particular body or person is before the Bank. But it could mean that the conditions of a licence may be amended, revoked or added to without  any application before the Bank. I presume, in the context of subsection (1) that, if the Bank intends to grant a licence, it may append certain conditions —that the licence may be amended, revoked or added to. I presume that is what it means in that case and that Senator Robinson is right. Does the Minister understand what I am getting at here?
Mr. Colley: Does the Senator have in mind that it could only be done in relation to an original application for a licence and not thereafter?
Dr. Belton: In other words, the Central Bank itself may draw up rules or amend without any application before it. That is one way of interpreting it. But in the context in which it is here I do not think that is the interpretation that can be put on it. It can, with an application before it, grant, revoke or amend a licence or do certain things to the licence that is before it. I think that is the meaning to be taken out of this in the context of the subsection (1). If that is so, Senator Robinson may have a point in that. Does the Minister understand the points I am making on this?
Mr. Colley: I am afraid I do not.
Dr. Belton: The Central Bank may decide on certain rules in regard to the granting of licences, imposing conditions, and so on. In any case I am in agreement with Senator Robinson that there should be recourse to the courts. I do not know whether Senator Russell's point is valid. He may be more or less looking for information.
Mr. Colley: First of all, what Senator Robinson has stated is correct. Indeed, the section was drafted with an eye to the Supreme Court judgment in the Marts case. Listening to the Senator express an off-the-cuff opinion, what she has said is correct. Certainly, the position is that any non-judicial exercise of the powers of this section would be grounds for an application to the court.
Senator Russell will notice that the section provides that, in the event of the bank deciding that it proposed to  amend or add to the conditions of a licence, notice in writing is given to the licensee who may make representations in writing to the Bank in relation to the proposals; and the bank, before deciding to impose the condition or to amend or add to the conditions, must consider these representations. The point arose on the previous section, although I did not deal with it. The point of making these representations in writing is that this makes it quite clear as to what are the terms of reference so that one can judge whether or not the Central Bank has acted in a judicial way. If the Central Bank acts in a non-judicial way then it is open to the courts to intervene and because the representations are in writing the court can determine whether the Central Bank acted judicially or not, and acted within the terms of the section. In these circumstances I do not think any question of an appeal to the Minister need arise.
Mr. Russell: He only accepts representations from the Bank but not from the——
Mr. Colley: The reasons for the representations in the other case is that, as I explained, it does not seem possible to have an application to the court. Here it is possible to have an application to the court.
Question put and agreed to.
Mrs. Robinson: I move amendment No. 2:
In page 8, before subsection (3) to insert the following new subsection:
“() (a) Where a licence is to be revoked under this section the Bank shall notify the holder not less than sixty days before the day on which such revocation is intended to take effect and the holder may, within thirty days after the date on which the notification is given to the holder, appeal against the revocation to the High Court whose decision shall be final and unappealable.
(b) The High Court may, if it  thinks it proper to do so, provide by order that a revocation under this section to which an appeal under this subsection relates shall not have effect during the period, or such part of it as it may specify by order, prior to the determination of the appeal.”
I urge the acceptance of this amendment in view of the points raised by the Minister in relation to the granting of a licence. As he said, in many areas this is largely a policy matter, and is subject to the problem of the confidentiality of information—the problem of having sources available abroad in relation to banking concerns coming from abroad to operate here—and considerations of that sort. The Minister will accept that these considerations are not as relevant, if they are relevant at all, in relation to the revocation of a licence. The statutory reasons for revocation are set out in section 11. I give my opinion with a certain diffidence, but in my view the section as it stands would hardly withstand constitutional scrutiny. I say this because the operation of a banking licence is a property right and the revocation of a banking licence is a deprivation of property. The deprivation of property for the reason set out in section 11, which I propose to go through, amounts to a deprivation of property without recourse to the courts. It would be unfortunate to pass the Central Bank Bill at this late stage in the parliamentary session and then find that it was challenged when an attempt was made to revoke a licence. Section 11 states: “The Bank may, with the consent of the Minister, revoke a licence—” for the following reasons and the reasons are set out as follows:
(a) if the holder of the licence so requests,
(b) if the holder fails or ceases to carry on banking business,
There would have to be a finding that he was either failing or ceasing to carry on a banking business.
(c) if the holder is adjudicated bankrupt,
Again there would have to be evidence that the holder was adjudicated bankrupt.
(d) if the holder is a partnership and  the partnership is dissolved by the death or bankruptcy of any partner, or otherwise under the law of partnership,
(e) if the holder, being a company, is being wound up,
(f) if the holder becomes unable to meet his obligations to his creditors or suspends payments lawfully due by him,
Again, I would say a very judicial determination as to whether the holder becomes unable to meet his obligations to his creditors or suspends payments lawfully due by him. Paragraph (g) states:
if the holder fails to maintain a deposit in the Bank of an amount determined in accordance with section 13 of this Act.
In relation to the deposit, there might be an argument based on the desire to promote a climate of commercial stability and commercial confidence here. It might be thought that the bank could, under these terms, to some extent bully the particular person who had a licence, but if he did not maintain his deposit—and this could be a matter of a couple of days—his licence would be revoked. It is certainly something that the Bank might need in order to ensure that deposits were maintained under section 13. It is also something that might possibly be abused and it would restore the confidence of commercial concerns if there was recourse to the courts in relation to it. Paragraph (h):
if the holder is convicted on indictment of an offence under any provision of this Act or an offence involving fraud, dishonesty or breach of trust,
Again, the Minister would agree with me that this is very much a determination which might be disputed and which might require to come before the courts on appeal—a judicial determination, a matter of evidence, a matter of argument. Finally, we have paragraph (i):
if, since the grant of the licence, the circumstances relevant to the grant have changed and are such  that, if an application for a licence were made in the changed circumstances, it would be refused.
Again, a matter under which a person might like to have recourse to the courts if the licence was revoked. The Minister's argument in relation to the granting of a licence—that the reasons for granting a licence were not set out in the Act, in other words there were no statutory grounds for granting a licence —does not apply here. There are definitely clearly set-out statutory grounds for revoking a licence and most of these involve in some way or another a judicial determination. They involve a determination as to whether a person will continue to carry out a property right or will be deprived of that property right with no recourse to the courts. That seems to me to raise a constitutional issue. Again, I say this with a certain diffidence and I would welcome the views of other lawyers in the House in relation to this.
As to the amendment which I have proposed, it is to give recourse to the courts. It states at (a)
Where a licence is to be revoked under this section the Bank shall notify the holder not less than sixty days before the day on which such revocation is intended to take effect and the holder may, within thirty days after the date on which the notification is given to the holder, appeal against the revocation to the High Court whose decision shall be final and unappealable.
Then there is in (b) a provision for a stay of the situation pending the appeal:
The High Court may, if it thinks it proper to do so, provide by order that a revocation under this section to which an appeal under this subsection relates shall not have effect during the period, or such part of it as it may specify by order, prior to the determination of the appeal.
I say again, with honesty, that the provisions are borrowed or adapted from the unit trusts scheme, from the cancellation of the registration of a unit trust under the Unit Trusts Bill which was passed in this House. I would  refer the Minister to section 4, subsection (4) of that Bill, which provides:
(a) Where a direction in relation to a unit trust scheme is given under the section—
that is a direction to cancel registration of a unit trust scheme—
the registrar shall notify the manager and the trustee under the scheme of the direction not less than 60 days before the day on which it is intended to take effect, and the manager or trustee may, within 30 days after the date on which the notification is given to the manager or the trustee as the case may be, appeal against the direction of the High Court. This decision should be final and unappealable.
Then (b) is a repeat of the section that I read. In the meantime the High Court may put a stay on the cancellation of the registration of the unit trust scheme.
I feel that in this case another great weighty argument put forward by the Minister in relation to the granting of licences is not present, and that is the element of confidentiality. Whatever the importance of the confidential sources of information in relation to the granting of licences there is no value in relation to the revocation of licences of this element of confidentiality because there are statutory grounds for the revocation. We would be passing a Bill in which the Central Bank, with the consent of the Minister, would have the power to make these important determinations and the total power to revoke licences, and there would be no appeal to the courts in this matter.
I have referred already to the Unit Trusts Bill. I could refer to other Bills such as the Employment Agency Bill or I could refer to the Livestock Marts Act which has been referred to as a case relating to that. I think the Minister would accept that the reasons for either granting or revoking a livestock marts licence are nothing like as serious or subjective or important to the community as the reasons for granting or revoking a banking licence. There is much greater need for us to protect the community, to protect the public, in  relation to a banking licence and the Minister has already stated this in relation to the granting of the licence, and also in connection with the revocation of the licence. Very serious matters, as I read them, are set forth in the section for revoking the licence. They show that this is an important determination.
In the Livestock Marts Act there was at least a procedure for inquiry into the revocation of a licence and this procedure was referred to very strongly by the Supreme Court. I, at least, in reading the Supreme Court judgement, quite honestly get the impression that if this procedure for inquiry had not existed the Supreme Court would have come down on the side of the President of the High Court and upheld his findings that this part of the Act was unconstitutional.
If I might refer again to the judgement of Mr. Justice Walsh of the Supreme Court in that case. In page 94 of The Irish Law Times Reports he says:
Where the Minister proposes to revoke a licence because of a contravention of regulations, that is to say because the licensee has been convicted of a breach of the regulations, the Minister shall notify the licensee of his proposal to revoke the licence and if within seven days after receiving such notification the licensee makes a request to the Minister for the holding of an inquiry in relation to the matter the Minister shall cause an inquiry to be held unless he has already decided not to revoke the licence as a result of consideration of representations made to him. Even if no such representations are made the Minister shall not revoke the licence until the expiration of one month after giving the notification.
That paragraph clearly contemplates the Minister receiving representations and being prepared perhaps to act upon them by deciding not to revoke the licence and also for the giving of a formal request for the holding of an inquiry. Paragraph (c) makes it clear that where an inquiry is asked for and where the Minister has not decided not to revoke the licence then he shall not revoke it until he has considered the report of the person holding the inquiry. An  inquiry, where held, is to be held by a practising barrister of at least ten years' standing and he is given power by paragraph (d) to take evidence on oath, which he is, by that provision, authorised to administer and then shall make a report to the Minister of his findings at the inquiry. At the inquiry naturally one of the proofs would have to be the fact of the conviction for breach of the regulation but in addition the person holding the inquiry must consider for the purpose of making findings of fact all the matters put forward by the licensee in support of his plea that his licence should not be revoked by the Minister. The function of the barrister holding the inquiry is to make his findings of fact in respect of these matters and in view of the statutory provision it is clearly not open to the Minister to arrive at any different findings when he comes to consider the report. The Minister's duty is then to consider whether, in view of the findings and of the conviction, he will revoke the licence.
The expression in paragraph (e) entitling the licensee to appear in person at the inquiry or by counsel or solicitor and to adduce evidence, coupled with the fact that by virtue of the statutory provision already referred to the Minister is bound by the findings of fact of the barrister holding the inquiry and, having regard also to the express statutory provision in subsection (7) of section 3 that when the Minister revokes a licence he shall cause a statement of his reasons for so doing to be laid before each House of the Oireachtas, gives this particular procedure a very special character. It has very many characteristics of judicial proceedings and the provision whereby the Minister must state his reasons by laying them before each House of the Oireachtas is in effect an appeal procedure in as much as the reasons may then be compared with the proceedings themselves and with the findings of fact made by the inquiring barrister, and the matter may be litigated in the courts if it should appear that the Minister's reasons  disclose a disregard of the findings of fact made at the inquiry or that the Minister has taken into account considerations which he is not permitted to take into account.
I read that judgment of Mr. Justice Walsh at some length because it illustrates the importance laid by the Supreme Court in the case of the Livestock Marts Act on the inquiry into the revocation of a licence for a livestock mart. The inquiry would be held by a barrister of ten years' standing. There would be the possibility of legal representation at this inquiry, and the Minister would be bound by the findings of fact of that inquiry.
The grounds for doing this would be that the holders of the livestock mart had been in contravention of regulations under the section. The reasons for revoking a banking licence under this Bill are much more nebulous and much more dangerous than the contravention or non-contravention of regulations under that Act. I have referred to them and I do not want to delay the House on it. If the holder becomes unable to meet his obligations to a creditor or suspends payment lawfully due by him, who is going to determine that? If the holder is convicted on indictment of an offence under any provision of this Bill, an offence involving fraud, dishonesty or breach of trust, we may ask what sort of fraud, dishonesty or breach of trust. These are matters, surely, on which there ought to be an ultimate appeal to the courts.
For these reasons, and the basic grounds that I should not like to stand over the constitutionality of the provision as it stands, I would ask the Minister in this case, which I think is much stronger than the case of granting a licence, to allow this amendment granting an appeal to the courts.
Mr. Russell: Very briefly, I should like to support Senator Robinson's amendment or some similar amendment. The Minister will appreciate that we have in the Bill three distinct processes. First of all, there is the granting of the licence, and the Minister has given reasons for not accepting Senator Robinson's previous amendment, which included recourse to the  High Court. The second is an amendment of an existing licence, and both the Minister and Senator Robinson pointed out that the licensee can have recourse to the courts. The third is the most serious one, which includes the provision whereby the Central Bank, after consultation with the Minister, can revoke what has been given, in other words the livelihood of a person or a corporation. That is far and away the most serious step which the Central Bank could take. I do not pretend to be a lawyer, but some of the reasons set out here seem to be rather dubious. Subsection (1) (g) states:
If the holder fails to maintain a deposit in the bank of an amount determined in accordance with section 13 of this Act,
Included in the deposit are Government securities. If Government securities were to reduce in value, and they have been known to reduce in value, does that mean that the holder would automatically lose his licence?
Subsection (1) (h) states:
if the holder is convicted on indictment of an offence under any provision of this Act or an offence involving fraud, dishonesty or breach of trust,
Who is the holder? If a member of his staff is convicted under this provision does that mean that the holder, who may be a person or a corporation, loses his licence if the bank appeals to the Minister to support the abolition of the licence?
I think Senator Robinson made a very good case for this. If the wording of her amendment is not acceptable to the Minister, something along the lines of her amendment should be accepted in this case.
Mr. O'Higgins: I take it that the main argument which the Minister has for refusing the last amendment proposed by Senator Robinson does not apply at all to this amendment, that is the question of the sources of information. Here that does not arise at all. There is no question of having to protect any source of information. The question  here is one of revocation on specific grounds which are set out in section 11 of the Bill.
It seems to me, therefore, that the arguments which were made for an appeal to the High Court in relation to the grant of a licence, which I believed were very strong, are all the stronger in the case of a licence already granted being revoked. That is so if for no other reason than the wording of section 11 (1) (i) which entitles the bank, with the consent of the Minister, to revoke a licence:
if, since the grant of the licence, the circumstances relevant to the grant have changed and are such that, if an application for a licence were made in the changed circumstances, it would be refused.
We have to consider this in the context of the remarks made by the Minister in relation to section 9 when he pointed out that one of the considerations which could apply, in relation to the grant of a licence, would be the question of Government policy. So long as section 11 (1) (i) remains without any protection by way of appeal the situation will be extremely fluid so far as the holders of licences are concerned. It means, in effect, that so long as the danger of change in Government policy exists, and it might change from day to day or year to year or it might change from one Minister for Finance to another, no one or no body, who has been granted a licence, can feel safe or sure that the licence will not be revoked merely at the whim of a Minister for Finance or a whimsical change of Government policy in relation to banking.
I do not think I am exaggerating the picture here. The Minister made it quite clear this evening that one of the grounds on which a licence might be refused would be the question of Government policy. His justification as to why the reins should remain in the hands of the Minister for Finance, rather than be given to a High Court judge, was that matters of Government policy in relation to banking existed. Having regard to the existence of this paragraph it is essential in relation to the revocation of a licence that some  independent review body should be available. The suggestion has been made of a High Court judge. If the Minister is not prepared to accept that suggestion perhaps he will put forward some alternative. Some appeal tribunal is necessary as regards the revocation of a licence.
I do not want to delay the House on this point or to speak later on this section. While I am on my feet I want to put this point to the Minister also. While this section is worded in the permissive sense rather than the mandatory sense, it would be thought by anyone reading the Bill that these are the grounds on which a licence will be revoked. In that context I want to ask the Minister if he would explain paragraph (e) in more detail than it is set out in the Bill. One of the grounds for revocation of a licence is “if the holder, being a company, is being wound up”. Normally, when that kind of provision is made, certainly in legal arrangements—I am sure Senator Nash and Senator Eoin Ryan will agree with me on this—there is usually a saver put in in the case of companies being wound up “in the course of reconstruction” or “for the purposes of reconstruction”. It would seem to me that the same kind of exception should be made here. Obviously, it would not be the intention of the Minister or of the Central Bank to revoke the licence of a holder which is a company if, by agreement all round, including agreement with the Central Bank, the company is being wound up purely for the purpose of reconstruction.
Mr. Colley: If I may deal with the last point made by Senator O'Higgins; as he pointed out, the section is permissive rather than mandatory. I do not think it is realistic to visualise a banking company which is being wound up for the purpose of reconstruction finding itself in the position where the Central Bank rushes in immediately and revokes its licence. Obviously that is not what happens. It is simply that the Central Bank may, where a company is being wound up for purposes other than that envisaged by Senator O'Higgins, revoke a licence, for example, because the  company is insolvent. That is the kind of case that would be covered by this provision. In a case which would involve reconstruction there could be no question of the Central Bank moving in and revoking the licence.
I want to make this point about this section in relation to the amendment. There are nine grounds set out here on which a licence may be revoked. The first eight of them are factual. Indeed, some of them even envisage a judicial finding. For instance, paragraph (f) envisages a judicial determination because the expressions “unable to meet his obligations to his creditors” and “suspends payments” are known to banking law and could only arise on judicial determination taking place. If all of those eight grounds are examined one will find that each one of them involves a determination of fact. Therefore, if the Central Bank acting on one of those eight grounds revokes a licence, it is open to the licence-holder to apply to the court and to establish that the fact is not as alleged by the Central Bank. I do not think that there is any problem at all about those eight grounds. There is automatically——
Mr. O'Higgins: While the Minister is on that point, supposing the licence is revoked, and then the situation envisaged by the Minister comes about, an application is made to the court and the applicant is found to be justified, what happens in the interim? If the licence has been revoked and he is not able to carry on the banking business, it might be 12 months before the court determination is given.
Mr. Colley: There is provision for what happens at the time of a revocation of a licence, allowing the business to be carried on for the purpose of dealing with creditors, and so on. I think it is quite clear that in a case such as is envisaged by Senator O'Higgins the courts could be asked, and would in such a case ensure, that the revocation of the licence be held up pending the full hearing of the action.
Mr. O'Higgins: Would there have to be some kind of injunction proceeding first?
Mr. Colley: Yes, that is what I should envisage. Therefore, in regard to those eight grounds it appears that precisely what is being sought is available, that is an appeal to the court.
With regard to the last—the ninth— ground, what is envisaged there is a situation where there is, say, a takeover of an existing bank which is licensed. That immediately brings up the whole question that we already debated on the previous amendment. What it amounts to is the granting of a new licence. If one could not control this, then somebody who would not get, or perhaps had been refused, a licence in the first instance, could by a takeover get a licence. Clearly, we cannot allow that loophole. What we are dealing with here is, in effect, the granting of a new licence, and all the arguments which arose in relation to the previous amendment arise in relation to that ground, and I do not propose to go over them again. As regards the other grounds, because in each case there is a question of fact involved, there is clearly a right of appeal to the court, which can control very rigidly whether or not the Central Bank is complying with the grounds set out in the section.
Mrs. Robinson: I think that the Minister's reply to this point is an argument in favour of accepting the amendment. If the Minister suggests that this is a question of finding a fact on which there would be an appeal to the court, then if the Minister would accept the amendment and give a statutory appeal, with the safeguards that I have put in, that in the interim the revocation would not take effect, or if the court so thought fit, pending the hearing of the point disputing the revocation of the licence, this is an argument for inserting the amendment. The Minister must know from the very fact of his practice as a solicitor that when you say to somebody that he would have an appeal, if a wrong finding was made the question arises how soon could he bring an appeal outside the terms of the Act? In the meantime, his licence has been revoked ...it could be a matter of months, or even years, before that appeal comes before the court for appeal. What  happens in the interim? Not only is that very bad for commercial stability but is most unfair in the sense of mere justice under the Bill. To me, it is impossible to distinguish this from the position of a revocation of a cancellation of the registration of a unit trust scheme, where an appeal is allowed to the court for an analogous reason set out under the Act which I have quoted to the Minister, where again there is the facility for a stay in proceedings.
I am at some disadvantage here because I have a fairly limited experience in law to be putting forward the extremely serious points I am putting forward in favour of this amendment. I should be interested to hear what lawyers on the Opposition benches, such as Senator Nash and Senator Ryan, have to say on whether they would consider it desirable to have an appeal to the court under this provision. Further, I should like to hear their comments on the points that I made and did not fully argue. I had hoped that the Minister would be more ready to accept the argument about the constitutionality of allowing a revocation of a licence for the statutory grounds given, with no appeal to the courts.
I wish to refer—without notes on this occasion—to cases which have been heard, such as the case in relation to the Solicitors Act, 1954. There was a case heard in 1960, where the practice of solicitors was revoked and it was found to be unconstitutional because it was exercising a judicial power, and the Incorporated Law Society were not a court in that sense, and it did not qualify under Article 37 of the Constitution as being a limited power of a judicial nature in matters other than criminal matters. It was not a limited power of a judicial nature because the power involved the removal of the means of livelihood of these solicitors.
Similarly this is not a limited power because it is removing the right to carry on a banking business in Ireland. That is not a limited power: it is an important power in deprivation of property right and on the lines of the argument put forward in the solicitors case. I do not honestly think that, if the bank were to exercise its power, it would stand up to constitutional  challenge. If the Minister's answer to me putting forward this amendment is that if this was exercised in a wrong way there would be an appeal to the court, but without the safeguard that I have put in the second half of the amendment, that in the interim, if the court saw fit, the revocation would be suspended pending the hearing. The Minister must accept that there is a great difference between giving a statutory right within a certain limit of appeal to the High Court and saying that the citizen would have the right of appeal if there was total abuse. I should be hard put myself to know how to frame that right; it would be an indirect right and there would be a delay of many months in the exercise of that right. If that is the Minister's argument, I find it very unconvincing.
Mr. Colley: I did not pursue the point made by Senator Robinson when she quoted the judgement of Mr. Justice Walsh. However, just in summary, in relation to the inquiry provision in the Marts Act, what his judgment amounted to was to say that this could produce a finding of fact by which the Minister would be bound.
What I am pointing out is—and the reason that I did not pursue it is that I thought it was obvious from what I was saying—that in the case of the first eight grounds, there can only be a question of fact involved. In relation to those, there is no advantage whatever in providing for an appeal to the courts, which exits anyway. If it is there, what is the use of adding it in? We are not improving——
Mrs. Robinson: On what grounds does the appeal to the court exist?
Mr. Colley: “If the holder of the licence so requests.” That is a question of fact: did he or did he not?
Mrs. Robinson: Where is the appeal to the court? That is what I am trying to introduce.
Mr. Colley: If the Central Bank purported to revoke a licence on any one of the first eight grounds, for instance, “If the holder fails or ceases to carry on banking business” and the holder of the licence said: “That is not  a fact”, then if the holder applies to the court on the grounds that the bank has wrongly purported to revoke the licence under (b) because the licensee has in fact continued to carry on a banking business, this is a matter of fact which the court will decide.
Mrs. Robinson: How would the Minister actually frame it?
Mr. Colley: I do not follow the Senator's point.
Mrs. Robinson: I would be interested to know how the action would be framed. It would be a very difficult action to frame. The probable course of action would be to test the constitutionality out of the section.
Mr. Colley: Surely it is a question of fact. I should think that a declaration would be clearly——
Mrs. Robinson: How long would that take?
Mr. Colley: I have no doubt at all that a bank whose licence the Central Bank had purported to revoke would apply to the court and get an injunction restraining the Central Bank pending the full hearing of the action. I should think this would be normal procedure which I should expect to happen. I see no advantage whatever being given to the licensee from the point of view of the Constitution by providing something which already exists, except in relation to the final point and which I have indicated earlier could not be subject to the amendment proposed. Since it cannot be applied to that and since it is not necessary in the other cases, I see no reason at all for accepting this amendment.
Mrs. Robinson: I am afraid I must pursue this because I do not follow the Minister's logic. He is telling me the remedy for a person whose bank licence has been revoked is to have recourse to the courts. He is telling me that an injunction could be applied for in relation to stopping the revocation of the licence. In other words, a most cumbersome and most difficult procedure, instead of granting the very simple procedure in the amendment which is precisely the right to apply to  the court and the possibility that the court may direct that the revocation would be suspended pending the hearing of it. The Minister is replying to me in terms of my amendment.
Mr. Colley: I am saying that it exists already. There is no necessity——
Mrs. Robinson: If it exists already in the terms of what we are talking about, then why would it have been introduced in the Unit Trust Bill in an identical way? Why would it have been introduced in other Bills such as the Employment Agency Bill in similar circumstances? If I might quote the provisions in the Unit Trust Bill for the cancellation of the registration of the unit trust scheme section 4:
Subject to the provisions of this section if in relation to a registered unit trust scheme there is a contravention of a provision of this Act or of an order thereunder.
If that is not a question of fact, find me a question of fact. The Minister has described the provisions under section 11 as questions of fact. That is one of the reasons for cancelling the registration of a unit trust scheme and there is a right of appeal to the courts in the identical terms that I am trying to introduce into the Central Bank Bill. There is no feeling that this is unnecessary or undesirable. Is it not necessary and desirable that a fair hearing be given to a person who will be deprived of a very important property right, deprived of a banking licence? The Minister is saying to them: “We will give you no statutory right of appeal under this section of the Bill, but we do not argue that you might have a right of going to the courts and pleading the circumstances.”
Mr. Colley: Is that not precisely the Senator's own argument in relation to section 10 concerning the alteration of conditions? The Senator made the case that it was not necessary to provide the right of appeal because it already existed under the Supreme Court judgment.
Mrs. Robinson: Under section 10 my argument was that the Central Bank would be entitled to attach conditions  to individual licences. This worried me. I went to the judgement of the Supreme Court in Livestock Marts Act and found that they had upheld a similar provision of attaching individual conditions and had stated that there must be a reason for these conditions, there must be constitutional justice and that, if it were arbitrary, there would be an appeal.
This has nothing to do with the question of revoking a licence and the procedure available, in justice, to the person whose licence has been revoked if they want to contest it. I am saying that, in relation to banking licences as in relation to unit trust schemes, we must build this right of appeal into the Act. I think that my argument is reinforced by the Minister's own reaction of saying that this would be the proper course of action, but that they will not have a statutory right to do it, with a safeguard within a certain period and that the revocation is suspended in the meanwhile. The Minister says they can seek a declaration. Senator Ryan will know that that might be a very delaying procedure. They can seek an injunction. This seems to me to be an extraordinary way of going about the remedy if it is the only remedy and the Minister, I think, is agreeing to that. I was to some extent persuaded by the Minister when he said that the question of granting a licence to carry on a banking business here could be very much a policy matter, a matter of how many banking concerns one could have, and very much a matter of great confidentiality, for which the sources of the information would have to be protected. It might be different from a unit trust scheme. But I cannot see, in relation to the operation of banking licences and unit trust schemes, why banks should be discriminated against. I cannot see why they should not have the same statutory right of appeal to the court written into the Bill since the Minister is saying that this would be their only recourse anyway. It is something which would be very hard to deal with if it were not written in. I do not see the logic in not accepting this amendment.
 The Committee divided: Tá, 8; Níl, 24.
Lyons, Michael D.
Mannion, John M.
Robinson, Mary T. W.
Russell, G. E.
|Brennan, John J.
Eachthéirn, Cáit Uí.
Flanagan, Thomas P.
|Honan, Dermot P.
Nash, John J.
Ryan, Patrick W.
Sheldon, W. A. W.
Tellers: Tá: Senators Russell and Mrs. Robinson; Níl: Senators Farrell and Brennan.
Amendment declared lost.
Progress reported; Committee to sit again.
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