Sale of Goods and Supply of Services Bill, 1978: Committee Stage.

Wednesday, 19 March 1980

Seanad Eireann Debate
Vol. 93 No. 12

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Government amendment No. 1:

In page 4, between lines 14 and 15, to insert a new subsection as follows:

“(2) This Act shall come into operation three months after the date of its passing.”

[1306]An Leas-Chathaoirleach:  Amendments Nos. 1, 5 and 23 may be discussed together as amendments Nos. 5 and 23 are consequential on amendment No. 1.

Minister for the Gaeltacht (Mrs. Geoghegan-Quinn): Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Several Senators who spoke on the Second Stage suggested that the business community would need a certain period of time following the enactment of the Bill in order to revise their documentation and become familiar with the provisions of the Bill. Senator FitzGerald made the very reasonable point that business people could not be expected to have their arrangements in order before enactment since it could not be assumed that the Bill would be passed without further amendment. The Minister, Deputy Burke, agreed with the points made on this subject and indeed feels that a lapse of time on enactment would give a breathing space for traders, consumers and lawyers alike to become familiar with the Bill. Three months is a reasonable time to elapse and the amendment to section 1 is designed to this effect. The other two amendments to sections 4 and 43 are consequential on the amendment of section 1.

Mr. Molony: Information on David Molony  Zoom on David Molony  On this side of the House we certainly agree with that. I would just like to ask the Minister whether she proposes to take any steps, or whether the Department of Industry, Commerce and Tourism propose to take any steps to advise the business community of the new provisions. One of the points we would all appreciate about this Bill is that it is a complex and technical Bill. It is difficult for ordinary business people to pick up this Bill or the Explanatory Memorandum, which is almost irrelevant now in view of the many changes that have occurred already and which we hope will take place before the Bill finally becomes law, and understand its implications. It seems to me that there is a very good case to be made for a more comprehensive Explanatory Memorandum or perhaps some sort of a little booklet setting out [1307] the changes in the law or, better still, a booklet that sets out not just the changes in the law but the general legal position in relation to the sale of goods and the supply of services. It would be very useful and would assist people if it could be brought out in sufficient time for people to absorb it before the three months expires.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  It would save them consultancy lawyers also.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I take Senator Molony's point and, indeed, when I was dealing with this particular Bill in consumer legislation I was very concerned with it. It is very much a legal Bill and I am not a legal person and I appreciate this perhaps far more than anybody else did. It was my intention at the time, and I understand it is still the intention of the Minister, Deputy Burke, that the Director of Consumer Affairs should prepare a very comprehensive booklet or memorandum for the benefit of both consumers and the business community. I think we should proceed on that basis. It is advisable that the Director of Consumer Affairs should be the one to do it because under the Consumer Information Act he is the person responsible for supplying information and keeping both consumers and the business community up to date on legislation dealing with consumers.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  I welcome the direction in which the Minister's amendment is going but I am a little unhappy about the length of time. We have waited for a period of 85 years or so to have this Bill. Some members of the community are more conscious of the waiting period than others and in so far as we are expected to know anything about it the change is all the greater I liked the Minister's approach to the idea that the Director of Consumer Affairs should take steps to inform the business community about this, and not merely the business community but sometimes that kind of information sometimes informs those whose duty it is to advise the [1308] business community about what it actually means and on due reward, to prepare the documentation. Would the Minister take the power—it need not be today because we have another Stage of this Bill—to determine by ministerial order when it comes into effect? The Director of Consumer Affairs already has a lot to do and in view of what the Minister of State said on Second Reading that office has a staff problem. Will it be able to get this work done in such time as to have three months a meaningful period for his performing the duties that the Minister envisages he should perform by way of notifying the public? I cannot see any objection to that other than the danger that I suppose always exists with a ministerial order, that the order would not be made. Hopefully, the Minister has sufficient confidence in herself to know that the order will be made. I would feel that the order should not be made until the director is ready to launch his paper around the community. I have read this Bill a few times. I am supposed to know what is in the Sale of Goods Act, 1893; God knows I once did, I think, or chunks of it anyway. The Sale of Goods Act originally was not all that easy to read; to try to read it with this—no discredit to anybody—is just that much more difficult. If that is the status of mind of any given practitioner in this field then what is going to be the state of mind of people who are not practised or expected to be practised in it? I just feel that the sensible and practical course is to let it be determined in the light of the facts that the Minister will discover to exist in the matter of communication. That would be my only suggestion on the Minister's amendment.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I am not so sure whether it would be desirable to have it only come into operation by order. I am not particularly enamoured of three months. Definitely, the point that Senator FitzGerald has made has merit, that it would probably take a very lengthy time to prepare a document explaining the Bill in sufficient detail for the business community, for consumers and [1309] others. I would be prepared to let the Department have another look at it. They have had a look at it between Second Stage and now and the general feeling was that three months would be sufficient because the Bill had been around for a reasonable length of time. Many of the business community are fairly familiar with some of the provisions that will affect themselves directly. I am prepared to ask the Minister, Deputy Burke, to have a look at it between now and Report Stage. The Senator can probably raise the matter again on Report Stage and the Minister will have decided by then what to do.

Mrs. McGuinness: Information on Catherine McGuinness  Zoom on Catherine McGuinness  In one sense I would like to support Senator FitzGerald in saying that the business community might need to see the booklet at the same time as the Bill is being brought into effect but I am aware, of course, professionally, that lawyers are already being consulted and have been for some time about the provisions of the Bill and its likely effect on the business community. I do not think I would like to see it brought to a stage where the Minister might bring it in by order because experience of human beings is such that if they have a deadline they will work to the deadline but if they think it is going to be put off to some vague date they will not inform themselves until they know what the date is. While, perhaps three months may be a little short, an actual defined period of time is probably better than just by ministerial order. As regards the Director of Consumer Affairs informing the public, this is the way to do it, but it will be essential to ensure that in order to do that he will have facilities to produce the booklet and that there will be an end to his staffing problems and to the slowness of his business going through the Department. There are other sections on which I would like to raise matters like this later and I will do so. If he is going to be asked to handle the publicity and the information for his Bill he must be given the tools to do so.

Mr. Molony: Information on David Molony  Zoom on David Molony  I would like to get an [1310] assurance from the Minister that whatever system she uses, whether it is to take power to introduce the legislation by order or whether to extend the three months to a longer period, whatever waiting period we have, during that period the director will publish the booklet.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Yes.

Amendment agreed to.

Question proposed:“That section 1, as amended, stand part of the Bill.”

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  I just want to make one point. Depending on the view the House will take of Senator Molony's amendments on the misrepresentation sections—if they were accepted my point would not arise, but if they were rejected then it might be desirable to amend the Title of the Bill—it may be necessary to amend the citation. If my view should prevail and if there is to be a misrepresentation part which I believe should apply to all types of contract then the Title would not be correct. It would have to include something like “and other contracts”. It seems appropriate that I should make the point on this section.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  This is something that we could discuss on Report Stage.

Question put and agreed to.

Government amendment No. 2:

In subsection (1), page 4, line 25, to delete “Energy” and substitute “Tourism”.

An Leas-Chathaoirleach:  Amendments Nos. 2, 3 and 22 are related and they may be discussed together.

Amendment agreed to.

Government amendment No. 3:

In subsection (1), page 4, line 27, to delete “Tourism and”.

Amendment agreed to.

[1311] Question proposed: “That section 2, as amended, stand part of the Bill.”

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  I am just puzzled by this. The definition of the word “service” states that `service' “does not include meteorological or aviation services provided by the Minister for Tourism and Transport or anything done under a contract of service;” I am puzzled by that last proviso. What does it mean?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  A contract of employment.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  May I follow Senator Cooney on that? I would suggest that there should be different language used in regard to “contract of service” here. It is undoubtedly confusing. I completely agree with what Senator Cooney has said in regard to this. We are talking about excluding contracts of employment. That is what the Minister immediately thought to say in response to Senator Cooney. That is what the Bill should say also. I do not know what difficulties there may be but I have no doubt that there are various statutes which refer to employments and if there is a problem about it the definition may be taken by some of the existing statutes. I would feel very definitely that it ought to be a “contract of employment”. Here we are left with subtle distinctions between contract of service and contract for service, I do not think we should unnecessarily get down into that difficulty.

I have a little criticism of the language in subsection (3) where “a question arises as to whether a term of a contract....” This reference in section 43 is not a reference to a contract, it is a reference to an agreement.

If Senators think I am making a lot of heavy weather about that matter, let me refer them to section 1 of the 1893 Act which draws a distinction between an agreement and a contract. So, in the language we use in any part of this Bill, where we are planning to use words which are themselves distinguished in the Act which is amended, we should be [1312] careful in our use of these words. Again the same point arises with regard to section 13 of this Bill. In section 13 there is no reference to a contract. In section 13 what you will find is a reference to an agreement. So, I am afraid I am not going to come unnecessarily to the aid of the Minister in taking out my pen to try to improve the Bill. Seeing such skilled persons present as I do, their skills should be called in our aid once the point is made. That subsection needs re-definition. If you like, that is the kind of point the Seanad is used to hearing me make and which is infinitely boring.

I now come to something a little bit more substantial. There ought to be an exclusion in this Bill for certain matters. There should be excluded sales in aid of charity or business activities carried on by voluntary bodies. Handicapped children make Christmas cards and people make baskets, and so on. There are countless examples of that kind. In some manner there should be an exemption from the implied warranties of the Bill and particularly the stern new realities must be understood. We are in a consumer situation where it is no longer possible, as it has been during all the years in which these charitable bodies have been in existence, to exclude them from all these warranties. They could have been excluded but now they cannot. It should be possible to exclude them. That is a relatively substantial point.

I am not at all satisfied with the Minister of State's reply on the Second Stage about the exclusion of leases and bailment contracts from the provisions of this code. I do not see the necessity for an extensive examination of what we know is a widespread practice in commercial dealings. I do not know whether it impinges more directly on people dealing as consumers—quantitatively the number of transactions that go on in relation to bailments of goods for cleaning purposes, for example, or the amount that goes on in the realm of the leasing of motor cars or the leasing of machinery. There is a very great deal of leasing of motor cars.

[1313] I am absolutely unable to see why people choose to conduct their business in such a way that they get rewards in the form of a rental or other periodic payment rather than in a flat straight sum, whether received from a person who is buying out absolutely the item involved, or purchasing through a hire purchase company, should be put in the position that they can exclude every single one of the implied warranties that had been in existence and were capable of being excluded under the Sale of Goods Act, 1893. They are now being revised and will not be capable of being excluded where the person is dealing as a consumer and can only be excluded, even where the person is not dealing as a consumer, in other cases where it is fair and reasonable that they should be excluded. The court can have regard to all the criteria, admirable criteria in a large part, set forth in the Schedule to the Bill.

If there is an exclusion clause in a lease or in a bailment and if the person is not dealing as a consumer, then it is perfectly fair and perfectly reasonable that that exclusion clause should apply where the criteria are satisfied. The fact that it may not have occurred to those who originally gave the set of instructions to prepare this Bill is a defect in our situation and it is right for us now to remedy it. There were some very strong arguments that this would do some frightful damage to the financing of Irish industry, or something of that kind. With very great respect, I should like to hear more about it. I should like to hear the argument and assess it. I hear nothing of this kind. In any case, such an argument could not apply in the ordinary kind of bailment situation, certainly not in the ordinary motor car position.

Take, for example, a motor seller who has got into the business of leasing his cars. He is ripe for a real development of that business. This Bill, when enacted, will obviously make it more attractive for him to do that than to incur the liabilities that he will not be able to exclude by virtue of the provisions of this code. I know the hire purchase code applies at the moment but it is very considerably [1314] tightened, as I read it, by the provisions of this Bill. The man who has developed the leasing business is to be encouraged. Why? The man who has developed a hire purchase side to his business is to be discouraged. Why? I do not see any good commercial reasons for it.

What really seems to me to be wrong is that, in principle, the legislature is taking the line that the business of buying and selling is such that there are two situations. There is the consumer and there are certain warranties to protect that consumer which cannot be excluded. The second situation is that where there is not a consumer these warranties can be excluded if that is fair and reasonable. There is one type of transaction where they can be excluded where it is unfair and unreasonable, where the person may be a common consumer and, even in that case, the question of fairness and reasonableness does not arise, for all the odious so-called guarantees that we know exist, guarantees which are, in effect, to tear up your statutory rights under the Act. That is the language which has come to be used.

The guarantees will continue in bailment situations and in leasing situations, whereas they will be totally unenforceable in transactions which are either ordinary sales or hire purchase. So, you are giving greater rights to somebody who is making a lease or taking a bailment than you are giving to someone who is dealing in hire purchase. I do not understand why that should be and it ought not to be. This section, therefore, should be amended. Here we would need a re-definition of “seller” as defined in the Sale of Goods Act, 1893. The Sale of Goods Act, 1893 defines “seller”. In the slightly fatuous language used, “seller” means a person who sells or agrees to sell goods. We will have to have a definition of “seller”, if my argument is followed by Senators, as including lessors or bailors. “Buyer” likewise will have to be re-defined as including lessees or bailees. The money consideration which is not defined in the Sale of Goods [1315] Act will have to be given a definition which includes payment or payments of rent, or any other sum periodically payable.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  I should like to support Senator FitzGerald in his plea for amendment of the definition of “seller” so as to bring leasing contracts under the Bill. Senator FitzGerald has made all the arguments. One point I would add to his argument is this: The philosophy behind the changes proposed in this code is to redress the position of the comparatively weak consumer faced with the strength of modern selling. That is the basis on which the Bill has been brought forward to us, the basis for amending and updating the laws to protect the consumer. That is entirely commendable in this day and age of high pressure salesmanship and the unequal status between buyer and seller which so very often arises.

That need is present to an even greater degree in the case of many leasing contracts. Many leasing contracts are entered into because the lessee is not in a position to find the capital to purchase the piece of equipment in question. He is driven into a leasing arrangement by virtue of lack of capital. He then is in a weaker position vis-á-vis the lessor who invariably is a strong and sometimes a gigantic financial organisation. The lessee, more than any other consumer, is in no position to dictate what the terms of the lease shall be.

A glance at any leasing agreement shows how hard they bear on the lessee as a consumer in terms of the exclusion of his rights.

Senator Molony put on the record of the House during the Second Stage debate actual excluding clauses from common forms of lease. If the rationale behind the Bill is to improve the position of the weak consumer vis-á-vis the strong supplier, then in the leasing situation that argument applies perhaps more strongly than in any other commercial transaction.

Mrs. McGuinness: Information on Catherine McGuinness  Zoom on Catherine McGuinness  I should like to [1316] support what Senator FitzGerald and Senator Cooney have said about the inclusion of leasing and bailment contracts in this Bill. I mentioned this on Second Stage and went into some detail about it. The arguments have already been very ably made by Senator FitzGerald in particular about this matter. It may have been in the minds of the framers of the Bill that leasing contracts were carried out generally by large businesses who leased fleets of cars, or large quantities of business equipment, or something of this sort and that these people were already well advised by lawyers as to the kind of contracts they could enter into.

Leasing is spreading nowadays way beyond that sort of thing. We have only to look at the advertisements which appear in the public press, on television, and so on, to see that people are being urged to lease motor cars, pieces of office equipment, farm machinery, and so on, precisely in order to avoid tying up their capital in buying the particular piece of equipment. Certainly my own experience in the legal field is that if consumers sign agreements which do away with their common law rights, and do away with their rights under the 1893 Act, on some occasions if a case is brought the courts will practically ignore the agreements simply because the judge himself feels they are so unjust. One is left in the position of not being sure what reaction the courts will have to this type of agreement.

If we are protecting consumers in hire purchase situations, we should also protect them in the situation of leasing and bailment. I realise, as was pointed out by the Minister in the Second Stage reply, that there is not an enormous amount of litigation on bailment matters at present. Nevertheless, the bailment situation arises very often in ordinary consumer life. Cleaning is one example that has been mentioned but there are quite a number of others such as putting in goods for repair, and so on. It may well be that abuses exist but, because the matter is fairly small, because the costs of bringing a legal action are high, consumers may not pursue this matter of [1317] bailment as much as they might otherwise do.

Perhaps by amending the definitions in this Bill, either by including definitions of “seller” and “buyer”, or possibly by changing the definition of “service”, or some other means, these types of contracts—leasing in particular and if possible bailment as well—could be included in the protection given to the consumers by the Bill.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  To take them in the order in which the arguments were made, first there is the changing of the term “contract of service”. As I was about to reply to Senator Cooney, a contract of service would be the agreed conditions of employment between employer and employee. It looked as if it would be a simple matter to take out “service” and put in the word “employment”. I am informed that there may be a legal problem involved in that the term “contract of service” is the one which has always been used. However, we will have a look at it between now and Report Stage. If it can be simplified by the use of “contract of employment”, that will be done.

Senator FitzGerald made the point on subsection (3) that we have various terms in use in section 13 and section 43. Instead of “a term of a contract” we have “agreements” and “conditions” and various words. He felt it would be more uniform if we used the one set of terms throughout the Bill. This is something which we might discuss on sections 13 and 43 at a later stage. I would have an open mind about it, if it were possible to accommodate the Senator's arguments. He has made very cogent arguments. That can be done, because I did not come in here to go through Committee Stage as a dictator, as it were. I am open to any proposals which Senators wish to make to improve the Bill. That is what we are here for. We can have another bite at the cherry on Report Stage.

The question of leases has been looked at—Senator McGuinness spoke about this matter also—in the light of what various Senators had to say on [1318] Second Stage. It is possible that we may be proposing an adjustment to the situation on Report Stage.

Mr. Molony: Information on David Molony  Zoom on David Molony  I am very pleased to hear what the Minister has said with regard to extending the Bill to include leases. In his reply to the Second Stage debate the Minister of State, Deputy Burke, felt that there was no evidence of complaints from people that leases were being excluded. I would not expect that. I would expect it to be the other way around. Given that consumers in this country are not well organised to lobby, I do not think one would expect to hear from a scattered group of people that leases, as we know them, were not being included.

Any solicitor in general practice, or anybody who has any knowledge of consumer affairs, would accept that for many years now finance houses have been using leases to avoid the provisions of the Hire-Purchase Act. We are creating a situation here where leasing agreements are not affected at all by this Bill and more and more they will attempt to avoid the provisions of this Bill. For that reason, it is absolutely essential, if the Bill is to have any teeth at all and to work, that we avoid the flaw of leaving this lacuna in it. I am very pleased to hear what the Minister had to say in that regard.

Generally with regard to section 2, it seems to me that there are matters within the legislation that should be defined and are not defined. I should like to ask the Minister for her comments on this that might be considered. First of all a consumer is defined and we can discuss later if we agree with the definition itself. The other expression used is a buyer. I do not know whether it is absolutely necessary to define a buyer, but where a third category is introduced, a customer, we should ask what the difference is between a customer and a buyer. We should go for one or the other. It seems to me that there should not be a major difference between a customer and a buyer. Maybe “customer” is meant to include a buyer and a hirer. In the absence [1319] of any definition we do not know where we stand. Of course, the buyer and seller are both defined under the Sale of Goods Act, 1893.

The second point I would make in relation to matters calling for definition is the question of misrepresentation. Later we will come to that, and I will be opposing the entire Part of the Bill dealing with it. If, for the sake of argument, I do not succeed in my efforts, I feel very strongly that misrepresentation should be defined. It is a very important term. It is not defined in any of the sections. A very considerable amount of difficulty has been created in Great Britain because of the absence of a definition in their Misrepresentation Act. This has been referred to in many legal textbooks published since that Misrepresentation Act was enacted. It is a great flaw in our Bill. Frequently we have discussions on whether or not we should follow English legislation. If we are to follow English legislation, we should also have the benefits of the comments their courts and legal academics have made on the efficacy of the legislation. I would ask the Minister why “Misrepresentation” and “customer” are not defined. She may feel they do not require a definition but I would be very grateful for a definition of both “customer” and “misrepresentation”.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I am told the difference between a buyer and a customer is that a customer encompasses a buyer of goods and a recipient of services.

Mr. Molony: Information on David Molony  Zoom on David Molony  How about a hirer?

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  How about a client?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  A hirer is defined in the Hire-Purchase Act. A buyer is defined in the Sale of Goods Act and a hirer is defined in the Hire-Purchase Act. A customer here means the buyer of goods and the recipient of services.

Mr. Molony: Information on David Molony  Zoom on David Molony  It does not mean a hirer?

[1320]Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  No. A hirer is defined already in the Hire-Purchase Act.

Mr. Molony: Information on David Molony  Zoom on David Molony  In clause 2 (b) of the Schedule we talk about whether the customer received inducement to agree to the term, and so on. Am I to understand that does not include the hirer?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  It does. Under clause 2 (b) of the Schedule a customer would include a hirer.

Mr. Molony: Information on David Molony  Zoom on David Molony  How is that the case?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Could we discuss that point on the Schedule when we come to it?

Mr. Molony: Information on David Molony  Zoom on David Molony  Provided that is the only place where “customer” is used.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  As we go through it, if we come up against it again we will see what we can do.

Mr. Molony: Information on David Molony  Zoom on David Molony  I suggest it would resolve the problem if we defined a customer as a purchaser or recipient of services, or a hirer. That is the intention but the position is unclear.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  If the Senator would be prepared to let us have a look at it, if it can be done we will do it. The other word is “misrepresentation”. I agree that it should be defined. If it is to be defined the best way might be to do it in section 40. I do not know whether the Senator would agree with that.

Mr. Molony: Information on David Molony  Zoom on David Molony  If section 40 is to continue to exist.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  May I go back to the question of the definition of “service” under a contract of service? What is the position if one has a contract of service for the supply of services? Services are brought in under section 37. An example is a trade union solicitor who is under a contract of service to his trade union to supply services to the individual members. What would be the position of the [1321] members in relation to him or to the trade union? He has a specific contract of service with a trade union. He is a solicitor in general practice. Take another example. An artificial inseminator is under a contract of service with a milk board. He has to supply a service to farmers. For example if he brings a Friesian instead of a Hereford, who is liable?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  That can happen.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  It has.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I am not trying to put off Senator Cooney. This is something we will have to look at. We have tried to deal so far as we can with the anomalies raised on Second Stage. We will also look into the point raised by the Senator.

Question put and agreed to.

Mr. Molony: Information on David Molony  Zoom on David Molony  I move amendment No. 4:

In subsection (2), page 5, line 14, after “goods” to insert “except any such sale”.

The purpose of the amendment is fairly clear. There was some discussion in the Dáil about the wisdom of bringing auctions within the scope of this legislation. Auctions are specifically excluded under the British legislation. I am not making any great point about that but if we are going to look at British legislation as we and the Department have done in preparing this Bill we should at least query why certain things are different from what we propose. In relation to certain specific types of auctions I would be very concerned about the necessity, or the desirability, of including them under the provisions of the Bill. I refer specifically to sales of bloodstock, a branch of sale of goods that is very highly regulated and carries within it its own definition, warranties, its own guarantees and almost its own entire [1322] area of law. Veterinary surgeons and dealers in bloodstock are aware of the nuances of the law in respect of the sale of bloodstock. The major bloodstock sales that take place here, at the RDS and in Goffs, have their own detailed conditions of sale. Those conditions have stood very well the test of time and where they required to be changed because of decisions in our courts they were changed. They were looked at a great deal more frequently than our own Sale of Goods Act was in that respect at least.

I am sure there are other auctions that are subject to their own regulations. For example, I imagine that marts have their own conditions of sale, their own understanding of what the law is in that respect.

From the general point of view I can understand the Minister's arugment. In the Dáil the Minister was concerned about the sale of Connemara ponies in the west of Ireland. Fair enough, there may be reason to control that type of sale but that is not good enough a reason to include all auctions. It may be necessary to include some auctions but the Bill should be placed on the footing that the Minister could consider whether specific types of auctions ought to be included and, if so, that she should have the power to include them. That is what the amendment sets out to do. The Minister can look at bloodstock auctions, livestock auctions, the sale of Connemara ponies or furniture auctions and decide on the basis of that trade whether it is a good thing that they be included. If she does that she will end up with a far more effective Bill. If she does not do it and includes all auctions from the start we will see trouble occurring. Then some attempt will be made to do something about it. In relation to the bloodstock industry our conditions of sale here are much the same as those which exist in the United Kingdom and on the Continent. That is so because it is an international business and a very important one.

The Minister expressed the view that it would not be of great concern to the [1323] bloodstock industry because of the fact that most people who would purchase bloodstock at auctions would not be purchasing as consumers. Most of them may not but I have no doubt that at these auctions there are a significant number of people who purchase in a consumer rather than in a business capacity. There is no necessity or call to include an area like that. I do not put that forward as a reason why that should specifically be excluded but because auctions are so diverse and different arguments may be made in relation to each type of auction. The Minister should take the power to look at any given situation at any auction and if it seems appropriate to include it she should do so by Order at a later stage. At least she should look first.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  We must put the UK legislation in perspective. Auctions are not excluded in that legislation at all; they are included. In the United Kingdom buyers at an auction are not regarded as dealing as consumers. Senator Molony's amendment seeks to reverse the impact of the provision in subsection (2) (b) which was, as he said, introduced by me in the Dáil following considerable representations from Members, including the former Taoiseach, Deputy Cosgrave, and the bloodstock industry. They were worried about the fact that bloodstock auctions would be included under the terms of the legislation. The argument was made by me then that the vast majority of people, in fact, I would have thought, all the people, going to such auctions would have been dealing in the course of business and not as consumers. That was my reason for not excluding them specifically in the beginning. However, it was proved to me and Department officials that many people attending bloodstock auctions deal as consumers and, therefore, we had to make an exception in the case of bloodstock auctions.

The amendment, instead of enabling the Minister to exclude by order certain varieties of auction sales from the special [1324] consumer provisions of the Bill, where they lead to detrimental repercussions or whatever, would make the application of the consumer provisions to auction situations the exception rather than the rule. I do not see any reason why we should change this situation. It would create conditions in which the major protection that we are affording now to consumers could be readily circumvented by a shift or a change by business people in their techniques of sales. We have seen that with the considerable increase in auction sales recently. We are not just talking about the genuine auctions we have seen in the past such as bloodstock and antique auctions. There has been a very definite change in sales techniques employed by various business people. If I accepted the amendment we would be creating a climate where business people, if they felt they wanted to change sales techniques, could do so and circumvent the Bill. They are my reasons mainly for not accepting the amendment.

Mr. Molony: Information on David Molony  Zoom on David Molony  I understand what the Minister has said and I agree that quite a number of people are selling goods, particularly household goods, by way of auction and they could circumvent this measure. However, the Minister would have the right to introduce an order —she will have at least three months in which to do so—providing that particular types of auctions would come within the scope of the Bill. I am urging her to avoid a situation in which, simply because we do not have a specific knowledge of it now, certain auctions may be included which should not be included. I do not think bloodstock auctions should be included at all, good, bad or indifferent. There is no call to include them. They have their own regulations which are better than the provisions set forth in the Bill. These regulations are more appropriate to their business than the provisions in this legislation which will supersede them. Why include them? That is just one example. Many ordinary livestock marts have excellent conditions of sale but, again, the provisions in the Bill will take precedence and supersede [1325] local regulations designed specifically for their sales, and which are satisfactory and are understood by people.

There are other sales to be considered. In relation to secondhand furniture sales or antique sales, we will be coming to questions of definitions of merchantable quality and fitness for purpose. None of these things would have a direct bearing if antique furniture sales are to be included, as they will be under the Bill as drafted. I can see a lot of problems arising, problems that will have to be teased out afterwards in the courts. We will be left in a situation where because the legislation is unsatisfactory decisions by the courts will be unsatisfactory. I do not think it is good enough.

I sympathise with what the Minister has said in relation to the recent development of the sale of new household goods by auction. The Minister has the resources to bring in orders even before the Bill becomes law to deal with that situation. If the Minister does that, she avoids the danger of including auctions which should not be included. I urge her to reconsider the Department's attitude.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I regret I cannot meet Senator Molony's view or agree with him. The provision allows the Minister the freedom to decide the types of goods on sale by auction that should be excluded under the terms of the Bill. The provision was brought in by way of amendment in the course of the debate in the Dáil mainly to cover the point made by the bloodstock people who were very worried. Other people, whether they are involved in antique furniture auctions or whatever, if they have a genuine case for not being included in the Bill can make that case like the bloodstock interests did. They can be accommodated by the Minister and can be excluded. The bloodstock people indicated that they were happy with the amendment brought in in the Dáil.

Amendment, by leave, withdrawn.

Question proposed: “That section 3 stand part of the Bill.”

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  I am very unhappy [1326] about this section. I know the Minister correctly said that the UK does not exclude sales by auction but what it very definitely excludes is the treatment of a buyer at an auction as one who is to be regarded as dealing as a consumer. I do not want to start making frightfully nationalistic speeches here but in so far as it is not clearly required by differing circumstances I should have thought that our substantive law should be the same as that which prevails in Northern Ireland where these pieces of law on just prices in the UK now apply. I would want very good reasons to include for a different type of treatment what is excluded in the law applicable in that country and in that part of this island. I would also think, as a working pragmatic principle as I have already said boringly often, that we get the advantage of judicial interpretation of British language and, therefore, let us use it unless we have reason to depart from it. I do not know that there will be a great deal of trouble resulting from the exclusion of auctions from the treatment that is to be meted out by our statute law to people dealing as consumers.

I do not think Senator Molony is tied to the language of the amendment which he withdrew; other language can be used, but I should have thought that our stance ought to be that the Minister should get into a position to watch the commercial situation and be entitled to intervene by order where a clear attempt to escape from the warranties and the obligations of this Bill develop. In that position the Minister should be able to say that at auctions of this nature purchasers are not to be treated as consumers.

I am extremely unhappy with the position. I worry about people who are acting as liquidators of companies, trustees, people who are selling as receivers, or who are personal representatives in the administration of estates. They may in the course of business do the selling. If they cannot sell in such circumstance because they are burdened by the warranties, responsibilities and liabilities of this Bill I see great impediments for them.

[1327] Section 10 introduces a new table which relates to the implied warranty with regard to fitness for purpose and merchantable quality. This applies to a sale by a person who, in the course of business, is acting as agent for another. It applies to a sale by a principal, except where that other is not selling in the course of a business. That may save a number of such situations but there are lots of other situations where there will be a business. A liquidator selling off part of a business, winding it down—perhaps one branch is being kept going—could sell all the goods and ordinary supplies for private use of the other branch by auction so as to exclude himself from the applied warranty. He may do so to close off his account and finish it. Otherwise, people will be extremely slow to take on the obligations and responsibilities of liquidatorship or receivership. I do not see how the ministerial power in this section will help such a person because subsection (2) refers to goods of a type defined by the Minister by order. There may be the most hopeless jumble of everything on God's earth in the branch I referred to; there may be a wide variety of items but the liquidator or receiver in the case might not be clear as to what was included in the lot before it was listed. If I am wrong I would be delighted to know. It is a difficulty I do not want to arise if it can be prevented.

When the Minister, Senators Molony and Cooney were exchanging formalities on the matter of the sale of horses, I noticed that in the original Sale of Goods Act they were so nervous about the sale of horses that they provided specifically that nothing in the section about selling goods in market overt should apply or should affect the law relating to the sale of horses. For God's sake let us know what we are doing if we are doing anything that might affect the law relating to the sale of horses which must be very special and with which Senators Molony and Cooney are familiar. I do not know whether we are having an intervention here in the sale of horses but I [1328] do not think we ought to. The provision may be pertinent to this section as to any subsequent one.

With regard to the sale of goods in market overt section 22 of the Sale of Goods Act states that the buyer acquire a good title to the goods provided he buys them in good faith and without notice of any defect or want of title on the part of the seller. That section is to be reconciled presumably with what we are providing in this section and also with the table in section 10 which incorporates a new set of sections. I suggest that the Minister should not concern herself with that last observation until we get to the table but bear in mind that the entire of the Sale of Goods Act has got to be looked at in the light of any amendments we are making in the existing provisions in the Act. I would feel uncomfortable at the failure to exclude any sale by auction from provisions which provided that buyers at auctions be regarded as dealing as consumers. The people who sell by auction ought to be able to lay down their conditions, make their exclusions, and if these are unfair and unreasonable—there are tribunals to rule accordingly—the buyers can have the conditions upset. If they are fair and reasonable the conditions should be enforced.

What is the position of the official assignee in bankruptcy? Has anybody found out if the old bankruptcy code has kept him harmless if he is selling off goods by auction which are the property of his bankrupt? Is he stuffed with a lot of implied warranties under this Bill? Maybe the official assignee is among those exemptions which are referred to but unfortunately, not specified, elsewhere in the Bill. I would like to see the complete exclusion from this of a sale by competitive tender or by auction and the buyer not in any circumstances regarded as dealing as a consumer. That is the way I would like it to be.

Mr. E. Ryan: Information on Eoin David Senior Ryan  Zoom on Eoin David Senior Ryan  A well known film producer on a famous occasion said: “include me out.” There is an element in this discussion as to whether auctions [1329] should be included out or excluded in. There are arguments for both points of view. We are dealing with a Bill concerned, in particular, with the consumer. Consequently, it seems to me that the strongest argument is in relation to anything of that kind, where we are discussing whether it should be included in the Bill or not, to include it unless there is a reason why it should be out of the provisions of the Bill. The Bill as it is, where auctions are included unless there is a case made to the Minister for removing them, seems to be the correct way of approaching this matter. Senator Molony referred to the fact that consumers, by and large, are not well organised. He was talking about lessees. He felt that consumers are not likely to be as well organised as sellers. Consequently, if the amendment that Senator Molony suggests is made it is less likely, and it is going to be done less effectively, that the consumer will come along and have certain auctions included than it is the other way around. There is a strong argument to be made for allowing the Minister to make an order, if a case is made by people who are selling—they are more than likely organised and in a position to make the case to the Minister as to why a certain kind of auction should not be included in the Bill. Consequently, while I agree that there are points of view to be made on both sides, on balance the way the Bill is framed at the moment is the best.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  I should like to ask Senator Ryan to take up the troubled state of the liquidator. He has to liquidate in the course of his business a lot of goods which are of a kind ordinarily supplied for private use. He has to get those in to pay the creditors of the business. That is his duty and his business. In the course of doing so he finds the only way he can get the most money for his creditors, on the advice of all the experts in the area, is by auctioning them. He must not allow himself to be in the position of not being able to exclude himself from the provisions of this Bill. What about the person who is stuck with the winding up of an estate who [1330] wants to pay the legacies? In the course of his business he may be involved in an ordinarily consumer type operation. How does one do the business of winding up? People are afraid to die for fear of the liabilities they leave behind in terms of matters undone. How does one deal with that situation? Up to this one could go into the auction room with all the goods and that was the end of the matter. They were sold under the appropriate exclusion of warranties and appropriate conditions of sale. Now, these conditions of sale will not hold up. The conditions of sale may not be fair and reasonable because they would not have been adapted for the particular case. It seems to me to be a dangerous business. Will Senator Ryan tell me what the liquidator, trustee or the executor can do in that situation?

Mr. E. Ryan: Information on Eoin David Senior Ryan  Zoom on Eoin David Senior Ryan  The Senator has gone a long way towards persuading the Minister that it is a special case.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  In a special case how does the Minister make the order? The goods may be anything from a needle to an anchor.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I was going to make the point that in a case where a company becomes insolvent and a liquidator or a receiver is appointed and an auction is held, the consumer's right of redress is not to the liquidator or to the receiver who sold but to the company and that in the case where the company is insolvent and therefore cannot deliver his or her rights to the consumer, the consumer would not have any more rights than he would have were he to buy the particular product or goods from a shop initially which could perhaps go out of business within a couple of weeks after he bought the goods. He would not have any rights at all because the shop would have been insolvent or in the case of the receiver or a liquidator going into a company, the company would have become insolvent. That is my information.

[1331]Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  I would suggest that the Minister is misinformed on the matter.

Mr. Molony: Information on David Molony  Zoom on David Molony  On a slightly different point, subsection (3) of the section states:

Subject to this, it is for those claiming that a party does not deal as consumer to show that he does not.

There is no prohibition on a party contracting their way out of the provisions of the Act except in one particular part of the Act dealing with “misrepresentation”. What would the position be for somebody—this might help Senator FitzGerald with the problem he has regarding liquidators—who attends at an auction, signs an acknowledgment that he purchased in the course of business and not as consumer? If that is possible what steps could the Minister take to ensure that that is not done in every circumstance in relation to a sale?

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  Is it not a case of going, going, gone?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  The Senator is talking about people going to an auction and signing to say that they are not dealing as consumers. They are not covered in the Bill.

Mr. Molony: Information on David Molony  Zoom on David Molony  What happens in relation to somebody who goes into one of these sales that the Minister is endeavouring to include in the Bill and who signs a similar form? The same goes for somebody who goes into a shop or buys a car or anything else and signs a similar acknowledgment. Is that not the same effectively as an exclusion clause? It is the same as excluding one's liability. It is not done by way of exclusion clause under the Bill but is done where somebody acknowledges that they purchased goods in the course of business and not dealing as consumer. They no longer have rights under the section and the seller avoids responsibility completely.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  We can only go so far to protect the consumer and if [1332] he does not want to be protected we cannot force him to be protected.

Mr. Molony: Information on David Molony  Zoom on David Molony  There is provision under the Landlord and Tenant Act, 1931 and under a different part of this Bill whereby a person cannot do that and I suggest that a similar provision should go in here.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  It is a totally different situation. I can have a look at it and see if we can do anything to regularise it.

Mr. Molony: Information on David Molony  Zoom on David Molony  I cannot remember the section but I think it is under the “misrepresentation” section. I do not mean to be frivolous in making this point but it happens. It is the Landlord and Tenant Act, 1931 and I am sure it was retained in the amendment to that Act last year. Section 43 of the Bill states:

If any agreement (whether made before or after the passing of this Act) contains a provision which would exclude or restrict—

(a) any liability to which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made, or

(b) any remedy available to another party to the contract by reason of such a misrepresentation, that provision shall be of no effect except to the extent (if any) that, in any proceedings arising out of the contract, the court may allow reliance on it as being fair and reasonable in the circumstances of the case.

It is not as simple as the provisions of the Landlord and Tenant Act but it is something if we are anxious to protect the consumer. In relation to that section only I suggest that some prohibition on a person's ability to contract his way out be included.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Misrepresentation is a totally different area from the one we are talking about now but we can [1333] have a look at it between now and Report Stage and if it needs to be regularised we will regularise it.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  As options are included within the ambit of the Bill, who is liable to the customer? Is it the auctioneer or the owner of the goods?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  The owner of the goods.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  I assume that subsection (2) (b) is the paragraph that the Minister will use to exclude certain types of auctions. In the type of auction referred to by Senator FitzGerald where the person selling is the administrator or the liquidator it seems to me that the exclusions permitted by subsection (2) (b) refer to the type of goods to be sold rather than to the status of the person selling. Would it not need to be amended to include such words as, for example, “the sale by auction of goods of a type or by a person defined by the Minister?”

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  We can look at that.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  Something on these lines that would deal with a personal representative situation or something that could be so defined as not totally to exclude a bogus situation.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  On the definition of when a party deals as a consumer, we find in section 3 (1) (b):

the other party does make the contract in the course of a business....

That is that the seller has to sell in the course of a business. There is a grey area in relation to people who may be doing odd commercial transactions by way of a sideline. Do I take it that it would have to be decided by the courts in a particular case in which the legislation was invoked by a customer, whether it applied or not?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Yes.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  The same applies with [1334] regard to paragraph (c) which refers to the type of goods ordinarily supplied for private use. The question might arise where the goods might be of a type ordinarily supplied for private use but might be supplied in a volume that could still be provided for private use but might not normally come within a single transaction. Would this be a matter for the courts?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Yes.

Question put and agreed to.

Government amendment No. 5:

In subsection (1), page 5, line 21, to delete “passing” and substitute “commencement”.

Amendment agreed to.

Question proposed: “That section 4, as amended, stand part of the Bill.”

Mr. Molony: Information on David Molony  Zoom on David Molony  Subsection (2) states:

This Act does not affect any exemption from liability conferred by or under statute.

Perhaps the Minister could tell us what are the exemptions.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  While the Minister is thinking up the answer to that might I ask about consideration of this point: when the UK shoved through their Misrepresentation Act of 1967 I think they included misrepresentations which were made before the Act. Is that right? I wonder if misrepresentations made before the Act should be included here. This does not apply to contracts made before the passing of the legislation. I would like the Minister to come in on this. I would be interested in getting an idea of the exemptions.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I can note the point made by Senator FitzGerald and see if we can solve it if not immediately, at least before the next Stage. The exemptions that Senator Molony is interested in are statutory exemptions [1335] which are enjoyed by the Minister for Posts and Telegraphs. The fact that the postal and telecommunications services are so universal would put the Department in a particularly vulnerable situation if the Bill were applied to them. There is also the fact that the Department are not engaged in the provision of services for profit or strictly in the sale of services. They are merely making services available for the public to whom they are accountable in ways in which the private sector is not accountable. The effect of the Bill would be to reduce the Minister's existing legislative protection rather than to close loopholes in the existing law which had been availed of by the private sector.

Mr. Molony: Information on David Molony  Zoom on David Molony  Perhaps the question could be considered between now and Report Stage.

Question put and agreed to.

Question proposed: “That section 5 stand part of the Bill.”

Mr. Molony: Information on David Molony  Zoom on David Molony  I should like to ask if there is a distinction in the Bill between orders and regulations. The orders are referred to throughout the Bill but in section 13, which is a very controversial section, there is reference to a regulation rather than an order being made by the Minister. Is there any significance in that distinction? Also, since it is provided in this section that every order proposed by the Minister must come before the Houses of the Oireachtas is it not implied that a regulation made under section 13, subsection (5) would not have to come before the Houses of the Oireachtas?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  The difference between an order and a regulation is, of course, as the Senator has pointed out, that an order must be laid before both Houses of the Oireachtas [1336] while that is not the case in respect of a regulation. The regulations under section 13 would be matters which we feel would not be such that the Houses of the Oireachtas would have to spend time on. They would be relatively technical matters to be included as regulations and therefore it was felt that they would not necessarily have to come before the House in the form of an order under the Bill.

Mr. Molony: Information on David Molony  Zoom on David Molony  I am interested to hear that. I did not think that was the reason but it seems to me to be a nice quiet way of slipping the dummy because it was not apparent. I did not think it was the case that regulations could be introduced just like that without reference to the Houses of the Oireachtas but I take the Minister's word on this. The only point that occurs to me is that if regulations under section 13(5) do not require to be brought before the House why is it stated specifically that a draft of every order in this section needs to be brought before the House? Surely if the distinction between regulations and orders preexists this legislation there should not be a necessity to refer to it at all.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Perhaps we can leave that to section 13 when we may go into it in more detail.

Mr. Molony: Information on David Molony  Zoom on David Molony  That is all right but I will be objecting to the fact that it is not proposed to bring the matters referred to in section 13(5) before the Houses of the Oireachtas. I think it is a very important section and it should be brought before the House if section 13(5) is going to exist as it stands now. That is the only point I am concerned with apart from the academic interest of the difference between an order and a regulation.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  Could the Minister make a regulation to improve the heating system of the House?

An Cathaoirleach: Information on Séamus Dolan  Zoom on Séamus Dolan  We will try to do something about that.

Question put and agreed to.

Question proposed: “That section 6 stand part of the Bill.”

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  On this section I should like to repeat the criticism which I understood was made on Second Stage of making breaches of this Act a criminal offence, Up to now the remedies have been entirely matters of civil law and the Bill as I understand it signifies a departure by imposing criminal liability on persons who may be guilty of a breach of some of the conditions of the Act. The Bill sets out to regulate relations between individual citizens and not between individual citizens and society as a whole.

The idea of the criminal law is to impose a sanction where the offence is something which affects society as a whole. Normally when two citizens are in contention they resolve their difficulties through the civil law. Society does not come in through the criminal law to punish one citizen for his failure to discharge his contractual statutory obligations to another citizen. Essentially these are contractual obligations now being put forward in statutory form. We are making it a criminal offence to break a contract such as we have now in statutory form. This is a novel and a retrograde step and I want to put on record as forcefully as I can my disagreement with this idea of making breaches of this Act criminal offences. Criminal offences should be reserved for incidents which impinge on society as a whole, Though they may be committed to affect one individual they are generally to regulate the relationship between an individual and society. This Bill is regulating commercial transactions between two individuals. If one breaches it the remedy of the other should be by way of civil law and not through the criminal courts.

I take exception to subsection (2) of section 6 where it is provided that where an offence is committed by an unincorporated body of persons and is proved to have been committed or to be attributable to any neglect on the part of a [1338] member of the committee of management or other controlling authority of such body that person should also be guilty of that offence. I understand that we are creating in this statute absolute offences where the commission of the offence brings with it automatic guilt. Here we are imposing automatic guilt for neglect without even specifying that it must be in any way culpable or serious neglect. We are imposing automatically a criminal offence for neglect by a member of a committee who might, perhaps, remain on a committee through no fault of his own, elected against his will and, too polite to refuse to go on the committee, and if the unincorporated body of which he is a member neglects to do something under this Act that person can be guilty of a criminal offence and could even be indicted if ultimately the prosecution authority should so decide.

The principle of making what traditionally has been a matter of civil law between contracting parties arising out of a contract into a criminal offence is altogether wrong. At this late stage I would appeal to the Minister to withdraw it. The argument for it is that it is a greater sanction to ensure that what the Bill sets out to achieve will be achieved. I would suggest to the Minister that the sanction of damages or whatever other civil remedy is available is equally and will be equally effective in the commercial sphere, and we are talking about commercial transactions here, in ensuring that parties dealing under this Act will have their rights protected because it is all about commercial transactions which in turn are all about money and advantage in the hands of the persons dealing in them. In this case if there is a penalty imposed the fine goes into the Exchequer and does not go in ease of the injured party whereas an action for damages ensures that the remedy benefits the injured party. I presume it is the injured party we want to benefit. It is not much joy to the injured party to know that the person who has not observed the Act has been fined in the District Court. It may be a source of a passing satisfaction but I would suggest that a [1339] much more realistic benefit is to rely on the civil remedies.

I am not sure from reading the Bill if a person who is in breach of his obligations under the Act can be liable to two sanctions, the civil sanction, and can also be prosecuted under section 6. I should like to know if the Minister envisaged that that would be the situation. If that is the situation, as I expect it to be, it makes matters even more reprehensible. Subsection(2) is drafted altogether too wide and can impose a criminal liability in a situation that normally should never be intended in terms of the criminal law.

Mr. E. Ryan: Information on Eoin David Senior Ryan  Zoom on Eoin David Senior Ryan  We are dealing principally here with section 11 and section 30. We are dealing with statements purporting to restrict the rights of a buyer or of a hirer as the case may be. We are not dealing with a casual or inadvertent action on the part of somebody. We are dealing with a situation in which somebody deliberately and quite consciously prints, puts up a notice or publishes an advertisement or does something of that kind where he deliberately tries to give the impression to the consumer that certain rights that are contained in this Bill do not apply. In this situation it is quite different from what we had in section 13 which was certainly objectionable. We are dealing here not with anything casual or inadvertent or a once-off type of action but with somebody who is deliberately putting up notices, printing advertisements to try to give the impression to the consumer that he has no right to mislead him as to his rights.

That is certainly a completely different thing from somebody trying to mislead somebody else in the course of a once-off kind of agreement or a sale of goods or something of that kind. How would this be dealt with if it was not an offence? Who is going to take action against somebody who puts up this kind of a notice or publishes this kind of advertisement? After all, the consumer is quite likely to be unaware of the fact that [1340] it is misleading and even if he finds out afterwards that it was misleading, it would not be worth his while doing anything about it. Therefore, unless you have this kind of a provision where the Minister or the State is going to take action against somebody who does this, in fact in 99 cases out of 100 the person doing it will get away with it. I have a lot af sympathy with the point of view which is being expressed about the hesitation which the Minister should show in regard to including an offence in a Bill of this kind but unless you proceed in this way it is going to be very difficult to stop people publishing these kinds of notices. In fact they are likely to get away with something which we all agree they should not get away with.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  There is a clear distinction to be made here between some of the sections and others of them with regard to the criminal aspects. For my part I have no doubt that the breaches of sections 45 and 46 relative to directory inquiries should be criminal matters and should give rise to offences and consequential penalties. I likewise think, subject to what one might have to say on that section in due course, that there can be no doubt with regard to the necessity for section 44 concerning unsolicited contracts. After some little doubt about it I have concluded with Senator Ryan that really it is something more than merely failing to give freely a right which the law confers on the consumer. Attempts in the sections to which Senator Ryan referred, sections 11 and 30, tend essentially to mislead people as to their rights, in a way to deprive them of knowledge of what their rights are. I conclude that these should be offences though I do not think the matter is clear on unsolicited goods and directory entries.

Senator Ryan did not mention section 16 which deals with the offence of supplying a guarantee which complies with the requirements of section 16. I have some doubt about whether that ought to be an offence. There are many matters of the law and many such requirements the [1341] breach of which do not give rise to criminal offences and that might be one of them. Perhaps we can look at that again when we come to it but observations which I have made in regard to section 16, I would repeat in regard to sections 48 and 49. Indeed, I feel obliged, in due course, to ask the Minister for some expression as to the intent of these sections.

Now I come to the only point I have to make on section 6. Senator Cooney said these are absolute offences in all cases. Something more than neglect ought to be involved if you are to be given a criminal record if you are a member of a committee of management, a director or a member of a controlling authority or body and it is found at issue that the guarantee is not in accordance with the requirements or not printed as legibly as required by the section. You might find that there is a notice attached to a barrel or something that is being sold about which you never knew. Some degree of activity more complete than seems to be involved with the use of the word “neglect” should be required for one to end up with a criminal record, I am unhappy about that.

Admittedly, if you allowed yourself to become director of a company which went around depositing goods on the back doors of big houses, or the director of a company which was producing spurious directories you should be punished for that if you were so foolish as to let yourself get into that situation. An ordinary decent trader or professional person might easily find himself in this position with regard to this other kind of offence where people had their rights in law, despite the attempts that were being made by somebody down the line to take away these rights.

I came across a case not so long ago where 99p was added to the price of goods and it is quite clear from the way the thing was done that it was done by the manager of the department who was quite clearly under pressure from his boss to produce an overall improvement in his mark-up. He was in fact cheating [1342] without the connivance of his boss. He was taking in the money; it was going in; he was in fact fiddling with the invoice to produce a better return to the store department that he was managing. The director of that company might have been responsible for the criminality involved in that particular matter. It was a Trade Descriptions Act offence, in fact, but I had enough to do besides enforcing the Trade Descriptions Act or the Consumer Information Act. I am unhappy about this. I would like to see the word “neglect” in some way strengthened there.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  I think possibly I misled my colleagues when I said the ordinary offences are absolute. It would appear that offences under sections 45 and 44 are not absolute because the sections talk about having reasonable cause to believe, which is important as an element of mens rea. I still think that it is wrong in the case of what is essentially a contractual relationship put in statutory form, to import some further sanctions to deal with breaches of it. If people display notices purporting to restrict rights of the buyer under section 11 or similar notices under section 30 I do not think that the displaying of such notices should be a criminal offence. It obviously changes the contractual relationship between the parties or is an attempt to do so and if it succeeds in doing so it should and does give rise to damages. I would maintain my case that it is an adequate sanction in a civil matter where the relationship is between two citizens and not where there are any social grounds being encompassed or involved. Likewise with regard to political goods and directories; if there is, an element of fraud there, well then there would be a separate offence committed and dealt with under the ordinary criminal code. That would be the proper way to deal with it. The two sections in question, 44 and 45, provide that there is no liability in the case of directory entries to pay for them. Section 44, not having read it closely at this stage, I confess, seems to provide that persons in receipt of unsolicited goods, have other [1343] ample remedies which would bite the sender of the unsolicited goods equally effectively as the criminal sanction.

Mr. Molony: Information on David Molony  Zoom on David Molony  May I suggest that the insertion of the word “wilful” before “neglect” might improve the situation? I sympathise with what Senator Cooney has said and I appreciate the problems involved as far as enforcement is concerned but I agree strongly with Senator FitzGerald that the mere neglect of someone who is on the committee of management, let us say, of an organisation, which has offended or committed an offence under the Bill may be very hard done by if there is to be some question of being found guilty of criminal offences. I suggest that it should be wilful neglect rather than mere “neglect”.

Mrs. McGuinness: Information on Catherine McGuinness  Zoom on Catherine McGuinness  While I appreciate what Senator Molony has said about inserting the word “wilful” before “neglect” and I think that probably would be a good idea I might be permitted to say a word in favour of retaining the idea of an offence in these sections. I do not agree with Senator Cooney that a social wrong is not being committed; I think that quite often a social wrong is being committed in this type of situation. It is all very well to say that you can leave it to the relationship between the buyer and the seller and damages can be got but very often people hesitate to go to law over these matters partly because it costs them a good deal of money to go to law and partly because people are genuinely nervous and afraid of involving themselves in the legal system.

In fact, there are other areas where there are offences in regard to the putting up of notices and so on. I have just to mention one example: publicans and also sellers of grocery goods are supposed to put up a statutory price list and as far as I understand it, they commit an offence if they do not have the correct price list up. This is, in a sense, a matter between the consumer and the seller and theoretically the consumer of drink could sue his publican if he was [1344] charging too high a price. Nevertheless the law makes the non-display of the proper notices an offence. I do not think that it is an entirely new thing or an entirely wrong thing to bring in the concept of an offence here. I do take the point about the wilful neglect, that it could be that mere neglect would be a little too strict a standard. Also—this is probably just because of my own ignorance—I would be grateful if the Minister at some stage could make it clear just which sections are offences of strict liability and which are not. I take it that that is what the Senators mean by saying an absolute offence, that it is a strict liability matter rather than a matter of mens rea and proof and so on.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  First, we are not making it a criminal offence to breach a contract. Secondly, as Senator Ryan and Senator FitzGerald have rightly pointed out, not all of the sections provide for criminal offences. Section 11 does—that is a statement restricting rights—and the corresponding provision of section 30 for hire-purchase; section 16, supplying a guarantee not conforming to the section; section 44, asking for payment for unsolicited goods or threatening proceedings; section 45, asking payment for a directory entry without a proper prior note of agreement; section 46, breach of an order made in relation to the content or lay-out of invoices for unsolicited goods and directory entries and sections 48 to 50, omission of particulars of notice or failure to use minimum size type in contracts which may be required by orders under the sections. The offence which was originally created by section 30 (3) is now being deleted by way of an amendment at this stage.

For reasons which have been set out both by Senator Ryan and, indeed, by Senator FitzGerald himself and now latterly by Senator McGuinness it is only right that we should leave the criminal offence attaching to these sections. What Senator McGuinness said is true, that very often consumers in the past did not bring civil actions under the old Sale of Goods Act because of the often [1345] prohibitive charges of solicitors and very often, as she rightly said, because they were afraid of the whole court procedure and situation and that very often the item was so small, the redress needed was so small the cost of going to court would not be justified. People got away with it for too long, so it is important to have the criminal offence attaching to breaches of these sections.

Section 6(2) is a standard provision in Acts providing for prosecution of offences and essentially its purpose, as Senators have said, is to broaden the apparent value of the offences created. It is also, incidentally, in the Consumer Information Act, 1978 and in the Industrial and Provident Societies (Amendment) Act. So, we are not creating a precedent or bringing in anything new. It is just a standard provision.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  The first of these created a precedent which allowed the Minister to say that.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I cannot remember back that far. I forget whether or not the Senator mentioned that point at the Committee Stage of that Bill.

Mr. Molony: Information on David Molony  Zoom on David Molony  But would the Minister not consider the insertion of the words “wilful neglect”? Whatever about precedents or not, surely that is not to guide our every thought on the subject. I mean it is either good or bad that it should be mere neglect or wilful neglect and I would like if the Minister had some comment to make on that.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I would not consider putting in the word “wilful”. The word “neglect” on its own is sufficient and after all, it will be up to those to prove in court that there was neglect on behalf of the director, the manager or any other member of the committee of management of the company. If that is proven in the courts, it is an offence under the Act. I do not think that putting in the word “wilful” would improve it or disimprove it. I would not be in favour of putting in the word “wilful”.

[1346]Mr. Molony: Information on David Molony  Zoom on David Molony  I do not want to drag it out. I think we did discuss this before on the Consumer Information Bill. I do not agree that mere neglect on somebody's part should have the woeful consequence of making him a criminal. You can imagine circumstances in which a director of a company, or somebody who is not even a director of the company but somebody who does not take part in some particular discussion that goes on or some particular activity and, although he gets the minutes of his board meeting in the post, through neglect, mere neglect, does not read them and consequently is not aware of what is going on. That is not wilful neglect. He has never connived in or in any way thought of committing the offence and, indeed, you can imagine circumstances in which a person, if he thought for a second that he was conniving in or in any way contributing to this would avoid it. It is wrong that a person like that, because of mere neglect on his part should be held guilty and I would urge the Minister to reconsider it. I cannot see what damage it will do. I am sure the Minister does not want to see convicted persons who are not in essence guilty in terms of their intentions and that is all I am asking the Minister to consider changing.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I am saying that we should not include “wilful”. That a person, a director or a member of the committee of management of a company was neglectful must be proved in court by the State.

Mr. Molony: Information on David Molony  Zoom on David Molony  I accept that but is that not mere neglect rather than wilful neglect? The fact that somebody might fail to read a minute, for example, or indeed might fail to attend a meeting might be regarded as neglect on his part. He may know nothing at all of the particular offence that has been committed but through neglect on his part he might not have been aware of it.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  For my part, I would rather accept this now if I could settle for the terms because if it all turns on whether I read my post with exactitude [1347] and I am regarded as neglectful if I get tired half-way down the column it would seem to me to be unreasonable. There is such a difference between the types of offence here. It is one thing to be going around the country depositing goods at premises or with old ladies. You then know what you are doing when you are doing it. It is another thing to fail to take the necessary steps to see that somebody does not put up—or take down, incidentally—some statement that might have been up at a time when it was perfectly legal to have it up, or take some piece of paper off goods that may be delivered. Perhaps this section is in usual form. I do not know what the word “neglect” in this case is held to involve. What degree of duty is required of persons, who are on boards for one purpose or another? Sometimes you do not even know it they are making enough.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  If you are on a board you should ensure that you know what they are making.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  The Minister drafted the Bill but I have to utter a warning that the Minister is not interpreting it. We must take great care before we allow this section to go any further.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  The extent of the neglect would be taken into account by the courts.

Mr. Molony: Information on David Molony  Zoom on David Molony  Yes, perhaps the length of time a person has to spend in prison. That is hardly any great consolation for persons who have to be a month or six months in prison. The fact is that the court will be obliged to convict a person of having committed a criminal offence and he will thereby become a criminal.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  I do really think we ought to review the Acts that have gone through in recent years in the context of this because we are in a new kind of area. We ought to have a fresh look at them to see whether there is anything required to be done here to [1348] protect the people who are doing what they should be doing in this kind of position. They are on a board for one purpose, for giving their advice on general policy or some such thing and I do not think they should get themselves exposed to charges of criminality where they have had no opportunity of preventing it and know nothing at all about it.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I do not think that either of the two Bills that I mentioned would have been sufficiently——

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  No, I am not suggesting that the Minister would have it wrong. I merely think that we ought to have a fresh look at it.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I think we can look at it again. Looking at these Bills would be an ongoing procedure.

Mr. E. Ryan: Information on Eoin David Senior Ryan  Zoom on Eoin David Senior Ryan  Surely what we are discussing in the last five minutes has nothing to do with this Bill? It is a matter of the general principle of the responsibility of a director of a company for everything that is done by the company and there is no doubt that in theory and, if necessary, in practice a director is responsible for what is done by the company. If you move away from that situation, then you can have a situation where all kinds of things can be done, not only under this Bill but in all kinds of areas where the servants of the company do things and the directors can say they just did not know about it and evade all responsibility. It is a fundamental matter of company law that a director must be held responsible even though that may often sound extremely unfair and unrealistic.

Mr. Molony: Information on David Molony  Zoom on David Molony  Is it not a great principle in company law that directors had every right to be stupid as long as they were honest? I accept that they are responsible for their actions but they are not criminally responsible. But we are making them criminally responsible here in a Bill that is there essentially to protect the consumer. I do not like to see a Bill like [1349] this that does not have criminal justice tagged on to it somewhere. I hate to see a Bill like this creating as many criminal offences as this Bill creates. When we are creating criminal offences we need to be very careful because people are entitled, as Senator FitzGerald has said, not to be exposed to criminal law without their knowledge. That is what is happening here. I accept the point that Senator Ryan has made but there is a big difference between a person who is responsible in law and a person who is responsible in criminal law. I would see it as being convicted of having committed a criminal offence for something he knows nothing about. Our criminal law started, it is fair to say, on the great basis of mens rea, that the person had the intention to commit an offence. We have now reached the stage where mere neglect on somebody's part, with no intention whatever, would have them brought before a jury and have them convicted of a very serious criminal offence.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  I am sure the Minister would want to have some degree of culpability on the part of the person being prosecuted. She would not want a perfectly innocent person or a merely neglectful person prosecuted. There will have to be an element of culpability. The only way one can ensure that is by introducing a word such a “wilful” because, as it stands at the moment, a merely careless and innocently neglectful person can be prosecuted.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  As regards Senator Ryan's less than usually fortunate contribution I do not think the position is as he outlined it with regard to directors. The Companies Act does provide an express limitation on the extent to which directors' responsibilities can be given over by them to shareholders, but subject to the specific matters that they are required to do under the Act, they are guilty of criminality only to the extent that they are criminals made such by Acts of Parliament. We may need some provision for an appropriate defence where somebody can clearly show he did not know a damn [1350] thing about it and need not have known.

Question put and agreed to.

An Leas-Chathaoirleach:  Amendments Nos. 6, 24, 25, 26 and 27 are related and may be discussed together.

Government amendment No. 6:

In subsection (1), page 5, line 50, after “Minister” to insert “or by the Director of Consumer Affairs”.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Senator McGuinness maintained during the Second Stage debate that it should not be necessary for the Minister to have to confer the functions listed in section 52 (1) on the Director of Consumer Affairs by order but rather that these functions should be conferred on the director directly by the Bill. I agree with the Senator that there seems to be no good reason why the director should not have the functions involved immediately the Bill comes into operation. These amendments, therefore, serve the dual purpose of acting on Senator McGuinness's suggestion and of tidying up the position relating to the director from the drafting point of view.

Turning first to the proposed amendment to section 7, this section already gives the Minister authority to prosecute summary offences under the Bill. Since we will now be conferring a similar function directly on the director it seems logical that the powers of the director to prosecute offences should be contained in the section dealing with prosecution of offences, in other words, section 7 subsection (1). This is the effect of amendment No. 6. This amendment will involve the consequential deletion of section 52 (1) paragraph (d) and amendment No. 27 does this.

Amendment No. 24 removes the necessity for the Minister to make an order to confer on the director the remaining functions of section 52 (1). The effect is, therefore, that when the Bill comes [1351] into operation, the director will immediately have the functions listed in paragraphs (a) to (c). The fourth and fifth amendments in this package, in other words, amendments Nos. 25 and 26, make it clear that the functions being conferred on the director in this subsection relate to the provisions of the Bill which create statutory duties of one kind or another; these are sections 11, 13, 16, 30, 33, 44 to 46 and 48 to 50.

Mrs. McGuinness: Information on Catherine McGuinness  Zoom on Catherine McGuinness  May I just thank the Minister for having made these amendments? These meet my points entirely.

Amendment agreed to.

Question proposed: “That section 7, as amended, stand part of the Bill.”

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  Could the Minister give me an indication as regards subsection (2) why the limitation period for summary offences is changed from the normal six months to eighteen months? The whole point of having the six months limitation period for summary offences is that they have to be dealt with quickly and while the facts are fresh in all the parties' minds. To increase that to 18 months seems unduly long.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  This was done on the suggestion of Deputy Barry Desmond in the other House.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  Did he give any reason? I presume the Minister had to be given a good reason to agree.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I had, yes.

Question put and agreed to.

Question proposed: “That section 8 stand part of the Bill.”

Mrs. McGuinness: Information on Catherine McGuinness  Zoom on Catherine McGuinness  This again is a matter which I raised on the Second Stage but I would like to refer to it again here. Section 8 states that the expenses [1352] incurred by the Minister or the Director of Consumer Affairs in the administration of this Act may be met out of moneys provided by the Oireachtas. I would like to be assured by the Minister that if expenses are needed by the Director of Consumer Affairs for his functions under this Act, these should be provided in addition to the expenses which he already has for the expenses that arise under the Consumer Information Act. The moneys provided for the office of the Director of Consumer Affairs should be separately funded from the rest of the moneys of the Department, that they should be provided by grant-in-aid separately rather than just an integral part of the finances of the Department. This is essential if the Director of Consumer Affairs is to have either real or perceived independence, either to be really independent to act on behalf of the consumer and also to be seen to be independent so to act. He has very important functions both under this Act and under the Consumer Information Act. To finance him in this way is one of the ways of ensuring that he can carry out these functions properly through the moneys voted by the Oireachtas rather than having his finances integrated into the Department and his whole office thereby integrated because we all know that the basis of any office in any independent action is the finance that lies behind it.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  While the Senator's points are very fine in theory, it has been found over the years that it has been better to tie the expenses and indeed the offices of these various officers to the Department and to have them become an integral part of the Department. Having the office of the Director of Consumer Affairs and his staff included in the Department Vote is not something new in the Department of Industry, Commerce and Tourism, because, in fact, the other bodies which exist under that Department already are treated in the same way, such as the Examiner of Restrictive Practices and the Restrictive Practices Commission office, the Registrar of Companies and the [1353] Registrar of Friendly Societies. I would not take the point that it is necessary now to, as it were, put the director out on a limb on his own and give him a grant-in-aid. If it were to be done for him it should be done for the others also.

Mr. Molony: Information on David Molony  Zoom on David Molony  I am not going to rehash a lot of debate that went on during the passage of the Consumer Information Bill about the advisability of ensuring that the Director of Consumer Affairs would be independent. I agree fully with what Senator McGuinness has said. As the Minister will recall, I made those points at the time. I would like to know whether the Director of Consumer Affairs has been given all the financial resources he has sought since his office was established, or whether he is experiencing any difficulties in getting on with his job. I have heard him being interviewed on radio a couple of times about consumer affairs but, other than that, I have not seen any great evidence of his existence. I do not know whether he has been applying to the court for all the injunctions he is entitled to apply for under the Consumer Information Act. Perhaps the Minister could avail of this opportunity to give us an idea as to what he has been doing? I should particularly like to know whether he has had any difficulty in getting the funds he has sought since his office was established.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I presume the director is carrying out his functions as laid out under the Consumer Information Act. I am not aware that he has been encountering severe financial restrictions. However, I would remind the Senator that the director and the Minister for Industry, Commerce and Tourism, and all Ministers, and all Departments, never get the exact amount of money they look for. Many things must be delayed or postponed to a later date. I think that would be true of all of us. Were the director to get all he is looking for, the rest of us would be looking for all we feel we should get. I do not think anyone should be afraid that the director will not get sufficient funds to [1354] carry out his work under the Consumer Information Act. If he needs extra moneys, which he will need to carry out his functions under this Act, they will of course have to be provided as well, if we are serious about consumer affairs.

Mr. Molony: Information on David Molony  Zoom on David Molony  Will they be provided? If he has not got enough money at the moment to do the job and if the money he has sought has not been given to him, why give him more powers and more responsibilities unless you guarantee him that you will give him more funds?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Of course, he will have enough funds to carry on his functions under both the Consumer Information Act and the Sale of Goods and Supply of Services Act. Nobody can be guaranteed that he will get the exact amount of money his is looking for. I am sure if you asked the IDA, or CTT, or any of the other organisations which are working hard for the country—just as the director is—how much they wanted, they would not be satisfied with the amount of money they get, just the same as the Minister in charge of a Department would never be satisfied with the amount of money he gets to run his Department. I do not think you could give a guarantee to anybody—not even to the Minister himself—that he will get what he is looking for.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  The Minister is being disingenuous in regard to the Director of Consumer Affairs. It is common and notorious knowledge that his office is seriously and grossly under-financed and under-staffed.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I would not accept that.

Mr. Molony: Information on David Molony  Zoom on David Molony  Could we have some idea of the percentage of funds he is getting compared with what he has sought?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  As the Senator knows, I am not in that Department any longer. I have not been there since last November and, therefore. I [1355] cannot answer his question at the moment. The Estimates were decided for that Department since I left the Department. If the Minister, Deputy Burke, were here, he could quote the figures for the Senator. I will ask him to bring the figures the next day Committee Stage is being taken.

Mr. Molony: Information on David Molony  Zoom on David Molony  In case the Minister for Foreign Affairs will be dealing with it the next day perhaps he could have the figures, or whichever Minister——

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  It is unfortunate that the Senator should make that complaint. The Minister of State, Deputy Burke, is ill this week and cannot be here. I had been dealing with it before. The Minister, Deputy O'Malley, is in America and there was nobody else in the Department to deal with it.

Mr. Molony: Information on David Molony  Zoom on David Molony  I am sorry to hear that the Minister of State is ill.

Mrs. McGuinness: Information on Catherine McGuinness  Zoom on Catherine McGuinness  While I accept the point the Minister makes that nobody gets all the money he is looking for, nevertheless if it was listed under a separate subhead in the Estimate we would have a better idea of how much money the director's office was getting. According to information this is not so. It is not even listed under a separate subhead, never mind a grant-in-aid. I accept that the other officers in the Department of Industry, Commerce and Tourism are dealt with in the same way, but the fact that they are dealt with in this way does not necessarily mean that it is a good thing. Very probably where they act on behalf of the public it would be better if they were funded in a separate way. This does not necessarily mean they should be given enormous sums of money but, after all, nobody would suggest that the Director of Public Prosecutions funding should be put in one holus-bolus, with the whole Department of Justice. Officers who are meant to be acting in the public interest rather than in the Department's interest—and, if the Minister will [1356] forgive me, sometimes the Department's interest is not necessarily the same as the public interest—should be funded in such way that people can see fairly readily how much money they are getting.

Question put and agreed to.

Section 9 agreed to.

Mr. E. Ryan: Information on Eoin David Senior Ryan  Zoom on Eoin David Senior Ryan  Could I ask the view of the House as to whether we should break for tea, or what would the House like to do?

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  Might I suggest to the Leader of the House and his colleagues that, as an alternative to a break now and coming back, we could continue on until 7 o'clock and then adjourn until the next day?

Mr. E. Ryan: Information on Eoin David Senior Ryan  Zoom on Eoin David Senior Ryan  Normally when we break, we break for an hour. Would the House consider sitting until 7.30 and then adjourning?

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  Yes. Might I suggest that we adjourn for 15 minutes and then go on until 7.30 p.m.? Some people have been here since 2.30 p.m.

Business suspended at 6.05 p.m. and resumed at 6.20 p.m.

Mr. Molony: Information on David Molony  Zoom on David Molony  I move amendment No. 7:

In page 7, line 40, after “goods” to insert “in an advertisement”.

This is a very comprehensive section. The point I am concerned with in amendment No. 7 relates to the sale of goods by description. Subsection (1) provides that where there is a contract for the sale of goods by description there is an implied condition that the goods shall correspond with the description. My concern is that claims in advertisements may not always be taken as forming part of the contract. Therefore my amendment proposes that subsection (3) [1357] should read: “A reference to goods in an advertisement on a label or other descriptive matter accompanying goods exposed for sale may constitute or form part of a description.” Without the words “in an advertisement”, it could happen that somebody might see an advertisement on television, and a couple of weeks later he might go into a shop and purchase the goods simply by asking for a particular item off the shelf, and he might not be able to hold the supplier afterwards to the claims in the advertisement. For that reason I ask that the amendment be accepted.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  The purpose of section 13 (2) of the Table is to ensure that sales by description will include self-service sales. To give this subsection real effect it is also necessary to provide, as subsection (3) does, that a reference on a label or notice with goods may constitute a description. In other words, the mere fact that words are not spoken will not prevent the sale from being a sale by description. It will be sufficient if the description is on or alongside the goods.

Subsections (2) and (3), therefore, are intended to relate specifically to self-service sales. Accordingly, the concept of an advertisement in a newspaper or catalogue, for example, has no place in subsection (3) which is intended to refer only to descriptions on or alongside the goods. If, however, an advertisement accompanies the goods, it would come within the ambit of the expression “other descriptive matter” in so far as it actually describes the goods. If the advertisement, on the other hand, does not describe the goods, it would not fall within the ambit of subsection (3). This is only right as section 13 of the Table is concerned only with sales by description.

Mr. Molony: Information on David Molony  Zoom on David Molony  I take the Minister's point, but I would ask her would she not think that where claims are made in relation to goods in an advertisement in a newspaper, or on television, or some other medium, a seller should be held to such claims?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  That is covered in section 13 (1).

[1358]Mr. Molony: Information on David Molony  Zoom on David Molony  I do not follow that in view of what the Minister said. I thought she said to the House a moment ago that the whole thrust of section 13 of the Table was in relation to sales by description where a notice or advertisement accompanies the goods. I am talking about a situation that may be different from that. Can she tell me—and show me her authority for saying it—where somebody sees an advertisement in a newspaper, or in some other medium, before going to the shop to purchase goods, do claims in such an advertisement form part of the contractual terms?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Yes. Section 13 (1) deals with an advertisement in a newspaper, or on television, or whatever, which is away from the goods and which gives a description of the goods. Subsection (2) deals with the self-service situation, and subsection (3) deals with the advertisement in the shop at or beside the goods which are being offered for sale.

Mr. Molony: Information on David Molony  Zoom on David Molony  I do not wish to be difficult. Section 13 (1) of the Table reads: “Where there is a contract for the sale of goods by description ...”. Am I to understand the Minister to mean that where somebody sees an advertisement and subsequently goes into a shop and purchases goods off the shelf, he can say the sale is a purchase of goods by description, referring back to an advertisement he had seen in a newspaper a week before? I find it hard to read that into the section.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I am told that if a person sees an advertisement in a newspaper, or on television, where goods are described, and goes into a shop and says: “I saw an advertisement in the paper for so and so and I want to buy it” and buys it, then he is covered under subsection (1).

Mr. Molony: Information on David Molony  Zoom on David Molony  I will look at it again. That was not my reading of it.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  That is my advice. [1359] Amendment, by leave, withdrawn.

Mr. Molony: Information on David Molony  Zoom on David Molony  I move amendment No. 8:

In page 8, lines 16 and 17, to delete “for that purpose, whether or not that is a purpose for which such goods are commonly supplied,” and substitute “and as durable for that purpose as is reasonable to expect having regard to the purpose for which they were bought, any description applied to them, the price (if relevant) and all other relevant circumstances, whether or not the purpose for which they were bought is a purpose for which such goods are commonly supplied,”.

One of the difficulties about having to propose amendments before discussing the section is that you can find yourself in a position where you are proposing something that you do not entirely agree with yourself. The reason I find myself in that position at the moment is that this section 14 in the Table in section 10 introduces a new concept into our law in relation to implied undertakings as to quality or fitness of goods. In the past we always had the idea that merchantable quality and fitness for purpose had certain characteristics. Now a new concept of durability is being introduced for the first time into our law. I am not too sure that that is a good idea in the sense that I see many difficulties arising in relation to the interpretation of the word “durable”.

The point is being made in articles written about the Bill that even the Oxford dictionary definition of “durable” is such that it is very difficult to see how the court would accept it as an efficient description for this subsection. If we decide to include the word “durable” in subsection (3) then I believe it should also be included in subsection (4). Subsection (3) provides: “Goods are of merchantable quality if they are as fit for the purpose or purposes for which goods of that kind are commonly bought and as durable as it is reasonable to expect having regard to any description applied to them”, and so on.

Subsection (4) provides: “Where the [1360] seller sells goods in the course of a business and the buyer, expressly or by implication, makes known to the seller any particular purpose for which the goods are being bought, there is an implied condition that the goods supplied under the contract are reasonably fit for that purpose...” That subsection does not go on to say “and as durable as it is reasonable to expect”, and so on. Therefore I propose that there should be much the same wording in each of those two subsections. Whether one makes known the intention for which one wants the goods, I do not think matters that much. If we are to introduce the idea of durability at all, it should apply equally in the case of somebody who is relying on a merchantable quality section and somebody who wishes to rely on a fitness for purpose section. I move the amendment on the basis that if we introduce durability we should be consistent in subsections (3) and (4) of this section.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  This subsection covers any situation where the buyer says, or it should be obvious to the seller, that the goods are wanted for a particular purpose, even if that is a purpose for which those goods are not usually supplied. For example, a customer may come into a shop and ask for some glue and say he wants it for mending china. He may ask for some rubber bands or elastic bands and say he wants them to power a model airplane. By virtue of the definition in subsection (3) “merchantable quality” is to be judged on two criteria: first, that the goods involved are fit for their normal purpose and, secondly, that they are as durable as it is reasonable to expect given their description and their price and so on.

What subsection (4) does in effect is to refine the first criterion in the sense that, if goods are bought for a special purpose such as the ones I mentioned, they should be reasonably fit for that purpose. The Senator's amendment would have the effect of introducing the concept of durability into such a situation and this would be inappropriate.

[1361] Where a buyer requires goods for some special or unusual purpose, a purpose, for example, for which those goods are not usually or commonly supplied, I consider it would be unduly onerous on the seller to introduce the criterion of durability in that type of situation. The requirement that the goods be reasonably fitted for the purpose specified is adequate in these circumstances. While I appreciate that the intention behind the amendment is to strengthen the buyer's position it should be borne in mind that his position has already been greatly improved by virtue of this subsection. The present condition of fitness for purpose differs from the former conditions in a number of respects. First, it was not clear whether a person who sold goods in the course of a business of a kind which he had not previously supplied came within the original section 14. However, it is clear that this situation will now be covered under the new provision. Secondly, it is now expressly provided that the purpose need not be the purpose for which the goods are commonly supplied. Thirdly, the new provision puts the burden on the seller to show that the buyer did not rely on his skill or judgment or that in all circumstances it was unreasonable for the buyer to rely on his skill or judgment.

Mr. Molony: Information on David Molony  Zoom on David Molony  I appreciate the last three points the Minister has made and I accept the change, which is good, with regard to fitness of purpose. I still do not see why, in relation to merchantable quality, we introduce durability and not in relation to fitness for purpose. It is not durability in the wildest sense of the word in that the amendment I proposed provides that the goods are “as durable for that purpose as is reasonable to expect having regard to the purpose for which they were bought, any description applied to them, the price if relevant and all other relevant circumstances, whether or not the purpose for which they were bought is a purpose for which such goods are commonly supplied”. If the Minister takes the stand that the concept of durability should be introduced in the definition of merchantable quality, it is [1362] just as reasonable to introduce it in relation to fitness for purpose. I cannot see why the Minister will accept it for one and not for the other. It is a dangerous thing to introduce at all, but at least for the sake of consistency——

I do not think the Minister has answered the point I made—if it is there for merchantable quality, why should it not be there for fitness for purpose? I accept that even if it is not there for fitness for purpose, the fitness for purpose section has been improved, and properly so. Why not use the same words? Why should somebody relying on the merchantable quality section have the benefit of this concept of durability but a person who relies on the vendor's knowledge and indicates the purpose for which he wants the goods not be entitled to the advantage of durability?

Mrs. Cassidy: Information on Eileen Cassidy  Zoom on Eileen Cassidy  As a housewife, I find that the inclusion of the concept of durability in the definition of merchantable quality is very welcome. Durability has been one of the casualties of the consumer society and housewives have been concerned about this. We no longer can keep clothes, footwear, or even schoolbooks to hand down in a family. Indeed, we have been brainwashed to accept that we should change our cars every few years. A person who keeps a car longer than three or four years is regarded at best as some sort of amiable eccentric. I have often felt that in the various “Buy Irish” campaigns it would have been better if the powers that be had appealed to the housewife's sense of thrift rather than to her patriotism. The Minister, by including the words “as durable” in the definition of merchantable quality has gone further than her counterpart in Great Britain where in the Supply of Goods (Implied Terms) Act, 1973 the words “as durable” were not included. I welcome the fact that the concept of durability is written into the Bill. It will have an important bearing on other sections, in particular section 12 which deals with spare parts and servicing.

[1363]Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  In subsection (4) durability is implied in that if the goods are reasonably fit for the special purpose for which they are sought it would be unreasonable to require that they should be as durable for that purpose as for the purpose for which they are commonly supplied. The examples I gave were of a person who would normally buy glue for sticking various things together, probably pieces of paper onto hardboard or something like that, or children who would buy glue for sticking model airplanes. Suppose one broke the handle of a cup and went to a hardware merchant explaining what had happened and asked the merchant to suggest a kind of glue. If we put in the word “durable” here we are going to get into a situation where the hardware merchant would say, “I am sorry but I cannot advise you”. He would feel he was going to be cut out if the glue did not work. At present he is entitled to say, “I suggest you get glue A which does a reasonably good job and is reasonably fit for the purpose. Although it is not normally the purpose for which we sell the glue in this situation it might do the job”. The other example I gave concerned rubber bands which are normally used to tie one's hair back or for some such purpose. If they are to be offered to a child or, indeed, an adult, to propel a model airplane and something goes wrong the hardware merchant is entitled to say, “We do not normally sell them for that purpose but I told him I thought they might work and he could try them out”. That is the distinction. If we put in the word “durability” there we will be making it more difficult, in fact, impossible, for the consumer to get any of that kind of free advice over the counter.

Mr. Molony: Information on David Molony  Zoom on David Molony  I do not think the Minister is advancing her argument any by what she has said. She may be knocking the whole concept of durability which is another question altogether. which we will come to in a moment. To talk about going into a merchant and saying the merchant will not be so anxious to advise about anything because if it does not work he could be responsible [1364] is not what we are talking about at all. If he makes known the purpose for which he wants it and it does not work he has his answer under the section as it exists. If we are going to say that goods are of merchantable quality if they are fit for the purpose for which they are commonly bought and as durable as is reasonable to expect them to be, similarly, where somebody goes in and purchases goods and says, “I want something to mend something, what would you recommend?”, and the person recommends, for example, a form of glue that is not ordinarily used for that, he can say, “Use that; it is not ordinarily used for that purpose but it should do the job.” I provided for this in my amendment by stating: “are as durable for the purpose as is reasonable to expect having regard to the purpose for which they were bought, any description applied to them” and so on. I am allowing a generous amount of room. If we are going to introduce the concept of durability we should be consistent and it should remain the same whether we are talking about merchantable quality or fitness for purpose.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  It will be reasonably difficult for the courts, first of all, to decide what is durable under section 3. If we were to include durability under subsection (4) it would be impossible to establish durability, particularly when talking about using something for a very special or an unusual purpose. The arguments Senator Molony has made may not have been made to me before and we will keep them in mind between now and Report Stage to see if we can accommodate him in some way.

Mr. Molony: Information on David Molony  Zoom on David Molony  I accept that.

Amendment, by leave, withdrawn.

Question proposed: “That section 10 stand part of the Bill.”

Mr. Molony: Information on David Molony  Zoom on David Molony  It might be appropriate to discuss this whole question of durability now. No doubt there will be [1365] quite an amount of discussion on this section. On the question of durability we are introducing a concept here and if we are going to do so we had better define it carefully because it is a matter which has been considered before by experts in the field. It is entirely new to our law and I do not think it is everything that has been suggested to us by the people we have asked to look into the area of law and make recommendations. On Second Stage I made reference to a series of articles by Mr. G.M. Golding who is a lecturer in Business Law in University College, Dublin, and which were published by the Irish Law Times and Solicitors' Journal last year. I should like to quote portion of that article where he discusses the problems involved for the courts so far as the concept of durability is concerned. He stated:

However, the reference to durability appears to be entirely new. According to the Whincup Report only the Ontario Law Reform Commission proposed the “novel requirement” of durability. “The new law would impose an implied warranty that the goods should be durable for a reasonable length of time having regard to all the circumstances of the sale”.

Professor Whincup stated that “in England this point has already been established by the case of Bartlett r. Sidney Marcus Ltd (1965) 1 W.L.R. 1013.” But the word “durable” does not appear in that judgment. Lord Denning M.R. did comment on the extent to which section 14 (2) of the 1893 Act could be applied to sales of second-hand goods. He said that:

“the article may be of some use though not entirely efficient use for the purpose. It may not be in perfect condition but yet it is in usable condition. It is then, I think, merchantable.”

The question therefore seems to be, is “usable” to be equated with “durable”?

The National Consumer Advisory Council recommended “that to be merchantable goods should be usable [1366] and durable for all normal purposes... ...The meaning which the courts will ascribe to “durable” can only be a matter for speculation. The Concise Oxford Dictionary's definition would appear to be far too wide for all practical purposes: “Lasting, not transitory; resisting wear, decay, etc.”

The Bill qualifies the implication of durability by adding “as it is reasonable to expect....” Presumably the courts will have recourse to the reasonable man, the man on the Clapham omnibus.

The main difficulty we are going to have with this whole concept of durability is its definition. In the Schedule we have introduced means by which the courts would assess, for example, what would be fair and reasonable terms. If we are going to introduce this concept of durability we need to provide some standard by which the courts can assess what durability is to mean. We can do that either by preparing a schedule like that covering fair and reasonable terms or we can provide that in relation to different articles or goods the Minister would have the power to set out in orders or regulations, or whatever would be appropriate, the criteria to be employed in deciding whether something is durable or not. The only definition available to us is the definition in a dictionary which is that durable is lasting, not transitory; resisting wear, decay and so on. That is not satisfactory. It is too broad and, as the Minister has already acknowledged, it is likely that the courts will have difficulty with this.

One of the most important aspects of any legislation is that it is fairly clear to consumers what their position is. I am as anxious as anybody else to see that consumers are protected in the way that they should be protected. However, we are not advancing the consumers' cause by introducing a vague concept like durability into legislation unless we specify exactly what we mean. Otherwise, we return to Senator McGuinness's point, that consumers will have to be very sure before they bring any action before the courts. What one [1367] person might regard as durable might not fit the description of durability that the vendor might ascribe to the same article. Indeed, one consumer might regard an item as being durable while another consumer might not.

I accept the point that Senator Cassidy made, that we have come to the stage now where in relation to cars, for example, we tend to change them a good deal more frequently now than we did in the past. Everybody accepts that items of equipment, for example plugs that go into microphones, are sealed and if one little thing breaks inside the whole plug is useless. That is clearly not as durable as it was. It is reasonable in the circumstances to expect that if it does break that we dispose of it all. Because of the way our economy and our business is orientated nowadays, or because labour is so costly, or for whatever reason, it is cheaper to have disposable units. Senators may disagree with that but it is the case. It is something that is prevalent in modern day living. If we are to put a consumer in a good legal position we are better off telling the consumer that it is either durable or not. Whatever way it is going to be lets tell him what we are talking about and that is exactly what we are not doing here.

I have no objection to introducing a concept of durability provided we and the consumer know what we are talking about. We have introduced it in too vague a way that we do not know ourselves. We would probably disagree if we produced various items such as buckets, hatchets, bread knives, or whatever, before the Seanad as to what is or is not durable.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Senator Molony has made a very good case for me not defining durability in the Bill because I do not think that one can. He very rightly stated that durable can mean many different things to different consumers. In a Bill such as this one cannot talk about specific areas of durability and about what it is going to [1368] mean to A, B and C and, maybe, as far as Z. A lot of different people may have very differing ideas of what “durability” should be. An item if it is durable must be lasting and have a certain resistance to wear. It should be as durable as is reasonable to expect. If somebody goes out and buys a new carpet for the house it is reasonable for them to expect that it is going to last for a number of years whereas if their neighbour buys a second-hand carpet at an auction it is also reasonable for them to expect that they will not get the same type of wear out of it as their next door neighbour will from the new carpet. The same can be said of a car or any goods one can think of. The concept of durability means a lot of different things to different people. Therefore, it is necessary for us in the Bill to leave the term “durability” vague so that the courts can be the people to decide what “durability” means to the various people.

Mr. Molony: Information on David Molony  Zoom on David Molony  We could talk about this for the night but I do not think we would gain a great deal by doing that. It is not fair to compare first-hand goods with second-hand items. A problem does not arise there. One could talk about two people purchasing the same carpet. One judge may take the view that to be durable a carpet should last 10 years and another judge may take the view that to be durable a carpet should last three years. I do not think it is right. We are the legislators. The courts are there to enforce our laws and we should know what we are talking about when we talk about durability. I accept it is difficult and maybe that is a reason why we should not rush in and introduce a concept like that if we are going to be faced with this difficulty. What we are doing is simply passing the buck on to a consumer who is not going to be any the wiser. We are putting a consumer in a position where he may go to the court feeling that a carpet is not as durable as it should be in the circumstances and finding a judge who had carpets in his house for only two or three years before he had to turn them over. That judge [1369] may ask why should this consumer not have to turn his carpet over.

If we are anxious to protect the consumer we should make his position clearer. I do not see any problem with regard to first-hand or secondhand goods but we have a problem in relation to various people's interpretation of what is durable in relation to the same goods purchased on the same day in the same shop. That is where the nub of the problem is. I urge the Minister to define what is meant. We do not require any wildly comprehensive definition but I remind the Minister of what is in the schedule in relation to fair and reasonable terms. Fair and reasonable terms seems far more capable of definition than something like durability. Durability is a very vague concept and we should make some effort to be more specific about what we mean. It is not good enough for us to say that it is up to the courts.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  Senator Molony shows that he has very little confidence in our legal profession and in the judges we have.

Mr. Molony: Information on David Molony  Zoom on David Molony  It is not the function of our legal profession.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  It is very much the function of our legal profession. I hope no judge would base his judgment of a case on his own experience. Take the obvious situation of a young fellow charged with a crime and when the guards are prosecuting——

Mr. Molony: Information on David Molony  Zoom on David Molony  We are talking about durability.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  It is the same situation. A judge will not treat somebody as he has been treated by them. I hope our legal profession and our Judiciary are independent enough not to be that way inclined. If we are going to define the term “durable” or “durability” it will have to be widely comprehensive. For example, if Senator Molony and Senator Conroy buy a pair of shoes on the same day and Senator [1370] Molony wears his shoes out faster than Senator Conroy does, he cannot say that a pair of shoes must last for two years after he wears them out in two months. It should not be my business as Minister, or the business of the Bill, to define “durability”. We will have to leave that to the legal profession and members of our Judiciary who are quite capable of deciding when they have heard evidence from both sides whether the articles or the goods were durable and of merchantable quality.

Mr. Molony: Information on David Molony  Zoom on David Molony  It is unfair to say that I did not have confidence in the Judiciary. I did not suggest that but I pointed out that they would be faced with a difficulty. I make no bones of the fact that I regard it as our job to legislate and that is what we are failing to do. It is very nice to introduce the concept of “durability” but we are failing to live up to the task of being able to explain to the courts in our legislation exactly what we mean by “durability”. I have no doubt that judges will say from the bench, “For Heavens sake, what did the Legislature mean when they came across with this?”

Mr. Golding, a very eminent person who has made a great study of this whole area and of this Bill concludes his note on “durability” by saying: “What is durable for the goose may not be so for the gander. Here the courts will be faced with the dilemma”.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  There are more points to be made on this big section which takes in four sections of the Sale of Goods Act. It is worth noting that we have not heretofore had any reference to durability or any definition of merchantable quality. Section 14 (2) refers to this where it states that where goods are bought by description from a seller who deals in goods of that description, whether he be the manufacturer or not, there is an implied condition that the goods should be of merchantable quality. That is the end of the matter as far as the existing statute law is concerned. There are volumes as to what “merchantable quality” means. Rather than disagree with the Minister in the [1371] matter of confidence of judicial ability to determine what “durability” is, we have had to depend on the Judiciary to determine what “merchantable quality” has meant since 1893 and we are now proposing to provide them with a definition. I must confess to be unhappy with picking the aspect of “durability” for specific mention, it being only one aspect of the fitness for purpose.

In so far as it has been argued that goods lacked merchantable quality it has only been successfully so argued in relation to perishable goods and even in relation to such goods it has been doubted and it has only been a question of the reasonableness of the time. How durable is a balloon expected to be? How durable is an ice-cream required to be? How useful is a weighing scales which one stumbles over as one goes into one's bathroom but which will still faithfully, and wrongly, record one's weight? What use is its durability if it is no use for the purposes for which one has it? What is the use of having a bit of hard rock to lick if one wanted an ice-cream to suck?

The words “durability” and “as durable” are of doubtful value. There was criticism of commercial society which is part of our environment, by Senator Cassidy. It is a pity that goods wear out in the manner modern goods do but goods may live up to the description given them or be useful for the person who bought them. A car which I would buy would have to work. It would have to do everything right but I could not drive it or do anything with it. Another person would only be interested in a car if he could take it to bits and put it together again. It would be merchantable to him because he would know what to do with it. It depends on the object, the kind of buyer and seller, the price and all the relevant circumstances. We are confusing our legal system by picking one aspect of fitness for purpose. There are all sorts of other aspects. How accurate ought they to be? How accurate can one be about anything? What is appropriately accurate? If one writes a [1372] textbook one has to be a great deal more accurate than if one is gassing in the Seanad. Perhaps delivering a textbook in the Seanad would be thoroughly inappropriate for the Seanad. The market place is like that. We must remember what Mr. Golding said. The Ontario Commission recommended that. Our Consumer Advisory Council adopted it also but the Law Commission for England and Wales in their Working Paper No. 71 felt that the term should not be implied explicitly by statute, and that would be my view. It is dangerous for us in the Legislature to be intervening in this field at all. They have managed to date so far and it seems to have defied everyone's efforts to get a satisfactory definition and to leave it to the set of facts of each case.

I have given this as much thought as anyone could give to such matters and I do not think we are helping by putting in the words “and as durable”. The subsection of section 14 would stand very well if we decided to have a definition. There is a definition working in the other legislation.

Paragraph (3) of subsection (14) reads that:

Goods are of merchantable quality if they are as fit for the purpose or purposes for which goods of that kind are commonly bought and as durable as is reasonable to expect having regard to any description applied to them,

Durability is taken in in the appropriate matter in relation to the appropriate goods and the description applied to them according to the facts. I do not know what degree of confusion this may give rise to because a great deal of importance may be attached to the words to the confusion and distress of perhaps sellers and ultimately to the easy operation of the market place.

May I make a general point here? It is to illustrate a point which arises in this section. In section 20 of the Bill we substitute a new section, 35, for the existing section 35 and in so substituting we introduce some new words to that section. [1373] The new words being “or subject to section 34 of this Act”. Section 34 of this Act is in fact section 34 of the Sale of Goods Act and we are referring to section 34 of that Act. May I suggest that in that case for convenience of operation we repeal section 34 at the same time as we repeal section 35 and re-enact the two of them together. Likewise, when we are doing this Table in this particular case I think it would help us in our understanding of everything and help not merely our debate but help the judicial functioning to operate more easily if section 15 of the Sale of Goods Act of 1893 which we are not changing were put into this Table also. In that way it would be possible to read the full set of the sections in the same Table. We are not changing section 15 but if we look at section 15 we in fact find language slightly different from the language which we choose to use in section 14 which when a judge starts to look at it and finds the differences in the language between section 14 and section 15 he must say to himself, “There must be a reason why they use these words in one section and all these other words in the other section”.

So let us look at section 15 and the particular words that are relevant to this observation. There is provision in section 14 (2) of the 1893 Act whereby when a seller sells goods in the course of a business there is an implied condition that the goods supplied under the contract are of a merchantable quality except that there is no such condition as regards defects specifically drawn to the buyer's attention before the contract is made or if the buyer examines the goods before the contract is made as regards defects which that examination ought to have revealed. Subsection (2) (c) of section 15 of the same Act provides that there is an implied condition that the goods should be free from any defect rendering them unmerchantable. If the buyer examines the goods before the contract is made there is an implied condition that the goods are free from any defect rendering them unmerchantable, that is to say, any defect which would not be apparent on reasonable examination [1374] instead of as regards defects which that examination ought to have revealed. Do not ask me to say because I am not proposing to tell you what the differences may be between these two separate and several sets of words. But they are different and someone is going to ask what is the intent of the distinction between them. I think that the Minister should have an anxious comparison made of the language used there.

In so far as section 14 is concerned—where the seller sells goods in the course of his business—we are making an important change here because I think I am correct in saying that where we are talking about descriptions, say about selling goods by description, it is by description from a seller who deals in goods of that description. Now we are having the mere fact that selling in the course of a business—whether it is a business in which you deal in goods of that description or not—gives rise to the implied warranty. That should be noted because if you are in business and you go off and sell your goods, the implied conditions arise regardless of whether it is your business to sell these goods. I think this point was made in the other House but I do not know whether the Minister was handling the matter at that stage.

My final point relates to the Table. I refer to the provision in subsection (2) of section 12 concerning the implied warranty that the goods are free and will remain free until the time that the property is to pass from any charge or encumbrances not disclosed to the buyer. The words should be “and not known to the buyer” because the unworthy purchaser in the market place is not unknown. That should be in both sections. A buyer should not have the benefit of an implied warranty about an encumbrance that he knows perfectly well about, whether he is hiring the goods or whether he is buying them. That was the law and ought still to be the law. The Minister proposed it should be the law with regard to hiring but she has changed her mind on it. It seems to me to have been a mistake and it not like the [1375] Minister to be making that kind of mistake. Therefore, would the Minister kindiy make the requisite change?

Professor Conroy: Information on Richard Conroy  Zoom on Richard Conroy  I am a little surprised at Senator FitzGerald's remarks. If I understood the Senator correctly he was querying bringing in this concept of durability and suggesting, and I am sure quite rightfully, that there are many other aspects one could look at. I would have thought that in the present day world it is a matter of considerable importance and urgency that this concept of durability should be introduced and that it should be a matter of legislation. It is important from the point of consumer protection because whatever the case may have been in 1893, or whatever the situation as of now, certainly it is not that goods are made to last. The Senator referred to cars. Ten, 20 and certainly 50 or so years ago a motor car may well have been built to last, having been constructed of a metal of considerable thickness with leather and various other goods in it intended to be durable but that would not be the situation today. In fact there is now the concept of built-in obsolescence, and over the last ten or 20 years the consumer has been deliberately taken for a ride by manufacturers whether of motor cars or anything else on this basis of obsolescence, in other words, of making sure that the goods they produced were not durable. I must praise the Minister for introducing this term and for giving it the prominence which it requires. It is very important that something should be done about this in legislation. It may raise many of the difficulties of definition which Senator Molony has referred to but nonetheless these are difficulties to be faced rather than to ignore the question altogether.

The Minister referred to shoes and I am sure it is the experience of anyone who has had to shop for shoes that unfortunately many shoes today are in no sense durable. They do not last and it is important that the consumer should be protected in this respect. I should like to [1376] congratulate the Minister for introducing this term “durable”. I regard built-in obsolescence as one of the curses of the modern day commercial world.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  I wish, in so far as any of my language can do, to negative these congratulations on the Minister. The Minister no more than any of us is not in any way able to determine what is going to happen in the market place. All that is going to happen by our making a provision that there is an implied warranty as to the durability of goods will be to give rise to litigation about the goods to the benefit of my flock, and to send out of the market place, where they are being sold by people who are in business and burdened by the implied warranties of this kind, to where they will be dealt with where there are not implied warranties. If that does not happen and if we seek to impose more durability than the buyers want and at the price they are prepared to pay we simply add to the cost of selling these goods. Let us not fool ourselves. I would like to congratulate the Minister on many things but I will not congratulate her on attaching her name to that particular proposition of Senator Conroy—that we can in this place do anything in regard to the matter to which the Senator has referred.

Professor Conroy: Information on Richard Conroy  Zoom on Richard Conroy  Would the Senator not agree that it is important that the manufacturers or sellers of goods which are not durable, which are shoddy, which have built-in obsolescence, should indeed be exposed to litigation if they sell such goods to the unfortunate consumer? I would have thought it was an excellent idea that there should be legislation on such matters.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  Even if the word “durable” were deleted the sellers of shoddy goods could be pursued by the remedy available to the buyers. The price itself would determine the matter because that is one of the categories of determining whether or not goods were shoddy but there are people who cannot afford to buy anything other than shoddy goods.

[1377]Professor Conroy: Information on Richard Conroy  Zoom on Richard Conroy  Surely the Senator is referring to another concept of this matter. It is one thing to say that you have goods on the market which are at a low price. This is fair enough. It might even be arguable that there should be goods on the market and that the manufacturer should have to indicate that these shoes, for instance, will only last six months or whatever, but not that he should be able to sell them to an unsuspecting person. The Senator is naturally referring to the less protected person, the less well-off person.

Mr. Alexis FitzGerald: Information on Alexis Fitzgerald  Zoom on Alexis Fitzgerald  The protection is still there. We could go on for hours on this subject. We are only fooling ourselves in a manner which I suggest is critical if we think that by legislation of this kind we are raising the standards of life for people who are in the circumstances described by Senator Conroy or that in some way we are going to punish people who know how to vend shoddy goods. We make a great mistake in life when we fool ourselves, whomever else we may fool.

Mr. Molony: Information on David Molony  Zoom on David Molony  On the whole question of planned obsolescence, this is one of the basic problems we have. I cannot recall any example mentioned by Senator Conroy but take for example something that annoys me. The last car I drove had a sealed headlamp unit on it which meant that if I broke the glass in the front of it I had to replace the entire unit. That was tough luck because instead of costing something like £5 or £10 to fix it it cost £30 or £40.

In introducing a concept like durability into this Bill does anybody suggest for a minute that I will now be able to sue the company from whom I bought the car saying that the sealed headlamp unit was not durable? The fact is that when I purchased the car I purchased something that was made for obsolescence. If I broke the glass on the front of the headlight, the whole headlight unit would have to be maintained. It goes back to Senator FitzGerald's point. If it were to be any other way, my car would have cost me a [1378] lot more money. Senator Conroy made the point also about cars. Some decades ago, because the steel in the cars was so thick and the upholstery was leather, they were designed to last. If you want to buy a Rolls-Royce today, you will get one with leather seats. You will get one with a sufficiently strong and thick steel body to last for a long time but you will also pay an awful lot of money for it. That is not what we are talking about here at all. We are talking about a concept of durability and we do not really know what we are talking about because it is just possible that one person might take the view that such and such a thing is not durable because it only lasts six months or eight months. Another person might take the view that it was perfectly durable because it lasted that length of time. Our problem here is that we are not defining the concept of durability. It is a lovely word and it has lovely connotations so far as consumer protection is concerned but frankly we are not doing what Senator Conroy asked us to do. Let us face up to the difficulties or else abandon the whole idea.

Professor Conroy: Information on Richard Conroy  Zoom on Richard Conroy  I do not wish to go on too long but the Senator specifically refers to motor cars and specifically to a Rolls-Royce and I think, with great respect, he is bearing out my point. A Rolls-Royce is made with thick metal. It is made with parts that are going to last and those people who happen to be well off and could afford to buy a Rolls-Royce some years back find that their Rolls-Royce is worth more now than it was worth when they bought it. The other people who are not so well off and have to buy an ordinary motor car with modern built-in obsolescence, in other words which is non-durable, find that from the moment they buy their motor car it is losing money every single day that they own it. That to me is the difference.

Mr. Molony: Information on David Molony  Zoom on David Molony  Of course. Let us carry the Senator's point a little bit further. I accept every word he has said. We have introduced the concept of durability here but am I to take it that we can sue the [1379] supplier of the lesser valued car now because it is not durable? The point is that, by introducing this concept, we are not going to change what goes in in the market place. That is the reality of the position. The car that is costing £3,000 or £4,000 will still be obsolete within three or four years whereas the Rolls-Royce will not be obsolete by then. The difference is that better stuff goes into one than goes into the other. By introducing the concept of durability here we are not going to affect that one iota because we have not said what we mean.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  There is a problem of definition here. There is also an issue of common sense. What the Minister is trying to do is to provide some extra protection for the consumer, to give him a fair crack of the whip. Durability can be defined and is defined well by quality control engineers. For instance, a part will perform its function in stated circumstances and context and during a stated time. Planned obsolescence is worked out on a technical basis. In this legislation what we are trying to ensure is that with common sense and reasonable operating conditions, parts will perform reasonably well, and you give some protection to the consumer. It is a reasonable provision. There is no way that you are going to be able to define it down to engineering limits. However, if you are involved in going to the moon, or you are flying an aeroplane, you have to do it where safety in those circumstances exists. I spent many years of my life being responsible for the bolts that hold on aeroplane wings and I can assure you that as far as the people flying the aeroplanes were concerned, they hoped I was doing my work. That meant that I had to define my work exactly. I do not think that can be done in legislation in this way but it is reasonable to say that something should be durable.

Mr. Molony: Information on David Molony  Zoom on David Molony  All I suggest is that we do what we have done with regard to the term “fair and reasonable terms”.

[1380] Question put and agreed to.

An Cathaoirleach: Information on Séamus Dolan  Zoom on Séamus Dolan  Amendments Nos. 9 and 21 are related and may be discussed together.

Mr. Molony: Information on David Molony  Zoom on David Molony  I move amendment No. 9:

In subsection (4), page 8, line 57, to delete “dealing as consumer”.

Subsection (4) of section 11 states:

It shall be an offence for a person in the course of a business to furnish to a buyer dealing as consumer goods bearing, or goods in a container bearing, or any document including, any statement, irrespective of its legal effect, which sets out, limits or describes rights conferred on a buyer or liabilities to the buyer in relation to goods acquired by him or any statement likely to be taken as such a statement, unless that statement is accompanied by a clear and conspicuous declaration that the contractual rights which the buyer enjoys by virtue of sections 12, 13, 14 and 15 of the Act of 1893 are in no way prejudiced by the relevant statement.

That is an excellent provision and all I seek to do is to extend it. It is at the moment limited to a very narrow or very narrowly defined group of people who will be buyers dealing as consumers. It is a very welcome provision and one that should apply to any buyer and not merely to a buyer who deals as consumer. Any person, even a person who is buying in the course of business, is entitled not to be confronted with notices which purport to set out what his rights are if the rights set out are contrary to what his rights actually are. I simply ask that the words after “buyer”, namely the words “dealing as consumer”, be deleted so that the provision would extend to any buyer, whether a buyer in the course of business or dealing as consumer.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I would not accept that a person dealing in the [1381] course of a business is at the same disadvantage as the person dealing as a consumer and that is the whole basis of consumer legislation. As we know, the person who is dealing as an ordinary consumer and not in the course of business is normally the person with lesser economic resources at his side. Secondly, the balance of bargaining power normally rests with the person who is dealing in the course of a business. It militates against the person who is buying as a consumer. The consumer cannot be expected to have the expertise at his side that the person dealing in the course of a business would have in order that he would judge or appraise a purchase in detail at the time of making the contract. I think Senator Molony would accept that. Thirdly, very often we have found that the problem in consumer legislation is that consumers are not generally aware for one reason or another of their rights as consumers. They would be more likely to be misled by statements by the person who is selling goods to them, statements that would mislead [1382] them as to their rights or whatever they would have. The person dealing in the course of business would be very well aware of what his rights would be and the balance of bargaining power would be in his favour. He would be the person who would be better off economically and financially to be able to ensure that he got his rights. Therefore, there is obviously a very great need to protect the buyer who is dealing as a consumer in these circumstances and not to the same extent to protect the person dealing in the course of business.

An Cathaoirleach: Information on Séamus Dolan  Zoom on Séamus Dolan  Is the amendment withdrawn?

Mr. Molony: Information on David Molony  Zoom on David Molony  No.

Progress reported; Committee to sit again.

The Seanad adjourned at 7.30 p.m. until 2.30 p.m. on Wednesday, 26 March 1980.


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