Committee for Enterprise,
Trade and Investment
Wednesday 11 September 2002
MINUTES OF EVIDENCE
Insolvency Bill
Members present:
Mr Neeson (Deputy Chairperson)
Mr Clyde
Ms Morrice
Dr O’Hagan
Mr Wells
The Deputy Chairperson:
The Committee has already dealt with the Insolvency Bill in two previous sessions. Comments have been received from the Minister of Enterprise, Trade and Investment, the Equality Commission and the Assembly’s legal adviser, particularly in regard to clause 8 of the Bill.
I am aware that some Committee members still have difficulty with clause 8, and we must examine that. You may remember that, when officials appeared before the Committee last week, amendments were put forward. There were no problems with those; it was a matter of tidying-up the situation. Let us now deal specifically with clause 8.
Ms Morrice:
I apologise for having been absent at the last session of the meeting at which the matter was discussed. I still have concerns. It is very useful to have had the Minister’s interpretation, and I appreciated his explanation. I took on board the points made by the Equality Commission and by our legal adviser.
The legal adviser’s points are possibly the most interesting, and one of those gives us an opening. It is interesting that in his letter of 29 August, the Minister states that he accepts that the potential adverse consequences of clause 8 are likely to fall more heavily on women. It is important that the Minister has recognised that, and the Committee should not allow it to happen. Are the resources available to insert an amendment to clause 8 so that there is no question of more women than men suffering adversely?
The Committee Clerk:
The Committee has two options. First, if the Committee is not content with the clause as it stands it can propose an amendment. The clause is drafted in such a way that nothing in it pertains to a widow whose partner was declared insolvent following his demise.
Secondly, the Committee could oppose the clause, which would remove the question of joint tenancies. That means leaving a gap in the legislation.
The Committee must decide whether to propose an amendment. There are complications in that. Should that refer only to domestic properties, or should it also refer to business properties? There is the question of whether benefit should be given to the widow of someone who was insolvent or to that person’s creditors.
Ms Morrice mentioned resources. Currently, there are none available to Committees for drafting. However, the Secretariat staff, with legal advice, draft proposals for amendments for Committees.
Mr Wells:
There is a principle to consider. If the property is a business property, I see no problem with the estate having the right to seize it. The amendment would apply simply to the matrimonial home. That is a reasonable stance to take and would further eliminate opportunities for the amendment to cause any difficulties. However, if Mr and Mrs Smith are extremely wealthy, and she owns 40% of the business, there is no discrimination in taking that into account if the business goes bust. That principle will apply if she has recently lost her husband and is left at home with three children. Is that a possible middle way to get round the suggested difficulties?
We must also ask whether we have time to do it. How tight is the deadline on this legislation?
The Committee Clerk:
Consideration Stage of the Bill is currently scheduled for 23 September, but that will be adhered to only if the Committee deliberations have been completed by today or next week. As with any Bill, the Business Committee decides the schedule for the following week’s business on Tuesdays, and Order Papers are issued on Wednesdays. There are one and a half days to table amendments. This is exactly the same time as for any other Bill.
Mr Wells:
How long would it take for an amendment to be drafted?
The Committee Clerk:
The amendment would be drafted in time for it to be laid by 4.30pm on the Thursday afternoon.
However, I issue a word of caution. The amendment may not be fully competent, but were it to be passed by the Assembly, we hope that, at the next Stage, the Executive would recognise the will of the Assembly. If the amendment were in any way flawed, the Executive’s draftsmen would work at it so that, at Further Consideration Stage, a fully competent amendment could be laid to the Bill.
Mr Wells:
All we are talking about is such property that will not include the matrimonial home.
Ms Morrice:
Exactly.
The Committee Clerk:
The amendment will only apply to the matrimonial home in cases in which joint tenancy applies.
The Deputy Chairperson:
Can we be clear about what we want to achieve? Ms Morrice, are you satisfied that the amendment will only include the matrimonial home?
Ms Morrice:
I agree with Mr Wells. The separation is useful. The problem is that, in the majority of cases, it is a woman whose husband has died and is bankrupt. If she is joint tenant of the home, she must find the money to pay the creditors for his half of the home. That is my understanding of it.
If there are difficulties between the creditors and the wife, the creditors will be at a disadvantage — which has been pointed out here — because the amendment will not allow them to use the funds of the half-share of the property. The difference between the creditors and the widow in this case is that the widow has not only lost the money from the business, but she has also lost her husband. That is an additional burden, which should be taken into account. The fact is that, in the majority of cases, it is a woman who is in that situation and not a man. That may indeed change, but it implies a certain discrimination against women. It would be very useful to see what amendment we can devise to exclude the matrimonial home from the clause and ensure that it is legally compatible.
The Deputy Chairperson:
I have just benn reminded of a related issue about the complications that could arise if a man were in the same situation and his wife were bankrupt.
Ms Morrice:
The problem relates to the loss rather than to the gender of the person. In this case, the discrimination or the adverse consequences would affect women more than men. I agree that we should not think that it is only women who are in that situation; men could also be affected.
Dr O’Hagan:
I am doubtful about the status of the relationship. Perhaps we should not specify “the matrimonial home”, for people are in long-term relationships without being married; something of that sort may need consideration.
Mr Wells:
Is there no protection for unmarried people? That is the difficulty — there is no protection at all for common-law relationships regarding intestacy and property. That is the great gap in the legislation. If one is not married, the spouse is entitled to nothing. That is being examined, but as things stand, the partner does not exist as far as the law on property rights is concerned.
The Deputy Chairperson:
Would it be possible to extend the Committee Stage?
The Committee Clerk:
I presume so.
Ms Morrice:
Do we need an extension if an amendment can be drawn up?
The Committee Clerk:
An extension is unnecessary in such circumstances, Mr Chairperson, because the Committee Stage is due to conclude at the beginning of October 2002. If the Committee agrees the report today, that would mean that it would have at least two or three weeks to sort out and approve the agreed amendment.
The Deputy Chairperson:
Is the Committee consensus that an amendment is necessary to address the issues raised by members? Might we ask the Committee Clerk to examine it and suggest possible amendments at the next meeting of the Committee?
Members indicated assent
Must we still agree the report today?
The Committee Clerk:
The draft report does not go into detail; it simply says that the Committee considers that clause 8 should be amended, which is adequate.
The Deputy Chairperson:
Can we also agree the amendments that we brought forward last week? There were no problems at the time. Could someone make a formal proposal?
Mr Wells:
Yes.
Ms Morrice:
I second that. I would like to clarify the points raised by Dr O’Hagan and Mr Wells on the wording “matrimonial home” and common law. A background note on the situation for unmarried couples would be useful.
The Committee Clerk:
There should be a legal definition.
Ms Morrice:
I assume that along with the proposed amendment we shall receive information on how it affects couples’ long-term relationships.
The Chairperson:
With the proviso that the Committee will bring forward an amendment, can we agree the report?
Members indicated assent.