The Gazette 1983

GAZETTE

SEPTEMBER 1983

(b) Q. Did payment by Mrs Somers to Terence Weir as a purported purchase price create any estate or interest in Mrs Weir in the Premises. A. No. 6. Q. If the Answer to 5 (a) or (b) is Yes does any such estate or interest provide Mrs Somers with a de- fence to Mrs Weir's proceedings herein. A. No. Margaret Weir v. Sandra Somers. Supreme Court, (per McCarthy J. Nem. Diss.) 18thMarch, 1983. Unreported. Attracts Campbell BANKING Constitutionality of Section 5(2) Industrial and Provident Societies (Amendment) Act, 1978 - restrictions on the conduct of the business of banking by a Society - Constitution of Ireland, Article 40(3), (6)1.lii. The first named Plaintiff (the Society) is engaged in the business of banking in accordance with its powers as a Society registered under the Industrial and Provident Societies Act, 1893. This business which consists in the acceptance and holding of deposits from members of the Society and the making of loans to members expanded steadily since the registration of the Society in 1958, with deposits amounting to £13.700,000 and advances amounting to £11,700,000 at the date of the commencement of the proceedings. Under subsection 4 of Section 7 of the Central Bank Act, 1971 Industrial and Provident Societies were exempted from the provisions under that Act providing for the requirement of a banking licence from the Central Bank and for the supervision of banks by the Central Bank. Section 5(2) of the Industrial and Provident Societies (Amendment) Act. 1978 (the Act) prohibiting such Societies from accepting or holding deposits after the end of a period of five years commencing at the date of the passing of the Act, if taking effect, would render it practically impossible for the Society to carry on a banking business profitably, the Act also prohibiting the raising of loans by Societies other than a loan made by a bank. The Society and the second named Plaintiff, a shareholder in and a member of the Management Committee of the Society sought a declaration in the High Court that the Act was invalid having regard to the provisions of the Constitution. Despite the wide terms of the Declaration sought it is clear that the invalidity alleged arose only in respect of Part II of the Act dealing with xxxi

the Act of 1976 must "primarily be used to secure the protection of the Family in the Family Home and all other claims to the premises that constitute such home must remain secondary to it". The Court held that by seeking the case stated Mrs. Somers had already obtained a reprieve of twelve months on top of the years of delay resulting from protracted legal proceedings during which time she had the use of Mrs. Weir's home, and that the defence sought to be made in the present proceedings was a delaying tactic, simply to allow further time during which proceedings, (on their face appearing to be statute barred) could be commenced. The possibility of expediting such proceedings was declared to be minimal and accordingly the required injunction was granted to Mrs. Weir who had done nothing save suffer the loss of her house and the unconscionable delays of the law. It was noted that Mrs. Somers who was also an entirely innocent party may have some equity in relation to the premises, certainly an equity against Terence Weir and undoubtedly an unanswerable claim against her solicitor; she did not, however, have any equity against Mrs. Weir. The questions in the case stated were answered as follows:- 1. Q. Did the order of the Supreme Court vest the leasehold interest in the family home in Mrs Weir? A. No, but the proper inference from the Order is that the premises are the family home within the meaning of the Act, of 1976. 2. Q. In the proceedings by Mrs Weir against her husband did the High Court vest the leasehold interest in the Family Home in Mrs Weir? A. Not as such but since it is declared that she is entitled to a half share in the leasehold interest in the premises she was thereby entitled to have the legal estate in such half share conveyed to her and is to be treated as a person having such legal estate. 3. Q. Does the Order of the Supreme court entitle MrsWeir to the relief sought in these proceedings. A. Not as such. 4. Q. Does the estate or interest dealt with in the proceedings referred to at 2 above entitle Mrs Weir to the relief sought in these proceedings. 5. (a) Q. Does the purported assignment by Terence Weir to Mrs Somers create any estate or interest in the Mrs Somers in the premises. A. No, save that the Mrs Somers may- have an equity against Terence Weir and not otherwise. A. Yes, as indicated above.

Industrial and Provident Societies, in particular in relation to Section 5(2). Both Plaintiffs contended: 1. The Act and in particular Section 5(2) thereof constitutes an unjust attack on property rights contravening Article 40(3) of the Constitution in that any attack on the business and profitability of the Society is an indirect attack on the property rights of the Second Plaintiff in his investment as a shareholder in the Society. The legislation in effect wholly eliminated without compensation the banking business of the Society as it could not profitably use bank loans as a source of funds. There was no guarantee that if the Society changed into a company in accordance with the provisions of the 1893 Act that a licence to engage in banking would be issued to it. 2. That the legislation is an interference with the personal right to freedom of association guaranteed to citizens by Article 40(6)1. iii. of the Constitution as it prohibits the accomplishment of the purpose for which the second Plaintiff and his associates had joined together to achieve. The claim of the Plaintiff was rejected by the High Court. The Supreme Court held in rejecting the appeal that: 1. As the second Plaintiff is a citizen with locus standi if his personal rights are infringed it is unnecessary to consider the argument that the Society being a creature of Statute Law does not enjoy that constitutional protection. The Court rejected the submission made on behalf of the Attorney General that a shareholder in an incorporated body such as the Society whilst paving various contractual rights in its relations with such a body has no property rights in its assets or business, stating that the Second Plaintiff has to the extent of his investment on interest in and contractual rights arising from the Society and property rights capable of being harmed by injury done to the Society relying on East Donegal Co- operative v Attorney General, [19701 IR317, and the judgment of Kenny J. in Central Dublin Development Association v Attorney General, 109 ILTR69. The Court noted the conclusions of the Trial Judge on the evidence: the reason why Societies such as the Society had been exampted by Section 7 (4) of the 1971 Act was that there were at that time only two societies carrying on a small business without an appreciable risk to the public at large. None of the Societies taking deposits in 1976 and 1977 were operating their businesses in accordance with the criteria applied