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GAZETTE
SEPTEMBER 1979
14.1
The work of the Committee is divided into consideration of domestic develop-
i a w
ments in company law and the prospective impact of directives of the European
r ^ w » E c o n o m i c
Community as part of the programme of the harmonisation of company law
COMMITTEE
w i t h in t h e
Community
Brian J. O'Connor
Walter Beatty
Anthony E. Collins
Michael G. Dickson
Mary Finlay
Gerald FltzGerald
Houghton Fry
Michael Irvine
Patrick Kilroy
James 0*Dwyer
Laurence K. Shields
14.2
The year opened with Mr. Justice Butler's decision in the Cork Shoe Company
Chairman
case in which he decided that a company could not appoint an attorney to execute deeds
on its behalf within the State. One of the most serious effects of this judgment was that the
power universally given to receivers in mortgage debentures to execute deeds on behalf of
the company was invalid. As a result, the title of those who had purchased through
recivers would have had to be regarded as dubious. Furthermore, forms of mortgage
debentures would have to be substantially redrafted for the future. Fortunately, this part
of Mr. Butler's judgment was appealed to the Supreme Court where it confirmed the
widely-held view, that a company had indeed power to appoint an attorney to execute
deeds on its behalf in the State and hence, the normal provisions in the mortgage deben-
tures authorising a receiver to execute documents on behalf of the company were valid.
Members of the profession involved in this type of work therefore heaved a sigh of relief!
It should be noted, however, that Mr. Justice Butler in his judgment had confirmed and
made it clear that the receiver could not affix the seal of the company to documents unless
he were authorised by the Articles of Association to do so (a rare situation).
14.3
Members of the Committee met with Mr. C. O'Connor, Assistant Secretary,
and Mr. S. Cauldwell of the Department of Industry, Commerce and Energy, to discuss
with them a number of matters in relation to the Department's responsibility in company
law area. Mr. O'Connor thanked the Committee for the help it had been giving to the
Department in relation to the various E.E.C. Directives and said he hoped to build on the
good relations which had existed between the Committee and his predecessors. The
Committee drew his attention to two aspects of the work of the Company's Office which
were concerning practitioners. The first of these was the delay in the formation of new
companies and the Committee was assured that with the training of new staff it was hoped
that this could be accomplished in a minimum of three weeks. Secondly, the members of
the Committee said the profession was concerned with what appeared to be new policy in
the Company's Office which was resulting in the frequent rejection of names for
companies even if they bore no resemblance to the names of the existing companies. It
was agreed that this would be looked into.
14.4
It had been expected that a Company's Bill would have been introduced during
the course of the year in order to implement the Second E.E.C. Directive relating to the
preservation of capital to deal with a number of limited matters, e.g. removing the upper
limit of twenty for partnerships in certain instances. It was disappointing, therefore, that
no Bill has appeared as of the date of writing this report. Time is beginning to run out in
respect of the implementation of the Second Directive. It should, however, be expected in
the coming year.
14.5
The past year has given members of the Committee an opportunity to assess the
working of the Mergers, Takeover and Monopolies Control Act of 1978. Members'
attention was drawn in the
Gazette
to a statutory instrument made under the Act (No. 17
of 1979) entitled Mergers, Takeover and Monopolies (Newspapers) Order 1979. This
applied to the merger or takeover involving enterprises, at least one of which was engaged
in the printing or publication of newspapers regardless of the turnover or gross assets of
either the enterprises concerned. It would seem that in the operation of the Act the
Department is clearing most applications reasonably quickly though there have been
complaints of very long delays in some instances.
14.6
The pace of the implementation of the harmonisation programme in company
law of the E.E.C. is quickening. In addition to the Second Directive on the maintenance of
the companies' capital which has to be implemented by June of 1980, the Fourth
Directive on annual accounts has to be implemented by July 1980, and this will require
further legislation. Although this Directive is of primary concern to the accountancy
profession, there are certain areas in which the Committee consider it desirable to make
observations and a memorandum has been submitted to the Department of Industry,
Commerce and Energy. The Third Directive on internal mergers, and a Directive on the
harmonisation of stock exchange listing, have both been adopted and have to be imple-
mented by 1981. It is also expected that the Directive on the contents and supervision and
distribution of prospectuses will be adopted shortly.
165