I move amendment 2 :—

" To delete the section."

It will be seen that I have another amendment if this is not carried. My feeling about this section is that though it is clear that the Minister's intention is to safeguard the rights of the State in the matter of money and, perhaps, incidentally to give a greater assurance that fishermen who apply will get the loans more freely, because the section imposes a severe penalty for breach of the conditions, I nevertheless think that we are introducing a very important new principle into this class of legislation. Firstly, we are asking the Seanad to indicate the fine which a person would be liable to on summary conviction in respect of a breach of contract of a particular type between an individual and the Society. But the Seanad officially knows nothing of the class of contract or the terms of the contract a breach of which would involve this penalty. I think that it is not right that the Legislature should be asked to impose inferentially a penalty upon a person for breaking a contract about which it knows nothing. Secondly, there is, as I think, a very big principle involved in the section itself which lays down the penalty for a breach of a contract between an individual and a voluntary association which is not a statutory association and which is not subject to the control of Parliament except very indirectly. I think that the principle involved in that is one which may be sought for by other organisations. We have had, for instance, public notice of a Private Bill being introduced by hairdressers to form a hairdressers' guild. I can imagine the Hairdressers' Association trying to introduce into their Private Bill a provision that if anything in the agreement between the individual hairdresser and the Association is broken the individual shall be subject to a penalty in the Court of £20. There are many other private associations being formed of one kind or another, some with State assistance and encouragement, and some entirely independent of the State. Here we have, in effect, a co-operative organisation which is an association of individual members. The members make a contract with the Association, which contract may be varied according as the rules may be altered, though in respect of the particular contract referred to here it can only be by consent of the Minister for Fisheries. If there is a breach by the individual of the terms of that contract, we are making that individual liable to a penalty in the Courts. It is not only a civil liability, it is a breach of contract which involves damages at law.

It does still.

It does still, but this is in addition to damages. It involves what in effect is a criminal offence. I, personally, am inclined to think that we ought to move in the direction of very much higher organisation of all classes of society and industry, employers and employed, and that such organisations should be recognised by the State and given authority by the State, but until we have deliberately agreed upon that I think we should hesitate to do it in this rather minor way for a Society of this kind. I, therefore, feel that we ought to examine the implications of this section before we pass it. If the Seanad is satisfied that it is a good thing to impose a penalty at law upon an individual for a breach of agreement with a voluntary association of which he is a member, then so be it. I am not going to resist it, but I do not think it ought to be done without a clear understanding of the implications.

Does this section mean that the individual is liable to a penalty of £20, and that even after the payment of that he is still subject to civil proceedings in the Courts for damages ?

There is no doubt about that.

In other words, the £20 embodied in this section is a plus penalty.

I take it the Minister will justify it on the ground that it applies to conditions in the contract for which he could not get pecuniary damages. A person might loan a boat to somebody else to fish on his own, and the Association could not get damages for that. They might get 1/- damages if they went into Court.

I think this is entirely analagous to the Agricultural Credit Act, because if a man gets a boat for fishing purposes and uses it for carrying cargo that is a misuse of it. It is just like a man who gets a loan from the Agricultural Credit Corporation and who buys a motor car for the money instead of applying it for the purpose for which he got it.

It does not do the Society any pecuniary damage that you could recover ?

No.

The penalty is for any breach of a contract " whereby such member agrees with the Society to pay to the Society in a particular manner specified in such contract."

That is only a description of the contract. It is a breach of any condition in the contract. That is the kind of contract itself. That might be made clearer.

That makes it all the worse.

I merely mentioned the misuse of a boat as an argument that might be used, but it is not what I contemplate. What I contemplate is the taking of fish and, instead of handing it over to the Association, sending it elsewhere, and thus depriving the Association of its method of recoupment of the loan.

That is a matter for which the Society could get damages and could measure damages.

Yes, but what I fear is that if there is not sufficient protection for the Society, and if they feel they have not sufficient grip over the particular borrower, they will be chary about giving the facilities provided under Rule 23. I consider that the provision in that rule is very necessary in the present circumstances in the fishing industry, that is, that persons will get boats and gear for the next five years without any part payment in advance. If the Society have not the protection this section gives them, they will be very chary about giving that facility to fishermen. In other words, they will probably require part payment in advance. They will, at least, have that security.

Up to a certain extent.

Yes, but it will be some protection, that is, that the borrower will have made part payment for the chattel that he receives.

Twenty or thirty-five per cent., as the case may be.

Yes. That is the really serious matter involved—that the Society may feel themselves compelled not to give that concession.

Apparently Senator Johnson is friendly to this principle.

To an extension of the principle.

All he really asks the Committee to do is to be conscious of the implications.

I consider it a bad principle, because if they have the right to take civil proceedings to recover damages when an individual or a group of individuals own a boat, there is always the possibility of getting substantial damages for a breach of contract.

Yes, for a breach of certain conditions, but not for others. If they carried turf in the boat for two or three months instead of fishing, the Society could not prove any actual pecuniary damage. That is the trouble.

Would they not be committing a breach of contract in that respect by using it for a purpose other than that for which it was intended ?

Yes, but the damage would be nominal. You must prove the amount of damages in money, and they would not be able to do that. They would probably get a farthing damages, and they might get the costs if the judge thought they should get them, and punish the people in that way.

This deals with a contract " whereby such member agrees with the Society to pay to the Society in a particular manner specified in such contract the cost of such supply or repair or renovation and such member does any act, whether of commission or omission, which is a contravention of such agreement." I am not clear as to whether the agreement referred to as " such agreement " is the agreement whereby such member is to pay in a particular manner, or whether the agreement is a wider agreement involving many other conditions as well as the condition as to paying in a particular manner, and whether a breach of any of these conditions of that wider agreement will make the individual liable to these penalties.

Undoubtedly.

That is the intention.

The Society cannot inflict a penalty. They can only prosecute. It will be a matter for the courts. Before a prosecution is brought they have to get the sanction of the Minister. That is provided in Section 16.

That is so.

As I stated, I am in agreement with the general tendency that seems to be indicated in this section, that is, to deem it to be a social offence for a member of an Association to break the rules of that Association. That is the tendency of this section. I feel, however, that the method of application of that principle is hardly warranted ; that in addition to the civil liability there is a penalty of £20. I am not satisfied that this method of introducing the principle is a good or a sound one. I feel that the penalty involves imprisonment in case of non-payment.

In the case of non-payment imprisonment is involved.

I am inclined to think that the Bill would be better without this section, and notwithstanding the general views I have expressed on the matter, I think it should not be in this form.

What form will the agreement take ? The Minister can give an idea of the specific things that will be covered in it.

Part 16 specifies certain things.

Rule 16. That does not include repairs. I think it is intended to include them. It is a mere hire purchase agreement, and does not include repairs, except a condition to keep the chattel in repair after they got it. The Society apparently can make an agreement to give money to repair. Apparently the terms of that agreement, where there are repairs, are not set out in Rule 16.

In sub-section (f) of Rule 16 there is responsibility for repairs.

Once they have it on hire purchase agreement then the Society may spend money on repairs to a boat which was not got under the organisation.

See Rule 26.

What Senator Johnson says is correct to a great degree. This is introducing a new principle, and it is not at all analogous with the case of the Agricultural Credit Corporation. This goes a lot further. In the case of the Agricultural Credit Corporation the application of the money for agricultural purposes was set forth by the Act. After all, this is an agreement——

It is a fraud on the Agricultural Credit Corporation.

This goes much further than that.

I do not think it does. I think there is a stronger case.

All I was calling attention to was that Section 3 does not apply to an agreement where the Society is merely repairing a boat that does not belong to them.

It certainly was intended to do so. I wonder would Rule 24 cover that position ? (Rule read.)

The only difference is that under Rule 16 it is compulsory to have this condition, and in the other case it is " may." That is the only difference. Perhaps the Minister would look into it. It is not really a matter that we can deal with by way of amendment before the Report Stage.

It would be an amendment of the Rules rather.

I know, but it is to see if any amendment of Section 3 is necessary. I do not think it is myself.

Amendment put, and on a show of hands, declared carried by a majority.