AN BILLE UM CHEANTALAITHE AGUS GNIOMHAIRITITHE, 1966

AUCTIONEERS AND HOUSE AGENTS BILL, 1966

Mar a tugadh isteach As introduced

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EXPLANATORY MEMORANDUM

GENERAL1. The provisions of the Bill are applicable both to auctioneers

and house agents. For convenience, this memorandum refers to auctioneers only but the references are intended to be read as applying to house agents as well.

2. The main objects of the Bill are:(a) to increase from £2,000 to £5,000 the deposit which a

licensed auctioneer is required to keep in the High Court, and

(b) to require auctioneers to keep clients’ moneys in a specialbank account and to keep records of such moneys and of their dealings in them.

The Bill has a number of subsidiary provisions, mainly ones connected with the requirement that a special account be kept for clients’ moneys.

Section 1DETAILS

3. This contains definitions.

Section 24. This is the section which provides for an increase in the

deposit from £2,000 to £5,000. The figure £2,000 was fixed by the Auctioneers and House Agents Act, 1947. The deposit may be in cash or in the form of authorised securities, or it may be a guarantee bond (in favour of the President of the High Court) which is provided by an insurance company. In practice, the deposit is almost always a guarantee bond and, as the bond is arranged in relation to the licensing year which begins on 6th July, the proposal is that the provision for an increase in the amount of the deposit should become effective as from 6th Julv, 1967.

Section 35. The 1947 Act (section 16) contains provisions designed to

prevent the withdrawal of a deposit until it can safely be assumed that it will not be needed to meet any liability of the auctioneer. The provisions are such, however, that it is not possible for an auctioneer to withdraw a cash deposit even if he is in a position to substitute a guarantee bond. Section 3 proposes to allow a substitution of this kind.

Section 4Note: Sections 4 and 5 correspond,, broadly, with certain pro­visions—articles 3, 4, 5, 10 and 11-?-of the Solicitors’ Accounts Regulations, 1955 (S. I. No. 218 of 1955).

6. This section proposes to require an auctioneer to keep properly written up such accounts as may be necessary to show all his dealings with clients’ moneys, etc., and to retain the records for three years after the date of the last relevant entry or dealing.

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Section■ 5 . s

7. This section proposes to require an auctioneer to open a special client account in a bank. With certain exceptions, it proposes that all money for clients must be paid into thait account and that money may be withdrawn from it only when properly required to make a payment to or on behalf of the client or in payment of fees or commission or in reimbursement of outlay. Again with certain exceptions, it proposes that no money other than clients’ money may be paid into a client account.

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Section 68. This section proposes to give priority to the claims of the

auctioneer’s clients, in respect of money lodged for them in a client account, as against the State or any other persons who may have claims against the auctioneer. The section is on the lines of section 68 of the Solicitors Act, 1954. ‘ • *’

Section 79. This section contains provisions as to what is to happen in

relation to a bankruptcy. In its general principle, it follows the lines of section 32 of the Solicitors Act, 1960, by providing that, if there is a deficiency, in a client account, the sum to the credit of the account will be divided amongst the clients, in proportion to what is due to each. However, two factors arise in relation to auctioneers that did not arise in relation to solicitors, viz.:

(а) a limited company may be an auctioneer and a provisionis needed to deal with the situation that would arise in the event of the company being wound up on insolvency—provision for that event is made in the text; and

(б) the question of how the deposit in the High Court is tobe dealt with has to be determined—the proposal in the Bill is that the deposit should be added to what is available in the client account (which would mean that it would be divided proportionately amongst those represented in the client account). If there happened to be more than one client account with a deficiency, it would be divided between the accounts in proportion to the deficiencies.

10. The proposal for the transfer of the deposit to meet a deficiency in the client account is contained in subsection (1) of section 7. Subsections (2) to (5), inclusive, follow the lines of section 32 of the Solicitors Act, 1960.

Section 811. The object of this section is to ensure that the restriction

on dealing with money in a client account will not be construed as affecting an auctioneer’s rights of lien, etc. (The section is on the lines of article 16 of the Solicitors’ Accounts Regulations, 1955.)

Section 912. This section, which is on the lines of section 67 of the

Solicitors Act, 1954, lays down the limits of a bank’s obligation in the matter of moneys kept in a client account and makes

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clear that the bank (if the auctioneer is under a liability to it) will have no rights by way of lien, set-off, etc., against moneys in the client account, unless the auctioneer’s liability to the bank is connected with the account itself.

Section 1013. Section 15 of the 1947 Act allows a person who has obtained

a decree, etc., against an auctioneer (arising out of his business as such) to apply to the High Court for payment out of the deposit. It also allows a person who has commenced proceedings against an auctioneer to apply to the High Court to have the deposit (or part of it) “ frozen ” so that no payment can be made out of it until the proceedings have terminated or until some specified period has elapsed. Section 10 of this Bill proposes that, where the High Court grants an application of this kind, it may at its discretion go further and “ freeze ” also the moneys in the client account kept by the auctioneer—so that payments out of that account would then be subject to the scrutiny of the Court or be the subject of such other restrictions as the Court thought appropriate. Sections 8 (1) (c) (iii) and 20 of the Solicitors Act, 1960, have provisions of a somewhat similar kind.

Section 1114. This section proposes that, when renewing his certificate

of qualification (as a preliminary to renewing his licence) each year, the auctioneer must produce an accountant’s certificate to the effect that he (the auctioneer) is complying with the pro­visions relating to the keeping of a separate client account and the keeping of records. The section corresponds broadly with section 31 of the Solicitors Act, 1960. It prescribes, as the “ normal ” period to be covered by the accountant’s certificate, a period ending not more than three months before the application. This probably will mean in practice (since the application has to be made as a preliminary to the application for a licence which operates as from 6th July) that the accountant’s certificate can relate to the year ending 31st March. However, in case of practical difficulties arising on this point, subsection (6) proposes to allow the Minister, by order, to vary the “ accounting period ” pro­vided the principle is maintained that the certificates furnished from year to year cover an unbroken period.

Section 1215. This contains the short title, etc. It also provides that the

sections of the Bill relating to the opening of client accounts and the keeping of records will not come into force until two months after the Bill becomes law.

An Roirm Dli agus Cirt. Meitheamh, 1966.

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Wt. K48862/G/6. —. 625. 6/66. C.&Co. (4479). G.16.

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