Private Motorists Provident Society v Attorney General

• Jurisdiction: Ireland
• Court: Supreme Court
• Judge: O'HIGGINS C.J.
• Judgment Date: 01 January 1984
• Neutral Citation: 1983 WJSC-SC 992
• Docket Number: [1979 No. 1538P]
• Date: 01 January 1984

PRIVATE MOTORISTS PROVIDENT SOCIETY LTD v. A.G.

PRIVATE MOTORISTS PROVIDENT SOCIETY LTD. and JOSEPH MOORE

Plaintiffs

and

THE ATTORNEY GENERAL

Defendant

1983 WJSC-SC 992

O'Higgins C.J.

Finlay P.

Walsh J.

Henchy J.

McCarthy J.

(210/81)

THE SUPREME COURT

Subject Headings:

CONSTITUTION: personal rights

1 JUDGMENT OF THE COURT delivered the 6th day of May 1983 by O'HIGGINS C.J. [Nem Diss]

2 The first-named Plaintiff (hereinafter referred to as "the Society") is a society registered under the Industrial and Provident Societies Acts. The second-named Plaintiff (hereinafter referred to as "Mr. Moore") is a shareholder in, and a member of the Management Committee of the Society.

3 The Society was incorporated and registered in 1958. It engaged in the business of banking in accordance with its powers as a society registered under The Industrial and Provident Societies Act 1893 (the Act of 1893). This business, which consisted in the acceptance and holding of deposits from members and the making of loans to members, expanded steadily over the years and at the date of the commencement of these proceedings £13,700,000 were deposited with the Society and advances to members totalled £11,700,000. The Central Bank Act 1971(the Act of 1971) made provision for the licensing and supervision of banks by the Central Bank of Ireland. By Section 7 the securing of a licence from the Central Bank and the maintenance of a deposit therein were made essential to the carrying on of a banking business by any person. Subsection (4) of Section 7, however, specifically exempted industrial and provident societies from the requirements of the Section and accordingly the Society's banking business did not come under the control or supervision of the Central Bank. This banking business continued to be free of legislative control until the passing of The Industrial and Provident Societies (Amendment) Act 1978(the Act of 1978) which by Section 5(2) prohibits industrial and provident societies, such as the Society, from accepting or holding deposits after the end of a period of five years commencing at the passing of the Act (15th November 1978). It is clear that if this prohibition takes effect it will be virtually impossible for the Society to carry on a banking business and its ability to make a profit will be severely limited. The Society and Mr. Moore have brought these proceedings seeking a declaration that the Act of 1978 is invalid having regard to the provisions of the Constitution. This claim, having failed in the High Court, has been renewed in this Court by way of appeal.

The Act of 1978

4 The Act of 1978 is intended to amend earlier legislation dealing with industrial and provident societies. It is divided into four parts. Part I deals with interpretation. Part II deals with industrial and provident societies. Part III deals with credit unions and Part IV deals with miscellaneous matters. Despite the generality of the declaration sought by the Plaintiffs it is clear that the invalidity alleged arises only in respect of Part II and in particular in relation to Section 5(3). This and some other Sections contained in Part II require to be noted.

5 Section 5 provides as follows:-

6 a "5.-(1) (a) This subsection applies to a society which was not incorporated before the 4th day of October 1978, or which on that date was incorporated and either had not accepted deposits the aggregate of which on that date did not exceed £25,000.

7 (b) A society to which this subsection applies shall not accept depostis.

8 (2) Subject to subsection (3), a society other than a society to which subsection (1) applies shall not accept or hold deposits after the end of the period of five years commencing at the passing of this Act.

9 a (3) (a) The Minister, after consultation with the Central Bank may, by regulation, extend the period of five years referred to in subsection (2) for such further period or periods as he considers appropriate having regard to the pbulic interest.

10 (b) Regulations under this subsection may apply to a specified class or classes of society denoted by such matters as the Minister thinks fit and different periods may be specified for different classes of society.

11 (c) Every regulation made under this subsection shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either such House within the next 21 days on which that House has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to anything previously done thereunder."

12 Subsection (1) applies to newly incorporated societies and to older societies which were accepting deposits on a comparatively small scale. Subsection (2) applies to the older societies which were accepting deposits on a larger scale and in particular applies to the Society. Accordingly, unless the period of five years is extended by regulation made under subsection (3) the Society's power to accept and hold deposits will cease on and after the 15th November 1983. By Section 6 a prohibition is imposed on the raising of loans by societies but, by subsection (4) of the Section the prohibition will not apply to a loan made to a society by a bank. Section 10 which empowers the Registrar to regulate in various ways the banking business of a society applies to the Society during the permitted continuance of its banking business. Other Sections of Part II also apply but are not relevant to the issues raised on this appeal.

The position of the Society and Mr. Moore in relation to the claim of invalidity

13 The case for invalidity which the Plaintiffs seek to establish rests on two allegations. In the first place it is contended that the impugned legislation and, in particular, Section 5(2) thereof contravenes the provisions of Art. 40.3 of the Constitution in that it constitutes an unjust attack on property rights. In the second place it is contended that the legislation is an interference with the freedom of association which is guaranteed to citizens by Article 40.6.1(iii) of the Constitution. This case has been...