Insolvency Bill [H.L.]

– in the House of Lords at 6:45 pm on 26th July 2000.

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Clause 4 [Qualification or authorisation of nominees and supervisors]:

Photo of Baroness Buscombe Baroness Buscombe Shadow Spokesperson (Trade and Industry), Shadow Minister (Cabinet Office), Shadow Minister (Home, Constitutional and Legal Affairs)

My Lords, in moving this amendment, I shall speak also to Amendments Nos. 2, l5 to 18 and 21 to 30. When we moved these amendments both in Committee and on Report, the point that I made was a very simple one: if a company or debtor in financial difficulties consults an authorised person, that person may be tempted to recommend a moratorium or a voluntary arrangement because he will then be able to act as nominee or as supervisor in his role as an authorised person and so get paid as the nominee or the supervisor. If he does not recommend a moratorium or a voluntary arrangement, he will not be paid for the advice that he gives. In many cases the authorised person will be so tempted and will recommend an insolvency procedure that is inappropriate.

I believe that the Minister knows that I really have the bit between my teeth on this issue. We feel that it is important to try to get this point across on Third Reading. We are also concerned about the suggestion that there is some kind of hidden agenda behind our opposition. I have never said that there was a hidden agenda.

In the Minister's response to what I said on Report he said that he would write to me to make it plain that nominees and supervisors would be able to act in relation to voluntary arrangements generally and not just in moratorium cases. I am grateful for that correspondence but, with great respect, I never understood otherwise. The noble Lord then went on to say that it would be strange to suggest that the Secretary of State would regard Clause 4 as a measure of dumbing down on standards. Perhaps I may point out that I do not suggest that the Secretary of State would regard Clause 4 as a means of dumbing down on standards.

The Minister also said that the proposition that only a licensed insolvency practitioner will ever have the skills necessary to act as a nominee or supervisor was untenable. Again, I do not make that proposition. The noble Lord went on to say that there were areas of a supervisor's role, such as collecting in regular payments and distributing them in accordance with the terms of an agreed voluntary arrangement, where it would be absurd to claim that the particular skills of an insolvency practitioner are always needed. Again, with respect, I do not--and did not--make that claim.

We believe that any authorised person should be licensed to be an office holder in bankruptcies, administrations and liquidations. If he is not so licensed and if he is asked for advice as to which insolvency procedure is appropriate, he will be less likely to recommend bankruptcy, administration or liquidation. Because an authorised person will only be authorised to act as a nominee or supervisor, he is more likely to recommend a moratorium or a voluntary arrangement. If he recommends the former, he will not be remunerated. If he recommends the latter, he will be remunerated. Human nature is such that he will find it difficult to resist the recommendation that leads to remuneration rather than no remuneration.

To suggest that Clause 4 will not give rise to that danger is unrealistic. It happens now with licensed insolvency practitioners where some of them recommend insolvency procedures where they are more likely to be appointed and remain as the office holder than others. Further, as the Minister said on Report, there have been accusations, which have been made known to the insolvency service, that if insolvency practitioners provide advice as authorised persons they are more likely to recommend insolvency procedures through which they can make money. With respect, the Minister cannot ignore us; nor can he ignore those accusations. There is no doubt that, as currently drafted, the Bill introduces an element that might give rise to the danger feared by those of us who have made those accusations known to the insolvency service.

The Minister also mentioned previously that those who seek the advice of authorised persons must take into account the possibility that those who are advising them might receive fees through one course of action rather than through another course of action. The noble Lord said that he was sure they would do so. I accept that some of them may take that into account. However, many of them will not; and it is they whom we seek to protect. The directors of an insolvent company and an insolvent debtor are very susceptible to any advice that may save them from their financial difficulties. They will clutch at straws. Indeed, I suggest that many of them will be desperate. We should do all that we can to protect them. I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, as always, I listened carefully to what the noble Baroness, Lady Buscombe, said. However, I am as perplexed as ever. I entirely accept what she said about the various points where she believes I accused her of saying something that was not her intention. Indeed, I accept everything she said about her intentions.

The noble Baroness is now speaking to a quite limited point; namely, the relationship between an authorised person and the person who might ultimately be a nominee or supervisor. However, her amendments do not do that; indeed, they go much further. Like the previous amendments, the current amendments would take the stuffing out of Clause 4, which allows the Secretary of State, under certain very restricted circumstances that I shall spell out, to recognise a body that could provide nominees and supervisors.

What the noble Baroness, Lady Buscombe, is saying--she has said it before--is that because a person authorised via the new Section 389A of the Insolvency Act will be authorised only to act as a nominee and supervisor, he will inevitably be tempted only to recommend a voluntary arrangement of the kind that he might make money from as a nominee or supervisor. Of course, all of that is speculation.

The noble Baroness, Lady Buscombe, referred to the charge which has been made that when advice is given by insolvency practitioners to a company in difficulties, they might be tempted to recommend a course of action from which they could make money as insolvency practitioners. A serious charge of that kind needs to be examined on a case by case basis. We have to determine whether that happens; otherwise it is mere speculation. I suggest that the charge that authorised persons who are qualified to become nominees and supervisors might be tempted to recommend a voluntary arrangement also constitutes speculation and needs to be tested.

The amendments ignore the realities of the situation. Under new Section 389A the Secretary of State will be able to recognise a body to authorise its members to act as nominees or supervisors in relation to voluntary arrangements. But he will only be able to do so if the body maintains and enforces--I emphasise the words "maintains and enforces"--rules for securing that its members are fit and proper persons to act as nominees or supervisors and meet acceptable requirements as to education and practical training and experience. That means that if an individual did not continue to maintain those standards--I can imagine that an accusation that he had used his position as an authorised person to put business his way would be a serious accusation and a serious departure from those standards--he should be dealt with appropriately by the body we are discussing. I assure noble Lords that nothing of importance would be lost by the absence of the word "professional" from what will be the new section.

The power as drafted makes clear that the Secretary of State will recognise only bodies which have in place all that is needed to ensure that their members are up to the mark. Those authorised will also have to have in force security, or in Scotland, caution, for the proper performance of their functions which meets the prescribed requirements. For instance, we need to provide that the surety or cautioner will be jointly and severally liable with the nominee or supervisor for losses caused by the fraud or dishonesty of the office holder. So a body looking to apply for recognition will have to ensure that its regime for regulating its members is sufficiently rigorous to ensure that the high standards currently expected of nominees and supervisors can continue to be met. Why on earth would the Secretary of State want standards to fall? However, I acknowledge that the noble Baroness, Lady Buscombe, has not said that she thinks they will fall. The regime may be different from that applied to insolvency practitioners because of the limited authorisation but it will have to be rigorous and effective. If not, the body's recognition will be withdrawn.

I return to the assertion that prospective nominees will be tempted to recommend a voluntary arrangement when it is not appropriate. On a practical level, we cannot see how it would be good for business continually to recommend procedures that did not work. But the assertion ignores the fact that the authorising body will be monitoring its members. Those are the conditions laid down in Clause 4. The kind of conduct about which the noble Baroness, Lady Buscombe, speculates would almost certainly lead to a revocation of authorisation.

This is not a Bill about authorised persons; this is a Bill about a moratorium and about nominees and supervisors. The amendments would delete from the Bill the provision that there could be an alternative organisation with very rigorous standards to which nominees and supervisors might belong. Unless the noble Baroness, Lady Buscombe, can convince the House that an authorised person would be more likely--being a member of such an organisation--to recommend something to his advantage than is now the case, I do not think that the amendments have any substance.

Photo of Baroness Buscombe Baroness Buscombe Shadow Spokesperson (Trade and Industry), Shadow Minister (Cabinet Office), Shadow Minister (Home, Constitutional and Legal Affairs) 7:00 pm, 26th July 2000

My Lords, I thank the Minister for his response. I am sorry that he has not moved, as it were, on the point about which we feel strongly. We accept that there is no question of wanting standards to fall, as the Minister confirmed today. However, the Minister said that the Bill is not about authorised persons. He also said that it was speculation to suggest that individuals would use their position to obtain business. However, we suggest that it is human nature for individuals to recommend a course of action which will benefit them. We are talking about their livelihood after all. As the Bill is drafted, an authorised person is limited by the licence in terms of what he can do. Therefore, it would be common sense for him to follow a course of action for which he can be remunerated as a nominee or supervisor. I shall read carefully in Hansard what the Minister said. I am sorry that he will not move on this point. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Schedule 1 [Moratorium where directors propose voluntary arrangement]:

Photo of Baroness Buscombe Baroness Buscombe Shadow Spokesperson (Trade and Industry), Shadow Minister (Cabinet Office), Shadow Minister (Home, Constitutional and Legal Affairs)

moved Amendment No. 3:

Page 13, line 12, leave out ("either of those meetings") and insert ("the meeting of creditors").

Photo of Baroness Buscombe Baroness Buscombe Shadow Spokesperson (Trade and Industry), Shadow Minister (Cabinet Office), Shadow Minister (Home, Constitutional and Legal Affairs)

My Lords, the Bill as drafted provides that if a creditors' meeting meets and decides to extend the moratorium and the company meeting meets but decides not to, the moratorium will be extended against the express wish of the members, unless, of course, the court orders otherwise under paragraph 35. But if the company meeting has not met, the moratorium comes to an end. In other words, the creditors would not have their wish even though no one had turned up for the company meeting. That is clearly a perverse outcome.

I know that the Minister will agree with all I have said in speaking to this amendment as I have adopted precisely what he said in his positive remarks on Report. Indeed, in revisiting this amendment at Third Reading, I simply seek to probe the Minister--it is such an important point in our view--as to his thinking on the matter following Report stage. I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I do not know that my thinking has advanced much, but I reassure the noble Baroness, Lady Buscombe, that at any rate it has not gone backwards. We recognise that there is a serious point behind the amendment. We debated it in Committee and on Report. On Report, although not in Committee, I recognised that the Bill as drafted could lead to a curious outcome--what the noble Baroness calls a perverse outcome.

If the creditors' meeting met and decided to extend the moratorium and the company meeting met but decided not to, the moratorium would be extended against the express wishes of the shareholders--unless, of course, the court ordered otherwise under paragraph 35.

But if the company meeting had not met, the moratorium would come to an end. In other words, the creditors would not have their wish even though no one even turned up for the company meeting. That is certainly a perverse outcome. We consider it important that both the creditors and the members are offered the opportunity of meeting within the first 28-day period of the moratorium and, if they are not offered that opportunity, the moratorium should end after the 28-day period. I recognise the validity of the thinking behind the amendment but it does not provide the important safeguard that members of a company are able to have their say. On Report I said that we would bring forward amendments to deal with the concern that the noble Baroness, Lady Buscombe, raised. We did not expect them to be ready for Third Reading. They will be tabled in another place. I am sorry that they are not ready today, but I repeat the assurances that I have given.

Photo of Baroness Buscombe Baroness Buscombe Shadow Spokesperson (Trade and Industry), Shadow Minister (Cabinet Office), Shadow Minister (Home, Constitutional and Legal Affairs)

My Lords, I thank the Minister for his response and his reassurances. I look forward to seeing the amendments when they are tabled in another place. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Lord Kingsland Lord Kingsland Conservative

moved Amendment No. 4:

Page 14, leave out line 19.

Photo of Lord Kingsland Lord Kingsland Conservative

My Lords, on Report the Minister said that these amendments were wrecking amendments. I protest. They accurately reflect the existing rights of floating charge holders when a petition for an administration order has been presented. In those circumstances, a floating charge holder is entitled to appoint an administrative receiver before an administration order is made. That right has existed since 1986 when the administration order was introduced. That right did not wreck the administration order procedure and we cannot see how that right continuing could possibly wreck the Bill.

As the Minister observed, the Cork committee saw that opportunities for business rescues were often lost when there was no floating charge holder to appoint a receiver to effect a rescue. The Government subsequently put in place the administration procedure but left intact the right to appoint a receiver whenever possible. The administration order procedure filled the gap either where there was no floating charge holder to appoint an administrative receiver or where the floating charge holder was unwilling to appoint an administrative receiver. The essence of these provisions was to provide an insolvency procedure instead of an administrative receivership.

The essence of the present proposals is to provide a new insolvency procedure even where a floating charge holder intends to appoint an administrative receiver. That goes beyond what the Cork committee recommended and, as the Minister is aware, seriously interferes with the rights of floating charge holders.

The Minister said that a floating charge holder might make it plain that he fully intended to appoint an administrative receiver the moment the moratorium came to an end. He said that that act itself might have an impact on the viability of the voluntary agreement, which could in turn cause the nominee to conclude he should withdraw his consent to act, thus ending the moratorium. The floating charge holder could then appoint an administrative receiver.

Let us suppose that the floating charge holder makes it quite clear that he will do that; let us suppose that he does that in terms where even an authorised person can be left in no doubt whatever that the moment a voluntary arrangement is approved the floating charge holder will appoint an administrative receiver. In those circumstances the nominee would be under an obligation to withdraw his consent to act, thereby ending the moratorium and permitting the floating charge holder to appoint an administrative receiver.

What if the nominee does not withdraw his consent to act? He will compel the floating charge holder to apply to the court in those circumstances under paragraph 25. That application would add to the expense of appointing an administrative receiver and lead to delay, during which the company's movable assets could simply disappear. What possible benefit is that to anyone?

In my submission it would be more appropriate to leave a floating charge holder with the right to appoint an administrative receiver during the moratorium. It will then be up to the nominee or the directors to persuade the floating charge holder not to appoint an administrative receiver. They should try to do that by putting forward sensible arguments. That procedure has worked as regards administration orders because, as the Minister told us, recent research has shown that in some 50 per cent of administrations a floating charge was in existence but the floating charge holder agreed--or at least did not veto--an administration order.

I therefore reaffirm the point that I made in Committee: these provisions rewrite the bargain between the floating charge holders and companies and will deter lenders from making loans to small companies. That will be to the detriment of lenders and small companies. In contrast, there is no real benefit in delaying a floating charge holder appointing an administrative receiver. I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 7:15 pm, 26th July 2000

My Lords, we are going over ground that we have covered already in the earlier stages of the Bill. I do not know that I have a great deal to add to what I said before but it is my duty to say it again.

Our purpose in legislating for the option of a moratorium in the company voluntary arrangement procedure is to provide a short respite for the directors of a company to put a rescue plan to the company and its creditors free from the immediate threat of individual creditor action. Of course, if that can be agreed, it is good all round--not only for the creditors but for the employees, shareholders, directors and the wider economy. To allow an administrative receiver to be appointed or a floating charge to crystallise in the moratorium period would, in our view, be counter-productive.

I am glad that the noble Lord, Lord Kingsland, and I are talking the same language this time. Previously, I was talking about a floating charge holder and the noble Lord was talking about a debenture holder. I am grateful that we can use the same terminology.

We see no good reason why a floating charge holder--which will often be a bank--should be exempted from the general stay. But let us look at the arguments that have been urged on us. On Report, the noble Lord, Lord Kingsland, suggested that floating charge holders might be severely prejudiced if they could not appoint an administrative receiver during the moratorium. We do not agree. Quite apart from the fact that the moratorium does not have any effect on security rights other than to stay them, the nominee has to be satisfied that a voluntary arrangement is likely to be agreed and implemented before a moratorium can be obtained. If the nominee is able to reach that conclusion, I simply cannot understand why the noble Lord, Lord Kingsland, thinks that things will deteriorate so badly during the moratorium.

If at some point during the moratorium the nominee concludes that a voluntary arrangement is not likely to be agreed, he is obliged immediately to withdraw his consent. The noble Lord returned to this point today: he said that the nominee might not bring the moratorium to an end and there would therefore have to be a costly application to the courts. The nominee has no choice in this matter. He would have to withdraw if he became aware that the charge holder fully intended to appoint a receiver at the end of the moratorium and he thought that that would scupper implementation of any agreed voluntary arrangement.

I quoted the Cork committee; the noble Lord, Lord Kingsland, has done the same. But in the review that preceded the Insolvency Act 1985, the Cork committee recognised that the process of receivership could rescue businesses; but it also saw that possible rescues were lost when there was no floating charge holder to appoint a receiver to effect the rescue. As a consequence, the administration procedure came into existence but left in place the right to appoint a receiver where that was possible.

I also said that research has shown that in some 50 per cent of administrations a floating charge does exist but the administration was agreed to--or not vetoed--by the floating charge holder. So what appeared to be an automatic preference of secured creditors for administrative receivership over administration has diminished over the years.

I also wonder why the noble Lord, Lord Kingsland, thinks that a bank will want to appoint an administrative receiver when there is a viable prospect of rescue. It would be contrary to the code of practice of the statement of principles of the British Bankers Association. That states that banks, which are usually the best placed creditor in terms of security,

"will add [their] support to a rescue proposition which [they] believe will succeed".

Then there is the question of the fate of the other stakeholders when an administrative receiver is appointed. The noble Lord, Lord Kingsland, seems to be content to leave that in the hands of the bank, but let us be clear about the role of an administrative receiver. He is appointed by the charge holder. His duty of care is primarily to the charge holder. His job is to get the best price for the assets and to pay the lender, regardless of where that leaves the company's employees, other creditors, directors or shareholders. Sometimes he will sell the company's business but it is rare for him actually to save the company. So if a plan can be agreed for the rescue of a company by means of a voluntary arrangement we are firmly of the view that this is more likely to result in a better outcome for all concerned than a receivership. We do not wish banks to be the ultimate arbiters of whether a company should be saved.

Finally, it is strange to imagine that a voluntary arrangement procedure somehow takes place in a vacuum. We expect that in most cases the nominee will need to talk to the company's bankers, both before and during the moratorium. That may be in relation to funding during the moratorium. It will almost certainly be about their attitude to the rescue plan, and their interests will be taken into account by the nominee. But even if they were not, there is nothing to stop the bank making its views known to the nominee and challenging his decisions or actions, if appropriate. This is not some artificial process divorced from reality.

I have to repeat, though I will avoid using the offensive word "wrecking", that if these amendments were accepted they would defeat the purpose of the proposed legislation.

Photo of Lord Kingsland Lord Kingsland Conservative

My Lords, despite the compelling arguments advanced by the Opposition the Minister remains obdurate, indeed defiant. In those circumstances I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 49; Not-Contents, 125.

Division number 2

See full list of votes (From The Public Whip)

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 5 and 6 not moved.]

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, in moving Amendment No. 7 I should like to speak also to Amendments Nos. 8, 9, 10, 12, 14, 19 and 20. Opposition Amendment No. 11 is in the same group. These amendments should address the concerns of the Opposition that bona fide third parties should not have to check that certain preconditions have been met before dealing with a company which is subject to a moratorium; for example, that a disposal is for the benefit of the company. As I said in Committee, we also would not want third parties to be put off dealing with a company in a moratorium because of doubts about whether transactions entered into by the company will be valid and enforceable against that company. Therefore, we have brought forward Amendments Nos. 8 to 10 and 12 which provide that if a company enters into a transaction in breach of paragraphs 16 to 22, those transactions will still be valid and enforceable against the company. Those paragraphs deal with transactions such as disposals, payments and the obtaining of credit by a company during the moratorium.

I wonder whether the noble Baroness, Lady Buscombe, would mind me saying a few words about Amendment No. 11 at the same time. Although we recognise the concern, we consider that Amendment No. 11 does not go quite far enough. We consider it necessary to make it clear that not only transactions under paragraph 18, which Amendment 11 would provide, but also those under paragraphs 16, 17 and 19 to 22 are to be valid and enforceable against the company even if the provisions of those paragraphs have not been complied with.

We have also provided by way of Amendment No. 14 that, first, market contracts and charges under Part VII of the Companies Act 1989 and, secondly, transfer orders and collateral security as defined in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 will also be valid and enforceable by as well as against the company, even though the company should not have entered into such a transaction in the first place. We have also provided that nothing done by or in pursuance of such a transaction is to be treated as done in contravention of paragraphs 12(1)(f), 14 or 16 to 22.

Given that companies which are party to such types of transactions are effectively banned from entering into a moratorium, that may seem a somewhat strange provision. But we have concluded that it is possible that a company in a moratorium might just conceivably be able to enter into such a transaction. That being so, it is vital that it is valid and enforceable by all parties, even if entered into in contravention of the provisions of Schedule A1. It is also important that property subject to a market charge or collateral security charge cannot be dealt as if it were not subject to that security. Therefore, paragraph 20 has been disapplied. All of that is necessary to protect the integrity of the financial markets and ensure we are not in breach of our obligations under the EC Settlement Finality Directive.

However, as companies are not supposed to enter into market contracts, give transfer orders, grant market charges or provide collateral security during a moratorium we have provided by means of Amendments Nos. 14 and 20 that if a company does enter into any such transaction when it should not, the company and its officers can be prosecuted. Amendment No. 19 is consequential on Amendment No. 20.

Photo of Baroness Buscombe Baroness Buscombe Shadow Spokesperson (Trade and Industry), Shadow Minister (Cabinet Office), Shadow Minister (Home, Constitutional and Legal Affairs)

My Lords, I rise briefly to respond to the Minister and to speak to Amendment No. 11. The Minister has accepted that it would be damaging to rescue attempts if third parties were reluctant to deal with a company which is in a moratorium because of doubts as to whether the contracts would be enforceable against the company. We are pleased that the Minister has responded to our concerns. We were particularly concerned in relation to Amendment No. 11 which we put forward in Committee, on Report and again at Third Reading. We feel that the matter has now been addressed.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I am grateful to the noble Baroness for her contribution on the group starting with Amendment No. 11. I forgot to speak to Amendment No. 13. Perhaps for the record I should say that Amendment No. 13 sets out more fully the two offences which are committed if a company, first, disposes of any of its property which is subject to a security without the consent of the holder of the security or leave of the court under paragraph 20 and otherwise than in accordance with the terms of the security; or, secondly, disposes of any goods in its possession under a hire purchase agreement without the consent of the owner of the goods or leave of the court under paragraph 20 and otherwise than in accordance with the terms of the agreement. I beg to move.

On Question, amendment agreed to.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

moved Amendments Nos. 8 to 10:

Page 15, line 28, at end insert--

("(1A) The fact that a company enters into a transaction in contravention of any of paragraphs 16 to 22 does not--

(a) make the transaction void, or

(b) make it to any extent unenforceable against the company.").

Page 15, leave out lines 29 to 35.

Page 16, line 31, at end insert ("otherwise than in pursuance of an order of the court").

On Question, amendments agreed to.

[Amendment No. 11 not moved.]

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

moved Amendments Nos. 12 to 14:

Page 16, line 47, at end insert ("otherwise than in pursuance of an order of the court").

Page 18, leave out lines 6 and 7 and insert--

("(a) without any consent or leave under paragraph 20, disposes of any of its property which is subject to a security otherwise than in accordance with the terms of the security,

(aa) without any consent or leave under paragraph 20, disposes of any goods in the possession of the company under a hire-purchase agreement otherwise than in accordance with the terms of the agreement, or")

Page 18, line 12, at end insert--