Judgment Title: The Minister for Justice and Law Reform -v- Bernadette Margaret Rose Devine
Neutral Citation: 2012 IEHC 159
High Court Record Number: 2010 11CAB
Date of Delivery: 18/04/2012
Court: High Court
Composition of Court:
Judgment by: Feeney J.
Status of Judgment: Approved
NEUTRAL CITATION  IEHC 159
THE HIGH COURT
[2010 No. 11 CAB]
IN THE MATTER OF THE CRIMINAL JUSTICE (MUTUAL ASSISTANCE) ACT, 2008
THE MINISTER FOR JUSTICE AND LAW REFORM
BERNADETTE MARGARET ROSE DEVINE
Judgment of Mr. Justice Feeney delivered on 18th day of April, 2012.
1. Bernadette Devine (the respondent) was charged in England with five separate offences relating to the years from 1996 to 1999, of fraudulent evasion of Value Added Tax (VAT) contrary to s. 72(1) of the United Kingdom Value Added Tax Act 1994. She was tried in the Middlesex Crown Court and was convicted by the jury of all five counts on 6th July, 2001. She was sentenced to six years imprisonment.
2. The fraud of which the respondent was convicted was a fraud which operated on the basis of overseas purchases of goods, outside the United Kingdom, and the subsequent importation into the United Kingdom of those goods without the payment of VAT. When those goods were sold within the United Kingdom, VAT at the relevant rate was charged which resulted in the fraudulent traders being left with the full amount of VAT for which they subsequently failed to account. Traders who were involved in such schemes operate what is known as "missing trader companies" and those companies are essential to the fraudulent scheme.
3. Pending the trial of the respondent in the United Kingdom she was subject to a restraint order in that country which was obtained pursuant to the provisions of s. 77 of the Criminal Justice Act 1977 made by the Court on the 22nd July, 1999. That order, inter alia, prohibited the respondent from in any way disposing of or dealing with or diminishing the value of any of her assets whether within or outside England and identified certain assets in particular to which the order applied. A number of properties held by the respondent and a number of companies which it was claimed were set up by the respondent for her use and which it was claimed she was the beneficial owner were expressly identified in the order of the 22nd April, 1999.
4. Following the respondent's conviction on the 6th July, 2001, confiscation proceedings were commenced and following a hearing in the Middlesex Crown Court an order was made on 5th August, 2003. The Court determined that the respondent had benefited from her criminal activities, which was the fraudulent scheme in respect of which she was convicted, to the value of £18,759,430 Sterling. A confiscation order was made on the 5th August, 2003, against the respondent in the sum of €1,446,368.68 Sterling. A schedule of the respondent's assets had been agreed by the defence and the contested matter at the confiscation proceedings hearing related to the valuations of lands and property located at certain locations, namely, at Grayfield House and lands, Stone Parks land and Stone Parks Garages which are shown on page 3 of the schedule of assets attached to the order. The valuations of those properties were agreed at the confiscation hearing on 5th August, 2003, as is apparent from pages 8 and 9 of the transcript of the confiscation hearing which is exhibited before this Court.
5. At the confiscation hearing it was ordered that the respondent satisfy the confiscation order in full by 31st August, 2004 and that, in default of payment by that date, the respondent was liable to serve a term of five years imprisonment should she fail to discharge the sum identified in the confiscation order. Following the making of the confiscation order on the 5th August, 2003, the matter was further before the High Court in London on the 21st July, 2004, when an order was made appointing a management receiver to preserve and manage the assets of the respondent. The respondent lodged an appeal against both her imprisonment and the confiscation order. On receipt of that appeal, no further action could be or was taken by the United Kingdom authorities on foot of the confiscation order as an appeal was pending.
6. On 27th January, 2005 the respondent was refused leave to appeal her conviction and an application for leave to appeal against the confiscation order was adjourned, pending the outcome of another appeal which raised a similar point of law which was then current before the House of Lords. By the 21st December, 2005, that appeal had been dealt with by the House of Lords and on the 21st December, 2005, leave to appeal the confiscation order was refused by the Court of Appeal and the respondent notified the United Kingdom authorities of her intention to discontinue her appeal against the confiscation order.
7. On 27th November, 2006 the High Court in England made an order converting the management receivership order into an enforcement receivership order with power to realise the respondent's assets in satisfaction of the outstanding confiscation order.
8. On 26th July, 2007 the enforcement receiver paid the sum of £317,000 Sterling into the Magistrates Court representing the realisation of the respondent's assets in England and Wales. Enforcement proceedings were commenced against the respondent for non-payment of the outstanding amount in May 2007 and the respondent failed to attend at a number of hearings and was subject to a bench warrant. Finally, on 2nd October, 2007 the respondent attended Court and was requested to sign a power of attorney enabling the enforcement receiver to realise the respondent's assets which were outside of England and Wales including assets within this jurisdiction. The respondent refused to do so and, as a result thereof, the Judge activated the default sentence of five years imprisonment which formed part of the confiscation order of 5th August, 2003. By the date that the default sentence was activated, the respondent had completed her initial sentence and had been released from custody. The respondent was imprisoned as a result of the default sentence being activated and, after she had served fifty per cent of the five year sentence, she was released from prison on 1st April, 2010.
9. Notwithstanding the fact that the respondent has served the default sentence, the debt identified in the confiscation order remains due and owing and the balance, with due allowance for the payment of £317,000 Sterling paid into Court by the enforcement receiver, remains due and owing and continues to accrue interest. The entire amount paid as of August 2010 was £317,658 Sterling leaving a balance on the original amount together with accrued interest of £1,738,900 Sterling. Interest continues to accrue thereafter at a daily rate of £247.39 Sterling.
10. The first proceedings in this jurisdiction arising out of the conviction and orders made against the respondent resulted from an application by the United Kingdom authorities in Ireland for a restraint order over the respondent's property in this jurisdiction. That order was sought in support of the United Kingdom restraint order. On 7th March, 2005, an order was granted ex parte by the High Court pursuant to the provisions of the Criminal Justice Act 1994, as modified by the provisions of the Criminal Justice Act 1994 (s. 46(6) Regulations 1996). The restraint order made within this jurisdiction identified various items of property which were claimed to be the respondent's property including a bank account, various properties and land and assets held by companies of which it was claimed that the respondent was the beneficial owner.
11. By motion dated 15th December, 2005 the respondent sought an order from the High Court in this jurisdiction seeking to set aside the restraint order made on the 7th March, 2005. That motion was grounded on an affidavit sworn by the respondent's solicitor, James Orange, on 14th December, 2005 and the basis upon which the order was sought to be set aside was the absence of an undertaking as to damages. That motion was heard by the High Court in June 2006. O'Sullivan J. delivered judgment wherein it was held, inter alia, that at the ex parte stage of an application for a restraint order the Court ought to require an undertaking as to damages in the absence of an adequate explanation as to why it should not be given. The Court also held that the Court had statutory jurisdiction to make the order and that the failure by the applicant to furnish an undertaking as to damages did not, per se, invalidate the order or constitute a reason without more for setting it aside. The judgment of O'Sullivan J. in relation to the undertaking as to damages related to the steps taken by the applicant in this jurisdiction.
12. The order of the High Court on 27th June, 2006 was appealed and that appeal was delayed as the order was not perfected until 2nd April, 2007. A notice of appeal was served by the applicant on 23rd April, 2007. Due to difficulty in obtaining a certified or an attested copy of the judgment, there was a further delay and an attested copy of the judgment was not available until February 2008. Thereafter the books of appeal were lodged.
13. On 1st September, 2008 the Criminal Justice (Mutual Assistance) Act 2008 (the Act of 2008) came into force and thereafter is the legislation governing international co-operation and mutual assistance.
14. The restraint order of 7th March, 2005 granted under the Criminal Justice Act 1994, as modified, remained in force. That order had been made on foot of a letter of request of 20th September, 2004 which identified that, as of that date, the proceedings against the respondent as defendant in the United Kingdom proceedings relating to the confiscation of her assets had not been concluded. Those proceedings concluded on the 21st December, 2005 when the respondent notified the United Kingdom authorities of her intention to abandon her appeal.
15. On 20th May, 2010 the respondent brought a motion seeking to strike out the proceedings, Record No. 2005/16 MCA, which were the proceedings in which the ex parte restraint order had been made by the High Court in this jurisdiction. The motion of 20th May, 2010 sought an order striking out those proceedings for want of prosecution and when those proceedings came on before the Court on 19th July, 2010, the Court was advised by counsel for the applicant that a request from the United Kingdom authorities for a confiscation co-operation order pursuant to the Act of 2008 was anticipated and on that basis the respondent's motion was adjourned.
16. A letter of request dated the 18th August, 2010 was received from the United Kingdom authorities directed to the Irish Central Authority and the Minister for Justice, Equality and Law Reform. That letter sought the assistance of the Irish authorities in securing a court order in support of the United Kingdom confiscation order. On foot of the request contained in that letter of request, the applicant commenced the present proceedings on 15th October, 2010 and on that date the applicant sought an ex parte order by way of motion grounded on affidavit seeking a confiscation co-operation order pursuant to the provisions of s. 51 of the Act of 2008. An ex parte order was made on 15th October, 2010 and the matter was made returnable for the 1st November, 2010. The respondent did not file any affidavit in response to the application for a confiscation co-operation order and a hearing date of 14th January, 2011 was set. On that date the respondent, through counsel, indicated that the respondent intended to rely on a number of legal matters and, in particular, on the Statute of Limitations. The matter was adjourned to enable written submissions to be delivered by the parties.
17. In the respondent's legal submissions three matters were raised in relation to the applicant's proceedings under the Act of 2008, that is in respect of proceedings Record No. 2010/11 CAB. The respondent confirmed in the written submissions that no affidavit was to be filed on her behalf and sought to rely upon a claim based upon the Statute of Limitations that the proceedings were statute-barred pursuant to the provisions of s. 11(7) of the Statute of Limitations Act 1957. In the written submissions the respondent also raised two other matters, namely, an issue in relation to abuse of process and an issue in relation to hearsay. At the hearing of the matter before this Court counsel for the respondent indicated that the respondent was not seeking to rely on either of those two matters, that is, on either a claim based upon an abuse of process or a claim that hearsay evidence had been relied upon by the applicant and was not admissible. The hearing therefore proceeded on the sole issue as to whether or not the application herein is statue-barred.
18. The restraint order made by this Court on 7th March, 2005, was made pursuant to the provisions of Part 7 of the Criminal Justice Act 1994. That part of the Act deals with international cooperation and Part 7 of the Act updated existing criminal procedural powers which facilitated international mutual assistance. The enactment of Part 7 of the Act of 1994 enabled Ireland to ratify a number of international Instruments and provided a legislative framework to enable cooperation across national boundaries. The restraint order made on 7th March, 2005, was made pursuant 8 to the provisions of the Criminal Justice Act 1994, as modified by the Criminal Justice Act (1994)(S.46)(6) Regulations made pursuant to s. 46(6) of the Act of 1994.
19. The Criminal Justice (Mutual Assistance) Act 2008, repealed Part 7 of the 1994 Act, and re-enacted a number of its provisions, with amendment. Part 4 of the Act of 2008 dealt with seizing, confiscation and forfeiture of property and Chapter 3 of that Part dealt with confiscation of property and provided in s. 51 for confiscation cooperation orders. The Act of 2008 came into operation on 1st September, 2008, and thereafter, the provision of mutual assistance to other jurisdictions is governed by its provisions. Section 6(3) of the Act of 2008 provided that:
21. It is central to the issue raised by the respondent in this Court that applications for confiscation cooperation orders fall within the provisions of s. 11 (7)(b) of the Statute of Limitations Act 1957. The respondent contends that confiscation cooperation orders fall within the ambit of that section of the Statute of Limitations Act 1957, and further contend that all proceedings fall within the Statute of Limitations unless they are plainly excluded from falling within any of the provisions of that statute. The respondent contends that the application for confiscation cooperation orders cannot be brought after the expiry of two years from the date upon which the cause of action accrued. The confiscation cooperation order in this case was made against the respondent on 15th October, 2010.
22. The date claimed by the respondent as the date upon which the cause of action accrued was identified in the written submissions as being the 25th January, 2005, which was the date upon which it was claimed that the UK confiscation order became final. During the course of oral argument, the date relied upon on was altered to the 21st December, 2005, which was the date upon which the respondent notified the UK authorities of her intention to abandon her appeal against the confiscation order resulting in the confiscation order thereby becoming final. The applicant argued that insofar as the accrual of the cause of action was relevant, it being contended that it was not relevant due to the fact that the Statute of Limitations Act 1957 did not apply, that the cause of action for a confiscation cooperation order did not and could not accrue until a request to the Central Authority for the enforcement of an external confiscation order was received. That request was made on 18th August, 2010, and is therefore the applicant's contention that even if the provisions of the Statute of Limitations Act 1957 apply, that the application made in this case was made within two years from the date upon which the cause of action accrued.
23. Section 11(7)(b) of the Statute of Limitations Act 1957, provides in the section dealing with actions in contract and tort and certain other actions:
25. The second ground relied upon by the respondent is that an application for a confiscation cooperation order under s. 51 of the 2008 Act, is an action to recover a penalty or a forfeiture, or a sum by way of either, and is therefore expressly covered by the provisions of s. 11(7)(b) of the Statute of Limitations. In addressing that argument, the Court must consider the nature of the relief being sought in a confiscation cooperation order. The respondent claims that an application for a confiscation cooperation order is an application seeking both the recovery of a penalty and also an action for forfeiture. In making that argument in relation to forfeiture, the respondent combines the concepts of confiscation and forfeiture. The respondent fails to recognise the distinction between confiscation of property and forfeiture of property. Chapter 3 of the Act of 2008, deals not with the forfeiture of property, but with confiscation of property and the sections within that Chapter cover both domestic and external confiscation orders. Section 31 in Part 4 of the Act provides a statutory definition of a confiscation order and in s. 31(1), a confiscation order is defined in the following terms:
(a) recovering property in the State which was received or obtained as a result of or in connection with conduct which would, if it occurred in the State, constitute an indictable offence,
(b) recovering the value of such property,
(c) depriving a person of a pecuniary advantage so received or obtained."
26. Section 9 of the Act of 1994 lays down the legislative provisions in this jurisdiction which have to be satisfied before a confiscation order under s. 9 can be made. Those provisions mirror the analysis of the provisions in England considered by Lord Bingham in the case of R. v. May  1 AC 1028. Lord Bingham considered the central structure of a confiscation order and the regime under the 1986 UK Act (at p. 1034) and he stated in relation to that regime that:
28. A court does not come to consider the making of a confiscation order until the penalty or sentence has already been imposed. The fact that a confiscation order cannot exceed the amount that might be realised at the time that the order is made identifies the true nature of a confiscation order. A confiscation order or confiscation cooperation order, is recoupment. It is not the imposition of a penalty or a punitive sanction. This Court is satisfied that the respondent's claim that a confiscation cooperation order is, in the nature of a penalty, is incorrect and inconsistent with the provisions of the Acts of 1994 and 2008 Act, and the regime therein identified. A confiscation order or a confiscation cooperation order is not a penalty and therefore does not come within the use of that term as set out in s. 11(7)(b) of the Statute of Limitations Act 1957.
29. Section 51 of the Act of 2008, provides for confiscation cooperation orders and s. 51(5) provides that the court (a) may vary or discharge a confiscation cooperation order on the application of any person claiming to have an interest in the property concerned ... and (b) shall (i) vary a confiscation cooperation order in accordance with any variation made in the external confiscation order and (ii) if satisfied that the external confiscation order has been revoked or has been set aside in accordance with the law of the designated State concerned, discharge it". The following section in the 2008 Act deals with enforcement of confiscation cooperation orders and provides that where the High Court makes a confiscation cooperation order for the payment of a sum of money that order in the absence of an application to vary or discharge it, can thereafter be enforced by "the Director of Public Prosecutions at any time after it is made ... as if it were a judgment of the court for the payment to the State of the sums specified in the order". An application under s. 52 of the 2008 Act, is made by the Director of Public Prosecutions and is not made by the Minister whose role is simply to act on foot of a properly constituted request to seek a confiscation cooperation order. Part of the effect of a confiscation cooperation order is to preserve the relevant property in the State to satisfy any enforcement application that may or may not be made at a later stage. For confiscation to arise another application must be made. It follows that the relief granted by way of an application for a confiscation cooperation order is different and separate from forfeiture. It does not amount, as is claimed by the respondent, to the forfeiting of assets.
30. An order under s. 51 of the 2008 Act is an order for a confiscation cooperation order and that order can be thereafter varied or discharged and s. 51(5) expressly provides for such variation or discharge. The following section in the 2008 Act, s. 52 provides that where the High Court has made a confiscation cooperation order for the payment of a particular sum that a separate application must be made to enforce the confiscation order, that application being made by the Director of Public Prosecutions. The statutory scheme provided in the Act of 2008, is similar to the scheme which exists under the Proceeds of Crime Act 1996, as amended. Under that legislation a s. 3 order made under the Proceeds of Crime act 1996, as amended, is not and cannot be equated with an order for forfeiture.
31. The respondent in this case relies upon a statement by Keane C.J. in Murphy v. G.M. 4 I.R. 113, at (p. 137) where he stated in relation to s. 3 orders under the proceeds of Crime Act 1996:-
33. As a s. 51 order under the Act of 2008, is neither a penalty nor a forfeiture, it follows that the provisions of the s. 11(7)(b) of the Statute of Limitations Act 1957, can have no application.
34. In the F. McK v. G. W.D case, Fennelly J. in his judgment expressly identified (at p. 484) that given his finding in relation to the nature of a s. 3 order that it was unnecessary in that case to decide whether an order made under s. 4 of the Proceeds of Crime Act 1996, amounted to a forfeiture for the purposes of the Act of 1957. In the case of McK v. H (Unreported, Finnegan J., High Court, 12th April 2002), the Court held that the provisions of the Statute of Limitations s. 11(7) have no application to actions taken under the Proceeds of Crime Act 1996, having held (at p 8):
39. Even if the provisions of s. 11(7) of the Statute of Limitations Act 1957, did apply to an application for a confiscation cooperation order such proceedings or action would not be statute barred until two years from the date on which the cause of action accrued. The respondent contends that the cause of action accrued on the 21st December, 2005, which was the date upon which the respondent notified the UK authorities of her intention to abandon her appeal against the confiscation order and when the confiscation order thereby became final. The applicant in this case contends that if the provisions of s. 11(7)(b) of the Statute of Limitations Act 1957, apply that the cause of action did not and could not accrue until a request was made under s. 50 of the Act of 2008. That request was made on the 18th August, 2010, and the proceedings for as. 51 cooperation order were commenced within two years of that date and that it therefore follows that even if the provisions of the Statute of Limitations Act 1957 applied, that the action was brought within two years from the date upon which the cause of action accrued.
40. An accrual of a cause of action has been identified and defined by reference to a statement of Lord Esher M.R. in Read v. Brown (1888) 22 Q.B.D. 128, 131, applying Cooke v. Gill (1873) L.R. 8C.P. 107 at 116, as arising when "every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment of the court" has occurred. The approach provided for in the Statute of Limitations Act 1957, is that time commences to run from the date of accrual of the cause of action until the date upon which an action is commenced. An action is defined in s. 2(1) of the 1957 Act as including "any proceeding ... in a court established by law". The cause of action accrues when every fact which is necessary for an applicant to prove, if traversed, in order to support his right to judgment has occurred. In this case, no application for a confiscation cooperation order can be made until a request has been made to the State for its enforcement. Under s. 51(4), the High Court cannot grant a confiscation cooperation order unless it is satisfied that an application is made with the consent of the Minister and that consent cannot be made until a request is received. The Minister cannot commence proceedings for a confiscation cooperation order until the receipt of a formal request and as the Minister's consent is a necessary proof to support the making of a confiscation cooperation order, this Court is satisfied that the date of accrual of the cause of action for a confiscation cooperation order could not have accrued until the receipt of the letter of the 18th August, 2010, at the earliest. Since the application for a confiscation cooperation order was commenced within two years from that date it follows that even if the provisions of s. 11(7)(b) of the Act of 1957 did apply, that the application for a confiscation cooperation order was made within two years from the date upon which that cause of action accrued. Any question of delay is a separate and distinct matter.
41. For the reasons set out above, this Court is satisfied that the application for a confiscation cooperation order under the Act of 2008, is not statute barred and since that is the only matter relied upon, over and above certain proofs, it follows that the applicant is entitled to the order sought. The court has already, in an ex tempore 23 judgment, ruled that it is satisfied that the proofs necessary for the granting of a confiscation cooperation order have been established. The court will therefore make the order sought by the applicant.