THE HIGH COURT
2000 No. 12569P
BETWEEN
F K
PLAINTIFF/APPLICANT
AND
T H AND J H
DEFENDANTS/RESPONDENTS
Judgment of Finnegan J. delivered the 31st day of October, 2001
1. This is a motion in which the plaintiff/applicant seeks an order pursuant to the Proceeds of Crime Act, 1996 Section 7 thereof appointing a Receiver over premises in Co. Cork (hereinafter called “the premises”) and the conferring upon him of a power to sell the premises together with all necessary or appropriate ancillary directions. A.I.B. Bank are entitled to a charge on the premises and appear as a notice party on this motion and will abide by any order which I may make on the motion.
2. On the 29th of June 2001 an order pursuant to the Proceeds of Crime Act, 1996 Section 3 was made by Mr Justice O’Sullivan which entailed his finding that while the title to the premises is vested in the second named defendant/respondent they represent the proceeds of crime comprising profits from drug trafficking of the first named defendant/respondent. The first named defendant/respondent made no claim to any beneficial interest in the premises before Mr Justice O’Sullivan or before me. The second named defendant/respondent however unsuccessfully maintained before Mr Justice O’Sullivan that he had from his own assets acquired the site of the premises and caused the dwelling house thereon to be constructed with the aid of a loan advanced to him by A.I.B. Bank which loan is secured on the premises and the repayments in respect of which he had himself discharged. The first named defendant/respondent with his partner and their children occupies the premises and on an irregular basis pays sums of £75 rent to the second named defendant/respondent.
3. I am mindful that the office of Receiver (including a Receiver appointed pursuant to statute) has its origin in the Court of Chancery: it is appropriate to have regard to equitable principles in exercising the statutory discretion conferred by the Proceeds of Crime Act, 1996 Section 7 and I do so. For this purpose I deferred ruling on the plaintiff’s motion to allow time for me to reconsider all papers from the inception of these proceedings. Having done so I am satisfied that there is no equity which makes the appointment of a Receiver and a sale of the premises inappropriate.
4. The second named defendant/respondent opposes the making of the orders sought on the basis that the order of Mr Justice O’Sullivan is defective in that there was no compliance with the Proceeds of Crime Act, 1996 Section 3(2)(b).
5. The Proceeds of Crime Act, 1996 Section 3(2) provides as follows:-
“(2) An interlocutory order -
(a) may contain such provisions, conditions and restrictions as the Court considers necessary or expedient, and
(b)
(c) shall provide for notice of it to be given to the respondent and any other person who appears to be or is affected by it unless the Court is satisfied that it is not reasonably possible to ascertain his, her or their whereabouts.”
6. The order of Mr Justice O’Sullivan has not yet been perfected: if the order when perfected does not provide for such notice as is required to be given I am satisfied that that defect can be remedied on application to Mr Justice O’Sullivan pursuant to the Rules of the Superior Courts Order 28 Rule 11 upon the basis that the omission is an accidental slip or omission. See Concorde Engineering Limited v. Bus Átha Cliath [1996] 1 I.L.R.M. 533. Alternatively an application can be made to Mr Justice O’Sullivan for directions as to service of the order and this even if there is no express liberty to apply granted by the order: if the judgment is not final as a matter of law there is implied liberty to apply: Penrice v. Williams [1883] 23 Ch. D.353: if the order is a final judgment an application can also be made: Websdell v. Jenkins [1902] Sol. Jo. 484.
7. With one exception, on the evidence before me, there is no person other than the defendants/respondents and the notice party who are or who appear to be affected by the order. The first named defendant/respondent as the beneficial owner as found by Mr Justice O’Sullivan or in the alternative as the person in occupation and the second named defendant/respondent as the person entitled to the legal estate and the notice party as chargee of the premises are persons who are or appear to be affected by the Order. I am satisfied that Section 3(2)(b) requires notice of the order made pursuant to Section 3 to be given only to those persons who are or appear to be affected by the order who are not before the court: see reasoning in Nestor v. Murphy [1979] I.R. 326. On behalf of the second named defendant/respondent it is argued that his wife is affected by the order in that as part of the security for its advance A.I.B. Bank hold the mortgage or charge over her family home. Such charge to the extent that the same is so held will be discharged out of the proceeds of sale of the premises: I will ensure this by including in any order I may make a condition to that effect pursuant to the Proceeds of Crime Act Section 7 and she can accordingly have no concern of substance in regard to her family home. It seems to me however that she is indeed a person affected by the interlocutory order and so ought to be given notice of the same and accordingly it is appropriate that an application be made to Mr Justice O’Sullivan to provide in his order that notice of the making of the same be given to her. Even if the order of Mr Justice O’Sullivan has been perfected without providing for such notice to be given the order is not void: non-compliance with the Section can be remedied in the manner which I have indicated by application to Mr Justice O’Sullivan.
8. It was further argued on behalf of the second named defendant/respondent that having regard to the definition of respondent service on others is also mandatory. The Act in Section 1 thereof defines respondent as follows:-
“ ‘the respondent’ means a person in respect of whom an application for an interim order or an interlocutory order has been made or in respect of whom such an order has been made and includes any person who but for this Act would become entitled, on the death of the first named person, to any property to which such an order relates (being an order that is in force and is in respect of that person)”
9. The second named defendant/respondent has a wife and children other than the first named defendant/respondent and it is argued that but for the Act they would become entitled to the premises on his death and accordingly it is argued that pursuant to Section 3(2)(b) of the Act notice to them of the interlocutory order ought to have been provided for in the order. These persons have no vested interest in the premises. They have no more than a spes or hope that they might benefit under the will or on the intestacy of the second named defendant/respondent. I am satisfied that the definition of respondent does not extend to such persons. They are in no better position in terms of entitlement than a close friend who or a charity which had an expectation of benefit under a will. It would be an unreasonable interpretation to require notice to be given to such and accordingly I find that notice to such persons is not required pursuant to Section 3(2)(b) of the Act.
10. The wife under the Succession Act, 1965 Part IX and the children under the Succession Act, 1965 Section 117 might have some expectation of a benefit on the death of the second named defendant/respondent: but an expectation in this sense differs from an entitlement. I am satisfied that the Section speaking of an entitlement is concerned with a present right to a future benefit such as a vested interest in remainder. Even a joint tenant would not come within the definition as entitled as such an interest is contingent on the joint interest not being severed and on the relevant joint tenant surviving his co-owner.
11. Objection is made by the second named defendant/respondent to the proposed Receiver Mr G on the basis of his close association with the Criminal Assets Bureau. Notwithstanding this objection I am satisfied that Mr G is an appropriate person to be appointed Receiver. Upon appointment he will become an officer of the court and will be answerable to the court for his conduct of the receivership and this represents a sufficient safeguard to the second named defendant/respondent.
12. I will hear counsel as to the appropriate terms of the orders which I should make in this matter.