High Court of Ireland Decisions

THE HIGH COURT

2000 No. 9060P

IN THE MATTER OF THE PROCEEDS OF CRIME ACT 1996

BETWEEN

Mc K

PLAINTIFF

AND D

DEFENDANT

JUDGMENT of Mr. Justice Finnegan delivered on the 31st day of July 2002

This is an application for an order pursuant to the Proceeds of Crime Act 1996 section 3 thereof in respect of premises in Co. Wicklow together with the furniture, fittings and contents therein and thereon the premises being those comprised in a Folio of the Register County Wicklow. The premises were valued at £120,000 stg. in 1992 and at £360,000 I.R. on the 19th February 2000.
The Defendant was born in 1939. He has a criminal record extending from the 27th February 1962 including convictions for road traffic offences, shop breaking, malicious wounding,
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assault, handling stolen goods, robbery, suborning members of a jury, possession of controlled drugs and possession of firearms all within the United Kingdom. He was first sentenced to imprisonment on the 18th July 1962 and thereafter in 1963 was sentenced to three years corrective training, in 1965 six months imprisonment, in 1966 to two years imprisonment, in 1969 to three years imprisonment, in 1974 to two years imprisonment suspended, in 1976 to a total of nine years imprisonment, in 1983 four years imprisonment, in 1992 nine months and nine years imprisonment. He was sentenced to three years imprisonment consecutive to the last mentioned sentence for failure to comply with a Confiscation Order for £140,000 stg. made on the 18th November 1992.

The premises the subject matter of this application were purchased by the Defendant in late 1998 - early 1999 without the aid of a mortgage and for the consideration of £I.R.128,000 By transfer dated 26th April 1993 he transferred the premises to his partner for the sum of £5. She contemporaneously executed an acknowledgement that she held the premises in trust for the Defendant and executed a transfer in his favour of the premises in consideration of £10 which transfer bears no date except the year 2000. The premises are at present occupied by his current partner. The following dates appear to me to be relevant in considering the evidence as to the source of funds utilised by the Defendant to acquire the premises. He would appear to have been almost continuously in prison from 1963 to 1971 and from December 1974 to the 14th December 1984. He appears to have been at large from the 14th December 1984 to the 20th October 1992. He was again in prison from the 20th October 1992 to the 4th April 2001. The only relevant period of significance during which he was at liberty and so capable of engaging in employment is that from 14th December 1984 to the 20th October 1992.
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Also relevant is the nature of the offences of which he was convicted on the 11th December 1992 - two counts of possessing a controlled drug of class A with intent, two counts of possessing a controlled drug of class B with intent, two counts of possessing a firearm. He was sentenced to a total of nine years imprisonment for these offences. At the same time a Confiscation Order for £140,000 stg. to be effected within twelve months was made and on failure to comply he was to serve a further term of three years imprisonment consecutive to the sentence imposed. In fact he failed to comply with the Confiscation Order and served the three years imprisonment.
The Proceeds of Crime Act 1996 requires me to make an order pursuant to that section if it appears to me on evidence tendered by the Plaintiff including evidence admissible by virtue of section 8 of the Act that –

(1) The Defendant is in possession or control of specified property.

(2) In the circumstances of this case that the specified property was acquired in whole or in part with property that directly or indirectly constitutes the proceeds of crime and

(2) That the value of the property is not less than £I.R.10,000

Section 8 of the Act provides that where a member or an authorised officer of the Criminal Assets Bureau in oral evidence on an application pursuant to section 3 of the Proceeds of Crime Act 1996 states his belief that the Defendant is in possession or control of the property and that the property was acquired in whole or in part with property that directly or indirectly constitutes the proceeds of crime and is valued at not less than £I.R.10,000 then if the court
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is satisfied that there are reasonable grounds for that belief the statement shall be evidence of those matters. The order shall be made unless it is shown to the satisfaction of the court on evidence tendered by the Defendant or any other person that the property was not acquired in whole or in part with property directly or indirectly constituting the proceeds of crime or if it is satisfied that there would be a serious risk of injustice.

On the application the Plaintiff an authorised officer of the Criminal Assets Bureau gave evidence pursuant to section 8 of the Proceeds of Crime Act 1996 satisfying me as to the requirements of section 3 of the Proceeds of Crime Act 1996. As to the grounds for the belief of the Plaintiff the Plaintiff relied on information furnished to him by Detective Constable T M of New Scotland Yard and Detective Garda D L of the Criminal Assets Bureau both of whom gave evidence and I am satisfied on the evidence before me of these two witnesses that there are reasonable grounds for the Plaintiff s belief. Accordingly on this application I must make an order unless I am satisfied on evidence by the Respondent or other witnesses called by him that the property was not acquired in whole or in part with proceeds of crime or the value of the property does not exceed £I.R. 10,000
As to the value of the property I have evidence of two valuations carried out upon the same one in 1992 and the other in 2000: further it is not an issue that the value of the property exceeds £I.R.10,000
The Defendant gave evidence as to the source of the funds utilised by him to acquire the premises. In short his evidence is that in the period between December 1984 when he was released from prison and late 1988 - early 1989 when he purchased the property he carried on business dealing in mens clothing primarily mens shirts and jumpers. He purchased from
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importers and wholesalers and sold them to others to retail to the public. The business operated in the black economy. He gave up this business in 1991. His principal income however was derived from greyhounds both by conducting successful gambling coup and as a trainer and owner by buying dogs in Ireland and racing them in England. Many of his dogs were trained by a greyhound trainer M B. One of his dogs finished third in the Irish Greyhound Derby and he collected a prize of £4,000 for this. There is little to corroborate the Defendant's evidence. His partner in his clothing enterprise M M died in 1999. His greyhound trainer M B died in 1998. No records are available of the clothing enterprise. Again the lapse of time between 1991 and the commencement of these proceedings might well have caused the Defendant difficulty in obtaining corroborative evidence of his trading and gambling activities. A final difficulty which he faced is that he was only released from prison on the 4th April 2001 while this application came on for hearing on the 15th May 2001 so leaving him little time within which to prepare for the same. Because of these difficulties I accepted as evidence a statutory declaration of M M, greyhound trainer of Rochester, Kent that he trained greyhounds for the Defendant in the period 1985 - 1990, as many as ten greyhounds at any one time, and that the Defendant was a successful gambler. I accept the Defendant's evidence that he carried on the clothing enterprise and I accept the evidence that overall his gambling activities were profitable rather than as one might ordinarily expect conducted at a loss. However the Defendant has not satisfied me that the premises were not acquired at least in part by the proceeds of crime. In these circumstances unless the Defendant succeeds on legal objections which he has raised to the making of an order pursuant to section 3 I must make such an order.

A number of legal objections to the making of the order sought were raised by the Defendant and I propose to deal with each of these in turn.
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(1) The Proceeds of Crime Act 1996 applies only to crimes committed within this jurisdiction.

This matter was dealt with in the Director of Public Prosecutions & Others v Ernst Hollman and Others The High Court O'Higgins J. 29th July 1999 and M.V.M & Others The High Court 4th June 1999. I regard the law as correctly stated in those decisions of O'Higgins J. and I adopt the same. The Defendant's argument accordingly fails.
(2) It is not in the interests of justice to make the order sought having regard to the delay in making the application.
It is clear that the crimes relevant to this application must have been committed prior to the early months of 1993 and clearly there has been a lapse of time. A Plenary Summons was issued on the 3rd August 2000. In this regard I have already mentioned that two witnesses whose evidence might have been relied upon by the Defendant have died. It is possible that some prejudice might also have arisen by reason of the Defendant's business of dealing in clothing having terminated as long ago as 1991: however the business operated in the black economy and I am not satisfied that any documentation of significance would have been available had these proceedings been commenced at a much earlier date. However on the evidence of Chief Superintendent McK the Plaintiff only became aware of circumstances affecting the Defendant upon receipt of an anonymous letter on the 18th November 1999. Having regard to this date and the date of the institution of the proceedings there has been no delay on the part of the Plaintiff in instituting the proceedings. Again the
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application for a section 3 order was issued on the 3rd August 2000 returnable for the 6th October 2000. They came on for hearing some six weeks after the Defendant's release from prison in the United Kingdom. There was no delay on the part of the Plaintiff either in instituting or prosecuting these proceedings. In these circumstances the application is not an abuse of process and there is no basis upon which they should be struck out on grounds of delay.

(3) The issue of the confiscation of the Respondent's property is res judicata.

On the 18th November 1992 consequent upon the conviction of the Defendant for drug trafficking offences an order was made pursuant to the Drug Trafficking Offences Act 1986 section 1 whereby the Defendant was ordered to pay on or before the 18th day of November 1993 the sum of £140,000 stg. and in default to serve three years imprisonment consecutive to any term of custody which he was liable to serve for the substantive offences. I have heard evidence of P G, a Barrister at Law qualified to practise in England and Wales as to the effect of this order and I accept that where a term of imprisonment is served in default of payment on foot of a Confiscation Order this has the effect of satisfying the Confiscation Order: see R v. Court of Hagnall Justices ex parte Smyth 1988 152 Justice of the Peace 475.
I am satisfied that res judicata can have no application in the present circumstances. The order made in the United Kingdom under the Drug Trafficking and Offences Act 1986 section 1 on the 18th November 1992 was, having regard to the terms of that section, based on the determination that the Defendant had benefited from drug trafficking. Having made that determination that court in accordance with section 4
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of the Act had to assess the value of the Defendant's proceeds of drug trafficking: specifically the court was concerned with proceeds not solely of the offences in respect of which there has been a conviction: see section 3 of the Act. The Confiscation Order was satisfied in part by the realisation of the Defendant's assets and insofar as it was not so satisfied it was satisfied by the Defendant serving the term of imprisonment imposed in default of his satisfying the Confiscation Order within its terms. Accordingly he has no further liability on foot of the order of 18th November 1992. The present claim is brought pursuant to the Proceeds of Crime Act 1996 the object of which was stated by O'Higgins J. in D.P.P. & Others v Hollmann & Others The High Court unreported 29th July 1999 as follows –

"In my view the Act applies to the proceeds of crime even if the crime is committed outside the State notwithstanding the failure of the legislation to explicitly say so. The object of the Act is the divestment of assets generated by or in connection with crime. I agree with the submission of Counsel that there is no reason why this objective should be limited to offences committed in this jurisdiction and there are many reasons why it should not. It would be strange indeed if the legislature be deemed to have intended that persons committing criminal offences in another jurisdiction were free to obtain money from that crime and retain it in Ireland while those engaging in the same crime here would be liable to have the assets from similar offences forfeited. These are not criminal proceedings. They are based on the public policy consideration that people should not have in this State the enjoyment of the benefits of assets accumulated as a result of crime".

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I believe this to be a correct statement of the object of the Act of 1996. As I am satisfied to the extent required by section 3 of that Act that the Defendant is in possession of the premises and that the same were acquired with the proceeds of crime (the Defendant having failed to satisfy me that the premises were not acquired in whole or in part with the proceeds of crime) I am enjoined by section 3 to make the order sought if I am to give effect to the legislative intention. Res judicata could only apply if the Plaintiff in the two relevant actions is the same. The Plaintiff in the United Kingdom proceedings was the Crown and not the Plaintiff in the present proceedings. In these circumstances res judicata cannot apply.

(4) The Proceeds of Crime Act 1996 does not extend to property the proceeds of a crime committed prior to the 4th August 1996 the date upon which the Proceeds of Crime Act 1996 came into effect.

This argument fails on the definition of "proceeds of crime" contained in section 1 of the Act –

"Proceeds of crime" means any property obtained or received at any time (whether before or after the passing of this Act) by or as a result of or in connection with the commission of an offence."

The definition must be given its ordinary and natural meaning and this requires the Act to be interpreted as applying to the proceeds of crime whenever the crime was committed and whenever the property sought to be attached was acquired utilising the proceeds of crime and whether before or after the coming into effect of the Act.
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(5) The Proceeds of Crime Act 1996 section 3 is unconstitutional as infringing Article 15.5 of the Constitution of Ireland.

The Constitution in Article 15.5 provides as follows –

"The Oireachtas shall not declare acts to be infringements of the law which were not so at the date of their commission".

The Applicant relies on a passage in the Judgment of the Supreme Court in Doyle v An Taoiseach 1986 ILRM 693 at 715. The Finance Act 1980 section 79 purported to confirm the validity of S.I. No. 152 of 1979 which imposed liability for a levy payable by the vendor of cattle on the proprietor of the slaughterhouse where the same were slaughtered or the exporter of the cattle where the same were exported. In delivering the Judgment of the court Henchy J. at page 715 said –

"Counsel for the Defendants has submitted that any invalidity affecting S.I. No. 152 of 1979 was cured when it was expressly confirmed by section 79 of the Finance Act 1980. There might be force in that submission if the period of the operation of the levy came after the passing of the Act. However the levy was expressed to operate only from May - December 1979. Section 79 of the 1980 Act must be read subject to the presumption that it was intended to operate prospectively and not retrospectively: see the Judgments of this court in Hamilton v Hamilton (1982) I.R. 466. If it were to be held to operate retrospectively, it would have the effect of making, ex post facto,

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nonpayment of the levy in 1979 an infringement of the law. Such a result would make section 79 invalid having regard to Article 15.5 of the Constitution".

This passage must however be read in the context of the circumstances giving rise to the action. The Plaintiff's argument was that if the Act were to be construed as having retrospective effect they would be unable to comply with its terms and would therefore become liable to an excise penalty. It is clear that if it was indeed the legislative intention that the Act of 1980 section 79 was to have retrospective effect in exposing those affected by it to an excise penalty it would infringe Article 15.5 of the Constitution: it was therefore appropriate to construe the Act as having prospective effect only. In the present case the legislature having regard to the definition of proceeds of crime clearly intended that the Act should have retrospective effect insofar as it was intended to apply to the proceeds of crime whenever that crime might have been committed. I do not regard the passage quoted as authority for the proposition advanced by the Defendant. In McGee v Culligan 1992 1 I.R. 233 the Supreme Court was concerned with the Extradition (European Convention on the Suppression of Terrorism) Act 1987. The Act provides in section 1(4) that the Act applies to an offence whether committed or alleged to have been committed before or after the passing of the Act. The Plaintiff in that case had been convicted of offences in May 1980 and were it not for the passing of the Act of 1987 and section 3 thereof would not have been amenable to extradition in respect of the same they being political offences. At page 271 of the Report Finlay C.J. said –

"Section 3 of the Act of 1987 to which section 1(4) applies, in the context of this case, does not declare any Act to be an infringement of the law and, therefore of course,

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does not declare any Act to be an infringement of the law which was not so at the commencement of the Act of 1987. Section 3 merely makes a statutory amendment to what was a developing jurisdiction concerning the definition of a political offence for the purposes of the Extradition Act 1965, as amended. It does not create any offence or any infringement of the law in our jurisdiction.

The court is satisfied that the provisions of Article 15.5 of the Constitution are an express and unambiguous prohibition against the enactment of retrospective laws declaring Acts to be an infringement of the law, whether of the civil or the criminal law. It does not contain any general prohibition on retrospection of legislation, nor can it by any means be interpreted as a general prohibition of that description"

This was the approach adopted by the Supreme Court in Gilligan v Criminal Assets Bureau & Others Supreme Court McGuinness J. 26th June 1997 where having referred to the definition of proceeds of crime she says –

"The Oireachtas has not, by this definition, declared any Act to be an infringement of the law which was not so at the time of its commission. The acquisition of assets which derive from crime was not a legal activity before the passing of the 1996 Act and did not become an illegal activity because of the 1996 Act. The decision of the Supreme Court in this matter is binding on me and accordingly the Defendant's argument on this basis fails.

(6) The Plaintiff s claim is barred pursuant to the provisions of the Statute of Limitations 1957 section 11(7)(b).

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Having heard argument in this case I was asked to leave over giving Judgment until such time as I heard argument on this issue in the High Court 2001 No. 10513P Felix J. McKenna Plaintiff and Eugene Hanratty Defendant. I gave Judgment in that matter on the 12th April 2002. For the like reasons therein set out I am satisfied that the provisions of the Statute of Limitations 1957 section 11(7)(b) have no application to actions taken under the Proceeds of Crime Act 1996.
Having regard to the foregoing I propose to make the Order sought pursuant to the Proceeds of Crime Act 1996 section 3 thereof.