Supreme Court of Ireland Decisions

1. In these cases the defendants/respondents and the plaintiff/appellant respectively have sought declarations that some or all of the provisions of the Proceeds of Crime Act, 1996 (hereafter the “1996 Act” ) are invalid having regard to the provisions of the Constitution. In the first case, the defendants/respondents have also challenged the validity of certain orders made by the High Court in purported exercise of certain powers conferred by the 1996 Act on the court. The first part of this judgment is concerned with the non-constitutional issue raised in the first case. The second part is the judgment of the court on the constitutional issue raised in both cases.

2. The plaintiff in the first proceedings is a Detective Chief Superintendent in An Garda Síochána. He has instituted the proceedings as a member of the gardaí within the meaning of the 1996 Act and in them he seeks:

3. In an affidavit, sworn on the 28th July 1997, Det. Sgt. William P. O’Brien, a bureau officer of the Criminal Assets Bureau appointed under s. 8(1) of the Criminal Assets Bureau Act 1996, said that the first named defendant (hereafter “GM”) had been involved in facilitating armed robberies and hijackings since 1975. He said that he was a known “facilitator” providing guns and transport (sometimes stolen) for such criminal activity and was particularly well known as a receiver of large quantities of stolen property.

4. Mr. O’Brien said that GM had one criminal conviction, involving stolen property, having been convicted on 15th January 1988 by the Dublin Circuit Court for receiving stolen goods valued £107,000 approximately, in respect of which conviction he received a sentence of five years imprisonment.

5. Mr. O’Brien said that, in common with a number of other prominent criminals who had been active in armed robberies, GM became involved in the importation of controlled drugs, mainly cannabis and ecstasy, on his release from prison and, in association with known large scale drug dealers, organised the transport by other persons of drugs so as to ensure that, if the shipments were intercepted by gardaí or customs, he would not be liable to criminal convictions.

6. Mr. O’Brien said that he believed GM was the person behind, or at least partly involved in, the financing of a shipment of 50 kilos of cannabis resin which was seized by gardaí at the M50 motorway, Dublin, while in the possession of one John Doran. He said that the latter had been a close associate of GM since 1975 at least and had been sentenced to 12 years imprisonment in November 1994 in respect of this offence.

7. Mr. O’Brien said that GM was named in a trial in England in early 1997 by one Michael Boyle, who has been tried for attempted murder, as the person who had hired him (Boyle) to murder his intended victim. Mr. O’Brien said that GM’s wife and one or more of his children reside at a stated address in Palmerston, Dublin, but that GM himself had left Ireland and was staying at a stated address in the Netherlands. The apartment in question was owned by one Johannes Anthonius Bolung who had been charged in The Netherlands with a violation of the Opium Act, handling and receiving stolen goods, and five cases of theft, assault and battery and fraud.

8. Mr. O’Brien said that PB had been a close associate of GM for some time. He had stood trial in April 1995 in England with one Edward Phelan: both were convicted on 12 counts of theft and forgery and sentenced to three years imprisonment. PB absconded during the final week of his trial and was convicted in his absence. Mr. O’Brien said that he had been informed by the London Metropolitan Police that extradition proceedings in respect of PB had failed in September 1996 but were likely to be recommenced. As part of the sentence, PB was prohibited from being a director of a company for a period of five years, but he (Mr. O’Brien) had been informed by PB and the solicitor that it was intended to appeal the conviction.

9. Mr. O’Brien said that the statements made by him in the affidavit as to the activities of GM were based on garda information in his possession, the source and precise contents of which he did not wish to reveal for operational reasons.

10. Mr. O’Brien said that an extensive investigation had been carried out by bureau officers of the Criminal Assets Bureau. During their investigations, the solicitors’ offices were searched pursuant to a search warrant issued under s. 14 of the Criminal Assets Bureau Act, 1996. Mr. O’Brien said that in the course of that search a file was seized which was suspected to contain evidence of the whereabouts of the proceeds of the criminal activities of GM. On examination, the file was found to contain instructions in July 1996 from GM and one David Doran to the effect that funds would be deposited in the client account of the solicitor to be at the disposal of PB in connection with a property deal in the United Kingdom to the value of one million pounds. He said that the file also indicated that the third named defendant (hereafter “the company” ) was controlled by GM and PB.

11. Mr. O’Brien said that on the 23rd July 1997 he called to the offices of the solicitor, who informed him that he was holding approximately £300,000 in his client account for PB. He said that the sum of £300,000 was shortly to be paid out in pursuance of an agreement dated 30th May 1997 in a transaction involving the purchase of United States railroad bonds.

12. Mr. O’Brien said that he subsequently telephoned the solicitor and advised him that he (Mr. O’Brien) suspected that the £300,000 was the proceeds of crime and was being “laundered” using his client account. He requested him not to deal in any way with the funds. The solicitor denied knowing any person by the name of GM or that he was a client of the office. Mr. O’Brien said that he urged him to check his client ledgers and any other client files he might have had. Mr. O’Brien said that the solicitor in the course of the conversation told him that he was under pressure from his client and asked him (Mr. O’Brien) to fax a message to him advising that money laundering was suspected. However, before he had time to send him a fax, he received two faxes from the solicitor advising that

13. He subsequently sent a fax to the solicitor requesting him not to remove any monies referable to PB, GM or any associate companies.

14. Mr. O’Brien said that he believed that GM and his associates were extremely violent criminals and were likely to attempt to use violence or threats of violence to force the solicitor to make the monies available.

15. The plaintiff applied to the High Court (Smyth J.) on the 28th July 1997 ex-parte for liberty to issue and serve a concurrent plenary summons against GM, for an order pursuant to s. 2 of the 1996 Act restraining the defendants or any of them or any person having notice of the making of the order from disposing or otherwise dealing with the sum of £300,000 and appointing Barry Galvin, solicitor, of the Criminal Assets Bureau as the receiver of that sum. Those orders were granted by Smyth J. and the plaintiff thereupon brought a notice of motion seeking similar restraining orders against each of the defendants, an order pursuant to s. 7 of the 1996 Act appointing a receiver to take possession of the sum of £300,000 and an order requiring GM, PB and the company to swear and deliver an affidavit specifying all property etc. of which they were in possession or control.

16. In a preliminary report exhibited with an affidavit filed by him on the making of that application, Mr. Galvin said that, immediately following the making of the ex-parte order by Smyth J., he travelled to the offices of the solicitor in Dun Laoghaire where he met the solicitor. The solicitor told him that he had paid some of the £300,000 into his client account in the Ulster Bank, Dun Laoghaire and that the balance had been lodged by him into a solicitor’s reserve account in a branch of the National Westminster Bank in London. Having telephoned the bank in London, he told Mr. Galvin that the amount to credit in that account was £181,356.20 sterling and that the balance standing to credit in the Dun Laoghaire bank was £118,643.80. At

17. Mr. Galvin’s request, the solicitor signed an authority directing the London bank to give to Det. Gda. Cliona Richardson a bank draft in the amount of £181,365.20 sterling payable to Mr. Galvin. He also received from

18. Mr. H. a cheque in the amount of £118,643.80 drawn on the Ulster Bank client account. Det. Gda. Richardson travelled to London on the 28th July 1997 and collected a bank draft in favour of Mr. Galvin in the amount of £181,365.20 which she gave to Mr. Galvin. Those sums were paid to a receivership account opened by Mr. Galvin at the Camden Street branch of the Bank of Ireland.

19. In a further affidavit dated the 7th October 1997, Mr. O’Brien said that in the course of a search of premises which he did not wish to identify he had seized copies of two bank drafts in the amount of £25,000 sterling and £23,000 both payable to GM and purportedly endorsed by him which, he said, together with other monies totalling £169,746.36 were lodged by credit transfer to the client account of the solicitor in his Dun Laoghaire bank on the 30th September 1996. He said that he also searched the dwelling house of PB on the authority of a search warrant, during the course of which a document was seized purporting to be a contract dated the 28th April 1996. He said that, as a result of an examination of a computer also seized during the course of the search, it was ascertained that this contract had been only recently created and that it was proposed to present this document which he described as fabricated before the High Court on affidavit as a false explanation of the source of part of the £300,000. He referred to reports prepared by a member of the staff of the Criminal Assets Bureau who was a qualified system administrator in computer applications and a detective garda in the computer crime investigation unit in support of this averment.

20. Affidavits were filed by PB and the solicitor. For reasons which will appear shortly, it is unnecessary to deal with their contents in any detail. It is sufficient to say that PB denied that the sum of £300,000 came from GM or represented in any way the proceeds of crime. The solicitor, although accepting that there were references to GM indicating that monies from him had come into the solicitor’s client account and that there were also references in his correspondence with the London bank to “our client GM” , denied that GM was at any stage a client of his office.

21. No appearance was entered in the proceedings by GM. The remaining defendants entered appearances and made submissions on the hearing of the application for the interlocutory order pursuant to s. 3(1) of the 1996 Act, which was heard by O’Higgins J. over a period of 28 days. As already noted, in addition to a number of non-constitutional issues being raised, the respondents were also given leave to challenge the constitutionality of the 1996 Act. In a reserved judgment delivered on the 4th June 1999, O’Higgins J. determined both the non-constitutional and the constitutional issues in favour of the plaintiff and granted an order pursuant to s. 3 of the 1996 Act prohibiting the defendants and each of them from disposing or for otherwise dealing with the sum of £300,000 and appointing Mr. Galvin receiver over the sum. From that judgment and order, PB, the company and the solicitor have now appealed to this court.

22. In the course of his judgment, O’Higgins J. made a number of findings of fact which can be summarised as follows. He did not accept the evidence of the solicitor that he had never received any monies from GM or that the latter was not his client. As to the source of the monies, having considered the evidence in detail, the learned High Court judge rejected in emphatic language the explanation for its genesis offered by PB and said that the latter had been involved in what he described as

23. He said that in the result he was satisfied that the respondents were in possession and control of £300,000 and that this money constituted, directly or indirectly, the proceeds of crime or was acquired in whole or in part with, or in connection with, property that, directly or indirectly, constituted the proceeds of crime.

24. The specific findings of fact on which the learned High Court judge founded his conclusion that the sum of £300,000 constituted the proceeds of crime and that the plaintiff was entitled to the relief which he was seeking were not contested on the appeal. The second and third named respondents had, however, contested the jurisdiction of the High Court to make the orders in question on a number of grounds, including the unconstitutionality of the 1996 Act, in the High Court and those grounds were again advanced on the hearing of the appeal in this court.

25. Before the non-constitutional issues are considered, I should set out the relevant provisions of the 1996 Act. It is described in its long title as

26. Subsection (2) provides that an interim order may contain such provisions, conditions and restrictions as the court considers necessary or expedient and 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.

27. Subsection (3) provides that, where an interim order is in force, the court, on the application of the respondent or any other person claiming ownership of any of the property concerned may discharge or, as may be appropriate, vary the interim order. That can be done where it is shown to the satisfaction of the court that the property concerned or a part thereof is not, directly or indirectly the proceeds of crime or that the value of the property is less than £10,000. Subsection (4) provides that the court shall, on an application at any time by the applicant, discharge an interim order.

28. Unless an interim order is so discharged, it is to continue in force by virtue of subsection (5) until the expiration of the period of 21 days from the date of its making. It then lapses, unless an application for the making of an interlocutory order is brought during that period: if such an application is brought, the interim order is to lapse upon

29. Subsections (3) and (4) contain similar provisions to those contained in

30. The first ground on which the order made in the High Court was challenged was that the court had no jurisdiction to make the interim order appointing Mr. Galvin as receiver or the interlocutory order to the same effect. It was submitted that, under the terms of s. 7(1), such an order could be made only where an interim order was “in force” . Since the receiver was appointed by the same order of Smyth J. dated the 28th July 1997 as also made a restraining order under s. 2, the interim order was not, it was said, “in force” at the time the receiver was appointed.

31. I am satisfied that this submission is wholly unsustainable. It was quite clear from the terms of the order that the order restraining the defendants from disposing of or otherwise dealing with the property was made first. At that point, the order was, within the meaning of s. 7(1) “in force” and the High Court had jurisdiction to make the further order, which it did, appointing the receiver. There is nothing whatever in the section to indicate that the legislature intended that an unspecified interval of time, whether measured in minutes, hours or days, should elapse between the application for an interim order and the appointment of a receiver. I have not the slightest doubt that it was envisaged that the two applications could be made at the same time, which is what happened here.

32. It was also suggested that the interlocutory order which effectively continued the appointment of Mr. Galvin as receiver was also made without jurisdiction since, as the £300,000 had been lodged to the credit of these proceedings, there was nothing further for him to do. At worst, however, the appointment of Mr. Galvin under the interlocutory order was otiose; the learned High Court judge was no doubt proceeding on the reasonable basis that, were a further order not made appointing him as receiver, his appointment under the interim order might be regarded as having come to an end when that order was spent.

33. The second ground of objection was that, at the time the interlocutory order was made, no person was “in possession or control” of the sum of £300,000. Once the receiver had lodged the money in question in the bank to the credit of these proceedings, it was said, the monies were in the possession or control of the High Court, which is not a juristic person.

34. If this submission were correct, it would inevitably follow that, in every case where a receiver was appointed following the making of an interim order but before an interlocutory order was made, the interlocutory order could never be made, since at that stage the property would be in the “possession or control” of the court. A construction leading to so patently absurd and unintended a result should not be adopted unless the language used leaves no alternative: see Nestor .v. Murphy (1979) IR 326. At the stage when the application for an interlocutory order is made, the property can be said to be in the “possession or control” of the receiver, but since the restraining order can be made prohibiting “the respondent or any other specified person” from disposing of or dealing with the property account the fact that it is in the receiver’s possession or control is of no consequence. I am satisfied that this argument is without foundation.

35. The third ground of objection was that, at the stage when the order was made under s. 2 and s. 7, £180,000 approximately of the money was in a bank account in London. It was submitted that there was no jurisdiction to make the order in respect of that sum because

36. On the facts as already summarised, no issue appears to have arisen for determination in relation to this matter. The solicitor, at the request of the receiver, transferred the money in the bank account in London to the latter. If he had declined so to do, an issue might then have arisen as to whether the receiver’s demand could have been enforced by the court. That did not happen.

37. However, even apart from that consideration, I am satisfied that the submissions made on the topic have no foundation. It is settled law that courts, in the exercise of their equitable jurisdiction, can appoint receivers over property which is not within the jurisdiction. In In Re Maudslay, Sons & Field (1900) 1 Ch 602, Cozens-Hardy J. (as he then was) said at p. 611:-

38. There is no reason to attribute to the legislature in the case of the 1996 Act an intention that the powers of a receiver appointed under the Act were to be any less extensive than those of a receiver appointed by the court in the exercise of its general jurisdiction.

39. While a number of authorities were cited in the course of argument in support of the principle of international law that courts will not permit within their jurisdiction the exercise of sovereign authority by another jurisdiction, I do not find it necessary to refer to them in any detail since they do not arise for consideration in this case. In the present case, the order of the High Court was intended to secure compliance by a person within the jurisdiction of the court with an order of the court directing the transfer of property in his possession and control to a receiver appointed by the court. That order was in no sense an attempt to exercise sovereign authority in another jurisdiction. Similarly, the rules of private international law providing for the devolution of certain property in accordance with the lex situs have no application whatever to the facts of the present case and require no further consideration.

40. The fourth ground of objection related to the form of the proceedings. It was submitted that the plenary summons claimed interim and interlocutory relief and the appointment of a receiver only: it did not claim any substantive relief. It was said that this was an impermissible mode of procedure, having regard to the decision of this court in Caudron .v. Air Zaire (1985) IR 716.

41. No rules of court have been made prescribing the procedure to be followed in applications under the 1996 Act and, specifically, indicating whether they are to be initiated by way of plenary summons, special summons, notice of motion or some other mode. There was therefore no reason in principle why the proceedings should not have been initiated by way of plenary summons claiming the only relief which was required at that stage, i.e. orders under s. 2, s. 3, s. 7 and s. 9. It would seem at least debatable whether an application for a disposal order under s. 4 should have been included at that stage, since, as already noted, that relief could not be granted by the court until the expiration of a period of seven years from the date of the making of the interlocutory order. In the event, however, the learned High Court judge indicated that, in his view, the plenary summons should be amended so as to include a claim under s. 4 and such an application was made and granted following the judgment on the interlocutory application.

42. I can see no defect in any of these procedures and the decision of this court in Caudron is of no relevance. In that case, no substantive relief was claimed or could have been claimed and this court held that, in such circumstances, a plaintiff could not claim a Mareva injunction as a discrete remedy not depending on any specific cause of action relied on in the plenary summons. That is wholly distinguishable from the present case where the plaintiff is claiming express reliefs under specific statutory provisions. I am satisfied that there is no substance in the procedural points on which the respondents rely.

43. The fifth submission was that the 1996 Act does not apply to the proceeds of alleged crimes committed before it came into force and that, accordingly, if the allegations made in the affidavits grounding the proceedings are correct, they do not justify the making of orders, since they refer to crimes allegedly committed before the 1996 Act came into force.

44. It was submitted that an enactment of the Oireachtas should not be construed as having retrospective effect in the absence of plain and unambiguous language giving it such effect: see the judgment of this court in Hamilton .v. Hamilton (1982) IR 466 at p. 484. It was further submitted that it could not have been the intention of the Oireachtas to confiscate the proceeds of crimes committed decades or even centuries ago.

45. I can find no ambiguity whatever in the definition of “proceeds of crime” in s. 1(1). It expressly extends to property obtained or received before the passing of the Act by or as a result of or in connection with the commission of an offence. Property so obtained or received must, by definition, have been obtained or received after the offence had been committed and, accordingly, the Act in express terms applies to the proceeds of crimes committed before it came into force. A remarkably strained argument was advanced to the effect that the words “in connection with” could extend to, for example, a ship bought in order to import drugs and that it was only in that context that property obtained before the passing of the Act was to be captured. There is, however, nothing whatever in the section to support so fanciful and artificial a construction. If the legislature had intended the words “before or after the passing of this Act” to have so limited an application, they would have so provided. I am satisfied that the definition in plain and unambiguous language extends to property obtained or received at any time before the passing of the 1996 Act by or as a result of or in connection with the commission of an offence.

46. The sixth submission was that the applicant in proceedings under the 1996 Act was obliged to identify the crimes in question and when, where and by whom they were alleged to have been committed. It is unnecessary in this case to consider whether, and if so to what extent, the applicant in proceedings under the 1996 Act must satisfy the court that the property whose disposition he seeks to restrain is the proceeds of a specific crime. In this case, the plaintiff gave detailed evidence as to the nature of the criminal activities allegedly committed by GM which were the source of the property sought to be frozen. (This evidence was undoubtedly hearsay, but, as already noted, such evidence is admissible under s. 8.) This evidence was accepted by the learned High Court judge and his findings of fact in this context have not been disputed on the hearing of this appeal. Accordingly, no argument on this ground can succeed.

47. Finally, it was submitted that the learned High Court judge should, at the outset, have ruled on the question as to the onus of proof resting on the plaintiff, i.e. whether he was obliged to satisfy the court on the balance of probabilities that the sum of £300,000, constituted the proceeds of crime within the meaning of the 1996 Act or simply that there was a fair question to be argued as to whether they were. It was claimed that until such a ruling was made the respondents (to quote their written submissions) “could not join issue with the applicant on the facts” .

48. This is clearly wrong. The respondents were not in any way precluded from joining issue with the plaintiff on any of the facts. It was open to them to cross-examine the deponents who had given evidence in support of the application and to adduce evidence themselves. They could then have made whatever submissions they thought appropriate in the light of the evidence on the appropriate onus of proof. Their election not to cross examine and not to adduce oral evidence was a matter for them and they cannot now be heard to complain of the result.

49. I am satisfied that the learned High Court judge was entirely correct in rejecting, as he did, all the arguments advanced in this case in relation to the non-constitutional issues and I would, accordingly, affirm the order of the High Court.

50. This is the judgment of the court as to the claim made in both proceedings that the 1996 Act was invalid having regard to the provisions of the Constitution. That was the sole claim made on behalf of the plaintiff in the second of these proceedings. In her judgment (reported in (1998) 3 IR 185), McGuinness J. dismissed the plaintiff’s claim. In the first proceedings, O’Higgins J. in the reserved judgment already referred to also dismissed the plaintiff’s claim to the same effect.

51. The second proceedings were a sequel to proceedings entitled “The High Court 1996 No. 10143P between Michael F. Murphy, Plaintiff and John Gilligan, Geraldine Gilligan, Tracy Gilligan and Darren Gilligan, Defendants” in which an order was made by the High Court pursuant to s. 3 of the 1996 Act preventing the plaintiff from disposing or otherwise dealing with the properties specified therein. Those proceedings were grounded on an affidavit by the applicant who is also the plaintiff in the first proceedings, in which he deposed to his belief that the property forming the subject matter of the application was directly or indirectly the proceeds of crime. He said that his belief was supported by the fact that the plaintiff had been involved in crime for a lengthy period and had accumulated very substantial assets in a short period of time without his enjoying any apparent lawful source of income. The applicant also averred that the Gardaí believed that the plaintiff had a significant involvement in the importation of narcotics. The plaintiff did not swear an affidavit in those proceedings.

52. In those proceedings, evidence was given by senior Garda officers as to the problems posed for the law enforcement agencies of the State by the significant extension of the practice of “money laundering” the proceeds of illegal activities, such as the import and sale of drugs on a substantial scale.

53. The relevant provisions of the 1996 Act are set out in the judgment of Keane C.J. on the non-constitutional issues arising in the first proceedings.

54. The principal argument advanced on behalf of the appellants in this court was that the provisions of the 1996 Act essentially formed part of the criminal law and not of the civil law and that the persons affected by those provisions were deprived of some of the most important safeguards which were historically a feature of the criminal law. Specifically, the presumption of innocence was reversed, the standard of proof was on the balance of probabilities rather than beyond reasonable doubt, there was no provision for a trial by jury in respect of any of the issues and the rule against double jeopardy was ignored.

55. The features of the Act which the appellants pointed to as being indicative of its criminal nature can be summarised as follows:-

56. In support of the submission that the procedures provided under the Act are essentially criminal in nature rather than civil, the appellants relied on the decision of this court in Melling .v. O Mathghamhna (1962) IR 1. They submitted that the decision of the former Supreme Court in Attorney General .v. Southern Industrial Trust (1960) 94 ILTR 161, relied on by the respondents, went no further than holding that the penalties imposed in fiscal legislation for contravention of fiscal laws are not necessarily criminal in nature. The 1996 Act was not of a fiscal nature.

57. The appellants also relied on a number of United States decisions, particularly those of the Supreme Court, which, they said, supported their contention that legislation such as the 1996 Act was criminal in nature. They referred in particular to Peisch .v. Ware , 4 Cranch 347; United States .v. Halper , 490 US 435; Austin .v. United States , 509 US 602; Department of Revenue .v. Kurth Ranch , 511 US 767; United States .v. Ursery , 518 US 267; United States .v. Bagakajiam , 524 US 321. They accepted that the decision of the majority in Ursery was not in their favour, but submitted that this court should prefer the dissenting judgment of Stevens J. in that case.

58. They further submitted that the constitutional problems which flowed from the absence of the traditional safeguards of the criminal law were not resolved by treating the proceedings as essentially in rem rather than proceedings which effectively punished persons for alleged wrongdoing. They submitted that the decision of the House of Lords in Republic of India .v. Indian Steamship Company (No. 2) (1998) AC 878, that characterising actions as in rem was no longer an appropriate way of resolving questions of substance, should be followed in this jurisdiction.

59. The appellants further submitted that the decision of the High Court (Barrington J.) in Clancy .v. Ireland (1988) IR 326, which had been relied on by the respondents in the High Court, was of no assistance to them, since the points relied on by the appellants in the present case had not been raised or argued in that case. They submitted that the decisions of this court in McLoughlin .v. Tuite (1989) IR 82 and O’Keeffe .v. Ferris (1993) 3 IR 165 relied on in the High Court were also distinguishable. The first concerned a fiscal law and was a case in which there was no mens rea requirement of any kind. The second concerned the statutory remedy available to a liquidator or creditor of an insolvent company which was designed to ensure reparation for losses caused to the company by the defendants’ wrongdoing, an entirely different situation from that addressed in the 1996 Act.

60. The appellants also relied on a number of other features of the 1996 Act as demonstrating that it was invalid having regard to the provisions of the Constitution.

61. First, it was submitted that the Act permitted of delays which were so oppressive in their nature as to render the Act unconstitutional. Thus, in the present case, a period of over 15 months had elapsed between the making of the order under s. 2 and the hearing of the interlocutory application under s. 3. They said that this was compounded by the stipulation in s. 4(1) that what was effectively the trial of the action (i.e. the application for a disposal order) could not take place until at least seven years had elapsed from the making of the interlocutory order.

62. Secondly, it was submitted that the procedures permitted under the Act were so unfair as to be unconstitutional. In the first place, it was said that the maxim audi alteram partem was violated in that there was no provision to ensure that respondents to applications under the Act were told of the case they had to meet. Thus, in the present case the plaintiff was not ordered to deliver a statement of claim, the appellants were not furnished with particulars of the crimes alleged to be involved and no order for discovery had been made. Secondly, the provision for the admission of hearsay evidence meant that the appellants were deprived of the right to confront and cross examine the witnesses relied on by the plaintiff. Thirdly, there was no “equality of arms” between the parties to proceedings under the 1996 Act as required by Article 40.1 of the Constitution guaranteeing equality before the law. Thus, the appellants were not entitled to proper pleadings, particulars and discovery and evidence of opinion was permitted in the case of the plaintiff under s. 8(1)(b) but not in the case of the respondents. Fourthly, the complete reversal of the onus of proof in favour of the plaintiff was a manifestly unfair procedure, even if the proceedings were properly characterised as civil.

63. Thirdly, it was submitted that the entire scheme of the 1996 Act and in particular s. 9 - under which the respondent could be required to file an affidavit specifying its property and income - contravened the privilege against self-incrimination. A respondent wishing to challenge an order sought under

64. Fourthly, it was submitted that the Act was so over-broad in its sweep that it constituted an abdication of legislative responsibility. Thus, the expression “proceeds of crime” was extraordinarily vague and sweeping and the same could be said of the power given to the court to make or refrain from making orders where there was “a serious risk of injustice” . Similarly, the vagueness of the Act was in contravention of the requirement laid down in the European Court of Human Rights in the Sunday Times case 2 EHRR 245 where the term “prescribed by law” was explained. It was also contrary to the law as laid down by this court in King .v. Attorney General (1981) IR 233 and Cox .v. Ireland (1992) 2 IR 503.

65. Fifthly, it was submitted that the Act violated the guarantee of private property under the Constitution, since there was no provision for compensation in the event of any person other than the owner of the property seeking it or for bona fide purchasers of the proceeds of crime.

66. Sixthly, it was submitted that the Act impermissibly interfered with the judicial function in a number of respects. The obligation on the court to discharge an interim or interlocutory order on the request of the applicant was a fettering of the court’s discretion which was not permitted by the Constitution.

67. The seventh submission was that s. 3(5)(c) of the Act was unconstitutional because it purports to authorise and/or recognise the possibility of an appeal from the Supreme Court to a non-specified court or authority.

68. The appellants finally submitted that, if contrary to the arguments advanced by them on the non constitutional issues, the court found that the Act applied to property abroad and/or was retrospective in its effect, it was invalid having regard to the provisions of Article 29.3 and 8 of the Constitution and because it violated the unenumerated right of a citizen not to have a penalty or other penal burden imposed that was more severe than that applying at the time of the commission of the wrong.

69. The court begins its consideration of this issue by noting that the 1996 Act enjoys a presumption of constitutionality and that the onus was on the appellants to establish that it was invalid having regard to the provisions of the Constitution. It also follows that, if in respect of any provision or provisions of the Act two or more constructions are reasonably open, one of which is constitutional and the other is unconstitutional, it must be presumed that the Oireachtas intended only the constitutional construction: see McDonald .v. Bord na gCon (No. 2) (1965) IR 217. It also follows that, in accordance with the decision of the court in East Donegal Co-operative .v. Attorney General (1970) IR 317, it is to be presumed that the Oireachtas intended that any proceedings, procedures, discretions or adjudications permitted, provided for or prescribed by the Act would be conducted in accordance with the principles of constitutional justice and that any departure from those principles would be restrained or corrected by the courts.

70. The court addresses first the argument on behalf of the appellants that the procedures permitted under the Act are essentially criminal in nature and that the absence of some of the most important safeguards available under our system of criminal justice to persons charged with criminal offences renders the legislation unconstitutional.

71. It is almost beyond argument that, if the procedures under s. 2, s. 3 and

72. It is also clear that, if these procedures constitute the trial of a person on a criminal charge, which, depending on the value of the property, might not constitute a minor offence, the absence of any provision for a trial by jury of such a charge in the Act would clearly be in violation of Article 38.5 of the Constitution.

73. The central issue, on this aspect of the case, is, accordingly, whether the procedures prescribed by the Act are in substance criminal in nature.

74. The statutory scheme established under the 1996 Act may be summarised as follows. The applicant, who must be a senior Garda officer, may obtain on an ex parte application to the High Court an order prohibiting a person who is in possession or control of specified property (an expression which would obviously include the owner of the property) from disposing or dealing with the property if it is shown to the satisfaction of the court that it constitutes, directly or indirectly, the proceeds of crime. That order remains in effect for no longer than 21 days unless, before the expiration of that period, an application for a further order is made. This application must be made on notice to the person against whom the ex parte order was made or anyone else claiming to be the owner of the property. Again, the court, if satisfied that the property constitutes, directly or indirectly, the proceeds of crime, may make an order to the same effect as the interim order, unless it is satisfied that there would be “a serious risk of injustice” . That order then remains in force and, where it has been so in force for at least seven years, the court may make, on the application of the Garda officer, a “disposal order” transferring the property to the Minister for Finance or such other person as the court may determine. However, in the interval between the making of the interlocutory order and the expiration of that seven year period, the court may discharge the order on the application either of the Garda officer or the person to whom it was directed or who claims an interest in the property. In the latter case, the order is to be made by the court where it is satisfied that the property was not, directly or indirectly, the proceeds of crime or that it would cause “any other injustice” .

75. The effect of the statutory scheme, accordingly, is to “freeze” property which senior members of the gardaí suspect of representing the proceeds of crime for an indefinite period, subject to the limitations indicated. It is not in dispute - and indeed is a circumstance strongly relied upon on behalf of the appellants - that this unquestionably draconian legislation was enacted by the Oireachtas because professional criminals have developed sophisticated and elaborate forms of what has become known as “money laundering” in order to conceal from the authorities the proceeds of their criminal activities. In the two cases under appeal, the alleged activities were the importation and sale in this country of substantial quantities of illegal drugs, but the legislation is not, of course, restricted in its effect to that particular form of criminal activity. The appellants urge that the resultant legislation is a hasty, ill-considered and disproportionate reaction to that particular phenomenon which unjustifiably and dangerously erodes their constitutional rights.

76. Unless an order is made under s. 4 at the expiration of the seven year period for the disposal of the property, the owner of the property does not cease to be its owner by virtue of anything done in exercise of the powers conferred by the Act. He or she is, however, in effect deprived of the beneficial enjoyment of the property even before such a disposal order is made, the only provision for compensation being where the ex parte or interlocutory order is discharged or lapses or is varied, the compensation then being payable solely to the owner of the property. The orders which the court is empowered to make, accordingly, under the Act may equate to the forfeiture of the property in question and the appellants contend that such a procedure cannot be deprived of its essentially punitive and criminal nature by being given a statutory vesture appropriate to civil proceedings.

77. The general question as to whether proceedings authorised by statute which may result in the forfeiture of property are civil or criminal in nature has been considered in a number of authorities to which the court was referred.

78. The constitutional validity of the relevant legislation was challenged by the first defendant on two grounds, i.e. that it constituted a criminal procedure without the safeguard of due process and a trial by jury required under

79. Article 38 and that it violated the private property rights of the first defendant guaranteed under Articles 40 and 43 of the Constitution.

80. In the High Court, Davitt P. rejected both these challenges to the constitutionality of the relevant legislation and his conclusions were upheld on appeal by the Supreme Court. The first defendants had relied, in support of their first ground of challenge, on the earlier decision of the Supreme Court in The State (Gettins) .v. Judge Fawsitt (1945) IR 183.

81. In that case the prosecutor had exported a quantity of eggs in contravention of an emergency powers order which brought into operation certain provisions of the Scrap Iron (Control of Export) Act, 1938 and rendered him liable to the same penalties, detention and proceedings to which a person was liable under s. 186 of the 1876 Act for illegally importing prohibited goods. That section provided that, in the case of an offence under the Customs Acts, an offender was, for each offence, to forfeit either treble the value of the goods or £100 at the election of the commissioners and might either be detained or proceeded against by summons. Section 11 of the amending Act of 1879 enabled the relevant proceedings to be brought in the superior courts of common law in the name of the Attorney General or by information in the name of an officer of Customs and Excise before one or more justice or justices. The Revenue Commissioners had elected to proceed for a penalty of £100 in the District Court where the proceedings were dismissed. The complainant having appealed, the Circuit Court reversed the dismissal and convicted Gettins, who was ordered to pay a penalty of £100 or, in default, to be imprisoned for six months. A conditional order of certiorari having been obtained to quash the conviction and order on the grounds that the proceedings were criminal proceedings and that no appeal lay from the acquittal, a divisional court of the High Court held that the proceedings were not criminal proceedings and discharged the conditional order, following an earlier decision of a divisional court in O’Croinin .v. Brennan (1939) IR 274. On appeal, the Supreme Court by a majority (Sullivan C.J., Murnaghan and Geoghegan JJ., O’Byrne and Black JJ. dissenting) held that the proceedings were criminal proceedings and allowed the appeal.

82. Delivering the judgment of the majority in that case, Murnaghan J. distinguished the case from that of the Attorney General .v. Casey (1930) IR 163. That was also a case in which the Attorney General had proceeded by way of information in the High Court to recover certain penalties from the defendant under the provisions of s. 30(1) of the Income Tax Act, 1918 on the ground that he had fraudulently concealed part of his income for the year in question. The defendant had sought an order that the action be tried by a judge with a jury, but had been refused and, on the hearing of the appeal in the Supreme Court, it was argued on his behalf inter alia that the proceedings were criminal proceedings. That argument was rejected by the court, all three members - Kennedy C.J., Fitzgibbon J. and Murnaghan J. - being of the view that the proceedings were in the form of an action for debt and were accordingly civil. The fact that the statute which imposed the penalty also made the defaulter 1amenable to the criminal law by indictment or otherwise in respect of the same facts did not, in the view of the court, render the instant proceedings criminal in nature. While Murnaghan J. dissented, he did so on the ground that, even accepting that the proceedings were civil in nature, a charge of fraudulent intent under the then law constituted an issue which required resolution by a jury.

83. Davitt P. concluded that the case before him was governed by the decision in Casey, that it was essentially a civil proceeding which did not seek to make anyone amenable for a criminal offence and that the fact that, in order to lay the ground for an order of forfeiture, the Attorney General had to establish facts which showed that the second named defendant had committed a criminal offence did not render the instant proceedings criminal in nature. While he did not seek expressly to distinguish the decision in Gettins, it is to be inferred from his judgment that the learned President would have treated that case as also distinguishable on the ground that in that case the Revenue Commissioners had elected to proceed by way of complaint in the District Court and that this constituted the prosecution of a criminal offence in contrast to proceedings initiated by the Attorney General in the High Court.

84. On appeal, those conclusions were upheld in the judgment of the court, delivered by Lavery J. Having expressed disquiet at the form of the proceedings, which, in the light of the admissions and agreed statement of facts, indicated that both parties were anxious to obtain something in the nature of an advisory judgment from the court, the learned judge said

85. Lavery J. then went on to say that the matter was in any event determined by authority and to uphold the conclusions of Davitt P. in relation to three earlier decisions already referred to. He cited the following passage from the decision of Murnaghan J. in Gettins:

86. Lavery J. commented:

87. The court was not invited to hold that Southern Industrial Trust was wrong in law and should not be followed. (It should be pointed out, however, that, in the light of subsequent decisions, it cannot be regarded as correctly stating the law on the second ground of challenge relating to the private property guarantees.) It was, however, urged that the case was distinguishable on the ground that it related to fiscal legislation: it was said that, for somewhat anomalous historical reasons, revenue proceedings against tax defaulters had usually been treated as civil matters. It was also submitted that there could be a forfeiture under s. 5 of the 1945 Act, even where the owner had a full defence to a prosecution under the Act, e.g. where the vehicle had been stolen from him. In contrast, it was submitted that forfeiture under the 1996 Act was invariably predicated on crimes having been committed. It was also submitted that the procedure under the 1945 Act did not provide for the establishment of mens rea : the provisions of the 1996 Act enabling the court to grant relief to the owner of the property where there was a serious risk of injustice clearly indicated that mens rea was an essential ingredient of the forfeiture procedure under the 1996 Act.

88. It was further submitted that the procedures permitted under the 1996 Act, even if reconcilable with the Constitution when considered solely in the light of the Southern Industrial Trust decision, were repugnant to the Constitution in the light of the later decision of the Supreme Court in Melling .v. O Mathghamhna and Another (1962) IR 1, which must next be considered.

89. In that case, the plaintiff was charged in the District Court on fifteen charges relating to smuggling of butter into the State in contravention of the Dairy Produce (Price Stabilisation) Act, 1935 and s. 186 of the 1876 Act. The Revenue Commissioners, under the provisions of s. 186, elected to proceed for a penalty of £100 in respect of each of the charges. The prosecution was resisted on the ground that the District Court had no jurisdiction to try the charges because they were not minor in nature and hence could only be tried by a judge and a jury. The matter was adjourned in order to enable proceedings to be brought in the High Court claiming a declaration that the relevant provisions of the 1876 Act and the amending Act of 1879 were inconsistent with the provisions of the Constitution of Saorstát Éireann and the Constitution of Ireland. The High Court having refused to grant that declaration, an appeal was brought to the Supreme Court.

90. That court (Maguire C.J., Lavery, Kingsmill Moore, Ó Dálaigh and Maguire JJ.) were unanimously of the view that the offences were criminal offences, but a majority, (Maguire C.J., Lavery and Maguire JJ.) were also of the view that they were minor offences which could be tried in a summary manner.

91. Three judgments were delivered. In the course of his judgment, Lavery J. said that in his opinion the case was indistinguishable from Gettins, but went on to say

92. In his judgment, Kingsmill Moore J., in a passage which is strongly relied on by the appellants in the present case, referred to some definitions of a “crime” which had found favour with judges or text book writers. In Proprietary Articles Trade Association .v. Attorney General for Canada (1931) AC 310 at p. 324, Lord Atkin had said that it could be discovered by reference to one standard alone, i.e. “Is the act prohibited with penal consequences?” The then current edition of Cross and Jones had suggested as a definition:

93. Kenny, in the earlier editions of Outlines of Criminal Law ,had said that

94. The learned judge said that in his view an offence under s. 186 of the 1876 Act would fall within these text book definitions and went on to say

95. The learned judge went on to subject the decision in Gettins case to an exhaustive analysis (with which, it should be noted, Lavery J. in his judgment expressly agreed) and concluded that the decision of the court in that case had been to the effect that proceedings under s. 186 of the 1876 Act were criminal and that this was supported by other authorities in both this jurisdiction and in England. He summed up his view as follows:-

96. In the course of his judgment, Ó Dálaigh J. (as he then was), having noted that (a) one of the chief characteristics of civil liability, as contrasted with criminal liability, was the obligation to make reparation and not to have to suffer imprisonment if unable to make reparation, and (b) that certain acts, such as assaults, could be the subject of criminal as well as civil proceedings, went on to point to those features of s. 186 of the 1876 Act which, in his view, rendered the proceedings permitted thereunder criminal nature. He said

97. It is a notable feature of this case that the court’s earlier decision in Southern Industrial Trust , although referred to in the course of the arguments, is not mentioned in any of the judgments. The decisions taken together, however, made it clear beyond doubt that, where proceedings were taken by the Attorney General for the condemnation and forfeiture of illegally exported goods, they were civil in nature, but where the Revenue Commissioners elected to proceed by way of summons in the District Court seeking the imposition of a penalty, they were criminal in nature. The court, at a later part of this judgment, considers how the reasoning by which those conclusions were reached should be applied to the present case. There are, however, three later decisions of the High Court and this court which were also referred to in the course of argument and which must next be considered.

98. The first of these is Clancy .v. Ireland . That arose out of the enactment by the Oireachtas of s. 2 of the Offences Against the State (Amendment) Act, 1985. Section 22 of the Offences Against the State Act, 1939 provided that where the government had declared a particular organisation to be an unlawful organisation which should be suppressed, its property was to be forfeited to, and vested in, the Minister for Justice. Section 2 of the amending legislation provided that, where in the opinion of the Minister, monies held by a bank would, but for the operation of s. 22 of the 1939 Act, be the property of an unlawful organisation, the Minister could require the bank to pay the monies into the High Court on a specified day and in the meantime to refrain from doing any act or making any omission inconsistent with that requirement. The Act contained further provisions entitling a person claiming to be the owner of the money to apply to the High Court for an order directing the payment of the money to him, where he showed to the satisfaction of the court that the monies were not monies to which s. 22 of the 1939 Act applied and that he was the owner of the monies.

99. Such an order having been made in respect of monies held upon a joint account in the names of the plaintiffs in a bank, they issued proceedings claiming that the monies were not held for the benefit of an unlawful organisation and declarations that the relevant provisions of the 1985 Act were invalid having regard to the provisions of the Constitution. The laconic and unsatisfactory report of the case gives no indication as to the nature of the arguments advanced at the hearing in the High Court. It appears from the judgment of Barrington J. that the grounds on which the legislation was attacked were that it violated the plaintiff’s rights of private property under the Constitution and deprived him of the fair procedures to which he was entitled under a number of decisions of this court, in particular In Re Haughey (1971) IR 217.

100. Barrington J. rejected both grounds of challenge. The learned judge said that he was satisfied that the abridgement of property rights provided for under the Act was a permissible delimitation of property rights for the purposes of Article 43 and was not a breach of fair procedures, citing with approval the decision of the US Supreme Court in Calero-Toledo .v. Pearson Yacht Leasing Company (1974) 416 US 663, an authority to which it will be necessary to refer at a later stage.

101. Carroll J., in the course of her judgment, considered the decisions in Casey and Melling .v. Ó Mathghamhna and cited the extracts already quoted in this judgment from the judgments of Lavery J., Kingsmill Moore J. and

102. Ó Dálaigh J. in the latter case. Applying the indicia specified in the judgment of Kingsmill Moore J., she concluded that two of them were present in the procedures under s. 500, i.e. if an offence was created, it was one against the community at large and the sanction provided was penal in its nature, although there was no provision for imprisonment in default of payment of the penalty. She was, however, also satisfied that mens rea was not an ingredient in a failure to make a return of income. She also considered that the indicia mentioned in the judgment of Ó Dálaigh J. were all absent in the provisions relating to penalties under s. 500. The learned judge concluded that the imposition of a penalty where there was a default in making a return was not indicative of a criminal offence and that, accordingly, the provision was not repugnant to the Constitution.

103. That judgment was upheld on appeal by this court. Having considered the decision of the former court in Melling .v. Ó Mathghamhna , Finlay C.J., delivering the judgment of the court, said:

104. The last case in the series of Irish decisions is O’Keeffe .v. Ferris . That case arose out of the provision in s. 297 of the Companies Act 1963 empowering the High Court, on the application of the liquidator or any creditor or contributory of a company in winding up, to declare that persons who are knowingly parties to the carrying on of the business in a fraudulent manner are to be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company. It also provided that where the business is so carried on, the persons knowingly party to its being carried on in that manner were to be liable on conviction to imprisonment or fines or both. The liquidator of an insolvent company having instituted proceedings against one of the directors claiming relief under s. 297, the latter then instituted proceedings seeking a declaration that s. 297 was unconstitutional or, alternatively, that the manner in which the liquidator sought to invoke it against the plaintiff was invalid as it amounted to a trial of criminal offence without due procedures for a criminal trial.

105. In the High Court, Murphy J., having referred to the judgments in Melling, said that some of the indicia of a criminal offence identified in those judgments were not present at all in the impugned subsection and those that were present were ambiguous. In a passage which is of some relevance in the present proceedings, the learned judge pointed out that it would not be correct to treat the procedure under s. 297(1) as conforming to the generally accepted concept of compensation or reparation recovered in civil proceedings, since the applicant for the relief did not have to be the particular creditor who had been defrauded by the manner in which the business of a company was carried on. However, in his view, that feature of itself did not mean that the proceedings were criminal in form. He was satisfied that it was the clear intention of the Oireachtas that the remedy afforded by the section was a civil remedy and not a criminal one. He accordingly dismissed the plaintiff’s claim.

106. That judgment was upheld in this court. Delivering the judgment of the court, O’Flaherty J. referred to a submission on behalf of the plaintiff that the procedure under the section was “an ersatz civil proceeding which was really criminal in nature” , an expression which was also adopted by counsel for the appellants in the present case. In the course of his judgment, O’Flaherty J. says:

107. The court is satisfied that the decision in Melling does not support the submissions advanced on behalf of the appellants in these cases. Even if is assumed in their favour that the presence of mens rea is an essential ingredient which must be established before an order can be made under s. 3 or s. 4, that would not of itself deprive the proceedings of their civil character. It is clear from the judgments of Lavery J. (with whom Maguire C.J. and Maguire J. concurred) and from the judgment of Ó Dálaigh J. that the ratio of that decision was that the presence of a number of indicia, which are conspicuously absent in the present case, rendered the proceedings criminal in character, viz. the provision for the detention of the person concerned, the bringing of him in custody to a Garda station, the searching of the person detained, his admission to bail, the imposition of a pecuniary penalty with liability to imprisonment in default, the reference in the statute to a party having been “convicted of an offence” and the provision for the withdrawal of proceedings by the entry of a nolle prosequi . The court is satisfied that the emphasis placed by the appellants on the three elements indicated by Kingsmill Moore J. as essential ingredients of a criminal offence is misplaced: in another passage in his judgment, cited by Finlay C.J. in McLoughlin .v. Tuite , he refers expressly to some of these indicia as pointing clearly to the criminal nature of the proceedings. In contrast, in proceedings under s. 3 and s. 4 of the 1996 Act, there is no provision for the arrest or detention of any person, for the admission of persons to bail, for the imprisonment of a person in default of payment of a penalty, for a form of criminal trial initiated by summons or indictment, for the recording of a conviction in any form or for the entering of a nolle prosequi at any stage.

108. The court is in any event satisfied that the submission that the establishment of mens rea by the applicant is essential if an order under s. 3 or s.4 is to be made is fundamentally misconceived. Two conditions alone must be met before an order is made under those sections: that a person is in possession or control of a specified property which constitutes the proceeds of crime or was acquired in connection with such property and that its value is not less than £10,000. The orders can be made even though it has not been shown to the satisfaction of the court that there was mens rea on the part of the person in possession or control of the property. This is so, whether mens rea in this context is being used in the sense of “a general disposition to do something that was morally wrong in the old canonical sense” or in the sense adopted in the authorities at a later stage of “an intention to commit the particular wrong mentioned in the definition of the relevant offence” . (The distinction between the two forms of mens rea is helpfully discussed in Criminal Liability by McCauley and McCutcheon.) The fact that the person in possession or control of the property against whom the order is sought may not himself or herself have been in any way involved in any criminal activity and, specifically, may not have been aware that the property constituted the proceeds of crime would not prevent the court from making the order freezing the property under s. 2 or s. 3, unless it was satisfied that there would be “a serious risk of injustice” . If the legislature had intended that no such order should be made unless it had first been established that the person in possession or control of the property had acquired it with a criminal intent it would have said so. No doubt the court might decline to make the order in a case where the person in possession or control was in a position to establish that he or she had purchased the particular property in good faith for valuable consideration: it might, on the other hand, make the order in circumstances where an innocent recipient of the property had made no payment for it.

109. It also follows that one of the grounds on which it was sought to distinguish the decision in Southern Industrial Trust - that there was no requirement of mens rea under the statutory provision in question - is not well founded. Moreover, the court is satisfied that a further ground of distinction urged in respect of that decision, that the order of forfeiture could be made even though the owner of the property was innocent of any crime in respect of it, has not been established. Although the making of the orders under ss. 3 and 4 is undoubtedly predicated on the commission of a crime by some person or persons, the same could be said of the provisions under consideration in Southern Industrial Trust : although the first defendant was not guilty of any criminal offence, the second defendant had undoubtedly committed the offence of exporting the car without a licence. It is clear from the judgments both in the High Court and the Supreme Court that the order could not have been made had the car not been illegally exported.

110. The appellants submit that the sequence of cases from Casey to McLoughlin .v. Tuite do not support the findings in the High Court that the 1996 Act is constitutional because they were all cases in which revenue offences were under consideration. Black J., in his dissenting judgment in Gettins, said:

111. The learned judge was there referring to a procedure by way of summons in the District Court which the majority of the court found to be criminal in its nature. It is at this stage beyond argument that the procedures under consideration in Casey, Southern Industrial Trust and McLoughlin .v. Tuite were all found to be civil in character and - in the case of the two last mentioned decisions - constitutionally valid. The evasion of tax and the smuggling of goods are unquestionably serious criminal offences but it would, in the view of the court, leave the law in a truly illogical and anomalous condition if procedures for the recovery of penalties or the forfeiture of goods in such cases were constitutionally valid while similar procedures in respect of crimes of at least equal gravity, such as the sale of illegal drugs on a substantial scale, were held to be repugnant to the Constitution.

112. That conclusion receives significant support from the United States authorities to which the court was referred. Since in that jurisdiction trial by jury is a constitutional requirement in a wide range of civil proceedings as well as in indictable crimes, the cases in general dealt with a different issue, i.e. as to whether the existence of parallel procedures for the forfeiture of property and the prosecution of criminal offences was in violation of the constitutional prohibition of “double jeopardy” . Since, however, in determining whether the double jeopardy principle had been violated, it was necessary to consider whether the forfeiture proceedings were civil or criminal in their nature, the decisions are of assistance in considering the issue that has arisen in this case. They are conveniently reviewed in the opinion of the United States Supreme Court delivered by Rehnquist C.J. in United States .v. Ursery (1996) 135 L Ed 2D549.

113. In that case, the government had instituted forfeiture proceedings against the respondent’s house, alleging that it had been used to facilitate illegal drug transactions. Shortly before Ursery settled that claim, he was indicted and later convicted of manufacturing marijuana. The government also filed an in rem complaint against various properties seized from two other persons alleging that each item was subject to forfeiture because it was involved in money laundering.

114. In his opinion, Rehnquist C.J. noted that, since the earliest years of the United States, Congress had authorised the government to seek parallel in rem civil forfeiture actions and criminal prosecutions based on the same underlying events. He cited the following passage from an earlier case of Various Items of Personal Property .v. United States , 282 US 577, in which the court said:

115. Rehnquist C.J. also referred to the earlier decision of the Supreme Court in Calero-Toledo .v. Pearson Yacht Leasing Company , which was adopted with approval by Barrington J. in Clancy .v. Ireland . Calero-Toledo was a case in which a statutory forfeiture scheme under which a yacht had been seized and on which marijuana was discovered was challenged on the ground that, since the owner, who was unaware of the wrongful use of the yacht by the lessee, was not notified of the proposed seizure, it violated the due process requirements of the Constitution. It was also contended that the statute was in breach of the private property guarantees under the Constitution.

116. Delivering the opinion of the court, Brennan J. pointed out that, at common law, the value of an inanimate object directly or indirectly causing the accidental death of a King’s subject was forfeited to the Crown as a deodand. This in turn, he said, was traceable to biblical and pre-Judeo /Christian practices. He also referred to the forfeiture which resulted at common law from conviction for felonies and treason, the basis for them being that a breach of the criminal law was an offence to the King’s peace which was felt to justify denial of the right to own property. Having referred to the wide range of forfeiture statutes which had been enacted in the United States, the learned judge commented that contemporary federal and state forfeiture statutes reached virtually any type of property that might be used in the conduct of a criminal enterprise. In a passage clearly relevant to the present case, he added:

117. In the result, the opinion of the court in Calero-Toledo was that the statute under consideration furthered the punitive and deterrent purposes that had, in previous cases, been found sufficient to uphold, against constitutional challenge, the application of forfeiture statutes to the property of innocents.

118. While the dissenting opinion of Stevens J. in Ursery was relied on by the appellants, the court is satisfied that, on examination, even if it were to be regarded as more persuasive than the opinion of the majority in that case, it does not support the submissions of the appellants. The learned judge drew a distinction between the forfeiture of funds which he described as “the proceeds of unlawful activity” and the seizure of Ursery’s house, in respect of which, he said, there was no evidence that it had been purchased with the proceeds of unlawful activity. His opinion undoubtedly takes issue with the opinion of the majority in the same case that proceedings in rem are in general civil rather than criminal in character as being too sweeping and inconsistent with earlier decisions of the court, but the substance of his opinion can be found in this passage:

119. That passage reflects three categories of property identified by Justice Stevens as being subject to forfeiture and his analysis as to why in some circumstances the forfeiture would constitute “punishment” and in others not.

120. An examination of the analysis made by Judge Stevens would properly commence with the unusual (in this jurisdiction) title of the consolidated proceedings in which judgment was delivered. The report is entitled

121. The facts of the case should now be set out in more detail. The US government had instituted civil forfeiture proceedings under specific legislation against Guy Ursery’s house alleging that it had been used to facilitate illegal drug transactions. That claim was settled by Ursery who was then charged and convicted of manufacturing marijuana in violation of certain statutory prohibitions. In the other proceedings (the Arnt and Wren proceedings) the US government instituted proceedings in rem against currency seized from the accused, Messrs Arnt and Wren, on the basis that it was involved in money laundering or represented the proceeds of felonious drug transactions. That litigation was deferred while Messrs Arnt and Wren were successfully prosecuted for their illegal activities. The government then sought to revive the forfeiture proceedings. Issues arose as to whether the criminal proceedings in the Ursery case or the forfeiture proceedings in the Arnt and Wren proceedings involved an infringement of the double jeopardy rule. The ultimate decision of the majority of the Supreme Court was that there was no double jeopardy as the forfeiture did not involve the punishment of a wrongdoer.

122. It was in that context that Justice Stevens disposed shortly and clearly of the issue of punishment insofar as it arose in the case involving Messrs Arnt and Wren. He said in the second paragraph of his judgment:-

123. Again, Justice Stevens readily accepted that drugs seized by the police in pursuance of the search warrant in Mr Ursery’s house were correctly forfeited as the defendant had no right to retain contraband. It was on the third issue namely, the right of the United States to forfeit the respondent’s residence because it had been used “to facilitate the manufacture and distribution of marijuana” that Justice Stevens found himself in disagreement with his colleagues. Judge Stevens was scathing in his comments on the argument that the forfeiture of a valuable house, (which was the undoubted property of the defendant), because it was used for a very limited purpose in conjunction with what appears to have been a minor breach of the drug trafficking legislation, was not punitive. Furthermore, he was dismissive in that case, as were the House of Lords subsequently in Republic of India v. Indian Steamships Company Limited (No. 2) of the suggestion that there was “some mystical difference between in rem and in personam proceedings such that only the latter can give rise to double jeopardy concerns”.
Whilst his reasoning in that regard is impressive, his views did not gain the support of any of his colleagues nor do they accord with the legal precedents established in this jurisdiction. The Attorney General .v. Southern Industrial Trust [1960] 90 ILTR 161 is clear authority for the proposition that a motor car used in the course of an illegal activity could be subject to a forfeiture, notwithstanding the fact that the owner did not participate in and had no knowledge of that activity.

124. Even if this Court were to review the decision in the Southern Industrial Trust Case by reversing it or restricting its application, that would not assist the appellants. The issue in the present case does not raise a challenge to a valid constitutional right of property. It concerns the right of the State to take, or the right of a citizen to resist the State in taking, property which is proved on the balance of probabilities to represent the proceeds of crime. In general such a forfeiture is not a punishment and its operation does not require criminal procedures. Application of such legislation must be sensitive to the actual property and other rights of citizens but in principle and subject, no doubt, to special problems which may arise in particular cases, a person in possession of the proceeds of crime can have no constitutional grievance if deprived of their use.

125. The court is satisfied that the United States authorities lend considerable weight to the view that in rem proceedings for the forfeiture of property, even where accompanied by parallel procedures for the prosecution of criminal offences arising out of the same events, are civil in character and that this principle is deeply rooted in the Anglo-American legal system. The court notes that in Republic of India .v. Indian Steamship Company Ltd. (No. 2) , Lord Steyn in the course of his speech pointed to the fact that to treat the ship as a defendant in admiralty proceedings because they were in rem had always been a fiction. As already noted, there are observations to the same effect in the dissenting opinion of Stevens J. in Ursery. It may be, as Holmes pointed out in The Common Law , that principles of this nature may outgrow their origins in a different historical era and would now find their justification in considerations of public policy or the common good. It is sufficient, however, to say that the secure place of the principles as to civil forfeiture in our law and their congruence with the Constitution is clearly reflected in the decisions in Southern Industrial Trust and McLoughlin .v. Tuite .

126. As to the other modern Irish authorities to which the court was referred, the decision in Clancy is not, in the view of the court, of any assistance in determining the issue as to whether proceedings of this character are civil or criminal in nature as the report does not indicate whether that issue was raised in the case: since it is not referred to in the judgment of the learned High Court judge, it seems safer to assume that it was not. The decision of this court in O’Keeffe .v. Ferris usefully illustrates that the principle established in Southern Industrial Trust and McLoughlin .v. Tuite is by no means confined to revenue cases.

127. The court is satisfied that the appellants failed to discharge the onus on them of establishing that the sections referred to in the 1996 Act were invalid having regard to the provisions of the Constitution on this ground.

128. The next feature of the Act which the appellants relied on as rendering the Act unconstitutional was that it permitted delays which were oppressive in their nature.

129. The court, in considering this submission, finds it unnecessary to express any view as to whether the surprisingly lengthy period which elapsed between the making of the order under s. 2 in the first case and the hearing of the interlocutory application under s. 3 was wholly or in part the fault of the appellant in that case, as contended by the respondents. It is sufficient to say that the procedure under the Act is perfectly capable of being operated in such a manner as to ensure that no unreasonable delay elapses between the making of the interim order and the interlocutory order: that indeed is clearly what the Act envisaged, since under s. 2(5), the order is to lapse after the expiration of the period of 21 days from the date of its making, unless an application for the making of an interlocutory order is brought during that period. As to the claim that the period of seven years which must elapse before a disposal order is made is unduly oppressive, that rests on the misconception that the application for a disposal order can in some sense be equated to the trial of an action in respect of which the legislation earlier provides for interlocutory orders being made. That is clearly not the nature of the scheme provided for in the Act. A person who is affected by the provisions of an interlocutory order can apply at any time before the expiration of the seven year period for an order discharging or modifying the interlocutory order. The court is satisfied that the submission that the procedure is so oppressive as to be unconstitutional because of this time limitation is not well founded.

130. As to the submission that the procedures permitted under the Act are so unfair as to be unconstitutional, it is necessary to recall again that it is to be presumed that the Oireachtas intended that procedures provided for under the Act would be conducted in accordance with the principles of constitutional justice and that any departure from those principles will be restrained or corrected by the courts. The appellants complain that the maxim audi alteram partem was violated because, in the first case, the plaintiff was not ordered to deliver a statement of claim, the appellant was not furnished with particulars of the crimes alleged to be involved and no order for discovery was made. These orders were either made in a proper exercise of the jurisdiction of the High Court or they were not. If they were not, the appropriate course for the appellant to have taken was to appeal to this court. It accordingly has to be assumed that the orders were made in accordance with the principles of constitutional justice by the High Court judges concerned. In any event, the court is satisfied that in any case brought under the procedures laid down by the Act, the affidavits grounding the interim and interlocutory application of necessity will indicate to the respondents the nature of the case being made on behalf of the applicant. Nor is the provision for the admission of hearsay evidence of itself unconstitutional: it was a matter for the court hearing the application to decide what weight should be given to such evidence. The court is satisfied that there is no substance in these grounds of challenge to the constitutionality of the legislation.

131. As to the submission that there was no “equality of arms” between the parties because evidence of opinion was permitted in the case of the applicant but not in the case of the respondents, the court is satisfied that no such inequality has been demonstrated: the respondents to an application under s. 2 or s. 3 will normally be the persons in possession or control of the property and should be in a position to give evidence to the court as to its provenance without calling in aid opinion evidence. A similar submission was advanced in respect of the extent to which the onus of proof was reversed in applications under the Act, but the court is satisfied that, having regard to its conclusion that these are civil proceedings this did not, of itself, render the provisions unconstitutional.

132. In this connection, the court was referred to the recent decision of the Privy Council in McIntosh .v. Lord Advocate (2001) 2 All ER 638. In that case, an issue arose as to whether certain provisions of the Proceeds of Crime (Scotland) Act, 1994 were incompatible with Article 6(2) of the European Convention for the Protection of Human Rights and Fundamental Freedoms. Those provisions were in somewhat similar terms to those contained in the Criminal Justice Act, 1994 which enable a court to make a confiscation order requiring a person convicted of a drug trafficking offence to pay a certain sum. Those procedures are in contrast to the procedures under the 1996 Act, where the precondition for the conviction of the person against whom the freezing order is to be directed does not exist. The court, however, would adopt with approval the following passage from the speech of Lord Hope of Craighead as to the approach a court should adopt in considering provisions of this nature, whether in the context of the Constitution or of the European Convention of Human Rights. He said (at p. 654):

133. A further argument that the Act necessarily involves the contravention of the privilege against self-incrimination rests on the assumption that a respondent wishing to challenge an order sought under s. 3 might be obliged to disclose information that could then be used to incriminate him. Parties to civil proceedings, whatever their nature, may find themselves in a position where they are reluctant to adduce evidence beneficial to them because it might also expose them to the risk of a criminal prosecution. That factual position, however, cannot be equated to a statutory provision obliging a person to give evidence even in circumstances where his or her evidence might be incriminating. Similarly, the fact that a person can be required to file an affidavit specifying his or her property and income cannot, on any view, be equated to a statutory provision requiring a person to adduce evidence which may incriminate him or her. The court is satisfied that these grounds of challenge are also without foundation.

134. It was also argued that the Act was so over broad in its sweep that it constituted an abdication of legislative responsibility. This was based in the first instance on what was described as the vague and sweeping nature of the expression “proceeds of crime” . The court notes, however, that in every case before an order can be made the court must be satisfied on the balance of probabilities that on the evidence adduced to it in that particular case the property in respect of which the freezing order is sought was the proceeds of crime. Similarly, while the power of the court to extend relief to persons claiming an interest in the property where there is “a serious risk of injustice” is undoubtedly wide in its scope, that can only be in ease of the individuals whose rights may be affected and the court, in applying these provisions, will be obliged to act in accordance with the requirements of constitutional and natural justice. The court is satisfied that these submissions are also not well founded.

135. It was also submitted that the Act violated the guarantees of private property rights under the Constitution. The court has already noted that in Clancy, Barrington J. adopted as a correct statement of the law in this jurisdiction the opinion of the United States Supreme Court in Calero-Toledo and rejected a challenge to the constitutionality of analogous procedures under

136. It was further submitted that the Act was invalid having regard to the provisions of the Constitution in requiring the High Court to make orders of a specific nature in certain circumstances defined in the Act on the ground that this is an unwarranted interference with the exercise of the judicial function. The court is satisfied that there is no substance in this contention: it is perfectly permissible for the legislature to provide that, where certain conditions are met, the making of an order of a particular nature by a court may be mandatory rather than discretionary: see The State (O’Rourke) .v. Kelly (1983) IR 58.

137. The Act was also challenged on the grounds that, if, contrary to the arguments advanced in the first case, it did permit the making of retrospective orders and orders which were extraterritorial in their effect, this was in contravention of the Constitution. The court is satisfied that there is no substance in this submission. The Act does not offend in any way the prohibition in Article 15.5 against declaring acts to be infringements of the law which were not so at the date of their commission. The fact that it enables the court to make orders in respect of property constituting the proceeds of crimes committed before the coming into force of the legislation is not in any sense a contravention of that prohibition. Nor is the fact that the legislation may be operated so as to require the compliance of citizens within the jurisdiction with orders of the court directing the transfer of property in their possession or control to a receiver appointed by the court in circumstances where the property is in another jurisdiction constitute in any way a breach of the principles of international law which the State accepts under Article 29 of the Constitution.

138. It was also submitted that s. 3(5)(c) of the Act was unconstitutional as authorising and/or recognising the possibility of an appeal from this court to a non specified court or authority. The court is satisfied that the words “or if any further appeal” in s. 2(5)(c) are, at worst, surplusage and, in accordance with well established principles of statutory construction, can be disregarded where the result would otherwise be unconstitutional or would, as in this case, produce an absurd or anomalous result.

139. It was finally submitted by the appellants that the provisions of the European Convention on Human Rights ought to be considered as being part of the ‘generally recognised principles of international law’ and that the Act was in breach of the convention. It was submitted that since Article 29.3 provides that ‘Ireland accepts the generally recognised principles of international law as its rule of conduct in its relations with other States’ and the convention confers rights on individuals, any legislative measure which was in conflict with the provision of the convention must be considered repugnant to the Constitution having regard in particular to Article 29.3.

140. This case concerns the application of domestic legislation to persons within the jurisdiction of the State. In these circumstances it is not relevant or necessary to consider the application of the ‘principles of international law’ in this case and in particular whether the provisions of the European Convention on Human Rights ought to be treated as included in those ‘principles’, as Article 29.3 of the Constitution makes clear that these general principles, whatever their content, govern relations with other sovereign states at an international level. Furthermore, Article 29.6 expressly provides that no international agreement shall be part of the domestic law of the State save as may be determined by the Oireachtas. The European Convention has not yet been made part of the domestic law of the State. As Maguire C.J. stated in the judgment of the Supreme Court in In re Ó Laighléis [1960] I.R. At 93:

141. The convention itself recognises that it does not of itself have direct effect in the domestic law of the parties to it by providing remedies at international level for breaches of the convention by any of the High Contracting Parties. It is accordingly, unnecessary to express any opinion on whether the legislation is, as alleged, in breach in any way of the convention.

142. The court is, accordingly, satisfied that the appellants have failed to discharge the onus on them of establishing that the sections referred to in the 1996 Act were invalid having regard to the provisions of the Constitution on any of these grounds.

143. Having regard to the importance and novelty of the legislation it may be as well to emphasise that the decision of this court is based upon the record of the evidence adduced in the High Court and the arguments arising therefrom. Whilst these arguments were extensive they were necessarily confined to matters in which the appellants had an existing interest. Issues which were merely hypothetical were not open for debate or subject to decision and, in the result, the constitutionality of the Act was considered solely in the light of those issues which were the subject of submissions in this court.

144. It is indeed probable that the special character of the legislation and the broad nature of the obligations imposed upon the Court to make certain orders which “it may regard as appropriate” ; to refrain from others where it is satisfied “that there would be a serious risk of injustice” and to award and to determine compensation to be payable by the Minister in certain circumstances in respect of loss incurred by the owner of property, are among the aspects of the legislation which may be expected to give rise to difficulties in practice if not in principle. However, the resolution of any such problems must await another day.

145. The court will in both cases dismiss the appeal and affirm the order of the High Court.