Burns v Bank of Ireland

JurisdictionIreland
JudgeGilligan J.
Judgment Date27 July 2007
Neutral Citation[2007] IEHC 318
Date27 July 2007
CourtHigh Court
Docket Number[2005 No. 2898 P]

[2007] IEHC 318

THE HIGH COURT

[No. 2898P/2005]
BURNS v GOVERNOR & COMPANY OF THE BANK OF IRELAND

BETWEEN

ROBERT BURNS
PLAINTIFF

AND

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND, COMMISSIONER OF AN GARDA SÍOCHÁNA, IRELAND AND THE ATTORNEY GENERAL
DEFENDANTS

CRIMINAL JUSTICE ACT 1994 S57

CRIMINAL JUSTICE ACT 1994 S31(8)

CRIMINAL JUSTICE ACT 1994 S32

CRIMINAL JUSTICE ACT 1994 S31

CRIMINAL JUSTICE (THEFT FRAUD OFFENCES) ACT 2001 S21

CRIMINAL JUSTICE ACT 1994 S46(6)

CONSTITUTION ART 40.3(i)

CONSTITUTION ART 40.3(ii)

EUROPEAN CONVENTION ON HUMAN RIGHTS & FUNDAMENTAL FREEDOMS ART 6(1)

PROCEEDS OF CRIME ACT 1996

CONSTITUTION ART 34.1

DK v CROWLEY, IRELAND & AG 2002 2 IR 744

WALLACE v KENNEDY 2003 NI 367

REGINA (M) v SECRETARY OF STATE FOR CONSTITUTIONAL AFFAIRS, LORD CHANCELLOR & ORS 2004 1 WLR 2298

MIN JUSTICE v DEVINE UNREP O'SULLIVAN 27.6.2006 2006 IEHC 216

CRIMINAL JUSTICE ACT 1994 S31(1)

EAST DONEGAL CO-OPERATIVE LIVESTOCK MART LTD v AG 1970 IR 317

ORANGE v REVENUE COMMISSIONERS 1995 1 IR 517

GLOVER v BLN & ORS 1973 IR 388

STATE (LYNCH) v COONEY & AG 1982 IR 337

O'CALLAGHAN v AG 1994 1 IR 555 1993 9 2520

BRENNAN v MIN FOR JUSTICE & ORS 1995 1 IR 612 1995 2 ILRM 206 1995 6 1842

M (MURPHY) v M (G) & ORS; GILLIGAN v CRIMINAL ASSETS BUREAU (CAB) & ORS 2001 4 IR 113 2003 39 9225

CRIMINAL LAW

Money laundering

Direction to financial institution by An Garda Síochána - Time limit on direction - Whether direction could be open ended - State (Boyle) v Governor of Curragh Military Barracks [1980] ILRM 242, O'Callaghan v Ireland [1994] 1 IR 555, Brennan v Minister for Justice [1995] 1 IR 612 and Murphy v GM [2001] 4 IR 113 followed - Criminal Justice Act 1994 (No 15), ss 31 and 57 - Criminal Justice (Theft and Fraud Offences) Act 2001 (No 50), s 21 - Declaration that 2nd defendant acted unlawfully granted (2005/2898P - Gilligan J - 4/5/2007) [2007] IEHC 318

Burns v Bank of Ireland & Commissioner of An Garda Síochána

Facts: The Plaintiff successfully contested a United States extradition warrant. He had received a cheque for US$95,890.07 through a bank in the United States and lodged it to an account in the Bank of Ireland. The bank made a s. 57 of the Criminal Justice Act 1994 report to the gardaí who in turn issued a direction pursuant to s. 31(8) of the Criminal Justice Act 1994, as substituted by s. 21 of the Criminal Justice (Theft and Fraud Offences) Act 2001 to the bank not to deal in any way with the proceeds of the account. When the Plaintiff sought payment out of the monies, the bank refused and the Plaintiff issued proceedings. The Plaintiff alleged that the direction given by the Garda under s. 31 contravened his constitutional and Convention rights. The Plaintiff alleged that the statute made no provision for a reasonable time limit within which the direction should remain operative.

Held by Gilligan J. that the failure of the impugned section to provide for a time limit in relation to the direction to the bank was not, of itself, enough to displace the presumption that the section was constitutional. It was hard to see how any liability could attach to the bank in circumstances where it complied with a lawfully issued direction by a member of An Garda Siochana. The garda authorities in not lifting the direction at a time when they knew there was not going to be any prosecution of the plaintiff in respect of the funds held by the direction acted in a manner that was ultra vires their powers as provided for by s. 31(8) of the Act of 1994 and as substituted by s. 21 of the Act of 2001.

Reporter: R.W

1

Gilligan J. delivered on the 27th day of July, 2007.

2

The plaintiff in these proceedings is a citizen of the United States of America who faces charges pursuant to a grand jury indictment as handed down in the Northern District of West Virginia on 7 th September 2001 relating to matters involving fraud and money laundering. Prior to the indictment being handed down the plaintiff left the United States of America in June, 2001, settling in Ireland. Subsequent to the indictment, a warrant was issued for the arrest of the plaintiff and having been tracked to Ireland, he was arrested on 14 th January, 2002, pursuant to a United States extradition warrant. He was detained until December, 2004, while the extradition request was litigated before the High and Supreme Courts with the plaintiff ultimately successfully contesting the extradition warrant. Three co-defendants who remained in America were subsequently convicted on 5 th February, 2003, and sentenced to terms of imprisonment. The plaintiff since the judgment of the Supreme Court has married an EU national, Marta Natonieweska, and of that union there is an Irish born child. The plaintiff now has a residency permit, is entitled to work within the State and it is accepted that there is no issue arising in relation to the plaintiff's immigration status.

3

There is agreement on certain basic background facts which are;

4

1. On 10 th /11 th July, 2005, the plaintiff and Marta Natonieweska went to the Bank of Ireland, Athlone and sought to lodge to Ms Natonieweska's account a cheque drawn by Mony Life of America in the amount of $95,890.07 payable to the plaintiff. The Bank accepted the cheque for clearing.

5

2. On 5 th August, the proceeds of the cheque were remitted from the US bank to a bank in the United States on behalf of the Bank of Ireland.

6

3. On several occasions thereafter the plaintiff was told by the Bank that the proceeds of the cheque had not been received in Athlone and on 18 th August, 2005, his solicitor was similarly informed by the Bank.

7

4. On 19 th August, Mr. Brophy, the plaintiff's solicitor threatened legal proceedings.

8

5. On 19 th August, the proceeds of the cheque ($95,890.07) were received in Athlone and lodged to a suspense account. On 22 nd August those proceeds were transferred to the Dún Laoghaire branch of the Bank where the plaintiff had opened a current account on 15 th August, 2005, and were received by Dún Laoghaire on 23 rd August.

9

6. On 19 th August Mr. Brophy was informed that the cheque had now been cleared and would be lodged to the plaintiff's current account in Dún Laoghaire on Monday, 22 nd August, On 19 th August, 2005, the Bank made a report to An Garda Síochána pursuant to section 57 of the Criminal Justice Act 1994. When the plaintiff went to Dún Laoghaire on 22 nd August to withdraw the money the Bank refused to pay because the Bank said it had been directed by An Garda Síochána not to pay. In a letter dated 22 nd August, 2005, addressed to the Bank from An Garda Síochána, (and received by the Bank on the same day and prior to the withdrawal request) Detective Garda Padden stated, inter alia, that it was his "preliminary view" that the money constituted property captured by s. 31(8) of the Criminal Justice Act, 1994 (as amended) and for the purposes of s. 31(8) of the Act of 1994 "direct[ed] that you do not deal in any way with the account ... without my specific consent until further notice." The sending and receipt of the letter are admitted.

10

Section 57 of the Criminal Justice Act 1994, provides that any person to whom or which s. 32 of the Act applies, including their direct employees and officers, (and in this case it is accepted that the section applies to the first named defendant) shall report to An Garda Síochána where they suspect that an offence under ss. 31 or 32 of the Act, in relation to the business of that person or body, has been or is being committed. Section 31 of the Act deals with money laundering, which is defined as concealing or disguising any property which, in whole or in part, directly or indirectly, represents the proceeds of drug trafficking or other criminal activity.

11

Pursuant to s. 57, the first named defendant reported to the gardaí their suspicion as regards the plaintiff's transaction in respect of the cheque for US $95,890.07 which had been lodged into an account opened by the plaintiff in the Bank of Ireland, Dún Laoghaire, Co. Dublin branch.

12

There is no dispute in these proceedings but that the first named defendant was correct in submitting a s. 57 report to the gardaí as it was required to do because to fail to have done so could result in a person being guilty of an offence which carries a penalty of a fine and imprisonment.

13

Having received the s. 57 report, Detective Garda Padden [hereinafter referred to as The Detective Garda] of the Garda Bureau of Fraud Investigation issued a direction to the Bank of Ireland pursuant to s. 31 of the Criminal Justice Act 1994 as substituted by s. 21 of the Criminal Justice (Theft and Fraud Offences) Act 2001, specifically directing the first named defendants for the purposes of s. 31(8) not to deal in any way with the plaintiff's account without the Detective Garda's specific consent until further notice.

14

The direction from the gardaí also advised the first named defendant that there was protection under the relevant provision if the person in possession acted in accordance with the directions from An Garda Síochána.

15

It is not disputed in the circumstances of this case that the Garda authorities were entitled to issue the notice pursuant to s. 31(8) of the Criminal Justice Act 1994 as substituted by s. 21 of the Act of 2001.

16

Accordingly, in essence the plaintiff had received a cheque for US $95,890.07 through a bank in the United States, lodged it in what were suspicious circumstances to an account in the Bank of Ireland, Dún Laoghaire, which in turn made a s. 57 report to the gardaí who in turn issued a direction pursuant to s. 38(1) to the bank not to deal in any way with the proceeds of the account and when the plaintiff sought payment out of the moneys from his account on 22 nd August, 2005, the...

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2 cases
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    ...were cited, two which were pending in the High Court when this matter came on for hearing, the third being Burns v. Bank of Ireland [2008] 1 I.R. 762, to which I will refer later. No cause of action at the suit of the plaintiff arising from that allegation is disclosed in the statement of ......
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