Criminal Assets Bureau v Gately and Another

• Jurisdiction: Ireland
• Judge: Mr. Justice Alexander Owens
• Judgment Date: 07 April 2025
• Neutral Citation: [2025] IEHC 215
• Court: High Court
• Docket Number: [2021 No. 20 CAB]

In the Matter of S.3(1) of the Proceeds of Crime Act 1996

Between:

Criminal Assets Bureau

Applicant

and

James Gately and Charlene Lam

Respondents

[2025] IEHC 215

[2021 No. 20 CAB]

AN ARD-CHÚIRT

THE HIGH COURT

PROCEEDS OF CRIME

Proceeds of crime – Contributions – Proportionality – Second respondent seeking payment from the net proceeds of sale – Whether payments were funded from proceeds of crime

Facts: An issue arose as to whether payments by the first respondent, Mr Gately, to Ulster Bank of monthly mortgage instalments relating to the home of Mr Gately and the second respondent, Ms Lam, at Glin Drive, Coolock in Dublin (Glin Drive) in the period between 9 April 2019 and 19 June 2024 were funded from proceeds of crime. The High Court (Owens J) indicated that he would be prepared to make an allowance to Ms Lam out of the proceeds of sale of the house to reflect any contributions by her to those payments which were not derived from proceeds of crime. This judgment was supplemental to Owens J’s judgment delivered on 19 June 2024.

Held by Owens J that the evidence showed that money from undisclosed sources made a substantial contribution towards the lifestyle of Mr Gately and Ms Lam in the period between April 2019 and the end of 2022, except during some of the periods when Covid-19 restrictions were in place. Owens J held that this money topped up Ms Lam’s legitimate receipts and heavily contributed to her ability to service monthly mortgage payments from legitimate receipts during that period. He held that the extent of that contribution from undisclosed sources was much less significant during 2022. He held that some of the money which Mr Gately and Ms Lam lived on after Covid-19 restrictions were lifted came from cash receipts from Ms Lam’s business which were not lodged to her AIB Bank current accounts. Owens J held that in the period between January 2022 and September 2022 Ms Lam’s receipts from her business and from other beauticians were sufficient to service monthly mortgage payments for Glin Drive. In the absence of balance sheets and profit and loss accounts, he found it difficult to get a sense of how much of the value of those receipts was used to meet expenses. He could only identify two payments by her during that period which were designated as “rent”; both of these were for €600 and they were debited to Ms Lam’s AIB Bank Artane current account in May and September 2022. He held that any other payments by her of rent for her business premises during that period came from undisclosed means. He noted that during 2022 Ms Lam and Mr Gately continued to use money which came from undisclosed sources; that money indirectly subsidised mortgage payments and other legitimate expenditure, but the extent which it did so was not possible to quantify with any precision.

Owens J was prepared to direct that Ms Lam receive a further payment from the net proceeds of sale of Glin Drive to reflect the fact that part of the means which funded her contributions towards mortgage payments for Glin Drive in the period between April 2019 and September 2022 comprised legitimate income which was not sourced in proceeds of crime. He considered €6,000 to be an amount which gave fair and proportionate recognition to that contribution. He decided not to make any adjustment to take into account the benefit which Mr Gately and Ms Lam got by residing in Glin Drive and the additional loss of value to the State in the equity of redemption of that property.

Payment directed.

JUDGMENT of The Hon. Mr. Justice Alexander Owens delivered on the 7th day of April 2025

1 This judgment is supplemental to my judgment delivered on 19 June 2024.

2 An issue arose as to whether payments by James Gately to Ulster Bank of monthly mortgage instalments relating to the home of James Gately and Charlene Lam at Glin Drive, Coolock in Dublin (Glin Drive) in the period between 9 April 2019 and 19 June 2024 were funded from proceeds of crime. I indicated that I would be prepared to make an allowance to Charlene Lam out of the proceeds of sale of this house to reflect any contributions by her to these payments which were not derived from proceeds of crime.

3 Ulster Bank collected mortgage instalments relating to Glin Drive by monthly direct debits presented to James Gately's AIB Bank current account. These direct debits were presented for payment around the eighteenth day of each calendar month. Neither party to these proceedings exhibited statements which show transactions on James Gately's bank account for the relevant period. Ulster Bank mortgage statements show mortgage payments of €16,990 in the period between 9 April 2019 and 19 September 2022. This was made up of thirty monthly payments of €566 odd.

4 James Gately missed a number of payments during this period. Direct debits for monthly instalments which fell due in April, May and December 2019 were bounced. Direct debits for instalments which fell due in February, March, April, June, August and October of 2020 were bounced. Direct debits for instalments which fell due in May 2021, May 2022 and July 2022 were bounced. Charlene Lam's averment of belief that she may have made mortgage payments after that time is not supported by evidence.

5 All monthly direct debits for mortgage instalments which fell due after 19 September 2022 up until November of 2023 were bounced. As a result of this, James Gately and Charlene Lam got the benefit of free occupation of Glin Drive from October 2022 at expense to the State. This is because additional interest has accumulated on their mortgage balance as a result of their default. This extra interest must be discharged from the proceeds of sale of Glin Drive.

6 Charlene Lam submitted an affidavit sworn on 16 July 2024 in which she claimed that she contributed €10,411 to mortgage payments on Glin Drive between 8 April 2019 and 19 October 2022. She claimed that these payments were funded by proceeds of a personal injuries claim, a lottery win and earnings from her beauty salon. She provided a list of these payments. This list provided the date and amount of each withdrawal which was accompanied by the narrative “ mortgage” in her bank statements. It also identified her AIB Bank current account from which each of these withdrawals was made. She stated that she believed that she made other mortgage payments, but she did not then have documents to vouch these.

7 Charlene Lam left it to the reader of her exhibit to ascertain that pages were missing from her AIB Bank current account statements. She exhibited the remaining pages in a haphazard fashion. She inaccurately stated that €12,344 which her sister got as compensation for personal injuries was lodged to her bank account on 11 March 2019.

8 Charlene Lam exhibited copies of pages 8 to 68 of her bank statements relating to her business current account at AIB Bank Artane. These cover transactions on that account between 4 October 2021 and 6 January 2023. She also exhibited pages 183 to 221 and 245 to 260 of her bank statements relating to her current account at AIB Bank Drumcondra Road. These cover transactions on that account between 18 November 2018 and 31 July 2020, and between 10 August 2021 and 28 July 2022. She also exhibited her Revolut account statements for the period between 10 September 2019 and 29 February 2024. She also exhibited “a copy of my income tax returns for the years 2019 to 2022.”

9 Charlene Lam exhibited details of her sales, described as “ banked,” and as recorded in her cashbook for the years 2021, 2022, 2023 and 2024. These showed her “ sales” and “ VAT on sales” for those years. Her sales net, of VAT, for 2021 and 2022 were €44,145 and €69,574. She did not exhibit cashbooks, balance sheets or profit and loss accounts for 2019, 2020, 2021 or 2022. Her tax returns showed taxable income of €22,877, €19,303, €34,492 and €36,041 in the years 2019, 2020, 2021 and 2022, respectively. Her income tax, PRSI and USC liability, after credits and reliefs, for each of those years was €2,825, €1,061, €5,181 and €5,902.

10 I note that Charlene Lam has not been served with any estimated assessments in relation to alleged under-declaration of income for 2019 and later years.

11 The Bureau's deponent exhibited copies of the missing statements on Charlene Lam's AIB Bank current accounts. These disclose that Charlene Lam's business current account at AIB Bank Artane was opened on 9 July 2021 with a transfer of €600 from her Revolut account.

12 Charlene Lam submitted a supplemental affidavit sworn on 26 November 2024 in which she claimed that she provided €16,990 towards mortgage instalments during the period between 17 June 2019 and 19 September 2022. I agree with her general contention that the Bureau's deponent jumped to some conclusions which the materials which he worked off do not support.

13 I started by examining transactions recorded on Charlene Lam's AIB Bank Drumcondra current account in the period between 9 April 2019 and 31 July 2020 and on her Revolut account for the period between 10 September 2019 and 31 July 2020.

14 I then looked at transactions recorded in the extra material which covered transactions on Charlene Lam's AIB Bank Drumcondra current account in the period between 1 August 2020 and 9 August 2021. This was the period for which she did not retain copies of her bank statements relating to that current account. I also looked at transactions on her Revolut account during the same period.

15 I looked at transactions recorded on Charlene Lam's business current account at AIB Bank Artane for the period between 9 July 2021 to 3 October 2021. The statements detailing these transactions were omitted from her exhibit to her affidavit sworn on 16 July 2024. I also looked at transactions on her Revolut account and on her AIB Bank Drumcondra current account during the same period.

16 Finally, I looked at transactions...