Criminal Assets Bureau v McCarthy

• Jurisdiction: Ireland
• Judge: MR. JUSTICE MICHAEL PEART
• Judgment Date: 28 February 2019
• Neutral Citation: [2019] IECA 140
• Court: Court of Appeal (Ireland)
• Docket Number: Record Number: 151/2017
• Date: 28 February 2019

IN THE MATTER OF THE PROCEEDS OF CRIME ACTS 1996-2005 AND IN THE MATTER OF SECTION 3(1) OF THE PROCEEDS OF CRIME ACTS 1996-2005

BETWEEN:

CRIMINAL ASSETS BUREAU

APPLICANT/RESPONDENT

- AND -

EDWARD McCARTHY

AND

ANTHONY MULLANE

RESPONDENTS/APPELLANTS

[2019] IECA 140

Record Number: 151/2017

THE COURT OF APPEAL

Proceeds of crime – Evidence – Prima facie case – Appellants seeking to appeal against the order of the High Court prohibiting them from disposing of or otherwise diminishing the value of two properties – Whether four exhibited statements constituted hearsay evidence

Facts: The appellants, Mr McCarthy and Mr Mullane, appealed to the Court of Appeal against the order of the High Court (Fullam J) pursuant to s. 3 of the Proceeds of Crime Acts 1996 – 2005 whereby the appellants and any person having notice of the making of said order were prohibited from disposing of or otherwise diminishing the value of two properties set forth in the ‘Schedule of Property’ attached to the said order, the Court being satisfied that the said properties constitute directly or indirectly the proceeds of crime. The properties in question were 83 Cliona Park, Moyross, Limerick, and 29 Creagh Avenue, Kilkeely, Limerick. The main focus of the appeal was on the whether the trial judge erred by allowing into evidence, despite objection, four statements exhibited in an affidavit of D/Garda Hand, which were part of the information and material relied upon by D/Chief Superintendent Corcoran for the formation of his belief for the purposes of s. 8 of the Act that the two properties constitute directly or indirectly the proceeds of crime. The objection was that these four exhibited statements constituted hearsay evidence only, and that the appellants were unable to cross-examine the authors of the statements, one of whom was deceased by the time of the application. Secondly, the appellants submitted that the trial judge erred in the manner in which he determined the s. 3 application, and specifically that he did not correctly follow the steps to be taken as described by McCracken J in FMcK v G.W.D [2004] 2 IR 470 when concluding that a prima facie case was made out by the respondent, so that the onus of proof was then shifted to the appellants. Thirdly, the appellants submitted that the trial judge failed to properly consider the evidence adduced by them as to the source of funds from which the properties were acquired, and accordingly that he failed to comply with the principles in Doyle v Banville [2012] IESC 25. Finally, the appellants submitted that the trial judge failed to satisfy himself, as required by s. 8 of the Act of 1996, that the making of an order under s. 3 of the Act would not be an injustice.

Held by Peart J that it was clear from the way the trial judge summarised the evidence and the sequence in which he dealt with matters in his judgment, that he considered all of that affidavit evidence (which included the exhibits) as part of his consideration as to whether or not there were reasonable grounds for the Chief Bureau Officer’s belief; having been so satisfied, there was on that basis alone a sufficient basis for a conclusion that a prima facie case was made out. Peart J held that there was in this particular case no need to again visit the affidavit evidence of the deponents in order to consider again separately the evidence contained in those affidavits for the purpose of fulfilling the third step of the seven steps. In so far as the trial judge did so, and it was by no means clear that this was the case, he was in Peart J’s view entitled to have regard to all the evidence adduced by D/Garda Hand, even the statements exhibited by him; they were admissible for the purpose of the belief evidence, and there is no reality in considering that the trial judge had to close his mind to them for the purpose of the third step in the process. Peart J held that, even if it may be considered that the trial judge’s treatment of the evidence relating to the explanation of the source of funds could have been somewhat more expansive, the manner in which it had been treated did not fatally undermine the reasoning of the trial judge and his overall conclusion as to failure by the appellants to discharge their onus of proof. In Peart J view, in the absence of anything being offered by way of evidence or even by way of submission based on what evidence was already before the Court for the purpose of the other aspects of the s. 3 application, albeit on behalf of Ms Mullane, rather than by her since she herself was not a party to the proceedings and did not seek to be joined, the trial judge was entitled to express himself as satisfied that there was no serious injustice; he was not obliged to seek out, or inquire about, some evidential basis for injustice where none was proffered as the onus in that regard was upon Ms Mullane if she wished to make that case.

Peart J held that he would dismiss the appeal.

Appeal dismissed.

JUDGMENT OF MR. JUSTICE MICHAEL PEART DELIVERED ON THE 28TH DAY OF FEBRUARY 2019

1 This is an appeal against the order of the High Court (Fullam J.) pursuant to s. 3 of the Proceeds of Crime Acts 1996 – 2005 whereby the appellants and any person having notice of the making of said order were prohibited from disposing of or otherwise diminishing the value of two properties set forth in the “Schedule of Property” attached to the said order, the Court being satisfied that the said properties constitute directly or indirectly the proceeds of crime.

2 The properties in question are 83 Cliona Park, Moyross, Limerick, and 29 Creagh Avenue, Kilkeely, Limerick. For convenience I will refer to these properties respectively as ‘Cliona Park’ and ‘Creagh Avenue’.

3 The main focus of the appeal is on the whether the trial judge erred by allowing into evidence, despite objection, four statements exhibited in an affidavit of D/Garda Hand, which were part of the information and material relied upon by D/Chief Superintendent Corcoran for the formation of his belief for the purposes of s. 8 of the Act that the two properties constitute directly or indirectly the proceeds of crime. The objection was that these four exhibited statements constituted hearsay evidence only, and that the appellants were unable to cross-examine the authors of the statements, one of whom was deceased by the time of the application.

4 Secondly, the appellants submit that the trial judge erred in the manner in which he determined the s. 3 application, and specifically that he did not correctly follow the steps to be taken as described by McCracken J. in FMcK v. G.W.D [2004] 2 I.R. 470 when concluding that a prima facie case was made out by the respondent, so that the onus of proof was then shifted to the appellants.

5 Thirdly, the appellants submit that the trial judge failed to properly consider the evidence adduced by them as to the source of funds from which the properties were acquired, and accordingly that he failed to comply with the principles in Doyle v. Banville [2012] IESC 25.

6 Finally, the appellants submit that the trial judge failed to satisfy himself, as required by s. 8 of the Act of 1996, that the making of an order under s. 3 of the Act would not be an injustice.

The relevant statutory provisions:

7 Section 3 (1) provides:

‘3.(1) Where on application to it in that behalf by a member, an authorised officer or the Criminal Assets Bureau, it appears to the Court on evidence tendered by the applicant, which may consist of or include evidence admissible by virtue of section 8:-

(a) that a person is in possession or control of –

(i) specified property and that the property constitutes, directly or indirectly, proceeds of crime, or

(ii) specified property that was acquired, in whole or in part, with or in connection with the property that, directly or indirectly, constitutes proceeds of crime, and

(b) that the value of the property or, as the case may be, the total value of the property referred to in both subparagraphs (i) and (ii) of paragraph (a) is not less than €13,000,

the Court shall, subject to subsection (1A), make an order (‘an interlocutory order’) prohibiting the respondent or any other specified person or any other person having notice of the order from disposing of or otherwise dealing with the whole or, if appropriate, a specified part of the property or diminishing its value, unless, it is shown to the satisfaction of the Court, on evidence tendered by the respondent or any other person:-

(I) that that particular property does not constitute, directly or indirectly, proceeds of crime and was not acquired, in whole or in part, with or in connection with property that, directly or indirectly, constitutes proceeds of crime, or

(II) that the whole of all the property to which the holder would relate is less than €13,000,

Provided, however, that the Court shall not make the order if it is satisfied that there would be a serious risk of injustice.’

8 Section 8 (1) provides:-

‘8.(1) Where a member or an authorised officer states:-

(a) in proceedings under section 2, on affidavit or, if the Court so directs, in oral evidence, or

(b) in proceedings under section 3, on affidavit or where the respondent requires that opponent to be produced for cross-examination or the court so directs, in oral evidence,

that he or she believes either or both of the following, that is to say:

(i) that the respondent is in possession or control of specified property and that the property constitutes, directly or indirectly, proceeds of crime,

(ii) that the respondent is in possession of or control of specified property and that the property was acquired, in whole or in part, with or in connection with property that, directly or indirectly, constitutes proceeds of crime,

and that the value of the property or, as the case may be, the total value of the property referred to in both...