F McK v A F (Proceeds of Crime)

• Jurisdiction: Ireland
• Judge: Mr. Justice Geoghegan
• Judgment Date: 23 February 2005
• Neutral Citation: [2005] IESC 6
• Court: Supreme Court
• Docket Number: [S.C. No. 181 of 2003]
• Date: 23 February 2005

MCK (F) v F (A) & ORS

BETWEEN/

F. McK.

Plaintiff/Respondent

and

A. F.

Defendant/Appellant

and

J.P.M.F.

Defendant

BETWEEN/

F.J. McK.

Plaintiff/Respondent

and

E.H.

Defendant/Appellant

[2005] IESC 6

Murray C.J.

Denham J.

Hardiman J.

Geoghegan J.

McCracken J.

181/2003

No. 206/03

THE SUPREME COURT

CRIMINAL LAW

Proceeds of crime

Interlocutory freezing order - Limitations - 21 day time limit - Statute of Limitations - Whether freezing order constituted "penalty or forfeiture" - Whether interlocutory freezing orders covered by Statute - Statute of Limitations Act 1957 (No 6), ss 3, 7, and (11)2 - Proceeds of Crime Act 1996 (No 30), s 2(5) - Defendants' appeal dismissed

PRACTICE AND PROCEDURE

Pleadings

Proceeds of crime - Cause of action - Particulars - Whether proceedings disclose cause of action - Whether relationship between property alleged to be proceeds of crime and particular crime or crimes had to be shown - McK v F (Unrep, Finnegan P,24/2/2003) approved - Proceeds of Crime Act1996 (No 30), s 3 - Defendants' appeal dismissed (206/2003 - SC - 23/2/2005)[2005] IESC 6

McK (F) v F (A)

The appellant appealed from the decision of the President of the High Court refusing to grant an order striking out the respondent's claim for relief under section 3 of the Proceeds of Crime Act, 1996. The grounds for the appellant's appeal were that the proceedings did not disclose a cause of action as the respondent had not sought to establish that each item of the property was acquired or funded with the proceeds of the commission of a specific offence and in any event were statute barred. Two appeals were heard together as they raised issues, which overlapped.

Held by the Supreme Court (Murray, Denham, Hardiman, Geoghegan, McCracken JJ) in dismissing both appeals:

1. That it was not necessary for the respondent to be able to relate particular proceeds to a particular crime or even be able to give particulars making such linkage.

2. That section 3 applications were not subject to any statute bar provisions.

Reporter: L.O'S.

MCK v F (A) 2002 1 IR 242 2002 2 ILRM 303

PROCEEDS OF CRIME ACT 1996 S3

PROCEEDS OF CRIME ACT 1996 S4

MURPHY v M (G) 2001 4 IR 113

PROCEEDS OF CRIME ACT 1996 S1

PROCEEDS OF CRIME ACT 1996 S2

RSC O.19 r7

MCK v D 2004 2 ILRM 419

STATUTE OF LIMITATIONS 1957 S11(7)

LIMITATION ACT 1939 (UK)

STATUTE OF LIMITATIONS 1957 S3(2)

STATUTE OF LIMITATIONS 1957 S7

STATUTE OF LIMITATIONS 1957 S3

PROCEEDS OF CRIME ACT 1996 S2(5)

KSK ENTERPRISES LTD v BORD PLEANALA 1994 2 ILRM 1 1994 2 IR 128

1 JUDGMENT of Mr. Justice Geoghegan delivered the 23rd day of February 2005

2 These two appeals raise issues which overlap. They were originally listed for hearing and indeed opened before a court comprising of three judges. When it emerged that attempts were being made to challenge at least one previous judgment of this court, it was decided that the court should be reconstituted into a court of five judges and the appeals were re-entered for hearing before that court. The appeals were then heard before the reconstituted court and I am now delivering a judgment which covers both appeals.

3 Having carefully read and considered the several sets of submissions filed by both appellant and respondent in each case, I have come to the conclusion that I cannot meaningfully address the several grounds of appeal without first dealing with two underlying matters running through all the written submissions and, indeed, the oral submissions of the respective appellants.

4 The first is that the decision of this court in the case (rather oddly cited in the Irish Reports as F. McK v. A.F (Statement of Claim) [2002] 1 I.R. 242) was wrong. I delivered a reserved judgment in that case with which Denham J., Murray J. (as he then was) and Hardiman J. agreed. In it I pointed out that despite the contextually unusual use of the expression "interlocutory order" it was perfectly clear on any reading of the Proceeds of Crime Act, 1996that a proceeding under section 3 of that Act was a quite separate proceeding from a proceeding under section 4. It was wholly wrong to regard a section 4 hearing as in some way the trial of an action originally commenced by a Section 3 Application. Fennelly J. delivered his own judgment but to the same effect.

5 Although, unfortunately for quite a period the Act was viewed differently in the High Court partly with the encouragement of the parties and probably because the stage was never reached and, indeed, has not still been reached for considering all the ramifications and the precise nature of a Section 4 Application, this need not have happened after the 18th October, 2001 when the former Chief Justice, Keane C.J. delivering the judgment of this court in relation to the constitutionality of the Act of 1996 in Murphy v. G.M. [2001] 4 I.R. 113 at p. 154 of the report said the following:

"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."

6 That passage and another passage from a judgment of Keane C.J. in a different case are cited in my judgment referred to above. In making these references, I am merely pointing out that before ever F. McK v. A.F (Statement of Claim) was decided the scheme of the Act and in particular the concept that the Section 4 Application was not the trial of an action commenced by a Section 3 Application had been already signposted in earlier judgments.

7 Although as it has turned out and, indeed, could I think have been anticipated, the use of the expression "interlocutory order" in the 1996 Act given the scheme of the Act was most unfortunate, I do not consider that its use by the Oireachtas or the draftsman was in any way irrational or incorrect in terms of English. It is perfectly obvious that when a Section 3 Order is made it is contemplated by everybody that there will be a further order in the future. Either an aggrieved party will bring an application to have the Section 3 Order discharged and the property thereby unfrozen or, in the course of time, after the seven years have elapsed a Section 4 Application will be brought. In theory, of course, neither event might happen. But that would not be the probability or the anticipation. Only in that sense could the s. 3 Order be considered to have some elements which could be considered of an "interlocutory"nature. However, it is only described as an interlocutory order because, as I have already indicated, of the unfortunate use of that term in the drafting of the Act. Section 1 of the Act states ""Interlocutory Order" means an order under s. 3;" When the Act refers to an "interlocutory order" it means no more and no less than an order pursuant to s. 3, that being the appellation attached by the Act to it. In any event it cannot be regarded as an interlocutory order in a particular action or proceedings. Its use is unfortunate because the undiscerning may confuse that term and its specific statutory meaning under the Act with its use elsewhere in a purely procedural sense as for example in the Rules of the Superior Courts. In short the nature or effect of an order pursuant to s. 3 can only be discerned by reference to the substance of the provisions of s. 3 itself.

8 Accordingly, I will be approaching the grounds of appeal on the clear basis that F. McK v. A.F is correctly decided.

9 I now want to deal with the second underlying and overreaching point. In both sets of proceedings the general indorsements of claim on the plenary summonses followed the old procedure now held to be wrong by this court and included as a relief an order under section 4 as well as an order under section 3. Dr. Forde argues that whether that be right or wrong, once it has been done, then, for the purposes of a ground of appeal which he makes relating to the Statute of Limitations and to which I will be referring, the proceedings must be viewed as essentially seeking a Section 4 Order ultimately. I would wholly reject that argument. The reference to Section 4 must be regarded simply as surplusage. I will, therefore, be approaching both of these appeals on the basis that the nature of the proceeding before the court is a proceeding seeking a Section 3 Order only i.e. a freezing order.

10 Having disposed of those two matters, I propose now to deal with the relevant grounds of appeal. I will start with the F. case and explain what exactly is involved in the appeal.

11 The proceedings were commenced by plenary summons issued on the 20th July, 2000. In accordance with the practice which pertained at the time a notice of motion seeking relief under section 3 of the Proceeds of Crime Act, 1996was issued at the same time returnable before the High Court on the 28th July, 2000. That motion was grounded on various affidavits. An appearance was entered by the appellant on the 26th July, 2000 and on the 28th July, she gave undertakings to the High Court not to dispose of the property the subject matter of the application until the hearing of the Section 3 Application. The matter then became adjourned from time to time during which period there was a history of further motions which it is not necessary to detail here. I should mention, however, that that history included a motion which was appealed to this court which appeal was not in the event proceeded with. Ultimately, a statement of claim was delivered in April, 2002 and that gave rise to a notice for particulars....