McKenna v AF

• Jurisdiction: Ireland
• Judge: FENNELLY J.,Mr. Justice Geoghegan
• Judgment Date: 30 January 2002
• Neutral Citation: [2002] IESC 4
• Court: Supreme Court
• Docket Number: [S.C. No. 102 of 2001]
• Date: 30 January 2002

[2002] IESC 4

THE SUPREME COURT

Denham J.

Murray J.

Hardiman J.

Geoghegan J.

Fennelly J.

102/01

McK (F) v. F (A) & F (J)

BETWEEN

F. McK.

APPLICANT

AND

A.F. AND J.F.

RESPONDENTS

Citations:

PROCEEDS OF CRIME ACT 1996 S3

PROCEEDS OF CRIME ACT 1996 S4

PROCEEDS OF CRIME ACT 1996 S7

PROCEEDS OF CRIME ACT 1996 S9

M V M UNREP O'HIGGINS 4.6.1999 1999/19/5948

M V M (G) UNREP SUPREME 18/10/2001

PROCEEDS OF CRIME ACT 1996 S3(1)

PROCEEDS OF CRIME ACT 1996 S3(2)

PROCEEDS OF CRIME ACT 1996 S3(3)

PROCEEDS OF CRIME ACT 1996 S3(4)

PROCEEDS OF CRIME ACT 1996 S3(5)

PROCEEDS OF CRIME ACT 1996 S4(1)

PROCEEDS OF CRIME ACT 1996 S4(2)

PROCEEDS OF CRIME ACT 1996 S4(3)

PROCEEDS OF CRIME ACT 1996 S4(4)

PROCEEDS OF CRIME ACT 1996 S4(5)

PROCEEDS OF CRIME ACT 1996 S4(6)

PROCEEDS OF CRIME ACT 1996 S4(7)

PROCEEDS OF CRIME ACT 1996 S4(8)

PROCEEDS OF CRIME ACT 1996 S8(1)

PROCEEDS OF CRIME ACT 1996 S8(2)

RSC O.1 r1

RSC O.1 r6

RSC O.2

RSC O.3

RSC O.12 r2(1)

RSC O.12 r5

RSC O.19 r1

RSC O.20 r1

RSC O.20 r2

RSC O.20 r3

MCK V C & G UNREP SUPREME 23.7.2001

STROUDS JUDICIAL DICTIONARY OF WORDS AND PHRASES 6ED VOL 2 G-P

INSPECTOR OF TAXES V ARIDA LTD 1996 ILRM 74

PROCEEDS OF CRIME ACT 1996 S8

RSC O.40 r4

JUDICATURE ACT (IRL) 1877 S28(8)

STOCKTON IRON FURNESS COMPANY, RE 1879 10 CH 334

RSC O.3 r22

RSC O.1 r2

AG,PEOPLE V BELL 1969 IR 24

Synopsis:

REVENUE

Criminal assets offence

Practice and procedure - Proceeds of Crime - Whether statement of claim required - Whether matter could proceed by motion only - Proceeds of Crime Act, 1996 - Supreme Court of Judicature Act (Ireland) 1877 - Rules of the Superior Courts, 1986 (102/2001 - Supreme Court - 30/01/2002) - [2002] 1 IR 242 - [2002] 2 ILRM 303

McK (F) v F (A)

Facts: The proceedings were brought under the Proceeds of Crime legislation. The defendants contended that the plaintiff (acting under the relevant legislation) was required to furnish a statement of claim. The plaintiff contended that a statement of claim was not required and the entire proceedings could be conducted as though it were an application for a interlocutory injunction. This view was upheld in the High Court and the defendants appealed.

Held by the Supreme Court (Geoghegan J and Fennelly delivering judgments; Denham J, Hardiman J and Murray J agreeing) in allowing the appeal. Mr. Justice Geoghegan held that no rules of court had yet been specifically made to deal with applications under the Proceeds of Crime Act, 1996 and this lacuna had given rise to the dispute in question. The position was quite simple in that a statement of claim must be delivered and the plaintiff could not escape this obligation. Mr. Justice Fennelly held that the Proceeds of Crime Act, 1996 could not be said to lay down a particular procedure which would dispose the procedure laid down in the existing court rules. The plenary summons procedure applies. The appellant had entered an appearance seeking a statement of claim and the plaintiff was bound to deliver one.

1 30th day of January, 2002byFENNELLY J.

FENNELLY J.

2 This appeal raises an important about the procedures applicable to claims brought under the Proceeds of Crime Act, 1996("the act of 1996"). Is the Criminal Assets Bureau obliged to deliver a statement of claim, or may it proceed by notice of motion after the issue of the plenary summons?

THE PROCEEDINGS

3 On 20th July 2000, the Plaintiff issued a plenary summons against the respondents, claiming orders pursuant to sections 3, 4, 7 and 9 of the act of 1996. The present appeal concerns only the second-named defendant, whom I will call the appellant. The orders sought relate to a number of land holdings and bank accounts named in a schedule to theplenarysummons. As is clear from the affidavits later filed, the proceedings are maintained by the Plaintiff as an officer of the Criminal Assets Bureau established under the Criminal Assets Bureau Act, 1996.

4 On 28 ^th July 2000, the Plaintiff issued a notice of motion, grounded on a number of affidavits, seeking orders pursuant to several sections of the act of 1996. The principal grounding affidavit states that the appellant is joined because he is alleged to be the joint holder of two of the bank accounts described in the schedule to the plenary summons and that no allegations of criminality are made against him. On the hearing of the motion, the defendants gave certain undertakings in relation to the property, the subject-matter of theproceedings.

5 The second named defendant entered an appearance on 21 ^stSeptember 2000 requesting delivery of a statement of claim. This request was repeated in correspondence. The Chief State Solicitor, writing on behalf of the Plaintiff, replied as follows:

"The above proceedings are interlocutory in nature and the High Court has held that statement of claim is not a prerequisite in these proceedings. Sufficient detail of my client's case against your client is set out in the papers already filed herein and served on your client. Therefore it is proposed not to furnish a statement ofclaim."

6 The appellant brought a motion to dismiss the proceedings on the ground of failure to deliver a statement of claim. On the hearing of that motion, Mr Justice O'Sullivan decided that he should follow a decision of Mr Justice O'Higgins in M v M (unreported 4 ^th June 1999). It is apparent that, as a general practice, the Plaintiff in Criminal Assets Bureau cases does not deliver a statement of claim and that that position has been accepted in the High Court.The learned trial judge noted that the point had arisen in many such cases and though it is desirable that the matter be decided by thisCourt.

THE RELEVANT STATUTORY PROVISIONS

7 The long title to the act of 1996 describes it as "an Act to enable the High Court, as respects the proceeds of crime, to make orders for the preservation and, where appropriate, the disposal of the property concerned and to provide for related matters." In its judgment of 18 ^th October 2001, in M v G.M. anothers, this Court entertained and rejected a wide-ranging challenge to the constitutionality of many of the provisions of the act of 1996. The Court described the legislation as "unquestionably draconian." (Page 41 of the unreported judgment).

8 The act of 1996 enacts three substantive procedures for the achievement of its objective.

9 • - section 2 confers power on the High Court to make what is called "an interim order" preventing certain specified dealings with property for a period of twenty one days; the application is to be made ex parte either by a member of An GardaSíochána not below the rank of Chief Superintendent or by an authorised officer of the Revenue Commissioners;

10 • - section 3, which I set out in full, provides for an application to be made to the High Court for what it calls "an interlocutory order" in terms practically identical to the interimorder;

11 • - section 4 applies where an interlocutory order has been in force for not less than seven years. Then, the Court may, on application make a "disposal order" which divests the respondents of their rights in the property.

12 The act of 1996 contains other important provisions including provisions for admitting hearsay evidence subject to specified conditions.

13 The interlocutory order under section 3 is central to the argument in the present appeal and I set out its relevant provisions:

"3.(1) Where, on an application to it in that behalf by the applicant, it appears to the court, on evidence tendered by the applicant, consisting of or including evidence admissibility 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 property that, directly or indirectly, constitutes proceeds of crime,

14 and

15 (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 £10,000,

16 the court shall 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 diminishine its value, unless, it is shown to the satisfaction of the court, on evidence tendered by the responsibility of any other person-

17 (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

18 (II) that the value of all the property to which the order would relate is less than £10,000:

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

20 (2) An interlocutory order -

21 (a) may contain such provisions, conditions and restrictions as the court considers necessary or expedient, and

22 (b) shall provide for notice of it to be given to the respondent and any other persons who appears to be or is affected by it unless the court is satisfied that it is not reasonable possible to ascertain his, her or their whereabouts.

23 (3) Where an interlocutory order is in force, the court, on application to it in that behalf at any times by the respondent or any other person claiming ownership of any of the property concerned, may, if it is shown to the satisfaction of the court that the property or a specified part of it is property to which paragraph (I) of subsection (1) applies, or that the order causes any other injustice, discharge or, as may be appropriate, vary the order.

24 (4) The court shall, on application to it...