MFM v MC (Proceeds of crime)

• Jurisdiction: Ireland
• Judge: O'Sullivan J.
• Judgment Date: 19 December 2000
• Neutral Citation: [2000] IEHC 109
• Court: High Court
• Docket Number: [1999 No. 1606P]
• Date: 19 December 2000

[2000] IEHC 109

THE HIGH COURT

O'Sullivan J.

No. 1606P/1999

M (M F) v. C (M) & ORS

IN THE MATTER OF THE PROCEEDS OF CRIME ACT, 1996

BETWEEN

M.F.M.

PLAINTIFF/APPLICANT

AND

M.C.,J.W.,P.C.(OTHERWISE KNOWN AS P.C.) AND J.C.

DEFENDANTS/RESPONDENTS

Citations:

PROCEEDS OF CRIME ACT 1996 S3

PROCEEDS OF CRIME ACT 1996 S4

MISUSE OF DRUGS ACT 17977–1984 S 15

PROCEEDS OF CRIME ACT 1996 S3(3)

PROCEEDS OF CRIME ACT 1996 S3(1)

PROCEEDS OF CRIME ACT 1996 S8(1)(3)

PROCEEDS OF CRIME ACT 1996 S7(1)

PROCEEDS OF CRIME ACT 1996 S8

PROCEEDS OF CRIME ACT 1996 S1

MURPHY V M (G) UNREP O'HIGGINS 4.6.1999 1999/19/5948

IRISH TRUST BANK V CENTRAL BANK OF IRELAND 1976–1977 ILRM 50

PROCEEDS OF CRIME (SCOTLAND) ACT 1995 S1(5)

EUROPEAN CONVENTION FOR PROTECTION OF HUMAN RIGHTS & FUNDAMENTAL FREEDOMS ART 6(i)

EUROPEAN CONVENTION FOR PROTECTION OF HUMAN RIGHTS & FUNDAMENTAL FREEDOMS ART 6(ii)

EUROPEAN CONVENTION FOR PROTECTION OF HUMAN RIGHTS & FUNDAMENTAL FREEDOMS ART 6

CONSTITUTION ART 29(3)

CONSTITUTION ART 15(iv)(i)

O LAIGHLEIS, IN RE 1960 IR 93

EUROPEAN CONVENTION FOR PROTECTION OF HUMAN RIGHTS & FUNDAMENTAL FREEDOMS ART 6(2)

CONSTITUTION ART 15(2)(1)

PROCEEDS OF CRIME ACT 1996 S7(1)(b)

PROCEEDS OF CRIME ACT 1996 S3(1)(a)

DOYLE V COMMISSIONER OF AN GARDA SIOCHANA 1999 1 IR 249

CONSTITUTION ART 46

BYRNE V IRELAND 1972 IR 241

MACKINTOSH V LORD ADVOCATE UNREP AC 13.11.2000

Synopsis:

Proceeds of Crime

Proceeds of crime; constitutional; respondent involved in distribution of heroin; applicant seeks freezing order in relation to certain property and appointment of receiver to take possession of property; whether appropriate to appoint receiver as no interlocutory order had been made; whether admissible evidence had been tendered that value of property in excess of £10,000; whether Article 29.3 of Constitution had effect of incorporating text of European Convention on Human Rights into Constitution itself; whether Proceeds of Crime Act 1996 contravened Article 6 of European Convention on Human Rights.

Held: Order pursuant to s. 3 of 1996 Act prohibiting respondent from disposing of property granted; receiver appointed for limited purpose of receiving rents from property pending outcome of trial; consideration of constitutional issue inappropriate as respondent lacked locus standi.

M (MF) v. C (M) - High Court: O' Sullivan J. - 19/12/2000 - [2001] 2 IR 385

In this application a freezing order was sought pursuant to section 3 of the Proceeds of Crime Act, 1996, in relation to a property in Dublin. O'Sullivan J considered that the applicant had made out a case for the appointment of a receiver to manage the defendant's property to the extent only that such receiver should be in receipt of rents from the tenants therein and also an order pursuant to section 3 of the Act of 1996 would be granted prohibiting the defendant from disposing of or otherwise dealing with the said property.

1 O'Sullivan J. delivered 19th day of December 2000

Introduction

2 In this interlocutory Application brought pursuant to Section 3 of the Proceeds of Crime Act, 1996("The 1996 Act") the Applicant seeks a Freezing Order in relation to property at W. R., Finglas, Dublin 11 together with the appointment of a Receiver to take possession of the property and its proceeds (it is let to tenants) until a final Order is made under Section 4 of the Act of 1996.

3 The application is grounded in the usual way and as contemplated by the Act of 1996 upon Affidavit. The principal Affidavit is that of the Applicant himself supported by an Affidavit of Detective Sergeant P. R. The Applicant gives his belief, based inter alia on the averments contained in the Affidavit of Detective Sergeant P. R., that the first named Respondent (the matter has been compromised between the Applicant and the other three Respondents) is in possession or control of the aforesaid property and that it constitutes directly or indirectly the proceeds of crime or that the same was acquired in whole or in part with or in connection with property that directly or indirectly constitutes the proceeds of crime.

4 In his Affidavit Detective Sergeant R. sets out a complex narrative which establishes that the first Respondent is known to the Gardaí to have been involved at a significant level in the distribution of heroin in the inner city of Dublin in 1994, 1995 and 1996. He, together with the second Defendant, generated large sums of money and accumulated a significant amount of wealth in a short period without the benefit of any known lawful income. On the 10th of May 1996 the first Defendant was convicted of an offence pursuant to Section 3 of the Misuse of Drugs Act, 1977– 1984for possession of heroin and was sentenced to a three year suspended sentence. On the 4th of February 1998 he was convicted of an offence pursuant to Section 15 of the Misuse of Drugs Act, 1977– 1984and was sentenced to 10 years imprisonment following which the suspension was removed from his earlier three years sentence which he was directed to serve at the conclusion of the 10 year sentence. Apart from this he had been convicted on seven occasions between 1982 and 1993 of non-drug related offences.

5 The property was purchased in the names of the first and second Defendants. Detective Sergeant R. in his Affidavit of the 14th of February, 1999 says it has a "present" value of £100,000 approximately with a mortgage of approximately £77,560 in favour of the Educational Building Society. A booking deposit of £2,000 was paid on the 6th of February, 1997, a mortgage obtained from the Educational Building Society of £77,560, a further £2,000 was paid on signing the contract and on closing the shortfall of £5,500 was dealt with by way of the vendors accepting a mortgage guaranteed by the third named Defendant. Although the property was purchased by the first Defendant using a false name it is established that the first Defendant is still the beneficial owner of this property.

6 At all material times the first and second Defendants were claiming Social Welfare Benefit. In documentation furnished to procure the loan from the Education Building Society the first Defendant claimed to be a mechanical engineer with a gross annual income of £26,000. Detective Sergeant R. deposes that this information was false. He also avers that the money advanced by these Defendants for the purchase of this property was the direct proceeds of drug trafficking activity of these Defendants. The amount of the mortgage monies were obtained by them by falsely pretending that the contents of the documents submitted in support of the loan application are true and accurate and that forged P60's were genuine documents when they were not. He further deposes that additional sums were expended on decoration of the property and that all of this was paid in cash other than a sum of £4,000 paid to Arnotts for a suit of furniture.

7 The Affidavit of Detective Sergeant R. is detailed and complex setting out transactions affecting three other properties apart from this one, which other properties have been dealt with by compromise agreements between the Plaintiff and the second, third and fourth Defendants. The foregoing is a summary only of the evidential material deposed to on Affidavit in the case taken by the Plaintiff against the first Defendant.

8 This factual case was met by a single Affidavit sworn by Sean McDonagh, Solicitor dated the 12th of March, 1999 which where relevant refers to the allegations of fact in P. R. 's Affidavit and says

"I will seek my client's instructions and, if appropriate, will file a replying Affidavit and, in due course, apply under Section3(3) of the Proceeds of Crime Act, 1996, to vary such Interlocutory Order as may be made herein under Section 3(1) of that Act."

9 No such further Affidavit was filed and that remained the state of the evidence until oral evidence (as contemplated by Section 8(1)3 of the Act 1996) was presented at the hearing before me.

10 The oral evidence was that of the Applicant himself who is now an Assistant Commissioner who said that he was a "member" within the meaning of the Act of 1996 in 1998. He was aware of the contents of Detective Sergeant P. R. 's affidavit and he was in charge of the investigation carried out under the Act of 1996 by Detective Sergeant R. who was under his direction and control. He believed that this property was purchased with the proceeds of crime either directly or indirectly and that its value exceeded £10,000. He based this belief on the facts contained in the affidavit of Detective Sergeant P. R. In particular the first Defendant was engaged in drug trafficking on the streets of Dublin in the years 1994,1995 and 1996 and as a result of the proceeds thereof acquired property including this property.

11 Under cross-examination he accepted that he had not visited the premises, he could not say whether it was dilapidated or in excellent condition and had no idea who the tenants where. He formed his belief as to the value of the property taking into account the amount of the mortgage, and the value of the property as stated in the affidavit of Detective Sergeant R. He did not know if the mortgage payments where kept up or if penalties were due for non-payment. The booking deposit of £2,000 and the subsequent payment of £2,000 were he believed the proceeds of crime namely drug trafficking by the first Defendant. He ceased to be a bureau officer on the 1st of December 1999 and was unable to identify the year when the money that purchased this property had been acquired and specifically could not say if the crime of which it was the proceeds occurred after the 4th of August, 1996 (that is the date upon which the Act of 1996 became law).

12 Detective Sergeant P. R. gave evidence that the averment in his Affidavit as to the value of the property being £100,000 was based on...