High Court of Ireland Decisions

1. 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.

2. 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.

3. 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, 1977-1984 for 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, 1977-1984 and 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.

4. 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.

5. At all material times the first and second Defendants were claiming Social Welfare Benefit. In documentation furnished to procure the loan from the Educational 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 suite of furniture.

6. 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.

7. 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

8. 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.

9. 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.

10. 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).

11. 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 his telephoning auctioneers in the area and his knowledge of another house in the area. Since swearing his Affidavit he had passed the property several times and noticed that there where tenants in it recently and would say that the property was not as well maintained as it was in 1997 when it was a new house. Under cross-examination he said he checked with the building society and the mortgage had been paid up to the time that the first Defendant went to jail (that is the 4th of February, 1998) and at the time of his Affidavit (the 14th of February, 1999) the first Defendant’s equity in the property would have been about £15,000 or £16,000 or possibly more. It is a three bedroomed corner house and today would be worth £130,000. It had substantially increased in value in the last twelve months. He could not say how long the mortgage payments had been in arrears and he did not know the amount of any penalties. He had no idea of the internal condition of the property.

12. Counsel for the first Defendant divided his submissions into non-Constitutional and Constitutional arguments. I will set them out in that order and then the replies of Counsel for the Applicant and then my conclusions.

13. Secondly, there is no evidence to support any suggestion that the asset should be disposed of prior to the determination of the issues between the parties at the trial of the action. The purpose of the appointment of a Receiver is to prevent dissipation of the asset and there is no suggestion that the first Defendant will do that nor is there any evidence to suggest that the property is significantly deteriorating in value.

14. First of all it is submitted that the relevant property is the value to the first Defendant, that is his equity in the property after deduction of the amount of the mortgage. There is no proper evidence in relation to the amount of the arrears or in relation to any penalties due in foot of arrears. Furthermore there is no proper evidence in relation to the state of repair of the property: only that it seems to have deteriorated since it was purchased. The Court is asked to speculate in relation to this and also to speculate that the open market value of this property increased in line with the general increase of properties in Dublin during the last year or eighteen months. Counsel submitted that Assistant Commissioner’s “opinion” on the value of the property was pure speculation and should not be accepted and in particular the material in Detective Sergeant R.’s Affidavit should be rejected insofar as it contained hearsay and was not evidence under Section 8 which could only be tendered by a member or an authorised officer as defined, neither of which category applied to Detective Sergeant R.

15. By way of introduction I should say that Counsel for the first Defendant indicated that he wished to raise a large number of Constitutional points all but one of which had already been raised and determined in Murphy -v- G.M . (per O’Higgins J.: unreported: the 4th of June 1999) and in Gilligan -v- Criminal Assets Bureau (3: I.R.: 185). Counsel for both parties agreed that the decision of Parke J. in Irish Trust Bank -v- Central Bank of Ireland (1976-7: ILRM: 50 and in particular at page 53) represented the law on this point. Where relevant Parke J. said:-

16. On the basis of this I ruled that none of the points with the exception of the point that had not - or at least not explicitly - been determined in the earlier cases, should be argued before me but that this position was without prejudice to the first Defendant’s rights to raise these points on appeal.

17. The single remaining point arose to some extent at least out of the recent Judgment of the Appeal Court, High Court of Justiciary in Scotland delivered the 13th of October 2000, in which it was held that an application for a Confiscation Order requiring a convicted accused to pay such sum as the Court thinks fit (made pursuant to Section 1(5) of the Proceeds of Crime (Scotland) Act, 1995) was a criminal charge for the purposes of Article 6(i) of the Convention for the Protection of Human Rights and Fundamental Freedoms and that the statutory assumptions in relation to property appearing to the Court to have been held by the convict since his conviction was received by him as a payment or reward in connection with drug trafficking carried on by him (and other assumptions) were in breach of the provisions of Article 6(ii) insofar as it provided that:

18. Counsel for the first Defendant acknowledged that under present authority which is binding upon this Court the provisions of the Convention are not part of the domestic law of this Country by which is meant, he submitted, the common law, and statute law but not necessarily the Constitution itself.

19. Counsel for the first Defendant wished to make a similar point in regard to the present application, namely that it was in effect a criminal law procedure for the purposes of Article 6 of the Convention (as interpreted by several cases which he referred to including the said Scottish case). He accepted that this point had been dealt with generally by O’Higgins J. in Murphy -v- G.M. and Ors and by McGuinness J. in Gilligan -v- Criminal Assets Bureau and that, accordingly, it could only be appropriately considered again by this Court if it came within the exceptions referred to by Parke J. in the Irish Trust Bank case. In this connection it was submitted that the Scottish case represented new authority and secondly that the provisions of Article 29(3) of the Constitution had the effect of incorporating into the Irish Constitution itself (as distinct from any other level of domestic “law”) the text of the European Convention on Human Rights so that the true position is that Bunreacht na hEireann comprises the words not only of the Constitution as traditionally understood but also the entire text of the Convention on Human Rights. The wording of Article 29(3) is as follows:-

20. This sub-article, it is submitted, has “constitutionalised” the requirements of the Convention and it is submitted that Acts including the Act of 1996 which contravene the guarantees contained in the latter must now be struck down as repugnant to the Constitution (as so extended).

21. It was further submitted that it was apparent that the generally accepted principles of international law, as construed in a number of cases referred to by Counsel, make it clear that the procedure now being adopted by the Applicant was a criminal procedure which therefore required the protections set out in Article 6 of the Convention which were not reflected in the relevant statutory provisions of the 1996 Act. Secondly it was submitted that it can be demonstrated that Ireland has adopted the Convention as a rule of conduct in its relations with other States so that other States can bring proceedings pursuant to the Convention to compel Ireland to comply with its provisions.

22. Accordingly even though it must be accepted by this Court pursuant to authority binding upon it that the provisions of the 1996 Act governing this application are not criminal provisions for the purpose of the Irish Constitution as traditionally so understood, nonetheless they are criminal enactments for the purpose of the Convention on Human Rights which according to this submission is indeed itself part of the Irish Constitution. If it can be demonstrated, accordingly, that these statutory provisions are in breach of the Convention it should be condemned by this Court. In this context it was stressed that Article 15 (iv)(i) of the Constitution prohibits the enactment of any law which is repugnant to any provision thereof.

23. In reply Counsel for the Applicants refined this submission by saying that at the time when In Re Ó Laighléis was decided (1957) it was not possible to argue that the two basic guarantees contained in Article 6 (2) (namely the presumption of innocence and the right to cross-examine) had become part of the “generally recognised principles of international law” but that this had become the situation at the present time. Accordingly, the decision in In Re Ó Laighléis could not be authority dismissing this argument which was not (and could not have been) made to the Supreme Court in 1957.

24. Furthermore, in response to the argument that Article 15 (2) (1) of the Constitution provides that “the sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has power to make laws for the State.”, Counsel for the Applicant submitted that the Constitution (as distinct from legislation) as adopted by the people includes a limited self perpetuating and self amending provision, namely, pursuant to Article 29 (3) the incorporation of principles of international law as and when they become generally recognised for the conduct of Ireland in its relations with other states.

25. The property in respect of which valuation is given is not the equity to the particular defendant but rather the value of the property in respect of which that defendant is in possession or control. Clearly the first Defendant is in possession of this property and the evidence in relation to the overall value of that property clearly demonstrates on any reasonable basis that the value thereof exceeds £10,000. Furthermore there is provision in Section 3 for the Defendant if he wishes to tender evidence to the contrary but this has not been done. It is accepted that the evidence of Detective Sergeant R. is not tendered pursuant to Section 8 but submitted, nonetheless, that his evidence can be taken into account under Section 3(1) of the Act of 1996 which refers to evidence

26. With regard to the constitutional point it is submitted that the first hurdle the Defendant has to overcome is to establish that the terms of the Convention have become part of the Irish Constitution. It is accepted by Counsel for the first Defendant that so far as this Court is concerned there is binding authority to the effect that the terms of the Convention are not part of Irish Law.

27. In regard to this hurdle it is submitted firstly that governing authority is the Supreme Court decision In Re Ó Laighléis (1960 IR:93). That case clearly established that:-

28. It is submitted, contrary to the submission of Counsel for the first Defendant, that the reference to “Irish domestic law” does indeed include the Constitution and reference is made to the arguments submitted by Counsel for the Appellant in In Re Ó Laighléis and in particular to that reported at page 112 where it is recorded:

29. It is now submitted that the present constitutional argument was made in In Re Ó Laighléis (and at least implicitly rejected) in the context of an assumption that the Convention operated at the constitutional (as distinct from the legislative) level and that accordingly the argument now sought to be made and presented as a novel argument is in fact not novel at all. Accordingly Ó Laighléis is authority for the proposition that Article 29(3) of the Constitution did not incorporate the Convention into the Constitution itself.

30. Moreover the Chief Justice (p.124) observed:

31. Accordingly it is now submitted that that sub-article does not in any way assist an individual such as the first Defendant in advancing the present arguments.

32. It is further submitted that Article 46 of the Constitution provides an explicit mechanism for the manner in which the constitution itself may be “ amended, whether by way of variation, addition, or appeal, ”. To interpret Article 29(3) as providing, in addition, a further mechanism whereby the Constitution itself may be amended by way of addition-and that, indeed, by executive order of the Government, would be to interpret the Constitution in a way which is clearly inconsistent with its own provisions and indeed would be fundamentally at odds with the principle that it is the people who are sovereign.

33. It is submitted finally that even if the provisions of Article 6 of the Convention were part of the Irish Constitution that itself could not avail the Defendant in the present case because it has already been held by reference to the existing terms of the Irish Constitution that these statutory provisions are not criminal in nature and the terms of the Convention could only be incorporated into the Constitution insofar as they are not inconsistent with the terms already therein.

34. With regard to the Scottish case submissions were made that it is clear from the judgments when closely analysed that the opinions were based on provisions which were significantly different from those operating in the present case and in particular the Scottish provisions replaced proof by a presumption. The judgments leave one with the impression that a statutory régime imposing a fairly light burden of proof to establish for example a “reasonable suspicion” (to employ a phrase of Lord Prosser who read the leading opinion) might have produced a different result. In the Irish legislation the Applicant must establish the essential elements of his case to the usual civil standard albeit that in certain particulars hearsay and opinion evidence is specified as admissible.

35. It was further submitted that the reference in Article 29(3) to “generally recognised principles of international law” could not, in any event, apply to specific provisions as interpreted and applied by judicial authority to particular cases and which apply to a region (namely the region governed by the Convention) as distinct from the International Community at large so that even if all other arguments failed the proposition contended for by the Applicant cannot stand because the Applicant relies not upon general principles but on two specific rules of regional applicability contained in a specified article of the convention.

36. In my view Section 3(1) of the Act of 1996 makes it clear that the £10,000 threshold refers to property which is either in the possession or control of the Defendant. Clearly the Defendant is in possession of the property and in my view admissible evidence has been tendered to establish the value of that property as in excess of £10,000. I disagree that I must consider only the Defendant’s equity in that property and I base this conclusion on the wording of Section 3(1)(a) to which I have already referred. In so doing I have ignored any hearsay evidence in the Affidavit or evidence of Detective Sergeant R. In my view, however, I am obliged to have regard to the evidence of Assistant Commissioner M. Given the way in which I construe the relevant statutory provisions I think he is clearly entitled to give that evidence and in the absence of evidence to the contrary I accept that the value of the property in the possession of the first Defendant is not less than £10,000.

37. I am not persuaded that the reference to Irish domestic law in the Supreme Court judgment given by Maguire C.J. in In Re Ó Laighléis (in particular at page 125) necessarily includes the Irish Constitution. If it did then, I would not entertain this application as I am bound by that decision. I do not think, however, that the point has been explicitly determined in any decision binding on me. Accordingly, I now turn to consider it.

38. It seems to me that Bunreacht na hEireann provides at Article 46 an explicit mechanism for the amendment of the Constitution itself whether by way of variation, addition or appeal. I cannot construe Article 29(3) as in any way or in any case supplanting this mechanism. Not only does this sub-article not say that the Constitution shall be amended in accordance therewith as appropriate but if this were to be implied it could indeed give rise to a situation where an instrument solemnly adopted by the people and solemnly amended from time to time by the people could also from time to time be amended without such ratification. This seems to me to be entirely repugnant to the fundamental principles which underpin the Constitution and which have been recognised in such cases as Byrne -v- Ireland (1972:IR:241). Such an interpretation would, in truth, upend the Constitution itself.

39. Moreover Counsel for the first Defendant accepts that he must satisfy the Court, in addition to his general proposition which I have already rejected, that Ireland has undertaken to conduct its relations with other States in conformity with the provisions of Article 6 of the Convention in a manner which confers rights on his client to challenge the constitutionality of statutory provisions. I note the explicit determination of the Supreme Court in Ó Laighléis (page 124) where the then Chief Justice Maguire held Article 29(3) of the Constitution confers:

40. Counsel submits, nonetheless, that his client has locus standi to make such a challenge. I am not so persuaded given the detailed deliberations set out in the judgments in In Re Ó Laighléis.

41. Given that I hold no such rights or locus standi have been conferred upon the Applicant, I do not think it is appropriate for me to engage in a consideration of the several cases (including most prominently the decision of the Appeal Court: High Court of Justiciary in Mackintosh -v- Lord Advocate (Unreported:13th October 2000) )because, if I am correct in what I have already said, such an argument can only be addressed to the Supreme Court in an effort to persuade it either to amend, develop or reverse decisions which are clearly binding on me or to reverse those of my colleagues.

42. In the event I consider that the Applicant has made out a case for the appointment of a Receiver to manage the Defendant’s property at W. R., Finglas, Dublin 11 to the intent only that such Receiver should be in receipt of rents from the tenants therein and also for an Order pursuant to Section 3 of the Act of 1996 prohibiting the Defendant from disposing of or otherwise dealing with the said property.