A challenge by a number of persons being pursued by the Criminal Assets Bureau to the constitutionality of parts of the Proceeds of Crime Act, 1996, was rejected by the High Court yesterday. The decision means CAB can continue to seek to "freeze" assets which it suspects are the proceeds of crime.
Mr Justice O'Higgins also ruled that the Act, even if it permits the forfeiture of property from persons innocent of any wrongdoing, is not constitutionally invalid.
The proceedings were taken by a number of individuals in a case which had been heard in camera. Mr Justice O'Higgins did not identify these persons.
In the action, CAB had applied for an interlocutory order under Section 3 (1) of the Act preventing certain persons from disposing of or otherwise dealing with a sum of £300,000 partly made up of sterling and partly of Irish pounds. Mr Justice O'Higgins granted that order.
A High Court order of July 1997 made under Section 2 of the Act had frozen the monies, while another order of the same date under Section 7 of the Act appointed the CAB legal officer, Mr Barry Galvin, as receiver over the monies.
In the interlocutory proceedings, the respondents claimed the plenary summons was defective since it contained no claim for substantive relief under Section 4 of the Act and merely sought interlocutory relief under Section 3. It was submitted, accordingly, that the proceedings should be dismissed.
CAB argued that the respondents should have applied through notice of motion to have the claim struck out or to set aside the plenary summons for irregularity.
In his reserved decision Mr Justice O'Higgins dismissed several constitutional points raised by the respondents in the case, including arguments challenging the constitutionality of the power of CAB receivers.
He said the power of the court to appoint receivers over assets situated abroad was well established without explicit statutory provision. There was nothing in the legislation to indicate that receivers appointed under the Proceeds of Crime Act were intended by the legislature to have fewer powers than other receivers.
He said it had also been contended that the Act was, in substance, a criminal law which did not afford the protections normally existing criminal law, such as the presumption of innocence and the standard of proof required. The respondents claimed it was, therefore, unconstitutional both in failing to provide for due process of law and for fair procedures.
Mr Justice O'Higgins said there was, in his view, no offence created by the Act. He was not convinced that it created a money-laundering-type offence. Clearly, there was a public dimension to the legislation and it was not argued otherwise.
The Act itself made no provision for any finding of guilt by anybody. It was clear that it envisaged that property could be taken from people who were innocent of any wrongdoing as well as people who were guilty of wrongdoing. Under the Act, the question of guilt did not arise.
Referring to the facts of the case, Mr Justice O'Higgins said that on July 22nd, 1997, a detective sergeant was investigating the trail of certain monies belonging to the first respondent, in particular two bank drafts for £25,000 sterling and £23,000 sterling which were made out to the first respondent.
During his inquiries, he had occasion to search the office of a solicitor where he found a file relating to a second respondent and an associate of the first respondent. It appeared to the sergeant that the monies in questions had gone into an account of the fourth respondent.
Having sought and failed to obtain an assurance from the solicitor that the monies would not be moved, a court order was obtained and Mr Galvin was appointed as receiver.
On foot of that order, Mr Galvin attended the solicitor's office and sought the £300,000 from him. It then emerged that the £300,000 included Irish pounds and sterling and that £181,356 was held in the solicitor's reserved client account in a London bank branch. The solicitor said that by means of subtraction, he must have £118,643 in a Dublin bank account.
Mr Justice O'Higgins said that having regard to the evidence tendered by CAB, he was satisfied the respondents were in possession and control of £300,000 and the property constituted directly or indirectly the proceeds of crime.