THE HIGH COURT

2002 No. 139 SP

IN THE MATTER OF

THE PROCEEDS OF CRIME ACT 1996

BETWEEN

Mc K

PLAINTIFF

AND

M AND ORS

DEFENDANTS

Judgment of Finnegan P. delivered on the 12th day of February 2003.

Pursuant to the Rules of the Superior Courts Order 25 this matter comes before me for the determination of the following issues –

(1)	Whether service effected out of the jurisdiction pursuant to a Court Order under the Rules of the Superior Courts Order 11(1) by a member of the Garda Siochana is good service.

(2)	Whether there is power under the Rules of the Superior Courts Order 11 to order service out of the jurisdiction of proceedings claiming relief pursuant to the Proceeds of Crime Act 1996 section 3.

(3)	Whether the Proceeds of Crime Act 1996 applies where the Defendant is out of the jurisdiction and the offences relied upon were committed out of the jurisdiction.

(4)	Whether proceedings pursuant to the Proceeds of Crime Act 1996 must be brought within the time limited by the Statute of Limitations 1957 section 11(7).

At the hearing Counsel for the Defendants sought to expand these issues by introducing further issues which he characterised as subsidiary issues.  I was satisfied that the said issues are outside those issues which I had permitted to be dealt with by way of preliminary issue and that the Plaintiff was not fairly on notice of the same and I accordingly declined to entertain them.

The first issue arises in the following circumstances.  By Order made on the 27th March 2002 the Plaintiff was given liberty to issue and serve notice of the Special Summons herein out of the jurisdiction the Defendants being resident in Northern Ireland.  By further Order of Mr. Justice Abbott made on the 5th April 2002 it was ordered that service be effected on the second named and fifth named Defendants at the offices of Ruairi McShane & Company Solicitors, 34 Hill Street, Newry, Co. Down, Northern Ireland.  Service was effected in Northern Ireland by a member of An Garda Siochana in accordance with the said Orders.

On behalf of the second named Defendant and the fifth named Defendant it is contended that service by an on duty member of the Garda Siochana in Northern Ireland was in breach of public international law and that such service should be set aside.  Reliance is placed on the following passage in Oppenheim’s International Law Ninth Edition Volume 1 page 386 which insofar as relevant provides as follows –

“A state is not allowed to send .... its police forces into or through foreign territory .... or to exercise an act of administration or jurisdiction on foreign territory without permission.”

Reliance is also placed on Principles of Public International Law  Ian Brownlie Fifth Edition at page 310 – 

“The governing principle is that a state cannot take measures on the territory of another state by way of enforcement of national laws without the consent of the latter.  Persons may not be arrested, a summons may not be served, police or tax investigations may not be mounted, orders for production of documents may not be executed, on the territory of another state, except under the terms of a treaty or other consent given”.

Finally reliance is placed upon the Constitution of Ireland Article 29.3 –

“Ireland accepts the generally recognised principals of international law as its rule of conduct in its relations with other states”.

It would be a breach of the comity of nations for a member of the Garda Siochana to act in that capacity within the territory of another state.  That is not what occurred here.  In serving notice of the Special Summons herein the member of the Garda Siochana was performing an act unrelated to his powers and status as such member.  The fact that he possessed those powers and enjoyed such status is coincidental only and his capacity to perform the act in question was in no way dependant on his possessing such powers or enjoying such status.  It is not suggested that the service if effected by an individual other than a Garda Siochana would be open to objection.  In these circumstances as a matter of municipal law I am satisfied that the service effected  is not invalidated by the circumstance that the person effecting the same was a member of the Garda Siochana.  Further I am satisfied that the manner in which service of notice of the Special Summons  was effected does not infringe public international law and accordingly Article 29.3 of the Constitution of Ireland is of no assistance to these Defendants.  In any event having regard to the decision in Re O’ Laighleis (1960) I.R. 93 Article 29.3 of the Constitution of Ireland confers no rights on individuals.

As to the second ground it is contended on behalf of these Defendants that it is only in cases that come within the heads of the Rules of the Superior Courts Order 11 Rule 1 that orders can be made authorising service out of the jurisdiction and in this regard reliance is placed upon Caudron v Air Zaire and Others (1985) I.R. 716.  Order 11 Rule 1 does not authorise service out of the jurisdiction of civil forfeiture proceedings and in this regard differs from the corresponding Rule in England nor does the Rule authorise service abroad of proceedings relating to personal property in the State unless such proceedings come within one or other of the sub headings of Rule 1.

Counsel for these Defendants contends that my decision in McKenna v E.H. 18th July 2001 unreported is so manifestly wrong that it should not be followed.  The argument is that the substantive relief claimed in these proceedings is an Order pursuant to the Proceeds of Crime Act 1996 section 4 and that the nature of the proceedings therefore is that they are in rem proceedings for forfeiture of property and in this regard  reliance is placed on the judgment of McGuinness J. in Gilligan v Criminal Assets Bureau and Others 1998 3 I.R. 185 at 224.  At that point the judgment was dealing with the issue as to whether the proceedings were civil or criminal rather than with the question of the substantive relief being sought.  More in point is the decision of the Supreme Court in F. McK v A.F. and J.F. unreported 30th January 2002 Fennelly J. where it was held that the Interlocutory Order under section 3 is a substantive remedy.   See also the Judgment of Geoghegan J. in that case.   This is of course not to say that the section 4 Order does not itself represent a substantive remedy.  However once it is the case that the section 3 Order is a substantive remedy I see no reason to depart from my judgment in McKenna v E.H.  While in that case I did not find it necessary to determine whether the injunctive reliefs provided for in the Proceeds of Crime Act 1996 sections 2 and 3 are in the nature of ancillary reliefs similar to the mareva injunction sought in Caudron v Air Zaire and Others or substantive relief such as the injunctive relief sought in Joint v M’Crum (1899) 1 I.R. 217 it has now been determined by the Supreme Court that the relief under section 3 is substantive relief.  In Caudron and Others v Air Zaire and Others the Supreme Court held that to come within Order 11 Rule 1(g) of the Rules of the Superior Courts the injunction sought in the action had to be part of the substantive relief to which the Plaintiff’s cause of action entitled it and had to be properly and necessarily sought in the endorsement of claim contained in the originating summons.  Applying this proposition to the substantive relief sought here namely an Order pursuant to the Proceeds of Crime Act 1996 section 3, this being a substantive relief, Order 11 Rule 1(g) applies to the same and the court has jurisdiction under the Rules of the Superior Courts to make an Order for service out of the jurisdiction.

In McKenna v E.H. I held that if a statute confers jurisdiction upon the courts it is the duty of the courts to give effect to the intention of the Oireachtas and any conflict between the provisions of a statute and the rules of procedural law including the Rules of the Superior Courts must be resolved in favour of the former.  Support for this view it seems to me is now found in the decision of Fennelly J. in F. McK v A.F. and J.F. at page 15 where he said –

“I can accept, in principle, that a statute, introducing, as does the Act of 1996, a new legal remedy, may lay down a particular procedure so as to displace that provided for in the Rules”.

In summary then notwithstanding the fact that the relief sought under the Proceeds of Crime Act 1996 section 4, a disposal order, may be a forfeiture and so not within any of the provisions of Order 11 Rule 1 of the Rules of the Superior Courts the relief sought under the Proceeds of Crime Act 1996 section 3 is a substantive relief and so an injunction of the same nature as that in Joint v McCrum rather than of the nature of that sought in Caudron v Air Zaire and Others.  Accordingly the court has power to make an Order pursuant to the Rules of the Superior Courts Order 11(1)(g) for service out of the jurisdiction of the proceedings herein.

Insofar as the third issue is concerned the Supreme Court in Murphy v GM, B, P and H unreported 18th October 2001 held that the submission that orders under the Proceeds of Crime Act 1996 which are extraterritorial in their effect were in breach of the Constitution was without substance.  Keane C.J. said – 

“The Act was also challenged on the grounds that, if, contrary to the arguments advanced in the first case, it did permit the making of retrospective orders and orders which were extraterritorial in their effect was in contravention of the Constitution.  The court is satisfied that there is no substance in this submission.  The Act does not offend in any way the prohibition in Article 15.5 against declaring acts to be infringements of the law which were not so at the date of their commission.  The fact that it enables the court to make orders in respect of property constituting the proceeds of crimes committed before the coming into force of the legislation is not in any sense a contravention of that prohibition.  Nor is the fact that the legislation may be operated so as to require the compliance of citizens within the jurisdiction with orders of the court directing the transfer of property in their possession or control to a receiver appointed by the court in circumstances where the property is in another jurisdiction constitute in any way a breach of the principles of international law which the State accepted under Article 29 of the Constitution”.

As to the proposition that the Proceeds of Crime Act 1996 does not apply to the proceeds of crime when the crime was committed abroad I adopt the statement of O’Higgins J. in D.P.P. and Others v H and Others the High Court unreported 29th July 1999 – 

“It was contended that the Act did not apply to the proceeds of crime when the crime was committed outside the country.  I have been referred to the case of Bonalumi –v- Secretary of State [1985] 1 All E.R. 979 to Antonelli –v- Secretary of State [1998] 1All E.R. 997, where it was held that a conviction of  an “offence involving fraud or other dishonesty or violence” applied to offences outside the jurisdiction and to my own decision in the case of M. –v- M. and Others Judgment of the 4th day of June 1999 where the same point was argued and considered.  In my view the Act applies to the proceeds of crime even if that crime was committed outside of the State notwithstanding the failure of the legislation to explicitly say so.  The object of the crime is the divestment of assets generated by or in connection with crime.  I agree with the submission of Counsel that there is no reason why this objective should be limited to offences committed in this jurisdiction and there are many reasons why it should not.  It would be strange indeed if the legislature to be deemed to have intended that persons committed criminal offences in another jurisdiction were free to obtain money from that crime and retain it in Ireland, while those engaging in the same conduct here would be liable to have the assets from similar offences forfeited.  These are not criminal proceedings.  They are based on the public policy consideration that people should not have in this State the enjoyment of the benefits of assets accumulated as a result of crime”.

I am satisfied that the Proceeds of Crime Act 1996 applies where the crime was committed abroad.

It was further argued before me that the Proceeds of Crime Act 1996 does not apply where not alone the crime was committed abroad but the Defendant is out of the jurisdiction.  It is well settled that insofar as movables are concerned that a valid judgment in relation to the same may be made by the court within whose jurisdiction the movable is situate:  Cammell v Sewell 1858 3 H & N 617, Alcock v Smith 1892 1 Ch 238.  In particular in relation to a bank account held within the jurisdiction where the person entitled to the account is resident out of the jurisdiction the court may make an order in relation to the same:  Clare & Company v Dresdner Bank 1915 2 K.B. 576.  As to the approach to be adopted in interpreting a statute I adopt the approach set out in re Paramount Airways Limited 1992 3 All E.R. 1.  The court there had to interpret section 238 of the United Kingdom Insolvency Act 1986 which enables an administrator or liquidator of a company to apply to a court for an order reversing a transaction entered into by the company with “any person” at an undervalue.

It was argued that the words “any person” could not apply to a company which was not resident in the U.K. nor carried on business or had any place of business there.  It was acknowledged as a general principle that U.K. legislation applied only to British subjects or foreigners within the United Kingdom but was held that the Act could not be sensibly limited by reference to this principle.  Nicholls V.C. concluded at page 11:

“In my view the solution to the question of statutory interpretation raised by this appeal does not lie in retreating to a rigid and indefensible line.  Trade takes place increasingly on an international basis.  So does fraud.  Money is transferred quickly and easily.  To meet these changing conditions English Courts are more prepared than formerly to grant injunctions in suitable cases against non-residents or foreign nationals in respect of overseas activities.  As I see it, the considerations set out above and taken as a whole lead irresistibly to the conclusion that, when considering the expression ‘ any person’ in the sections, it is impossible to identify any particular limitation which can be said, with any degree of confidence, to represent the presumed intention of Parliament.  What can be seen is that Parliament cannot have intended an implied limitation along the lines of Ex parte Blain re Sawers (1879) 12 Ch. D 522.  The expression therefore must be left to bear its literal and natural meaning”.

I am satisfied from the scheme of the Act that it applies to assets which are the proceeds of crime situated within the jurisdiction where the person entitled to the funds is resident out of the jurisdiction.  The court may make an order in rem affecting the funds and it is within the scheme of the Act that it should do so.

As to the fourth issue on behalf of the Defendant it was argued that the decision in McKenna v H High Court Unreported 12th April 2002 should not be followed.  I there held that the Statute of Limitations 1957 section 11(7)(b) applied to actions by common informers or actions for penalties or forfeitures formerly lying at the suit of the Crown and accordingly did not apply to the Proceeds of Crime Act 1996.  In so holding I held that the following passage from Limitation of Actions, Franks in (1959) is a correct statement of the law in Ireland – 
“The 1939 Act provides that an action to recover any penalty or forfeiture or sum by way of penalty or forfeiture, recoverable by virtue of any enactment shall not be brought after the expiration of two years from the date on which the cause of action accrued.  Since the abolition of the common informer provisions in 1951 this provision appears to have become redundant”.

As the Common Law Procedure Amendment Act Ireland 1853 section 20 is in identical terms to the Civil Procedure Act 1833 section 3 in the United Kingdom and the Statute of Limitations 1957 section 11(7) is in identical terms to the Limitation Act 1939 section 2(5) the same as the case in this jurisdiction.  Counsel for the Defendant correctly points out that the Common Law Procedure Amendment Act Ireland 1853 section 20 does not in its terms apply to forfeiture but only to penalties.  While actions in relation to forfeitures and penalties have been consistently regarded as penal actions in Thomson v Lord Clanmorris 1900 1 Ch 718 at 725 Lindley M.R. had this to say in relation to section 3 of the 1833 Act – 

“In contrasting section 3 of the Act of 1833, as indeed in construing any other statutory enactment, regard must be had not only to the words used, but to the history of the Act and the reasons which led to its being passed.  You must look at the mischief which had to be cured as well as at the cure provided.  And when we look at the state of the law before the Act of 1833 we can see pretty plainly what was the mischief at which it was aimed.  There were certain causes of action as to which there was no defined time of limitation.  Some of them are enumerated in the earlier part of section 3;  for instance ‘actions of debt upon any bond or other speciality’ and others which are there mentioned.  They were not provided for by the then existing statutes of limitations and they are brought in.  That was the first effect.  There was another class of actions as to which there was no definite limitation of time – namely ‘actions for penalties, damages or sums of money given to the party grieved’ by various acts of parliament by way of penalty or punishment:  not by way of compensation to the person injured, but where, as was pointed out by Lord Esher M.R. when commenting in Saunders v Weil and Adams v Batley, punishment was the object;  and where the money to be paid, whether it was called penalty or damage or sum of money, was not assessed with a view of compensating the Plaintiff, although he might put some of it in his pocket.  That is the class of action which was contemplated by the latter part of section 3.  In other words they are what are popularly called ‘penal actions’.  We arrive at this from the history of the Act and from a knowledge of the then state of the law and the defect which was to be cured”.

Having regard to this Judgment which I regard as correct I am satisfied that Counsel is correct that the 1853 Act section 20 did not apply to forfeitures.  Section 20 however contains the following provision -

“Provided that nothing in this Act contained shall alter the period of limitation of any action given by any statute where the time for bringing such action is or shall be by any statute specially limited”.

Thus the 1853 Act provided a limitation period in respect of a number of causes of action in respect of which no previous limitation period had been prescribed but where by any statute a limitation period was prescribed that was preserved.  Thus in Connolly v Leahy 1899 2 I.R. 344 the relevant limitation period was that prescribed by the Real Property Act 1833.  The limitation period for any forfeiture upon a penal statute was that provided for in 2 GEO1 Cap 20 (1715) an Act to Limit the Time for Criminal Prosecutions for Words Spoken (1715) section 3 which provides as follows -

“And be it further enacted by the authority aforesaid that all actions, suits, bills, indictments or informations which after the first day of July in the year 1716, shall be had, brought, sued, or exhibited, for any forfeiture upon any statute penal, made or to be made, whereby the forfeiture is or shall be limited to the King, his heirs or successors only, shall be had, brought, sued, or exhibited, within two years next after the offence committed or to be committed against such act penal, and not after two years:  and that all actions, suits, bills, or informations, which after the said first day of July shall be had, brought, sued, or commenced, for any forfeiture upon any penal statute made or to be made, the benefit and suit whereof is or shall be by the said statute limited to the King, his heirs or successors, and to any other which shall prosecute on that behalf, shall be had, brought, sued, commenced, by any person that may lawfully pursue for the same as aforesaid, within one year next after the offence committed or to be committed against the said statute; and in  default of such pursuit, that then the same shall be had, sued, exhibited, or brought for the King’s majesty, his heirs or successors, at any time within two years after that year ended:  and if any action, suit, bill, indictment, or information for any offence against any penal statute made or to be made, shall be brought after the time in that behalf before limited, then the same shall be void and of now effect;  any act or statute made to the contrary notwithstanding”.

Insofar as that Act related to informations the period was amended by the Summary Convictions Act 1849 section 35 and the Act in its entirety was repealed by the Defamation Act 1961.  Thus insofar as Counsel for the Defendant argued that there was at the commencement of the Statute of Limitations 1957 no statute limiting the time within which a forfeiture action could be commenced in Ireland I am satisfied that this is not the case.   The premise for that argument is incorrect.

The second basis upon which it was suggested that the decision in McKenna  v H should not be followed was that forfeiture had been abolished by the Forfeiture Act 1870 and that therefore the 1957 Act could not have been intended to apply to actions for forfeitures formerly lying at the suit of the Crown.  The Forfeiture Act 1870 section 1 provides as follows –

“From and after the passing of this Act, no concession, verdict, inquest, conviction, or judgment of or for any treason or felony or felo de se shall cause any attainder or corruption of blood or any forfeiture or escheat, provided that nothing in this Act shall affect the law of forfeiture consequent upon outlawry”.

It is quite clear that the Act had very limited application – applying only to forfeiture for treason or felony and was not of general application.  Forfeiture consequent upon outlawry was expressly preserved and other forfeitures not thereby affected.  Actions by common informers whether for forfeiture or penalty were not abolished in the United Kingdom until the Common Informers Act 1951 which Act also applies to the Crown acting as a common informer.  In these circumstances the premise upon the Defendant’s second submission is based is false.

Accordingly I deal with each of the issues raised and which I have set out above as follows – 

(1)	The service actually effected out of the jurisdiction pursuant to the orders of this court by a member of An Garda Siochana is good service.

(2)	The court has power pursuant to the Rules of the Superior Courts Order 11 Rule 1(g) to order service out of the jurisdiction of proceedings claiming relief pursuant to the Proceeds of Crime Act 1996 section 3.

(3)	The Proceeds of Crime Act 1996 applies where the Defendant is out of the jurisdiction, where the offences relied upon were committed out of the jurisdiction and where both these circumstances apply.

(4)	The Statute of Limitations 1957 section 11(7) does not apply to proceedings under the Proceeds of Crime Act 1996.