High Court dismisses judicial review application regarding statutory time limits for freezing order applications.

Neutral Citation Number: [2008] IEHC 461

THE HIGH COURT

JUDICIAL REVIEW

2007 1442 JR

BETWEEN

J. G. R.

APPLICANT

AND

THE DIRECTOR OF PUBLIC PROSECUTIONS

AND

THE COLLECTOR GENERAL OF THE INLAND REVENUE

AND

JUDGE DONNACHA Ó BUACHALLA

RESPONDENTS

Judgment of Ms. Justice Maureen H. Clark delivered on the 31st day of July, 2008.

Background

1. On the 5th November, 2007, the applicant obtained leave from the High Court to apply for judicial review in relation to the following

matters:-

(1) An injunction prohibiting the first named respondent from making any application in purported reliance of s. 39 of the

Criminal Justice Act 1994, as amended by s. 20 of the Proceeds of Crime Act 2005, now pending before Circuit Court

Judge of the South Eastern Circuit.

(2) An order returning a sum of €100,604.66 seized by the second respondent.

(3) An order of certiorari quashing the order made by the third respondent on the 21st July, 2005, on grounds that it

failed to show jurisdiction on its face.

The third ground was abandoned at the hearing on the 21st April, 2008. This is the judgment relating to the substantive hearing.

Facts giving rise to the application

2. The applicant’s Northern registered car was stopped by customs and excise officers and officers of the Revenue Commissioners as

it was about to enter a car ferry travelling to France on the 19th July, 2005. 3. The car was searched and the sum of £69,880.00

Sterling was found concealed in multiple packages under the back seat of the car. This money was seized pursuant to s. 38(1) of the

Criminal Justice Act 1994, as amended by s. 20 of the Proceeds of Crime Act 2005 on suspicion that the money was the proceeds of

criminal activity.

4. On the 21st July, 2005, an application was made to Judge Ó Buachalla at Rathdrum District Court in the county of Wicklow for the

detention of the said monies seized pursuant to s. 38(2) of the Criminal Justice Act 1994 pending enquiries as to the source of the

cash. Judge Ó Buachalla made an order pursuant to s. 38(2) of the Criminal Justice Act 1994, whereby the said monies were detained

for a period which under the statute was for a period of no longer than three months.

5. Thereafter, applications were made by the state authorities for the detention of the money at regular three month intervals, the

last period of detention expiring on the 18th July, 2007.

6. At no stage did the applicant seek the return of the money seized as was open to him under s. 38(5) of the Criminal Justice Act

2005 on the basis that there were no longer any grounds for the continued detention of the money.

7. On the 17th July, 2007, the Director of Public Prosecutions issued a notice of motion pursuant to s. 39 of the Criminal Justice Act

1994 seeking the forfeiture of £69,888.00 Sterling seized from the applicant on the 19th July, 2005. The motion was in compliance

with S.I. 448/04 made pursuant to order 69 of the Circuit Court Rules which provides for procedure to be followed when seeking an

order from the Circuit Court directing that any sum seized be forfeit to the Exchequer. The motion was returnable to the 2nd October,

2007.

8. There is no issue made as to service of this Notice of Motion. The defendant sought an adjournment of the return date which was

refused and he was represented in court on the 2nd October, 2007 when the motion was listed for hearing. He served notice of

intention to cross examine on the affidavits filed. Ultimately, due to volume of work in the court that day, the case was not reached.

9. On 5th November, 2007 the applicant sought judicial review and an injunction in the terms recited above. He now disputes the

legality of the continued detention of the money seized arguing that the respondents are out of time for seeking an order of forfeiture

from the Circuit Court and he asserts that the statute requires an application to be made while the money in question is being

detained meaning that the application can only be made when the applicant actually stands up in court and makes the request for the

order. He claims that as the maximum period allowed for under s. 38 of the Criminal Justice Act is 2 years from the making of the first

detention order and the application has not yet been made, the money must be returned.

Applicant’s arguments

10. The applicant accepts that the cash was seized and detained in a lawful manner up to the 18th July, 2007 and that s. 39 of the

Criminal Justice Act 1994 provides a procedure whereby the monies detained could, within 2 years of the initial detention order, on

application be forfeited to the Exchequer once the judge of the Circuit Court was satisfied on the balance of probabilities that the

money represented proceeds of crime or was intended for criminal activity. He fully accepts that the amendment effected by s. 20 of

the Proceeds of Crime Act 2005 was that, once an application for forfeiture was made, the 2 year time limit was suspended and the

money seized would be retained until the Circuit Court hearing and any appeal were completed and there is no dispute that the notice

of motion was served within the 2 years period.

11. The only issue is whether the money is still lawfully detained if service of a notice of motion is merely notice of an intention to

apply for an order and as such is not enough to stop the two year period from running. The applicant’s case is that for the application

to be made to the Circuit Court, the DPP or his representative must actually stand up in Court and make the request. Anything less

does not amount to an application. As no application has been made to the court within the two year time period, the said monies are

unlawfully held and must be returned.

12. In interpreting the words “application is made” in s. 31(a) he urges reliance on the dicta of Henchy J. in Inspector of Taxes v.

Patrick Kiernan [1981] I.R. 117 in relation to the three basic rules of statutory interpretation:-

“A word or expression in a given statue must be given meaning and scope according to its immediate context, in line

with the scheme and purpose of the particular statutory pattern as a whole, and to an extent that will truly effectuate

the particular legislation or a particular definition therein.”….

“If the statutory provision is one directed to the public at large, rather than to a particular class who may be expected

to use the word or expression in question in either a narrowed or an extended connotation, or as a term of art, then in

the absence of internal evidence suggesting the contrary, the word or expression should be given its ordinary or

colloquial meaning.”

He particularly relies on the dictum of Lord Escher MR in Unwin v. Hanson adopted by Henchy J.-

“if the Act is one passed with reference to a particular trade, business, or transaction, and words are used which

everyone conversant with that trade, business or transaction, knows and understands to have a particular meaning in it,

then the words are to be construed as having that particular meaning, though it may differ from the common or

ordinary meaning of the words.”

“If a word or expression is used in a statute creating a penal or taxation liability, and there is looseness or ambiguity

attaching to it, the word should be construed strictly so as to prevent a fresh imposition of liability from being created

unfairly by the use of oblique or slack language.”

13. He describes the Criminal Law Act as a penal statute and argues that any ambiguity should be exercised in favour of the citizen

and that a narrow interpretation should be accorded to the wording “where an application is made.”

State arguments

14. Ms. Sunniva McDonagh SC on behalf of the Director of Public Prosecutions argued that the law is replete with examples where a

notice of motion prevents time from running and commences proceedings and that there is no authority anywhere for the concept of

a statutory period being calculated from when an applicant stands up in Court or when proceedings are commenced by an application

to the Court in person.

15. By way of example she cites the judicial review process where time stops when the originating notice of motion is served. She

argues that an originating motion is a suitable process for an issue such as forfeiture where no pleadings are necessary and the

matter proceeds on affidavit.

16. She argues that the Criminal Law Act 1994 as amended is not a penal statute as the entire purpose of the statute is to enable

the authorities to seize money and determine who owns money which is seized. While she accepts that if the applicant loses the

action, the result may well be detrimental to him that this is no different from what happens to a litigant under the Civil Liability Act

and that such result does not create a penal statute. The act creates no crime and imposes no sanctions as such and the particular

section the applicant seeks to have strictly construed is a procedural section giving rise to Circuit Court rules.

17. She reminded the Court that the applicant does not plead any prejudice in the motion procedure and does not challenge the

legality of the rules which prescribe the process for the bringing of the application for forfeiture. The applicant was provided with a

statutory alternate remedy to apply under 38(5) to the District Court for return of the cash seized on the basis that there were no

longer any such grounds for the detention of the money and that the detention of the money was not justified. He elected not to

utilise this procedure. She advocated the common sense interpretation of the words of the 1994 Criminal Justice Act as amended.

Decision

18. As the application involves an interpretation of s. 39(1) of the Criminal Justice Act 1994, as amended by the Proceeds of Crime

(Amendment) Act 2005 I believe that it is appropriate to quote s. 38 and s. 39 and the Rules of the Circuit Court in full to see the

section in context.

Section 38:-

“(1) A member of the Garda Síochána or any officer of customs and excise may search a person if the member or

officer has reasonable grounds for suspecting that:-

(a) the person is importing or exporting, or intends or is about to import or export, an amount of cash

which is not less than the prescribed sum, and

(b) the cash directly or indirectly represents the proceeds of crime or is intended by any person for use

in connection with any criminal conduct

(1A) A member of the garda Síochána or an officer of the Revenue Commissioners may seize and in accordance

with this section detain any cash (including cash found during a search under subsection (1) if

(a) its amount is not less than the prescribed sum, and

(b) he or she has reasonable grounds for suspecting that it directly or indirectly represents the

proceeds of crime or is intended by any person for use in any criminal conduct.

(2) Cash seized by virtue of this section shall not be detained for more than forty-eight hours unless its detention

beyond forty-eight hours is authorised by an order made by a judge of the District Court and no such order shall

be made unless the judge is satisfied –

(a) that there are reasonable grounds for the suspicion mentioned in subsection (1) of this section, and

(b) that detention of the cash beyond forty-eight hours is justified while its origin or derivation is

further investigated or consideration is given to the institution (whether in the State or elsewhere) of

criminal proceedings against any person for an offence with which the cash is connected.

(3) Any order under subsection (2) of this section shall authorise the continued detention of the cash to which it

relates for such period, not exceeding three months beginning with the date of the order, as may be specified in

the order, and the judge of the District Court, if satisfied as to matters mentioned in that subsection, may

thereafter from time to time by order authorise the further detention of the cash but so that –

(a) no period of detention specified in such an order , shall exceed three months beginning with the

date of the order; and

(b) the total period of detention shall not exceed two years from the date of the order under subsection

(2) of this section.

(3A) Where an application is made under section 39(1) for an order for the forfeiture of cash detained under this

section, the cash shall, notwithstanding subsection (3), continue to be so detained until the application is finally

determined.”

(4) Any application for an order under subsection (2) or (3) of this section may be made by a member of the

Garda Síochána or an officer of customs and excise.

(5) At any time while cash is detained by virtue of the foregoing provisions of this section a judge of the District

Court may direct its release if satisfied –

(a) on an application made by the person from whom it was seized or a person by or on whose behalf it

was being imported or exported, that there are no, or are no longer, any such grounds for its detention

as are mentioned in subsection (2) of this section, or

(b) on an application made by any other person, that detention of the cash is not for that or any other

reason justified.

(6) If at a time when any cash is being detained by virtue of the foregoing provisions of this section –

(a) an application for its forfeiture is made under section 39 of this Act; or

(b) proceedings are instituted (whether in the State or elsewhere) against any person for an offence

with which the cash is connected

the cash shall not be released until any proceedings pursuant to the application or, as the case may be, the proceedings

for that offence have been concluded.”

Section 39:-

(1) A judge of the Circuit Court may order forfeiture of any cash which has been seized under section 38 of this

Act if satisfied, on an application made while the cash is being detained under that section, that the cash directly

or indirectly represents any person’s proceeds of, or is intended by any person for use in connection with any

criminal conduct.

(2) Any application under this section shall be made, or caused to be made, by the Director of Public Prosecutions.

(3) The standard of proof in proceedings on an application shall be that applicable to civil proceedings; and an

order may be made under this section whether or not proceedings are brought against any person for an offence

with which the cash in question is connected.

19. The procedure for an application under s. 39 of the Criminal Justice Act 1994 is determined by S.I. 448 of 2004 new rules under

Order 69 of the Rules of the Circuit Court. Order 69, Rule 3 to 5 states:-

“An application pursuant to this Order shall be made by originating Motion on Notice in accordance with the form

annexed hereto. The Affidavit grounding such application shall contain the following information:

(a) details of the seizure and detention of cash the subject-matter of the application;

(b) details of the amount and currency of the cash seized;

(c) the date and time of the seizure and detention concerned;

(d) details of any person who claims an interest in the cash;

(e) the grounds on which an order for forfeiture of the cash in pursuance of section 39 of the Act is sought and

(f) any other information relevant to the application;

and shall exhibit the order or orders of a judge of the District Court made in pursuance of section 38 of the Act

authorising the continued detention of the cash.”

Rule 4:-

“The application shall be made to a Judge of the Circuit Court for the circuit in which the seizure was made or in

accordance with Order 2 (g) of the Rules of the Circuit Court 2001.”

Rule 5:-

“The application shall be made on notice to any person from whom the cash was seized and to any person who

claims an interest in the cash. The Court may direct that notice of the application be served on such other person

or persons, in addition to the respondent(s), as it shall think fit.”

A specimen notice of motion is appended to the Order.

20. Having considered the applicant’s arguments, I find that I cannot agree with several of the applicant’s submissions. While it is

settled law that “a word or expression of legislation which creates a penal or taxation liability should be construed strictly if there is

looseness or ambiguity attaching to it (my emphasis) the purpose of this strict interpretation in such a situation is to prevent a fresh

imposition of liability from being created unfairly by the use of oblique or slack language. There are several preconditions therefore to

this strict interpretation. First, the statute in question must be a penal statute and the particular section sought to be interpreted

must be capable of creating a fresh liability. Next the ambiguity must without a different interpretation be capable of creating an

additional adverse outcome or liability on the party affected. The first question therefore is whether the statute, or the section

sought to be interpreted is penal in nature. Murdock’s Dictionary of Irish Law (4th Edition) defines a penal statute as “legislation

creating offences or providing for the recovery of penalties in civil proceedings”. A perusal of the statute and in particular this

section, will reveal that while extensive new powers are given to the garda and revenue authorities in relation to the proceeds of

crime and suspect cash, no offences or penalties are actually created. I find therefore that ss. 38, 39 and 42 are not provisions of a

penal statute.

21. Section 39(1) of the Criminal Justice Act 1994 which authorises the forfeiture of money seized pursuant to s. 38(1) is an enabling

provision where the forfeiture procedure comes at the end of an investigative process into the origins of the money seized and held

under court order. The purpose of the investigation is to determine whether a criminal prosecution will follow or whether forfeiture to

the exchequer will be sought or indeed whether the money will be returned to its owner. At any time during that period, the owner of

the money or the person from whom it was seized has the right to seek the return of the money, if it can be established that there

are no grounds for its detention. The forfeiture procedure is provided for in s. 42 which states that:

“An order under section 38(2) of this Act shall provide for notice to be given to persons affected by the order.

(2) Provision may be made by rules of court with respect to applications or appeals to any court under this Part of this

Act, for the giving of notice of such applications or appeals to persons affected, for the joinder of such persons as

parties and generally with respect to the procedure under this Part of this Act before any court.”

The statute refers specifically to rules of court which provide for the procedure to be used in such applications. The applicant has

never sought to attack the legality of these provisions.

22. While the Criminal Justice Act of 1994 and the Proceeds of Crime Act 2005 are far reaching and extensive in purpose, I do not

believe that the particular procedural section in question calls for the narrow and strict interpretation of the wording “where an

application is made” sought by the applicant. The applicant is in effect asking the court to give a literal interpretation which would fail

to reflect the plain intention of the Oireachtas in relation to the two year time period during which the application had to be made. It

would be quite extraordinary in the context of that time limit to introduce a procedure whose lawfulness and compliance could only be

assessed when the court is actually addressed by the applicant. Such an interpretation would introduce uncertainty or vagueness in

the assessment of those stated time limits which would be neither desirable nor necessary and serve no useful purpose. Such an

assessment of a time limit would be imprecise and subject to the vicissitudes and vagaries of Court calendars and work loads and

cannot have been intended by s. 39(1).

23. If the applicant’s arguments were accepted, it would mean that the DPP could be put into a position where he could apply for

forfeiture several months before a Circuit Court hearing but would still have to apply to the District Court to extend the period of

detention of the money to ensure that the application for forfeiture was made during the period while the case was being detained

pursuant to s. 38 which would be unworkable. In addition, such an assessment of time limits would run contrary to all previous

methods of assessment and would be contrary to the general rules of construction provided in s. 18(h) of the Interpretation Act 2005

or any previous Interpretation Acts.

24. The term “application is made” is familiar court language with a specific meaning and not a phrase which requires to be construed

for being obscure or ambiguous or where a literal interpretation would be absurd or where it would fail to reflect the plain intention of

the Oireachtas. The meaning of an application to the Court is well understood to mean a formal request of the Court for orders,

directions or reliefs and subject to rules of procedure which determine how the application is to be made and the notice which must

be given to the Court or the respondent and the time limits in which the application is to be made. The particular procedure used in

this case was made in accordance with O. 69 of the Circuit Court Rules pursuant to s. 42(2) of the Criminal Justice Act 1994. The rule

was complied with regarding notice to the Court and to the applicant. It would be extraordinary if the validity of such a motion for

forfeiture could only be assessed at the time the application was moved.

25. The procedure in the statute consists of two steps, the application and the proceedings. The application must be brought within

2 years of the first detention order and the proceedings follow the application. The Rules of Court provided for an application under s.

39(1) to be made by originating motion on notice which is a well recognised method for initiating proceedings without pleadings and

generally supported by affidavit.

26. A similar issue to that which is argued by the applicant in this case was considered by the Supreme Court in McK. v. F. and

Others [2005] 2 I.R. 163 where it was held that proceedings will be deemed to have been brought when the originating notice of

motion has issued out of the Central Office. Included in the many issues considered in that case was whether the application

pursuant to the Proceeds of Crime Act 1996, s. 3 had been brought within the period of twenty one days from the making of the order

pursuant to s. 2 of the Act and whether the issue of a motion was enough to stop the period of time or whether there was a

distinction between the words made and brought. Section 2(5) of the Proceeds of Crime Act 1996 provides:-

“Subject to subsections (3) and (4), an interim order shall continue in force until the expiration of the period of 21 days

from the date of its making and shall then lapse unless an application for the making of an interlocutory order in respect

of any of the property concerned is brought during that period…”

Geoghegan J said as follows:

“I am quite satisfied that the application for the making of the Section 3 Order was “brought” during the statutory

twenty-one day period. I do not think that there is any significant difference between this case and the case of KSK

Enterprises Limited v. An Bord Pleanála [1994] 2 I.R. 128 where Flood J. rejected an argument that the word “made”

involved the actual moving of a judicial review application. Dr. Forde tries to make a relevant distinction between the

word “made” and the word “brought” but I believe that no such distinction can be made. Given the uncertainties of the

availability of courts and judges at any given time and the systems of listing, a statute which creates a time limit for the

bringing or making of an application or uses any such cognate words should be interpreted as meaning the date of

issuing if the proceedings require a summons or filing or possibly in some cases filing and serving if what is involved is a

motion but unless there are express words in the statute that require it, it should not be interpreted as meaning the

actual moving of the application in open court.”

Previously in McK. & H., Finnegan P. held that the time period of twenty one days during which an application had to be made

pursuant to s. 2(5) of the Proceeds of Crime Act 1996, was deemed to have been made once the motion had been issued:-

“It is well settled that the statute of limitations applies not just to proceedings commenced by summons but equally to

proceedings commenced by motion, Moore v. Gad [1997] T.L.R. 80 or Petition v. Camas Property Company Limited

[1989] DCLC 340. In every case once the initiating process is issued time ceases to run and it is never necessary that

service be affected within the limitation period”.

These decisions reinforce my view that the meaning of the phrase “application is made” includes the issue of a notice of motion and

does not require that an actual oral demand be made to a judge as urged by the applicant. I also rely on the hallowed dictum of Lord

Esher relied on by the applicant.

“If a word or expression is used in a statute creating a penal or taxation liability, and there is looseness or ambiguity

attaching to it, the word should be construed strictly so as to prevent a fresh imposition of liability from being created

unfairly by the use of oblique or slack language.”

As I do not see any looseness or ambiguity here attaching to the word or expression application is made even if I am wrong and the

Statute is a penal statute, the strict interpretation rule only comes into play only in the event of oblique or slack language and only

to prevent a fresh imposition of liability. None of those situations prevail in the wording of this particular section of the statute. In the

circumstances the applicants challenge fails and the case must return to be determined in the Circuit Court. The application is

refused.