IESC 4 · Supreme Court

Denham J.

Murray J.

Hardiman J.

Geoghegan J.

Fennelly J.

102/01

THE SUPREME COURT

BETWEEN/

F. McK.

Plaintiff/Respondent

and

A.F. and J.F.

Defendants/Appellants

JUDGMENT of Mr. Justice Geoghegan delivered the 30th day of January 2002

I have had the benefit of reading the judgment prepared by Mr. Justice Fennelly and I am in agreement with his view that a

statement of claim is required. I would also adopt his very clear treatment of the relevant statutory provisions and rules of

court. But I would like to add some comments of my own with particular focus on the nature of the proceedings. I think this is

of some importance because fundamentally the case being made by the plaintiff is that he does not have to deliver a statement

of claim as the entire proceeding can be dealt with as though it were an application for an interlocutory injunction in the

ordinary way including the rules of evidence in connection therewith. I believe that view to be fundamentally flawed.

The Proceeds of Crime Act, 1996 is described in its long title as "An Act to enable the High Court, as respects the proceeds of

crime, to make orders for the preservation and, where appropriate, the disposal of the property concerned and to provide for

related matters." The Act provides for some unique remedies and some unique procedures. No rules of court however have yet

been made specifically covering applications under the Act. It is this lacuna which has given rise to the present dispute. The

scheme of the Act is that under s. 2 a member of the Garda Síochána not below the rank of Chief Superintendent or a specially

authorised officer of the Revenue Commissioners may apply to the court for a Mareva type order freezing a person's property for

a period of twenty-one days, if it is shown to the satisfaction of the court on an ex parte application that the person is in

possession or control of specified property and that the property constitutes directly or indirectly proceeds of crime or specified

property that was acquired in whole or in part with or in connection with property that directly or indirectly constitutes

proceeds of crime and that the value is not less than £10,000. S. 3 of the Act (which is the section with which this appeal is

concerned) provides for more or less a similar order except that in this instance it is for an indefinite period of time subject to

the court being able to discharge the order at any time on appropriate evidence.

S. 4 of the Act provides that where an order under s. 3 has been in force for not less than seven years in relation to specified

property an application may be made to the court for an order directing that the whole or if appropriate a specified part of the

property be transferred to the Minister or to such other person as the court might determine. It should be noted in passing that

there is no right to bring an application under s. 4 until seven years have elapsed from the making of an order under s. 3.

Each of the respective orders under sections 2, 3 and 4 of the Act have been given names by the Act. An order under s. 2 is

called "an interim order". An order under s. 3 is called "an interlocutory order" and an order under s. 4 is called "a disposal

order". The first and the third of these names are genuinely descriptive and give rise to no great difficulty. It is the name given

to the section 3 order which causes problems and which has directly led to this dispute. "Interim order" and "interlocutory

order" are expressions well known to the courts. The interlocutory injunction is the commonest example of an interlocutory

order. The jurisdiction to grant such an injunction derives from s. 28(8) of the Judicature Act (Ireland) 1877 which by its terms

does not use the expression "interlocutory injunction" but rather "interlocutory order" which is the exact expression used in s. 3

of the 1996 Act. But it is well known to all lawyers that "an interlocutory order" within the meaning of the Judicature Act and of

the Rules of the Superior Courts in their various forms over the years means an order which is not a final order. As Jessel M.R.

said in In re Stockton Iron Furness Company (1879) 10 Ch.D. 334 at 349:

"The rules appear to contemplate two classes of orders: final orders which determine the rights of the parties, and

orders which do not determine the rights".

It must logically follow therefore that an order under s. 3 though called in the Act "an interlocutory order" cannot in fact be an

interlocutory order in the normal sense of that term unless the hearing of the proceedings for a disposal order under s. 4 is to

be regarded as the trial of the action. In Murphy v. Mitchell and Gilligan v. Criminal Assets Bureau (unreported judgment of the

Supreme Court of the 18th of October 2001) Keane C.J. at p. 77 said the following:

"As to the claim that the period of seven years which must elapse before a disposal order is made is unduly oppressive,

that rests on the misconception that the application for a disposal order can in some sense be equated to the trial of an

action in respect of which the legislation earlier provides for interlocutory orders being made. That is clearly not the

nature of the scheme provided for in the Act."

In F.J. McKay v. F.C. ex tempore judgment of this court delivered by Keane C.J. on the 23rd of July 2001 the Chief Justice said

the following:

"Given that statutory framework it is evident that in a sense in a practical way the interlocutory order or the application

for an interlocutory order is the trial of the real issue in the case and that obviously renders the proceedings of an

unusual nature."

It is abundantly clear therefore that orders under section 3 are final orders even though they can be discharged and not just

temporary orders. No significance is to be attached to the name which the Act has given except possibly to the extent that it

might be reasonable for the Rules-making Committee to provide for procedures whereby the plaintiff could actually get into

court shortly after the initiating document issued a result which is achieved by the ordinary interlocutory injunction procedure.

This would happen if the rules provided that the procedure was to be by originating notice of motion or indeed by special

summons. But in the absence of any special rules or an order of the High Court permitting procedure by special summons, the

plaintiff must proceed as he has done by plenary summons. Order 1, r. 6 of the Rules of the Superior Courts provides that in all

proceedings (other than to take a minor into wardship) commenced by originating summons, procedure by plenary summons shall

be obligatory except where procedure by summary summons or by special summons is required or authorised by the Rules. Order

3 of the Rules sets out a list of the categories of proceedings which may be commenced by special summons. The last of these

i.e. No. (22) reads:-

"Such other matters as the Court may think fit to dispose of by special summons."

It would appear, therefore, that the High Court judge regularly dealing with proceedings under the 1996 Act could make an

order permitting proceedings of this kind to be brought by special summons. High Court judges have been allowing the special

procedure of a notice of motion after the issuing of the plenary summons and again the lawfulness of that procedure is not in

issue in this case. Presumably, it is done pursuant to practice directions and it may well be unobjectionable subject to the rules

of evidence. It does, on the face of it however, appear to be inconsistent with procedure by plenary summons which by the

express terms of Order 1, r. 2 of the Rules of the Superior Courts is intended as the appropriate commencement document for

"plenary proceedings with pleadings and hearing on oral evidence". It certainly seems strange for two separate reasons that

affidavits grounding the notice of motion can be allowed to contain hearsay evidence. In the ordinary way hearsay evidence

can only be admitted in an interlocutory application within the traditional meaning of that expression and the name of the

informant must be given. As this is a final proceeding and not an interlocutory proceeding within the traditional meaning of that

expression despite the name given to the order, hearsay evidence cannot be justified unless it is especially permitted by the

Act itself, but section 8 of the Proceeds of Crime Act, 1996 while providing for the possibility of some hearsay evidence

expressly provided that in the case of proceedings under section 3, such evidence would have to be oral evidence.

Strictly speaking these issues are not before the court because the issue before the court is the question of whether a

statement of claim has to be delivered. But the overall nature of the proceedings and the procedures used in them are relevant

in considering the question of the obligation to deliver a statement of claim. I have no doubt at all that a statement of claim

must be delivered. The position is quite simple. The proceedings have been correctly commenced by plenary summons. An

appearance was entered to the plenary summons and in it the defendant, pursuant to O. 20, r. 3 of the Rules of the Superior

Courts gave notice that he required a statement of claim to be delivered. That seems to me to be the end of the matter. I do

not understand on what basis the plaintiff can escape from that obligation. Even if a s. 3 Order was a genuine interlocutory

order in the ordinary sense of the term, there would still be a requirement to deliver a statement of claim though not necessarily

before the application for the interlocutory injunction had been determined. But such an injunction would be merely a temporary

injunction.

Counsel for the plaintiff relied almost exclusively on one particular decided case to get him out of his difficulties. That case is

Inspector of Taxes v. Arida [1996] 1 ILRM 74. I turn now to consider that case.

The Arida case is in fact against the plaintiff's argument. In the Arida case the Supreme Court had to consider the question of

whether a Circuit Court judge on an income tax appeal had jurisdiction to award costs against the inspector. This court rejected

the argument put forward on behalf of the inspector that where the court was exercising a statutory jurisdiction the Circuit

Court Rules did not apply. It had been suggested on behalf of the Inspector that those rules only applied to the exercise of

jurisdiction conferred by the Courts of Justice Acts. It follows therefore that if the Arida case is of any assistance it is authority

for the view that the Rules of the Superior Courts apply to proceedings under the Proceeds of Crime Act, 1996. Egan J. in

delivering the judgment of the court followed an earlier decision of this court in People (Attorney General) v. Bell [1969] I.R. 24

to the effect that the Rules of the Superior Courts could apply to all jurisdictions of the High Court, and at p. 79 observed as

follows:

"it would seem anomalous were it to be necessary for express reference to be made to that procedural framework each

time an additional jurisdiction is conferred upon the Circuit Court."

The judge was, of course, referring to the Circuit Court Rules procedure. But in the Bell case Walsh J. had suggested that to

oust the Rules it was necessary to identify some contrary indication to the effect that the Rules were to be disapplied. It is this

slight qualification on the general principle which is relied upon by Mr. Nesbitt S.C. counsel for the plaintiff. He argues that

because the expression "interlocutory order" is used and that the order may be discharged at any time on the application of

the applicant and that it has a limited life in the sense that it becomes discharged once s. 4 proceedings are completed, there

is displayed a contrary indication. I cannot accept that there is any validity in that argument. I have already pointed out that

"interlocutory order" in the 1996 Act is simply a description of a particular order under that Act and bears no relationship to the

interlocutory order as normally understood. Secondly, even if it did have some connection the plaintiff, who in ordinary

proceedings, seeks an interlocutory injunction is not dispensed from delivering a statement of claim. He may not be compelled to

do so before the application for the interlocutory injunction is determined but he still has to deliver it at some stage. The

hearing of an application under s. 3 is the trial of the action and clearly the delivery of the statement of claim must precede

that in the ordinary way if the proceedings have been commenced.

In fairness to the argument of Mr. Nesbitt it may well be true to say that the Oireachtas would have contemplated special rules

of court being made which would not have involved applications under s. 3 having to be brought by plenary summons. I have

already referred to the other options. Special rules could provide that the proceedings would be brought either by special

summons or originating notice of motion or originating notice of application. Counsel for the plaintiff has not indicated to the

court that delivery of a statement of claim presents any problem. But if that is so, it is difficult to know why the matter has

been so heavily contested. One cannot but suspect that it is in some way to avoid searching notices for particulars. But no

matter what procedures the Rules-making Committee might lay down, constitutional fair procedures would dictate that a

defendant would be entitled to receive whatever particulars might be appropriate, and this would be all the more true in a case

where at the trial the defendant would be in jeopardy by having to face oral evidence of a hearsay nature under s. 8.

Some of the remarks of O'Sullivan J. in his judgment give the impression that if the matter was free from authority he would

have had concern about the obligation to deliver a statement of claim but he seemed to consider himself bound by earlier

decisions and in particular a judgment of O'Higgins J. in Murphy v. GMPBPC Limited and GH. It is not clear to me from that

judgment that the issues aired in this court were debated in precisely the same way in that case. But it is obvious that the

views of O'Higgins J. were coloured by the interpretation which he gave to the Act. O'Higgins J. clearly considered that the

hearing of proceedings under s. 4 for a disposal order was effectively the trial of the action and that proceedings under s. 3

were analogous to the ordinary interlocutory application. It is clear that that is not the view of this court having regard to the

judgment of the court on the Reference and the judgment of the Chief Justice in the McKay case already cited.

I would allow the appeal to the extent of making a declaration that a statement of claim must be delivered but having regard to

the fact that there was clearly room for doubt on the matter in the light of earlier High Court judgments I would not strike out

the proceedings. I would be in favour of this court fixing an appropriate time limit within which the statement of claim must be

delivered.

There are two important riders which I would like to add. First of all my view as to what the decision of this court should be is

based on the fact that the proceedings are brought and are correctly brought by plenary summons. Nothing in the judgment is

to be taken as expressing any view as to what might have to be done or not done procedurally beyond constitutional

requirements if a different form of proceeding was prescribed by Rules of Court. Secondly, I am expressing no view as to

whether in an appropriate case an interlocutory order in the traditional sense can be made which would remain in force pending

the hearing of the section 3 application or until further order of the court or as to whether such application could be made

before or after delivery of a statement of claim. Still less am I expressing any view as to the nature of the evidence which might

be allowed in such interlocutory application.