High Court: Two-year limitation period against a deceased’s estate does not apply to CAB proceeds of crime application
The High Court has granted an interlocutory application by the Criminal Assets Bureau (CAB) to prevent the disposal of certain assets alleged to be the proceeds of crime.
About this case:
Citation: IEHC 457
Judge:Mr Justice Alexander Owens
In so ruling, the court rejected a submission by the respondent that the application was statute-barred because the assets were held by a man who died more than two years previously.
The respondent claimed that section 9(2) of the Civil Liability Act 1961 operated to deprive the CAB of the opportunity to freeze the assets because the owner died in 2017. However, the court held that proceedings under the Proceeds of Crime Act 1996 did not constitute a “cause of action” within the meaning of the 1961 Act.
The CAB brought an application under section 3(1) of the 1996 Act seeking to prevent the disposal of monies contained in certain bank accounts which had previously belonged to Mr John Gibson. The application related to credit balances in excess of €83,000 and cash holdings of approximately €9,500.
It was alleged that these monies had been procured by Mr Gibson by dealing drugs. The evidence produced in the case alleged that Mr Gibson was involved in organised crime in West Dublin, with garda intelligence associating him with significant drugs related activity and with other major criminals. He had also been caught with cannabis and heroin in his possession previously.
The gardaí had made investigations into Mr Gibson’s financial affairs. Following a previous interaction in 2015, Mr Gibson claimed to have obtained the money from his work as a fitness instructor for Body Fitness Studio in Lucan. It was noted that payments to his accounts from his purported salary was inconsistent, including an unexplained payment of €25,000 in a cheque.
In September 2017, Mr Gibson was killed in a gangland shooting. He died intestate and was survived by his partner Ms Marlene Walsh and his two children. As guardian for the children, Ms Walsh was entitled to represent the Gibson estate during the proceedings.
The main submission made by the respondent was that the application by the CAB was made outside of the two-year time limit which ordinarily applied to actions against a deceased’s estate. It was argued that the CAB’s proceedings were a “cause of action” within the meaning of the 1961 Act.
Delivering judgment in the case, Mr Justice Alexander Owens began by finding that the monies were more than likely the proceeds of crime. It appeared to the court that Mr Gibson’s purported employment was simply a money laundering operation and that the monies in question had their origins in drug dealing.
The court then turned to consider whether the proceedings were statute-barred. The court noted that applications under section 3 of the 1996 Act by the CAB were often the product of years of work, particularly when efforts were made to conceal the criminal activities. Ordinarily, the running of time against fraud only occurred when that fraud was discovered.
However, the court held that section 9(2) of the Civil Liability Act 1961 did not apply a limitation period for section 3 applications, stating that the legal process for freezing assets was “unique.”
The court stated that the Proceeds of Crime Act 1996 was not concerned with exercising private rights relating to property or money. The 1996 Act provided a special public law right to seek adjudication that certain property was derived from criminal activity, the court said. Accordingly, section 3 applications fell outside the scope of the limitation period contained in section 9(2).
The policy of the 1996 Act was that no individual could enjoy the proceeds of crime and such proceeds were not considered the property of the holder (Murphy v. GM and Others  4 I.R. 113). The court noted that an express exemption from a freezing order was provided where the individual was adjudicated bankrupt or if a company was being wound up. As such, the court considered that the Oireachtas would have similarly made an express exemption if time-limits were to apply.
Further, the court held that proceeds of crime could pass from one person to another through death but that property could not form part of the estate due to its status as proceeds of crime. There was no reason to apply a special time-bar to allow for the speedy administration of estates if the property was a proceed of crime, the court said.
The court held that the remedy sought by CAB was not a “cause of action” which came into existence while Mr Gibson was alive and survived against his estate. Rather, the estate was only notified because of its potential interest in the items of property if it was not established that the assets were the proceeds of crime.
The court held that the property in question was never owned by Mr Gibson and therefore never passed to his estate. While Mr Gibson may have enjoyed and controlled the property, it did not mean that the CAB’s application was a “cause of action” within the meaning of the Civil Liability Act 1961.
Accordingly, the application was not statute-barred and the respondent failed to make out any reason why the application should be refused. There was no evidence that there was a serious risk of injustice in making the orders sought and the court therefore granted the application.