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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Murphy v. G. (J.) & Ors [2008] IEHC 33 (4 February 2008) URL: http://www.bailii.org/ie/cases/IEHC/2008/2008_IEHC_33.html Cite as: [2008] IEHC 33 |
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Neutral Citation No: [2008] IEHC 33
THE HIGH COURT
DUBLIN
1996 No. 10143P
DELIVERED ON MONDAY, 4TH FEBRUARY 2008:
MR. JUSTICE FEENEY: This is an application brought within the above proceedings by Notice of Motion dated the 25th day of July 2007. The application is brought in proceedings, Record No. 1996 No. 10143P. The application is for an Order pursuant to Section 7 of the Proceeds of Crime Act 1996, as amended, appointing a receiver to take possession of certain property set out in nine separate paragraphs in a schedule attached to the Order of the High Court dated the 15th and 19th day of December 1996.
Paragraph 16 the Notice of Motion seeks an order for the appointment of a receiver pursuant to Section 7 of the Proceeds of Crime Act 1996 and paragraph 2 identifies that, if necessary, a direction that the said receiver shall sell and/or manage the said property should also be made. Three separate matters were sought in the Notice of Motion and were identified as part ever the Applicant's application in opening by Counsel. They were:-
Firstly, the appointment of a receiver; Secondly, that the receiver be entitled to manage the properties in question and to take rents, and; Thirdly, that the receiver be permitted to dispose of or sell the properties. This was confirmed by Counsel on page 14 of Day 2 of the Transcript.
The extent of the Applicant's application was further clarified on Day 3 (page 22 of the Transcript) when Counsel for the Applicant indicated to the Court that at this stage an application was being made to the Court for possession and that the second matter as to what should be done with the property was a secondary matter and that, at this stage, the Applicant was not pressing that matter before the Court as the Applicant's stated primary aim was to get possession of the property and to preserve it.
In those circumstances, this Court will deal with this application on the basis that it is an application for the appointment of a receiver for the purposes of getting possession and preserving and protecting the property. Insofar as any issues might arise, if such Order were granted, as to the letting or sale of any of the properties, the same would require further application to this Court.
In light of the above, no issue arises concerning the fact that the Supreme Court, by Order of the 6th day of October 2006, had stayed proceedings seeking a Disposal Order in respect of the same property pending the outcome of an appeal to the Supreme Court. This Court does not, therefore, have to address the issue as to whether or not there is any inconsistency in seeking that a receiver have power of sale when the Supreme Court has placed a stay on proceedings seeking a Section 4 Disposal Order under the Proceeds of Crime Act 1996 pending an appeal. A separate issue was raised by the first-named Defendant/Respondent in respect of the Notice of Appeal and that will be dealt with later in this Judgment.
Notwithstanding the duration of the hearing before this Court and the nature and extent of some of the arguments made, the actual matters for consideration by the Court are extremely limited.
Section 7 of the Proceeds of Crime Act 1996 deals with the issues of a receiver. Section 7 reads as follows:
"7 (1) Where an interim order or an interlocutory order is in force, the Court may at any time appoint a receiver - (a) to take possession of any property to which the orders relates, (b) in accordance with the Court's directions, to manage, keep possession or dispose of or otherwise deal with any property in respect of which he or she is appointed, subject to such exceptions and conditions (if any) as may be specified by the Court and may require any person having possession or control of property in respect of which the receiver is appointed to give possession of it to the receiver."
As is apparent from the terms of that Section, the power of a Court to appoint a receiver is dependent upon an Interim Order or an Interlocutory Order being in force. An Interim Order is an Order under Section 2 and an Interlocutory Order is an Order under Section 3 of the same Act.
In this case proceedings were commenced on the 21st November 1969 and an Order was made by the High Court pursuant to Section 2 of the Proceeds of Crime Act 1996 preventing the Defendants/Respondents from disposing of or otherwise dealing with the property specified therein. On the 5th and 19th days of December 1996, Orders were made pursuant to Section 3 of the Proceeds of Crime Act 1999 preventing the same parties from disposing of or otherwise dealing with the property. A further Motion by the Plaintiff within those proceedings seeking the appointment of a receiver pursuant to Section 7 of the Proceeds of Crime Act 1996 was due to be heard on the 13th February 1997. On that day, J. G., the first-named Defendant/Respondent herein, issued a Plenary Summons challenging the constitutionality of the Proceeds of Crime Act 1996. Those proceedings bear Record No. 1997 No. 1667P. Those proceedings claimed that the Proceeds of Crime Act 1996 was invalid having regard to the Constitution, and a number of matters were identified including the contention that the Act infringed a person's rights under the European Community Law and the European Convention on Human Rights. The constitutional challenged commenced by the first-named Defendant/Respondent in February 1997 had the effect of halting the application for the appointment of a receiver. The constitutional challenge was heard by the High Court, and the Judgment is reported in the decision of G. v. Criminal Assets Bureau [1998] 3 IR 185. The High Court dismissed the claims made by J. G. in relation to the unconstitutionality of that 1996 Act and held, inter alia, that the proceedings were civil rather than criminal in their nature and that the standard of proof was the balance of probabilities.
J. G. appealed the High Court Judgment to the Supreme Court and that case was heard, together with another case, by the Supreme Court resulting in a Judgment being delivered on the 18th day of October 2001. The Supreme Court dismissed Mr. G.'s appeal and affirmed the Order of the High Court. The Supreme Court Judgment was delivered by Keane, C.J., and in the course of the unreported Judgment, he stated in relation to the scheme under the Act at page 77 of the judgment;
"A person who is affected by the provisions of an interlocutory order can apply at any time before the expiration of the seven-year period for an Order discharging or modifying the interlocutory order. "
In dealing with the contention by the appellants that the maxim audi alteram partem was violated because of the failure to deliver a Statement of Claim and the absence of particulars of the crimes alleged and the absence of an Order for Discovery, Keane, C.J. stated as follows:
"These orders were either made in proper exercise of the jurisdiction of the High Court or they were not. If they were not, the appropriate course for the appellant to have taken was to appeal to this Court. It accordingly has to be assumed that the orders were made in accordance with the principles of constitutional justice by the High Court judges concerned. In any event, the court is satisfied that in any case brought under the procedures laid down by the Act, the affidavits grounding the interim and interlocutory application of necessity will indicate to the respondents the nature of the case being made on behalf of the applicant."
In this case, both a Section 2 Interim Order and a Section 3 Interlocutory Order have been made against the Defendant/Respondents in respect of the property, the subject matter of this application. This Court must proceed on the basis that the Orders are properly made and made in accordance with the principles of constitutional justice. The Court is satisfied that there is both an Interim and an Interlocutory Order in force and that therefore the first matter required to be established before a receiver can be appointed under Section 7 - that an Interim or Interlocutory Order is
in force - has been so established.
The consequence of a Section 2 and a Section 3 Order is that the Court has determined that specified property constitutes, directly or indirectly, the proceeds of crime and that a specified property was acquired, in whole or in part, with or in connection with property that directly or indirectly constitutes proceeds of crime.
The scheme provided for under the Proceeds of Crime Act 1996 is that an application can be made for a disposal order pursuant to Section 4 where a Section 3 Interlocutory Order has been in force for not less than seven years. The Interlocutory Order herein was made on the 19th day of December 1996 and after that Order had been in force for a period of seven years, an application was brought in the High Court proceedings, Record No. 2004 No. 536, by Special Summons dated the 22nd day of December 2004, seeking a disposal order pursuant to Section 4 of the 1996 Act. The same nine items of property, the subject matter of this application, together with one further property at Timahoe East, were the subject matter of the 2004 proceedings. An application was made to Court on behalf D. G. and T. G., pursuant to a Notice of Motion dated the 18th day of February 2005, seeking to have the 2004 proceedings dismissed on the grounds that they were not commenced in accordance with the Rules of the Superior Courts and that application failed and an Order to that effect was made on the 7th day of March 2005. In January 2006 J. G. brought a Notice of Motion within the 2004 proceedings seeking various declarations, including a declaration that the cause of action in the proceedings "is whether or not the specified properties were the proceeds of crime" and further that the prosecution of the proceedings was in breach of Article 6 of the European Convention on Human Rights. On the 8th day of February 2005 G. G., the second-named Defendant/Respondent, sought an Order dismissing the 2004 proceedings on the grounds that they were not commenced in accordance with the Rules of the Superior Courts in that it was not open to the Plaintiff to proceed by way of special summons. In a Judgment delivered on the 30th day of January 2006 the High Court determined that the Superior Court Rules enabled proceedings for an Order pursuant to Section 4 of the Proceeds of Crime Act 1996 to be taken by way of Special Summons. An Order of the 30th day of January 2006 was duly made dismissing the second-named Defendant/Respondent's application. That decision was appealed to the Supreme Court and it is averred in the Affidavit grounding the application herein, sworn by Francis Cassidy, that the appeals to the Supreme Court brought by the various defendants in respect of the High Court's orders which, in effect, allow and permit the use of a Special Summons, are still pending.
Mr. G. indicates otherwise. It is appropriate to point out that whilst this Court has very extensive Pleadings and Orders in the various court cases, they are not comprehensive.
On the 10th day of March 2006, the first-named Defendant/Respondent herein, J. G., commenced new High Court proceedings seeking a declaration that all or part of Section 3 of the Proceeds of Crime Act 1996 are repugnant to the Constitution and/or incompatible with the European Convention on Human Rights. The first- and second-named Defendant/Respondents also brought a Motion pursuant to Section 3(3) of the Proceeds of Crime Act 1996 seeking to discharge or vary the Section 3 Order made herein. That application was unsuccessful and is also the subject matter of an appeal to the Supreme Court. Such an application under Section 3(3) can only be brought when an Interlocutory Order is in force and that application relates to the Section 3 Order made in 1996.
On the 6th day of October 2006 the Supreme Court heard an application by J. G. and T. G. to stay the trial of the Section 4 disposal application pending the outcome of the appeal against the Orders of the High Courts made on the 21st day of February 2006 and also on the 6th day of March 2006 concerning the Section 3(3) application to discharge or vary of the Section 3 Order. It was ordered that the High Court action be stayed pending the outcome of the appeal. On the same day, the Supreme Court also made a similar Order concerning the Sections 3 and 4 interface and again ordered that the High Court action be stayed pending the outcome of that appeal. The actions which are stayed by the said Orders relate to a Section 4 application for a disposal order, a Section 3(3) application to discharge or vary the original Section 3 Order and concerning the Sections 3 and 4 interface. The stay is on such High Court actions and this Court is satisfied that it does not relate to the Section 7 application herein which is a separate and fresh application for the appointment of a receiver.
In considering the principles to apply to an application to appoint a receiver under Section 7, a number of factors have been identified.
Firstly, it is the case that a receiver under Section 7 can only be appointed in circumstances where an Interim or Interlocutory Order under the Proceeds of Crime Act 1996 has been made. Therefore at the time that the Court comes to consider the appointment of a receiver, there will be in existence an Interim or Interlocutory Order whereby the High Court will have come to an earlier conclusion that the specified property constitutes directly or indirectly the proceeds of crime. That earlier conclusion is a necessary prerequisite to the application of Section 7 and is the context within which the appointment of a receiver must be considered.
Secondly, it is clear that an application to appoint a receiver under Section 7 requires to be considered on equitable principles.
Thirdly, the purpose of a receivership is to preserve the property over which the receiver is appointed for the benefit of the party ultimately found to be entitled to it. The appointment of a receiver is not a penalty but rather a mechanism to endeavour to ensure that property is preserved.
Fourthly, the use of the word 'preservation' is not the use of a precise term but covers a number of different and varying circumstances but unquestionably covers the necessity to ensure that property is properly and validly insured.
Fifthly, in considering the application of equitable principles, the issue of delay, if any, inconvenience and occupation by a family or a family member are factors to take into account.
Sixthly, a further factor a take into account in applying the equitable principles is the existence of pending proceedings seeking to discharge or vary a Section 3 Order and the timing and circumstances of such application.
Seventhly, the handing up of possession or use of lands and/or houses after the making of a Section 3 Order or when a Section 4 Order is pending is relevant.
Finally, a factor to take into account is consideration as to whether the appointment of a receiver is appropriate or inappropriate.
It also follows from the terms of Section 7 that if the Court determines that it is appropriate to appoint a receiver, that the Court should consider the nature of directions to be given in relation to the management, keeping of possession or disposing of the property. It must also address the question of exceptions and/or conditions.
The above principles can be gleaned not only from the terms of the Act and from the fact that the office of receiver has its origins in the Court of Chancery, but also can be identified in two authorities which have been opened to this Court.
It is clear from the decision of Finnegan, J. in FK v. TH and JH, a Judgment delivered on the 31st day of October 2001, where he stated (at page 2) as follows:
"I am mindful that office of Receiver (including a Receiver appointed pursuant to statute) has its origins in the Court of Chancery. It is a appropriate to have regard to equitable principles in exercising the statutory discretion conferred by the Proceeds of Crime Act, 1996, Section 7 and I do so"
that there is no doubt but the Court must apply equitable principles in exercising what is a discretion conferred by statute.
That High Court decision was the subject of consideration by the Supreme Court on appeal under the title McK v. H and Another (High Court Record No. 2000 No. 1256P) in an unreported Judgment delivered on the 28th day of November 2006. In that judgment, Mr. Justice Hardiman, in dealing with the appointment of a receiver, confirmed the approach of Finnegan, P. to the effect that an application for an Order under Section 7 of the Proceeds of Crime Act required to be considered on equitable principles and having approved the above statement by Finnegan, P., Hardiman, J. went on to state that having regard to the conclusion by the High Court upholding the Section 3 Order to the effect that the premises in question represented the proceeds of the crime, it was difficult to see any basis, equitable or otherwise, for setting aside the receivership. The emphasis placed upon there being a valid Section 3 Order in place upheld by the High Court at the time of the appointment of a receiver as being a significant and important matter to take into account is thereby highlighted. Hardiman, J. stated (at page 10 of 11):
"Moreover, the purpose of a receivership is to preserve the property over which the receiver is appointed for the benefit of the party ultimately found to be entitled to it. A vital aspect of this preservation, in the case of a building, is to ensure that the premises are at all times properly and validly insured. In my view the evidence before the learned President to the effect that the policy of insurance was likely to be or to become void, which was not contradicted, was quite sufficient in itself to justify the appointment of a receiver with power of sale."
That statement demonstrates the importance of a Court giving prominence to the vital aspect of the preservation of property which is the subject of a Section 3 Order. Also, where the property is a building, the preservation necessarily would include the existence of proper and valid insurance.
I now come to consider the application of the above principles to the facts of this case. There are in effect five different properties to be considered, the first being the J. Centre and surrounding and adjacent lands; the second being the residence together with a separate portion of the lands adjacent to the Equestrian Centre; the third being a house at W. V., Lucan; the fourth being a house at W. G., Lucan; and the final property being a house at C., Blanchardstown.
Four separate matters for consideration were raised by the Applicant as supportive of the application for the appointment of a receiver. These were matters over and above the general situation. The premises had been determined pursuant to Section 3 to represent the proceeds of crime and that had been the position for over ten years. There was also a number of pending appeals before the Supreme Court and that therefore the legal situation would not be clarified for some considerable period of time. The four particular points raised were:
1. Firstly, dilapidation and/or abandonment. During the course of the hearing it was clarified that any claim in relation to dilapidation or abandonment primarily related to the commercial property at J., that is the J. Centre and surrounding buildings and lands and, to some extent, to the residence adjacent to the J. Centre and did not relate to any of the other three houses.
2. The second matter raised related to the suggested declining capital value of the properties, particularly when allied to general dilapidation. It was urged that whilst the Irish property market had enjoyed an unprecedented boom over the last ten years, that the Court should take judicial notice that such boom was unlikely to continue and that accordingly it may be an appropriate time to liquidate the properties in order to preserve values. Since the Applicant did not proceed with an application for the sale of the properties, this second matter does not require to be considered by the Court at this time.
3. The third matter raised for consideration was the lack of insurance on any of the properties. The factual position identified during the course of the hearing was that none of the properties is currently insured and that such position has continued for a considerable period of time. The evidence from Mrs. G. G. was to the effect that the insurance of the J. properties ran into difficulties in 1997 and that at that stage her brokers were unable to obtain insurance. Other than that, she indicated her willingness to cooperate with the Criminal Assets Bureau in relation to obtaining insurance. No other evidence was provided by her in relation to insurance even though she continues to assert that she is entitled to occupy both the equestrian/commercial portion of the premises and the residence at J. It was also openly acknowledged in Court that none of the properties had any insurance.
4. The fourth matter raised by the Applicant related to the issue that some of the properties were being rented to and/or occupied by third parties pursuant to agreements made by the Defendant/Respondents. It was argued that such letting and/or handing up of the properties after the making of the Section 3 Order was arguably in breach of that Order. I will return to this matter later in the judgment.
I shall now deal with the issue of dilapidation/abandonment. As pointed out above, this solely relates to the J. properties. The issue took up the majority of the time before the Court and also resulted in a separate and discrete legal issue being raised. That issue concerned whether or not the Court should admit evidence, including photographic evidence from Detective Garda Ainsworth arising out of his visit to J. on the 11th day of July 2007 and his late affidavit. During the course of the legal argument, an application was made by the Applicant to permit the inspection of the J. properties to establish their current condition and following argument an Order permitting such photographic inspection was duly made and that inspection was carried out on Monday, the 28th January 2008. Whilst Counsel for the second-named Defendant/Respondent objected to the making of the Order and stood by such objection, notwithstanding the ultimate court ruling, no requirement to prove the photographs being handed into court was made.
The Defendant/Respondent's Counsel reserved his position that the Order should not have been made. The Court also ruled on that occasion that rather than admit the affidavit of Detective Garda Ainsworth, sworn on the 20th December 2007, that the correct approach to ensure fair procedures would be to have Detective Garda Ainsworth give oral evidence and to allow and permit him to be cross-examined. That occurred.
It was apparent from his evidence that Detective Garda Ainsworth had visited the J. properties on a number of occasions each year since the making of the Section 3 Order and that he did so again on the 11th July 2007. On that occasion he had information that there were horses on the property and that a car or cars had been seen coming and going from the J. properties. When he arrived at the property, he found the access points under lock and chain but he was able to see from the roadway that horses were in and about the property. He believed Mrs. G. was not in the country but in Spain. He therefore determined to go onto the property to endeavour to clarify "any occupancy of the property." He had with him a small and simple domestic-type digital camera and he decided to take a photographic record of what he saw so as to "protect himself in the event of any allegation of damage or disruption." He then went on and about the lands and looked into open buildings and took a series of photographs, including two photographs of the outside of the residence taken from within the curtilage.
Detective Garda Ainsworth was cross-examined on the basis that he had not only trespassed onto the property, including the curtilage of the private residence, but had done so deliberately for the purpose of obtaining evidence to support a claim of dilapidation. That was disputed by Detective Garda Ainsworth and it is an issue which requires to be considered by this Court. The Court has had the benefit of seeing Detective Garda Ainsworth give his evidence and in the light of that evidence the Court has come to the conclusion that there is no basis to support the suggestion that Detective Garda Ainsworth deliberately went onto the property for the purpose of inspecting it to support an application for the appointment of a receiver based upon dilapidation/abandonment. Such suggestion is inconsistent with a number of facts and the credible testimony of Detective Garda Ainsworth. The Court is satisfied that the true motive for Detective Garda Ainsworth entering the property was as stated by him, namely, an attempt "to clarify the occupancy or otherwise of the premises." He did so knowing that Mrs. G. was abroad and having observed horses in and about the property. The Court accepts the evidence that the photographs were taken to show the condition of the property and to avoid allegations of damage or interference with the property. That evidence must be viewed against the extensive, litigious history attaching to this property. Detective Garda Ainsworth's evidence is supported by the fact that when this application was commenced by Notice of Motion dated the 25th day of July 2007 and grounded on an affidavit sworn on the same date, no reference whatsoever was made to the Detective Garda Ainsworth's attendance at and on the property on the 11th day of July 2007. If the purpose of the visit was, as suggested in cross-examination, to obtain photographic evidence in support of abandonment/dilapidation of the property, then there would be no logical basis for the absence of the photographs in the Grounding Affidavit or the absence of any reference to Detective Garda Ainsworth's observations. Detective Garda Ainsworth swore an Affidavit and exhibited photographs in response to a denial that the property was dilapidated and/or abandoned and did so in December 2007. Secondly, it is clear from the evidence that the methodology which Detective Garda Ainsworth would have adopted if he was seeking to take photographs for use in court proceedings would have been entirely different from the one adopted on the 11th July 2007. When Detective Garda Ainsworth attended on the property in December 2007 for the purposes of taking photographs, he did so with a sophisticated camera and with a lens capable of taking long-distance photographs. Thirdly, the use by Detective Garda Ainsworth of a small, domestic-type, personal camera on the 11th July was supportive of his evidence that he made a short detour to visit J. when returning from another part of the country and did so at a time when he had in his possession only a small, domestic-type camera. He visited the property at a time when he had information concerning horses being in and about the property and cars coming and going from the property. The Court is satisfied that that formed the backdrop to the visit on the 11th July 2007. In the above premise, the Court is satisfied that the visit and enter onto the lands by Detective Garda Ainsworth was done in good faith and was not a deliberate and conscious trespass.
In any event, the photographs taken from the roadway clearly demonstrated that there had been little or no use of the J. residence and, in particular, that there had been no vehicular use of the residence driveway for a substantial period of time prior to the 11th July 2007. The state of the driveway as observed from the roadway demonstrated that it had not been used for a considerable number of months and was in a significantly overgrown condition.
Having considered this matter, the Court is satisfied that in exercise of the discretion which both sides acknowledged existed in the Court, it is appropriate to admit the photographs taken by Detective Garda Ainsworth from the road and also the other photographs other than the two photographs taken in and about the curtilage of the residence. The Court has determined to exclude those photographs in light of the argument put forward that those photographs were taken in breach of Mrs. G.'s constitutional rights. The admitted photographs provide the Court with useful assistance as to the then state of J. over and above the oral evidence of Detective Garda Ainsworth.
The photographs taken on the 11th July 2007 demonstrate that there had been little, if any, recent use of the domestic residence. Mrs. G. confirmed in evidence that whenever she used the house, she used the driveway. It is manifest from the photographs that the driveway had not been used for a number of months. Secondly, the photographs taken in July 2007 demonstrate that there was an unkempt appearance to the commercial property with some of the lesser buildings, in particular a large shed, suffering dilapidation. Significantly, the stable building was not secure and had entrances without gates or doors and the large shed building had portions of its roof missing. The equestrian arena remained secure and had a certain unkempt appearance but that was in no way surprising given the fact that it was never completed and it had been unoccupied and unused for over ten years.
The later photographs taken in December 2007 from the roadway demonstrate that there had been some significant improvement in the unkempt appearance of the properties, in particular in relation to the driveway access to the residence at J. Photographs taken in January demonstrate that the improvement in the overall appearances continued and whilst the premises remain unused, it could not be said that they are abandoned. It is clear that the domestic premises on J. is in habitable condition. The Court has the benefit of photographs from Mrs. G. which show the interior of the house.
From the evidence, the Court draws the conclusion that it cannot be held that the premises, either the commercial/equestrian premises or the residence, have been abandoned and that the state of dilapidation at this point in time is no more than one would expect from premises which have effectively remained unused for over a decade. The state of evidence does, however, demonstrate that not all the buildings are secure and would be open to a person who went onto the lands.
As regards the issue raised as to whether or not Mrs. G. G. resides in the residence adjacent to the J. Centre, the Court is satisfied that the evidence established that it is her primary residence, even though she does not continuously reside therein and spends considerable periods of time away from the premises. It is her permanent home and she primarily resides there when in Ireland. The evidence established that Mrs. G. spends considerable periods of time, in the last number of years, in Spain with her daughter and family but it cannot be said that she has abandoned or allowed the private residence to fall into dilapidation or disuse.
If this application fell to be considered solely on the basis of dilapidation or abandonment of the J. properties, then the Court would not have determined it appropriate to appoint a receiver.
However, a number of other matters are of significance in considering the issue as to whether or not to appoint a receiver. Firstly - and mostly significantly - it is common case that the J. properties and the three private houses are all uninsured. Secondly, it is apparent that in relation to both the J. lands and in relation to the W. V. property and in relation to the W. G. property, that one or other of the Defendant/Respondents had been willing to allow and permit third-party occupation and use of the lands and houses. They have done so pursuant to imprecise and uncertain agreements. The evidence relating to the permitted use of the lands in J. and the occupation of the house in W. V. and the tenancy in W. G. was such as to cause a real apprehension as to third-party use being permitted over lands, the subject matter of the Section 3 Order. All such third-party use and occupation took place after the Section 3 Order was made. It is also the case that the J. commercial property is unoccupied, unused and at least one of the buildings has open access.
Mrs. G. G. gave evidence that she receives payment for allowing and permitting the use of the Jessbrook lands by a third party and that she expends part of the money so received on the upkeep and maintenance of the property and uses the balance, which is the majority, for her own upkeep. D. G. gave evidence that he has let W. G. to a third party and is in receipt of a sum of €1,300 per month. However, no precise details were given as to that tenancy but it was indicated that part of the rental is used to maintain the property and the remainder is used for D. G.'s own personal maintenance. D. G. also gave evidence by affidavit that he personally resides at the premises on C..
The evidence was that the title to W. V. property is in the joint names of J. G. and T. G.; that the property at W. G. is in the joint names of J. G. and D. G. and that the property at C. is in the joint names of J. G. and G. G.
The evidence was that T. G. resides in Spain where she runs a business and that she stays in the property at W. V. when she visits Ireland and that the caretaker who is at present in the property and is not paying any rent vacates the property during such occasional visits. The property could not be said to be her home and it is clear that she works and lives in Spain.
It is against the above factual background that this Court comes to consider the principles outlined above in relation to whether or not it is appropriate to appoint a receiver and, if so, on what terms and conditions. The Court is satisfied that it is both appropriate and necessary to appoint a receiver over all the properties and lands. The primary reason is to ensure, insofar as is possible, the preservation of those properties and lands for the benefit of the party ultimately found entitled to them. An essential part of the preservation of each of the properties, which
this Court views as vital, is to ensure - insofar as the Court can - that each and every one of the properties is covered by valid insurance. It is common case that there is no insurance on any of the properties and this Court is satisfied that the most likely way of ensuring that policies of insurance will be in place and valid is by the appointment of a receiver. Further, by appointing a receiver over each of the properties, the Court will ensure that the properties are managed with a view to the properties being preserved and not subject to vague and uncertain agreements for third-party use and occupation and thereby will ensure that the properties will be available to the party ultimately found to be entitled to such properties at the conclusion of the Section 4 litigation.
The Court does not consider that it is necessary at this point in time to determine whether or not the letting or granting of use of the properties to third parties represents a dealing under Section 3 of the Act but is of the view that it is necessary to ensure that all use and any future use of the property is managed and done in an ordered and precise manner, thereby ensuring the preservation of the property and the availability of the property for the benefit of the party ultimately found entitled to it.
It was argued by Counsel on behalf of Mrs. G. G. that the Criminal Assets Bureau has an insurable interest in the properties, in particular in relation to both J. properties and that therefore insurance could be obtained without the appointment of a receiver. However, this Court is satisfied that the primary requirement is to ensure that the properties at all times are properly and validly insured without any potential argument in relation to the existence or non-existence of an insurable interest. In those circumstances, the court is satisfied that it is appropriate to appoint a receiver who can take possession of each and every one of the properties, subject to the conditions specified by this Court, thereby ensuring that a proper and valid insurance policy can be obtained. This Court does not have to decide the issue as to whether or not the Criminal Assets Bureau has an insurable interest as it is clearly the case that if possession of the property is granted to a receiver, that such a receiver will have an unquestionable insurable interest, thereby assisting in the obtaining of a proper and valid insurance. This is particularly relevant in relation to the unoccupied equestrian/commercial premises at J.
In determining that it is appropriate to make an Order appointing a receiver over each of the properties, subject to the conditions hereinafter set out, the Court has regard to the provisions of Section 16 of the Proceeds of Crime Act 1996 which provides for the payment of the compensation which the Court considers just in the circumstances of any loss incurred by a person by reason of a Section 3 Order if any of the properties, the subject of that Order, are ultimately held not to represent the proceeds of crime.
This Court must also have regard to the fact that there is an extant Section 3 Order in force to the effect that each of these properties represents the proceeds of crime and that the purpose of appointing a receiver is for the preservation of the property. This Court is satisfied that on an equitable basis, the best way to endeavour to ensure the preservation of the property particularly by the provision of the proper and valid insurance is by the appointment of a receiver. This will also ensure clarity in relation to third-party occupation and use.
The issue of delay has been raised as a suggested ground upon which the Court should decline to appoint a receiver. That argument ignores the central purpose of the appointment of a receiver which is to preserve property. This Court is satisfied that steps require to be taken to ensure the preservation of the property and those steps are required irrespective of whether or not there has been any delay. The requirement of preservation is such that it should be prioritised by this Court irrespective of any issue in relation to delay. In any event, this Court - given the tangled history of the litigation in relation to these properties - does not make any determination that there has been culpable delay on the part of the Applicant. Even if delay were established, the requirement of preservation of the property would be such that such delay could not result in the court declining to appoint a receiver if the Court was satisfied that steps needed to be taken to ensure that the property be preserved.
An argument was put forward in relation to the appropriateness of Francis Cassidy as a receiver. The Court is satisfied - given the existence of the Section 3 Order and the circumstances that the properties being taken into receivership have been held to represent the proceeds of crime - that Francis Cassidy, Solicitor of the Criminal Assets Bureau, represents an appropriate receiver. Once appointed under Section 7, the receiver owes his obligations as a receiver to the Court and is answerable to the Court and it is open to the receiver in relation to any contentious matter or in relation to any alteration in the circumstances of the properties to apply to Court for directions.
It is necessary to consider what conditions should be specified by the court in relation to the appointment of a receiver. This must be done with regard to equitable principles. In this case, the Court is aware that, for better or worse, there has been a very considerable delay from the making of the Section 3 Order and during that period of time one or other of properties in question has provided a permanent home or residence for G. G. and D. G.. In those circumstances, the Court is satisfied that in applying equitable principles that regard must be had to the passage of time and to the fact that two of properties in question are used by two of the Defendants/Respondents as their primary residence or home. In those circumstances, the Court is satisfied that the receiver should take possession of each of the properties and should manage and keep possession of those properties so as to preserve such properties, including effecting policies of insurance. The appointment of the receiver and the receiver's entitlement to take possession of each of the properties shall be subject to the condition that in relation to the residence at J. and in relation to the property at C., Blanchardstown, and that after he takes possession, that he enter into a caretaker agreement with G. G. in respect of the J. residence and with D. G. in respect of the C. premises and that each of those two persons be allowed and permitted to reside in those two properties without charge pending the outcome of these proceedings or further Court Order. The Court is satisfied that such Order should be made so as to ensure that pending the ultimate determination as to which party is entitled to the benefit of the properties, that those two persons have available to them their home. In making the receivership subject to such conditions, the Court has had regard not only to the fact that over a period of in excess of ten years both G. G. and D. G. have used one or other of the properties as their home, but also to the fact that there is a High Court action seeking a Section 3(3) Order to alter or vary the Section 3 Order herein and that that action has been stayed pending the outcome of a Supreme Court appeal. The delay in completing that appeal should not result in either G. G. or D. G. being deprived of a place of residence pending the ultimate determination of the Section 3(3) application.
Another factor of significance to the requirement of the preservation of the property is the fact that not only has there been a handing over of possession of houses and lands to third parties on an imprecise and apparently undocumented basis, but that such possession was transferred or permitted at a stage where Section 4 proceedings had already commenced. This occurred in either the majority or all of such instances.
Earlier in this Judgment, I indicated that the application at this stage is limited to the appointment of a receiver with power to protect and preserve and that the issue of how the properties might be managed, including any lettings, would be dealt with by subsequent and later application.
It would appear that the issue of sale or disposal will be considered within the Section 4 proceedings.
The issue of how the properties which come into possession of the receiver on foot of this Judgment are to be dealt with is a matter which requires to be addressed in the near future. This arises for a number of reasons:
Firstly, some of the properties have been placed in the possession or use of third parties.
Secondly, the income derived from such possession and/or use is claimed to be necessary for the support of Mrs. G. G. and D. G.
Thirdly, the preservation of the properties require that the legal basis of any occupation or use is clearly established and defined and regularised to the extent that any occupation or use is not such that the properties will not be readily available to the ultimately successful party within the Section 4 proceedings. Also it is necessary that any occupation of a house complies with the legislation under the Private Residential Tenancies Scheme.
Fourthly, the Court has been told that many months, possibly a number of years, might well pass before the various appeals will be complete. This clearly raises the issue of how the properties are to be managed and possibly used to the produce revenue in the short to medium term.
The Court does not have sufficient, precise information concerning the current status of the occupation or use of the buildings and/or lands or of the full financial position of the second- and third-named Respondents to form any view in relation to the conditions relating thereto under Section 7 of the Act. The Court can identify certain matters which the receiver should be 'directed' to carry out in relation to the future management and use of the lands and properties.
Firstly, the receiver should take possession of the lands and properties and identify any occupation or use by third parties and the basis for same.
Secondly, the receiver should ensure, as far as practicable, that such use or occupation is legally defined, compatible with possession being available within a defined period.
Thirdly, the receiver should identify a proposal as to how the lands and properties are to be dealt with and managed in the short to medium term and if revenue can be generated from any of them. If revenue can be generated, then application should be made to Court as to how such funds are to be used, including the issue, if any, of such funds are to be paid to any of the Respondents.
The Court will give such directions. The Court proposes to make an Order pursuant to Section 7 of the Proceeds of Crime Act, 1996, appointing Francis H. Cassidy as receiver to take possession of each of the properties identified in the schedule subject to the conditions set out above. The Court has also identified the directions it will give to the receiver under S7(1)(b) of the Proceeds of Crime Act, 1996.
END OF JUDGMENT
Approved: Feeney J.
