The High Court found that Gardaí acted beyond their powers by keeping a direction in place that prevented the Bank of Ireland from dealing with a customer’s account after Gardaí knew no money-laundering prosecution would follow.
In a judgment delivered on 4 May 2007, Mr Justice Gilligan said Detective Garda Padden had a duty to withdraw the direction from the end of August 2005. The court held that the direction’s continued operation was ultra vires section 31(8) of the Criminal Justice Act 1994, as amended. It did not find the section itself unconstitutional.
The case concerned a cheque for US$95,890.07 payable to Robert Burns. In July 2005, Burns and Marta Natonieweska sought to lodge it to her account at the Bank of Ireland in Athlone. After the proceeds reached the bank, they were transferred to Burns’s current account at its Dún Laoghaire branch. The bank had made a suspicious transaction report to Gardaí. On 22 August, Detective Garda Padden directed the bank not to deal with the account without his specific consent. The bank refused Burns’s request to withdraw the money.
The judgment records that the direction was issued after the detective spoke with a US Internal Revenue Service agent about US allegations against Burns. The detective said he suspected the funds represented proceeds of criminal conduct, including funds mixed with legitimate money. The court did not resolve an evidential dispute about hearsay in the account of those conversations. It noted the detective accepted that Gardaí would not pursue a money-laundering charge and that, without Burns’s High Court proceedings, he would have withdrawn the direction.
Burns argued that maintaining the direction was an abuse of power and challenged the statutory scheme on constitutional and Convention grounds. The court said it was unnecessary to decide whether section 31(8) was constitutional. It held that the absence of a statutory time limit did not authorise Gardaí to maintain a direction indefinitely, and that discretionary powers had to be exercised fairly and judicially.
The court found no liability on the bank, which had submitted the report required by law and complied with the Garda direction amid potential criminal liability if it dealt with the funds. It also recorded that earlier claims of fraud against the bank and misfeasance in public office against State defendants had been withdrawn.
The judgment concluded that the section remained presumed constitutional, the bank had no liability, and Gardaí acted ultra vires by failing to lift the direction once they knew there would be no prosecution. Gilligan J. said he would hear submissions on the form of the order. The judgment does not state the final form of that order.