The High Court has ruled that Vehicle Tech Limited is not automatically entitled to damages because a provision used to freeze funds was declared unconstitutional. Any award will depend on what loss the company can prove, and the court may instead award nominal damages or decide the declaration of invalidity is sufficient.
Mr Justice Hedigan delivered the ruling on 3 December 2013 while determining three legal questions in the company’s proceedings against Allied Irish Banks plc and State defendants. The parties agreed that the State could not claim it acted lawfully under section 31(8) of the Criminal Justice Act 1994, which had been declared unconstitutional.
The judge also ruled that the company could not now pursue claims based on alleged Garda abuse of the provision, including allegations about a search and broader Garda practice. He said those matters had already been considered by Ms Justice Laffoy, who found that the statement of claim disclosed no cause of action on those grounds. The case had moved on to an inquiry into damages arising from her declarations, and no other issues could be raised at this stage.
In October 2010, Laffoy J declared section 31(8) and a direction made in July 2008 invalid, then adjourned the damages issue. The source judgment refers in one passage to a search on 10 July 2009, but quotes Laffoy J’s earlier judgment as referring to 10 July 2008. It does not resolve that discrepancy.
On the question of damages, Hedigan J said that a finding of invalidity does not, by itself, create an entitlement to compensation. He cited earlier case law on the limits of remedies for acts carried out under laws later found invalid. The State parties argued that the legislation formed part of efforts to combat money laundering. The judge said the court assessing damages could consider public order and the common good, while stressing that he had heard no evidence at this preliminary stage.
The damages inquiry may result in compensation for loss the company proves flowed from the unlawful acts, nominal damages, or a finding that the declaration of invalidity is an adequate remedy. The ruling did not decide the amount or final outcome of that inquiry.