Couple challenging proceeds of crime freezing orders can have legal aid, court rules

A husband and wife who are challenging a proceeds of crime order freezing any dealing in two rental properties and their family home are entitled to free legal aid, the Court of Appeal (CoA) ruled.

The Criminal Assets Bureau (CAB) claims their first family home, bought in 2001 and which is not the subject of the freezing order, was funded by the proceeds of crime. The couple is only referred to in the case by initials.

CAB said when the first home was sold and part of the equity from it used to invest in their first rental property then it (the rental) was also the proceeds of crime.

CAB contended the second rental was funded by refinancing the first rental which then also meant it came from the proceeds of crime.

When they built their current new family home, that too was funded by the proceeds of crime, CAB says.

The husband said he is unemployed and his sole source of income was from the rentals for which mortgage repayments had to be made. His wife was receiving income from her business and was also in receipt of children’s allowance.

His income in 2018 was €37,586 and his wife’s income was €12,829, he said.

The husband said he had generalised employment before buying the first family home with some periods of unemployment having spent a year in prison in 1999-2000.

He had savings in 2001 which he used, together with a mortgage, to purchase the first family home, he said

Between 2006 and 2008 he generated an income from a specified business and from the subletting of a yard, and also began letting the first rental. He disputed CAB claims about refurbishment work on the second rental.

The new family home was paid with a loan from his wife’s grandfather as well as from accumulated rental income and work earnings until 2015 when he went to prison for 18 months. He was released in 2017.

CAB disputed his claims in relation to current income on the basis of previous tax returns.

It also said there were numerous occasions on which the couple were observed driving vehicles registered in the name of third parties. They enjoyed foreign travel and there were significant lodgements from unknown sources to their bank accounts over and above their declared income, it said.

The High Court granted them legal aid saying they met the criteria for having insufficient income to allow for the sort of legal representation that would be required to challenge the freezing order on their assets.

CAB appealed to the Court of Appeal

It argued, among other things, the High Court erred in law and/or in fact in in determining their means were insufficient to pay for legal representation and in determining that their historic position was not relevant.

CAB also said a forensic accountant had sworn in July 2019 that there was an overall shortfall of around €3m across the period of almost two decades between the costs of their alleged lifestyle and purchases and their objectively verifiable income.

There was also evidence from CAB of 26 separate motor vehicles alleged to have been at their disposal as well as foreign trips.

The couple opposed the appeal.

They argued, among other things, the High Court correctly determined that the specific factual issues raised by CAB, while relevant to the substantive proceedings, were not core issues to the application for legal aid. The High Court applied the correct test in relation to their means, they said.

Ms Justice Máire Whelan, on behalf of the three-judge Court of Appeal , was satisfied there was sufficient evidence before the High Court that the couple had reached the level of exceptionality required rendering it essential in the interests of justice to grant them legal aid.

She was also satisfied the High Court adequately engaged with the evidence and correctly refrained from carrying out an exercise that involved an evaluation of the merits of the case or an assessment of the prospects of the couple’s success in it.