Financial Penalties- Part II

I often blog about things I have experienced whilst at court. One such post related to the conduct of two lay benches when it came to the imposition and collection of financial penalties (see my post of the 14th August 2012). Although doing no more than reciting my experiences, the post attracted written criticism from some- with one JP saying "There is no way, ever ever, that a Bench will behave in this loathsome manner" and that "unrepresented defendants are treated with deference, respect and kid gloves without exception".

Yesterday I was emailed a case which I read with considerable interest. It is called R (on the application of Evans) v North Somerset Magistrates' Court [2012] EWHC 2382 (Admin). It is worth a read.

The case concerned the decision of the Magistrates' Court to commit the Claimant to prison for a period of 12 months in respect of the non-payment of an outstanding compensation order. You know that the case if going to be worth a read when Lord Justice Moses observes in the first paragraph that "What went on leading up to that committal seems to me a matter of considerable concern".

On the 13th March 2009, the Claimant had pleaded guilty, before the Crown Court at Bristol, to offences of theft and false accounting. She was sentenced to a term of 8 months' imprisonment. Confiscation proceedings were commenced and, on the 7th April 2010, the Crown Court made a confiscation order pursuant to s.6 of the Proceeds of Crime Act 2002 (POCA), assessing the criminal benefit as £56,039 and that the available amount was £27,771.29. That available amount was calculated by reference to the fact that the Claimant had a 100% interest in the equity of a dwelling house (valued at £25,771.29) and a car (valued at £2,000). The total sum was to be paid as compensation to the victim of the crime (a rugby club) and was to be paid within 6 months.

Time for payment was subsequently extended (the property not having been sold within the 6 month period). On the 12th August 2011 the property (and car) were sold. Unfortunately, there had been a miscalculation of the amount of equity in the property for which the Claimant had a beneficial interest. A shortfall of approximately £18,600 remained. Accordingly, the Claimant applied to the Crown Court for a variation of the Order and, on the 1st September 2011, the amount of the Order was reduced to 'nil', the Crown Court being satisfied that there were no other available assets.

The Claimant, however, still had to deal with the question of compensation (the compensation issue being distinct from the confiscation order, notwithstanding that the order on its face designed the order to be deployed in satisfaction of compensation). Pursuant to section 133 of the Powers of Criminal Courts (Sentencing) Act 2000, the Magistrates' Court may:

"...On the application of the person against whom the compensation order was made, discharge the order or reduce the amount which remains to be paid; but this is subject to subsections (2) to (4) below."

The case thus came before the Magistrates' Court on the 7th October 2011. They apparently heard evidence from the Claimant's partner, a Dean Evans, who although in employment, was due to be made redundant and to receive a redundancy payment, and also heard from representatives of the victim rugby club as to the disastrous effect on them of the dishonest behaviour of this claimant. The Magistrates adjourned those proceedings, ordering the Claimant to make a payment of £120 per month towards payment of the outstanding compensation order. The matter came before the Magistrates again on 2 December 2011. At that stage the Court heard that the Claimant's partner had indeed received a redundancy payment and apparently had heard that there was available, out of that redundancy payment, a sum of £3,000.

The Legal Advisor to the Magistrates provided the High Court (as part of the Judicial Review proceedings) with a document described as a 'statement of facts'. At paragraphs 10-11 of the Judgment, Lord Justice Moses observes that,

"In any event, on that hearing on 2 December, he [the Legal Advisor] says that the means enquiry was conducted with the Claimant on oath and the Claimant asserted that neither she nor her husband had the means to pay the compensation order and she indicated that her husband's redundancy payment had been used in full to set up a new business and thus the offer of payment out of that was withdrawn. It appears that she was asked about a holiday she had had, which she accepted, in Turkey earlier in the year, staying in a friend's villa, but there is no record of how much that cost or whether that was unreasonable expenditure in the context of the order made against her. She told the magistrates on that occasion, according to Mr Sims, that £7,500 remained out of redundancy money. The statement then goes on in quotation:

"The Justices adjudication was that the compensation should stand (...) The Justices were satisfied that the offer of payment from the redundancy money was made freely by the Claimant at the previous hearing and no good reason existed not to further consider this."

Accordingly, they ordered that she pay £3,000 within 14 days and to continue with the monthly payments of £120. There was a warning that she would go to prison for 12 months if she did not pay it. A review hearing was listed for 4 March 2012, once, so it is recorded, it became apparent by late December that the sum of £3,000 had not been paid. I then note with some disquiet that in this, "the Claimant had failed to contact the court to advise that she was unable to pay".

It seems, however, that the Claimant had not failed to contact the Court. At paragraph 13, his lordship continues-

"There was an acknowledgement on 22 December from L Guest, the administrative officer at North Somerset Court House, saying the hearing had been arranged for 3 January to allow the magistrates to read your letter. Those circumstances, are, as I have said, a matter of disquiet that it is asserted that she failed to contact the court. She did and there was a hearing on 3 January 2012 when she was, again, unrepresented. It is recorded that the £3,000 payment had not been made and the statement goes on:

"The claimant clearly told the justices that she did not see why she should have to pay the order. Her demeanour was belligerent during the hearing and she seemed unable to understand why she should have to pay the money outstanding to the compensatee. In effect she had already been punished. In answering the questions put to her by the justices the claimant expressed a palpable level of contempt for the court, claiming to appear unmoved by her compliance with the previous court order, made no offer of payment. A means enquiry followed. No offer was forthcoming and at this point the claimant's husband stood up in the public gallery and offered to pay £3,000 that day."

I turn now to the central part of the Judgment which is worth reciting in full. Paragraphs 15-21 of the Judgment read as follows:

"It was contended at a subsequent hearing by Mr Cameron on behalf of this claimant that that offer, apparently shouted out from the public gallery, was made when both the claimant and her husband felt under considerable pressure that if an order was not made she would go to prison. Mr Sims says that there was no pressure applied, that if payment were not made, imprisonment would occur. This is a surprising statement. Given the whole context of this case and the letter sent saying that the claimant was under severe depression and suicidal behaviour and that neither member of the household was working and that on more than one occasion she had been warned that if she did not pay it she would go to prison, it is startling to read from the legal adviser that no pressure was put on this claimant. The pressure arose from the circumstances, as anybody there must have appreciated.

Accordingly, following that date, the next hearing was a hearing on 3 February 2012. At that hearing, Mr Campbell did represent this claimant and evidence was given of the amount she received by way of employment support allowance of£67.50. The submissions fell on stony ground. The court, in giving its decision to send this claimant to prison, noted that the club had lost £56,000 and that£18,000 was still owed and it must be paid. It then recorded the history I have identified and the magistrates said the court entirely refutes any suggestion of improper pressure upon you on 3 January. The question is not whether there was improper pressure but whether the offer made by the husband was not plainly as a result of fear that were it not to be made the claimant ran a very real risk back in January of the very thing that occurred the month after, namely that, having already served one sentence of imprisonment, would go back there to serve even longer of the 12-month sentence. The magistrates said: "You are clearly in breach thereof of two court orders and the court finds culpable neglect."

The reasons were then expanded by the legal adviser who made it clear that the justices were satisfied that the claimant had exhibited culpable neglect in her approach to discharging compensation and particularly that no other method of obtaining the compensation was available. This is of significance to this claim because the magistrates went through the other possible sources of money to meet the compensation obligation. The legal adviser records that all other enforcement options were considered and were discounted as inappropriate or previously unsuccessful. A distress warrant was inappropriate because the claimant had no goods to distrain. A third party debt order was not appropriate because she had no savings. A money payments supervision order was inappropriate because other debts had been paid without such an order. An attachment of earnings order was inappropriate because she was not employed. A deduction from benefit order was inappropriate as the maximum amount was £10 per fortnight and it would take too long to pay. She was too old for an attendant sentence order. This is of considerable significance in this case. It demonstrates the magistrates' appreciation that there were no funds other than the paltry sum of £127 a month out of her benefit from which her own resources could meet the obligation to pay compensation. In those circumstances, it is necessary to identify on what basis it could be said that she had been guilty of any wilful refusal or culpable neglect. That was crucial to the order that the magistrates made. Absent such a finding, there was no basis for sending her to prison.

The only factual basis stemmed from the offer of the husband to use some of his money, and I emphasise, it was his money, which he had received by way of redundancy compensation to satisfy his wife's obligation. There was no obligation upon him to make the offer. As I have already sought to emphasise the circumstances in which he made it were perfectly plain: he did so to save his wife from going back to prison. The fact that he chose subsequently not to, whether for a good, bad or indifferent reason, did not in any way begin to establish a wilful refusal or culpable neglect on the part of his partner, this claimant.

The magistrates appear, in my judgment, to have fallen into error in two significant respects. Firstly, they failed to have regard to the orders of the crown court by which it was accepted that she had no assets to meet the confiscation order and that the confiscation order was linked expressly on the face of the order to compensation. It was thus recognised by the crown court that she had no assets out of which to pay the compensation. The only basis upon which it would be right not to discharge the compensation order would be on the foundation of clear evidence that there were other resources by way, for example, of regular income from employment or some windfall subsequent to the discharge of the confiscation order out of which the compensation order could be made. No such finding was made by the magistrates. No such finding could be made because there was no such resource, there was merely the sum she received by way of benefit. The second error into which the magistrates fell arose out of their elision between the resources of her husband and her own resources. That elision could not, as a matter of law, arise out of the mere fact that her husband had made an offer of £3,000 in the circumstances I have described or indeed under any other circumstances; it was entirely open to him having made the offer to withdraw it and there was nothing to suggest that she had compelled him to do so.

The error was, in my view, a basic error of law in regarding his assets as the same as hers. If authority is needed that the two are not the same, it is to be found in the R v Charalambous 6 Cr App R (S) 385 and in Archbold, paragraph 5-405, the edition of 2004. Both were cited by Newman J in R v Patricia Engam [2004] EWCA Crim 1536. It is wrong in principle to impose a fine on the assumption that one person, for example a spouse, will pay another person's fine. In that case, the judge expressed the limitations of that principle where it was sensible to regard the assets of a household as joint income and assets. Apparently in this case there was clear evidence that the spouse before the court was not the principal earner but that she had available to her the income of her partner because the income was properly to be regarded as joint income (see paragraph 13). That situation is miles away from the case here where the redundancy money plainly did not belong to this claimant and to which she had no entitlement and which was not part of her assets. I have explained the circumstances in which the offer was made and that provided no basis in law or in fact as foundation for making the compensation order, still less for finding culpable neglect.

It is, in my view, a matter of regret that although proceedings were launched and permission speedily granted in writing, no interim relief granting this claimant bail was allowed. Of course, High Court judges are enjoined not to grant bail in criminal appeals on the basis that if it is a short sentence, the case can be heard very quickly and it is thoroughly undesirable that someone who has been sent to prison should be released on bail and then sent back shortly after. But a compensation case like this is wholly different and, I am afraid, sad to recall that three different High Court judges, as this case maundered on between 2 March 2012 and 4 April 2012, failed to take a sympathetic and merciful view and let this lady out as soon as possible. We granted bail over lunch because we had not reached a final conclusion. But for my part, in my view, she should never have been ordered to go to prison in default at all and the magistrates erred in serious measure in those two respects. I will quash the decision and I shall hear argument, if my Lord agrees with that conclusion, as to the form of the order we should make for the future."

That the Magistrates "erred in serious measure" is undoubtedly correct for the reasons the High Court gave. However, what interests me is the way in which the Magistrates seemingly conducted themselves throughout the various hearings. Once again, I refer the reader back to my earlier post of the 14th August and the comments made by some in relation to it. In particular, not only did the Magistrates make "a basic error of law", the way they appear to have treated the Claimant is deplorable. The very fact that an offer of payment was being shouted from the public gallery is, many may think, indicative of the same. Furthermore, and as the High Court acknowledged, the fact that the Magistrates had conducted the exercise they had (in relation to other enforcement options) should have set off a huge flashing red light that this lady did not have the means to pay. For some reason neither that exercise, nor the previous findings of the Crown Court, swayed them from what turned out to be one of the most troubling Magistrates' Court decisions I have read in recent months.

There are serious lessons to be learned from this case and I for one suggest that it should be circulated throughout Magistrates Courts up and down the country. I do not, for one moment, suggest that all Magistrates are as incompetent or uncompassionate as those in the present case. However, this Judgment does illustrate that incidents such as those recorded in my post of the 14th August are certainly not isolated ones.