England and Wales High Court (Administrative Court) Decisions

1. THE LORD CHIEF JUSTICE: The applicant moves for an order of judicial review directed to the Crown Court at Truro concerning a decision reached by that court in relation to the applicant on 26 April 1996 and a decision of the presiding judge on 16 July 1996 declining to state a case for the opinion of this court.

2. The applicant is a man now aged 67. He was made bankrupt on a petition of the Customs and Excise in 1984, but obtained his discharge from bankruptcy. That discharge however proved to be only temporary since on 2 May 1995 he became bankrupt again, this time on a petition of the Inland Revenue who established a debt of some £42,417 of unpaid tax. This bankruptcy had the usual consequences that any assets and possessions, other than the excluded categories, of the applicant vested in his trustee.

3. Prior to his bankruptcy on the second occasion the applicant had been conducting a one-man business trading in cars. It appears from the evidence available to us that he had been selling cars on a sale or return basis and although there is a suggestion in the papers that the turnover figures of his sales made in this way were quite high, there is no indication whatever as to what profit accrued to him from selling cars on this basis. Indeed, it appears from the papers that the profit which he was able to make derived not from the sale of those cars but from the sale of cars which he accepted in part exchange. Whether that business was profitable or unprofitable it does appear that the business generated sufficient funds that the applicant was able to fund litigation brought by his wife, which however was unsuccessful and led to his wife incurring a debt in costs of some £8,000-£9,000.

4. During the period of trading which preceded the petition of bankruptcy on the second occasion the applicant failed to keep accounting records such as he should have kept. That led to the issue of a summons against him by the Secretary of State for Trade and Industry alleging that he failed to keep proper accounting records in the two years prior to the presentation of the petition of bankruptcy on 9 March 1995, contrary to section 361(1)(a) of the Insolvency Act 1986. For that offence the applicant appeared before the Falmouth and Kerrier Magistrates sitting at Truro on 4 April 1996 when the Justices fined him a sum of £2,500 and ordered him to pay £200 costs, a total debt of £2,700. The fine was to be payable by instalments of £50 per week which in effect meant that he would have roughly one year to pay the sum of £2,500.

5. The evidence before the Justices did not disclose that the applicant had any assets of any kind and, as already indicated, his assets would in any event have vested in his trustee. Nor, so far as we can see, was there any evidence before the Justices that he had any income either, apart from a state pension which yielded £60.47 per week. In addition, his wife had a state pension of some £36, although so far as we can see that was irrelevant. It is in any event plain that the applicant with a personal pension of £60 per week could scarcely be expected to pay £50 per week by way of fine.

6. Not surprisingly therefore the applicant appealed to the Crown Court at Truro. His appeal was heard on 26 April 1996 by His Honour Judge Thompson QC and two lay Justices. The upshot of the appeal was that the sentence was, as the court record recorded, increased. He was to pay the same sum of £2,500 but (and this was the aspect of the sentence which represented the increase) he was to serve a term of 45 days' imprisonment in default and instead of paying the fine at the rate £50 per week (which gave him a year to pay off the fine), he was now ordered to pay it within six months. He was again ordered to pay costs. It was accordingly plain that the result of his appeal was to put the applicant in a worse position rather than a better one.

7. On 16 May solicitors on behalf of the applicant invited the Crown Court to state a case for the opinion of this court. That was a request which was repeated, in the absence of a response from the court, six weeks later on 28 June. It is plain from a draft case that was submitted for the consideration of the Crown Court that the applicant was seeking to challenge the amount of the fine as being (it was submitted) so wrong as to represent an error of law, and also to challenge the power of the Crown Court in the circumstances to impose a term of imprisonment in default since it was contended that that was not a power enjoyed by the Justices and that the Crown Court could not exercise a power which the Justices themselves could not have exercised.

8. The Crown Court declined to state a case and a Certificate of Refusal was issued. The Certificate of Refusal expressed the court's view that the application was frivolous for the following reasons:

9. This court, having considered those reasons and as we hope considered the matters which moved the Crown Court to reach the conclusion that it did, have found great difficulty in accepting those reasons as satisfactory answers to the points which the applicant was seeking to advance. The fact that the applicant had been made bankrupt on a previous occasion, while it may have made his later failure to keep accounts more serious, would appear to us to have little bearing on the point which the applicant was seeking to raise, which was that he had no means with which to pay a fine of £2,500. Similarly, the fact that he had conducted a second-hand car business without keeping any books of any kind following his discharge from the earlier bankruptcy may again have increased the seriousness of the offence to which he had pleaded guilty, but would again seem to throw no light whatever on the applicant's ability to pay a fine. The same comment falls to be made in relation to the sum which the court mentioned as having been made available by the applicant to his wife to maintain an action.

10. The important matter plainly was whether the applicant had any means with which to meet the fine which the court was imposing upon him, it being a statutory requirement that the court should inquire into the means of a defendant before imposing a fine and should not impose a fine which it is beyond the means of a defendant to meet. That is not a matter to which the Crown Court (so far as we can discover in the absence of full reasons) directed its attention. In saying that the Crown Court saw no reason to differ from the view of the case taken by the Justices, we again find no answer to the point which the applicant was raising based on his inability to begin to pay a fine of the order which the Justices had imposed and the Crown Court had confirmed.

11. So far as the question of imprisonment in default of payment is concerned, the Crown Court has drawn our attention to no provision which confers upon it a power to impose a term of imprisonment in default of payment of a fine imposed on the hearing of an appeal against Justices.

12. It is against that background that Mr MacRae, in support of this application for judicial review, seeks to argue that the fine imposed by the Crown Court was so far outside the bounds of any financial penalty which could properly have been imposed on this bankrupt and (as we are told) disabled applicant as to constitute an error of law. It is clearly established by earlier cases, in particular R v St Albans Crown Court ex parte Cinnamond [1981] QB 480 and R v Croydon Crown Court ex parte Miller (1987) 85 Cr App R 152, that judicial review does not offer a back door means of mounting an appeal against a sentence imposed by the Crown Court on an appeal from Justices. It is nonetheless recognised by those authorities that there comes a point at which a penalty imposed by Justices or by a Crown Court on appeal is so far outside the range of penalties reasonably open to the sentencing court as to be indicative of a manifest error of law.

13. The court has on previous occasions suggested a test of whether the sentence in question is regarded by any acceptable standard as truly astonishing. I would, for my part, question whether that is an ideal test since some people are more readily astonished than others and it would appear to be a somewhat subjective approach. It would perhaps seem more helpful to ask the question whether the sentence or order in question falls clearly outside the broad area of the lower court's sentencing discretion.

14. However the test is formulated, I am, for my part, clearly of opinion that, given the personal circumstances of the applicant, the fine of £2,500 imposed by the Crown Court and the period of six months which was allowed to him to pay, was a sentence which it is quite impossible to begin to justify. It is, indeed, in all the circumstances, on the material available to us, an order which is hard to understand. It may be that the court suspected that the applicant had a sum of money salted away somewhere, but if so that was clearly a sum of money which would have been and should have been recoverable by his trustee and could not properly be regarded as property available to the applicant. For my part, therefore, I would have no hesitation in quashing the order of £2,500 payable within six months.

15. Counsel also submits that the Crown Court had no power to impose a term of imprisonment in default. In support of that submission he relies on section 31 of the Powers of Criminal Courts Act 1973. Section 31(2) provides that the Crown Court must make an order fixing a term of imprisonment in default if it imposes a fine. But counsel draws attention, quite rightly, to subsection (8) which provides that the section shall not apply to a fine imposed by the Crown Court on an appeal against a decision of a magistrates' court. That on its face makes plain that the imposition of the term of imprisonment in default is not mandatory, but does not of itself provide that the imposition of such a term is outside the powers of the Crown Court. Counsel nonetheless submits that such is the position in reliance on section 48 of the Supreme Court Act 1981 read in conjunction with section 82 of the Magistrates' Courts Act 1980. It is not, in my judgment, necessary to reach a final conclusion on that point since this is (as I think) a case in which no term of imprisonment in default should be imposed anyway. I am provisionally of opinion that counsel is right in his submission that the imposition of such a term fell outside the powers of the Crown Court.

16. In all the circumstances therefore I would make an order quashing both the orders which the applicant challenges and in exercise of the powers of this court under section 43(1) of the Supreme Court Act 1981 I would substitute an order that the applicant pay a fine of £150 at the rate of £3 per week. After my Lord has given his judgment, I shall invite the observations of counsel about the order for costs in the court below.

17. THE LORD CHIEF JUSTICE: Mr MacRae, what about the costs below?

18. MR MACRAE: My Lord, the difficulty there is that two orders for costs were made, so it appears, and only one appears on the latter Memorandum of Conviction.

19. THE LORD CHIEF JUSTICE: The magistrates' court ordered him to pay, I think, £200 the first time round.

20. MR MACRAE: On appeal it appears that there was a further order.

21. THE LORD CHIEF JUSTICE: He was again ordered to pay costs. The weekly instalments do not apply to the costs, do they?

22. MR MACRAE: No, my Lord, they do not.

23. THE LORD CHIEF JUSTICE: Suppose we were simply to quash the order for costs in the Crown Court, what would your client's position be then?

24. MR MACRAE: He would need to pay no costs at all.

25. THE LORD CHIEF JUSTICE: What about the magistrates' court?

26. MR MACRAE: It was a re-hearing.

27. MR JUSTICE MOSES: Yes, but quite often the Crown Court orders costs in the appeal, leaving the magistrates' court order standing so far as costs are concerned.

28. MR MACRAE: Certainly all your Lordships can do is to quash the order made in the Crown Court. Your Lordships cannot do more than that. Whatever is the position in relation to the costs in the lower court, nothing can be done unless it is comprised in the Crown Court order.

29. THE LORD CHIEF JUSTICE: We shall quash the order for costs in the Crown Court, Mr MacRae.

30. THE LORD CHIEF JUSTICE: Thank you very much. What about the costs of today?

31. MR MACRAE: My client is in receipt of legal aid. I would apply for legal aid taxation of his costs?

32. THE LORD CHIEF JUSTICE: We shall make such an order. Thank you.