Case No: CO/2496/2000
Neutral Citation Number: [2001] EWHC Admin 558
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Wednesday 18th July 2001
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Claimant | |
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Defendant |
"To deposit the title deeds to Pewsey House....at Court, or in lieu of the title deeds to Pewsey House the sum of £100,000 by bankers' draft or telephone transfer. The title deeds already deposited at the Lyndhurst Magistrates Court are not to be released by the court until the sum of £100,000 is deposited at Court. "
Two days later Messrs Dixon & Templeton, still acting as Mrs Stevens's
solicitors, disclosed their understanding of the matter in a letter they wrote
to the Southampton and New Forest Magistrates' Court to the effect that their
client had "agreed to provide security for bail for her son".
8. Mr Stevens made three more appearances at the same court, on 8th March, 19th
April and 26th April. On each occasion bail was renewed on the same terms
subject to one alteration necessitated by the physical transfer of the "title
deeds" from the court at Lyndhurst to the court at Truro, and another relating
to a change in his required place of residence. On the last of these occasions
he was remanded to appear again on 24th May 1999.
9. On 29th April 1999 Messrs Dixon & Templeton, now acting on behalf of Mr
Stevens, wrote to the clerk to the justices at Truro in the following terms:
"We are writing to you about the sale of this property, where exchange of contracts is imminent, and completion of the sale could take place as early as Friday 7th May. To enable us to complete the sale on whatever turns out to be the due date, we should be grateful if you would return to us the Charge Certificate, at the same time ... treating this letter as our undertaking to remit to you the sum of £100,000 from the proceeds of sale so as to underpin the conditions of our client's bail. "
10. Six days later, on 5th May, those solicitors on behalf of Mr Stevens wrote another letter to the clerk to the justices in these terms:
"We regret to tell you that due to a change of circumstances we no longer need the deeds of [Pewsey House] and we should be grateful if you would please retain them in your office and not send them to us as requested in our letter to you of 29th April 1999.
For the same reason, re failure of the sale to proceed, we shall have to ask you to treat the undertaking in our letter as cancelled."
11. The following day the solicitors wrote again, confirming a telephone conversation which they had had with a member of the staff of the court. The material part of this letter reads:
"... we confirm our understanding that Mr Stevens has now absconded and therefore it appears that the sale which was previously envisaged, cannot now take place. As you have not been able to return the Charge Certificate to us and doubtless will now not be willing to do so and as our undertaking in our letter of the 29th April 1999 was conditional on the return of the deeds, we would be grateful if you would now confirm that we are released from the undertaking."
12. On 24th May 1999 Mr Stevens failed to surrender to custody. His
solicitor attended court. The court issued a warrant for his arrest not backed
for bail. It also directed that the whole of the security should be estreated,
and that the deeds to Pewsey House should not be released save on payment of
£100,000. Mrs Stevens was not present or represented in court on this
occasion, and no notice had been given to her of the possible forfeiture of the
security. The court directed that she should be notified of its order.
13. On 8th June 1999 the clerk to the justices therefore wrote to Mrs Stevens
at her address in France, copying his letter to Messrs Dixon & Templeton.
The relevant part of his letter read:
"The Court further ordered that the surety which had been offered as a condition of his bail be estreated. The effect of this is that the house is directed to be sold, with the proceeds from the sale to be taken by the court. If there is any amount left after the completion of the sale taking into account the sum of £100,000 together with solicitors and estate agents fees, this will be forwarded to Dixon & Templeton solicitors. "
14. Messrs Dixon & Templeton replied on behalf of Mrs Stevens on 9 June
1999. They disputed that the security given to the magistrates' court extended
to her mortgage, and contended that only her son's interest in Pewsey House
could have been forfeited. Since he had now absconded and vacated Pewsey House
he had in effect surrendered the property to their client as mortgagee in
possession, and she now wished to sell the property and realise her security.
In subsequent correspondence, the clerk to the justices made it clear that, as
indeed appears from the court notices in question, Nicholas Stevens's bail had
been subject to a security, not a surety.
15. On 3 March 2000 Mrs Stevens presented a complaint to the Truro Magistrates'
Court seeking orders:
(a) (a) That the security estreated by the Order dated 24th May 1999 was the
beneficial interest of Nicholas Stevens, and not the complainant's separate
interest in the property.
(b) That the proceeds of sale to be taken by the Court under the Order were
the net proceeds after deduction of costs of and incidental to sale and all
prior mortgages and charges, including that of the complainant.
(c) Directions as to whether the complainant was to sell or the court was to
institute alternative means of sale.
The complaint went on to say that if the complainant's charge was affected by
the Order dated 24th May 1999, she also sought an order under section 120(4) of
the Magistrates' Court Act 1980 for the remission of the whole or part of the
sum affected by the estreatment or forfeiture.
16. Section 120 of the Magistrates' Courts Act 1980 as amended, provides so far
as is relevant, as follows:
"(1) This section applies where:
(a) a recognisance to keep the peace or be of good behaviour has been
entered into before a magistrates' court; or
(b) any recognisance is conditioned for the appearance of a person before a
magistrates' court, or for his doing any other thing connected with a
proceeding before a magistrates' court.
(1A) If, in the case of a recognisance which is conditioned for the
appearance of an accused before a magistrates' court, the accused fails to
appear in accordance with the condition, the court shall -
(a) declare the recognisance to be forfeited;
(b) issue a summons directed to each person bound by the recognisance as
surety requiring him to appear before the court on a date specified in the
summons to show cause why he should not be adjudged to pay the sum in which he
is bound;
and on that date the court may proceed in the absence of any surety if it
satisfied that he has been served with a summons.
(2) If, in any other case falling within sub-section (1) above the
recognisance appears to the magistrates' court to be forfeited, the court may
-
(a) declare the recognisance to be forfeited;
(b) adjudge each person bound by it, whether as principal or surety, to pay the
sum for which he is bound;
but in a case falling within section (1)(a) above, the court shall not declare
the recognisance to be forfeited except by order made on complaint.
(3) The court which declares the recognisance to be forfeited may, instead of
adjudging any person to pay the whole sum in which he is bound, adjudge him to
pay part only of the sum or remit the sum.
(4) Payment of any sum adjudged to be paid under this section, including any
costs awarded against the defendant, may be enforced, and any such sum shall be
applied, as if it were a fine ... but at any time before the issue of a warrant
of commitment to enforce payment of the sum ... the court may remit the whole
or any part of the sum either absolutely or on such conditions as the court
thinks just.
(5) A recognisance such as is mentioned in this section shall not be enforced
otherwise than in accordance with this section..."
17. Not surprisingly, since bail had been granted to Nicholas Stevens on his
security, and Mrs Stevens had never been a surety nor entered into a
recognisance on his behalf, the clerk to the justices was concerned as to
whether the magistrates had jurisdiction under section 120 of the 1980 Act to
hear this application. He wrote to Mrs Stevens's present solicitors to this
effect on 11 April 2000. In later correspondence he said he believed that
their client's remedy lay within the provisions of section 5 of the Bail Act
1976, and he was listing the matter on that basis. He told them he was
prepared to ask the justices to reconsider the issue of estreating the security
solely on the basis that he could not be satisfied from the court file that
their client had been given notice of such application on the earlier occasion.
Mrs Stevens's solicitors replied that they would not wish to withdraw their
application, at least until after the estreatment issue had been dealt with.
In the event the court made the order I have described in paragraph 1 above.
18. In these proceedings, Mrs Stevens contends:
(1) That the security taken by the magistrates' court as a condition of the
bail granted to her son applied only to her son's interest in Pewsey House, and
did not extend to her mortgage.
(2) More fundamentally, that the magistrates' court had no power to take
security from anyone other than Nicholas Stevens as a condition as a condition
of his bail, and, correspondingly, had no power to forfeit or to estreat any
security provided by herself.
19. We first heard this application on 23rd January 2001. After that hearing,
we decided we needed further assistance on the law, and we reconvened for this
purpose on 22nd June, when we had the additional services of Mr Hugo Keith,
acting as a friend of the court. We are very grateful to Mr Keith for his help
in taking us through the legislative history relating to the taking of security
from a defendant in a criminal case on the one hand and the taking of
recognisances from his sureties on the other.
20. There have been plenty of decided cases in recent years relating to the
obligations of sureties and the circumstances in which their recognisances may
be estreated in whole or in part. Butler-Sloss LJ has set out the position
succinctly in her judgment in R v Maidstone Crown Court ex p Lever
[1995] 1 WLR 928, 930:
"The general principle is that the purpose of a recognisance is to bring the defendant to court for trial. The basis of estreatment is not as a matter of punishment of the surety, but because he has failed to fulfil the obligation which he undertook. The starting point on the failure to bring a defendant to court is the forfeiture of the full recognisance. The right to estreat is triggered by the non-attendance of the defendant at court. It is for the surety to establish to the satisfaction of the trial court that there are grounds upon which the court may remit from forfeiture part, or wholly exceptionally the whole recognisance. The presence or absence of culpability is a factor but the absence of culpability, as found in this case by the judge, is not in itself a reason to reduce or set aside the obligations entered into by the surety to pay in the event of a failure to bring the defendant to court. The court may, in the exercise of a wide discretion, decide it would be fair and just to estreat some or all of the recognisance."
21. Section 3(4) of the Bail Act 1976 ("the 1976 Act") creates the modern
power to require a defendant to provide a surety or sureties to secure his
surrender to custody, and section 8 of that Act makes detailed provision in
relation to bail with sureties. I have recited in paragraph 16 above the
provisions of section 120 of the Magistrates' Courts Act 1980 which prescribes
the procedure which must be followed before a surety's recognisance can be
forfeited. The authorities in Truro appear, mistakenly, to have thought that
this was the procedure they should follow in the present case after Mr Stevens
failed to surrender to custody.
22. This confusion was understandable because the procedures relating to taking
security from a defendant, and subsequently forfeiting it if he fails to
surrender, are much less well known. It was, however, the course which the
Truro justices chose to adopt on 11th January 1999, after they had refused to
accept Mrs Stevens as a surety four days earlier, no doubt because she was
resident in France and therefore unable to perform the obligations of a surety.
It is therefore necessary for me to refer now to the statutory code prescribed
by Parliament in relation to taking security from a defendant.
23. Parliament's intentions in this regard are set out in Section 3 of the 1976
Act 1976 which now reads, so far as is material:
"(1) A person granted bail in criminal proceedings shall be under a duty to surrender to custody, and that duty is enforceable in accordance with section 6 of this Act.
(2) No recognisance for his surrender to custody shall be taken from him.
(3) Except as provided by this section -
(a) no security for his surrender to custody shall be taken from him,
(b) he shall not be required to provide a surety or sureties for his
surrender to custody, and
(c) no other requirements shall be imposed on him as a condition of bail.
(4) He may be required, before release on bail, to provide a surety or
sureties to secure his surrender to custody.
(5) He may be required, before release on bail, to give security for his
surrender to custody.
The security may be given by him or on his behalf." (Emphasis added)
Until the amendment introduced by section 54(1) of the Crime and Disorder
Act 1998, which took effect on 30th September 1998, the words "If it appears
that he is unlikely to remain in Great Britain until the time appointed for him
to surrender to custody" appeared at the beginning of sub-section (5).
24. If a defendant is granted bail on condition that he gives security for his
surrender to custody, and then fails to surrender to custody when required, the
position is governed by Section 5 of the 1976 Act, which provides, so far as is
material, that:
"(7) Where a person has given security in pursuance of section 3(5) above, and a court is satisfied that he failed to surrender to custody then, unless it appears that he had reasonable cause for his failure, the court may order the forfeiture of the security.
(8) If a court orders the forfeiture of a security under subsection (7) above, the court may declare that the forfeiture extends to such amounts less than the full value of the security as it thinks fit to order.
(8A) An order under subsection (7) above shall, unless previously revoked, take effect at the end of twenty-one days beginning with the day on which it is made.
(8B) A court which has ordered the forfeiture of a security under subsection (7) above may, if satisfied on an application made by or on behalf ... of ... the person who gave it that he did after all have reasonable cause for his failure to surrender to custody, by order remit the forfeiture or declare that it extends to such amount less than the full value of the security as it thinks fit to order.
(8C) An application under subsection (8B) above may be made before or after the order for forfeiture has taken effect, but shall not be entertained unless the court is satisfied that the prosecution was given reasonable notice of the applicant's intention to make it.
(9) A security which has been ordered to forfeited by a court under subsection (7) above shall, to the extent of the forfeiture-
(a) if it consists of money, be accounted for and paid in the same manner as a fine imposed by that court would be;
(b) if it does not consist of money, be enforced by such magistrates' court as may be specified in the order.
(9A) Where an order is made under subsection (8B) above after the order for forfeiture of the security in question has taken effect, any money which would have fallen to be repaid or paid over to the person who gave the security if the order under subsection (8B) had been made before the order of forfeiture took effect shall be repaid or paid over to him."
25. It will be noticed that this procedure makes no provision for giving
notice to any third party that the security given to the court may be
forfeited. The security is given to the court by the defendant himself (see
section 3(5)), and the procedure for forfeiting security gives standing only to
the defendant as the person who gave the security and failed to surrender to
custody (see section 5(7) and 5(8B)). Astill J explained the position clearly
in his judgment in R v Kent Crown Court ex p Jodka 161 JPR 638, 644 when
he made a distinction between Mr Jodka's position as a surety and his position
as the provider of the funds which the defendant in that case had been required
to provide as security.
26. Mr Keith has shown us how before the enactment of the 1976 Act the taking
of securities and sureties was provided for in piecemeal legislation. The
powers of the Crown Court and the High Court differed from those in the
magistrates' court, and there was no integrated regime available to all levels
of court, or indeed to the police when they released a suspect on police bail.
On this appeal we are not concerned with the taking of sureties, and I need say
nothing more on that topic, except to observe that section 8 of the 1976 Act
creates a procedure for the taking of sureties which is strikingly different
from the simple procedure for the lodging of security because the object is
quite different. In the one case there will be valuable security given to the
court which will be forfeited if the defendant fails to appear: in the other,
the court is concerned about the viability and character of the third party who
promises to ensure that the defendant surrenders to custody without giving
security of any kind.
27. On this appeal, in contrast, we are concerned with the way in which the old
practice of granting a defendant bail on his own recognisances first attracted
to itself a power in some courts, but not others, to permit him to give
security to the court in lieu of entering into a recognisance, and eventually
evolved into the abolition of any power to release him on his own recognisances
but the universal availability of a power to take security from him (see the
1976 Act, section 3(2) and (5)).
28. The details do not matter, but the relevant powers of the High Court could
be seen in section 37 of the Criminal Justice Act 1948 and the rules made
pursuant to section 37(4) of that Act. The equivalent powers of the Crown
Court appeared in section 13 of the Courts Act 1971 and rule 18(2) of the Crown
Court Rules 1971. Section 105 of the Magistrates' Court Act 1952, in contrast,
made no provision for the taking of security in support of or in lieu of
recognisances, whether from sureties or from the defendant himself, as was made
clear by this court in R v Harrow justices ex p Morris [1973] 1 QB 672
per Lord Widgery CJ at p 676F-H and 677F-H.
29. In 1976 Parliament decided to introduce the same regime for all criminal
proceedings (see the 1976 Act, section 1(6)). Schedule 2 to that 1976 Act (at
para 48(4)-(6)) shows the necessary consequential changes being made to section
13 of the Courts Act 1971. Section 37(2) of the Criminal Justice Act 1948,
which permitted the taking of security from a person in the High Court in lieu
of requiring him to enter into a recognisance, was repealed in Schedule 3 to
the 1976 Act. In the years between the coming into force of the 1976 Act and
September 1998 (for which see paragraph 23 above) the power to require a
defendant to give security was limited to those cases where it appeared to the
court that he was unlikely to remain in Great Britain until the time appointed
for him to surrender to custody.
30. In that context, the utility of the new power was obvious. If a foreign
visitor to this country was arrested for an imprisonable offence, a court might
not wish to keep him in custody until any adjourned hearing, but it might also
be sceptical about his willingness to reappear at that hearing. The court now
had a useful power to require him to give security before he was released on
bail, and in the normal course of events this security would simply be
forfeited if he failed to attend again when required. I have little doubt that
the words "The security may be given by him or on his behalf" were included to
make it clear that his family or friends, or even the local consulate, could
lodge the security required for his release without running the risk of
committing the offence of agreeing to indemnify a surety which is created by
section 9(1) of the 1976 Act. The fact that it is the defendant himself who
gives the security is highlighted by the fact that Parliament made no
requirement that anyone else should be notified before the security was
forfeited on his non-attendance. The arrangements the defendant might make
with those who helped him to put up the requisite security were not to be a
matter for the court.
31. Parliament did not attempt to limit the type of security that might be
given. I have equally little doubt, however, that it envisaged the lodging of
some asset, whether in cash or kind, which could be readily forfeited on the
defendant's non-appearance without any of the complications that have
characterised this litigation. Although Home Office guidance published after a
bill is enacted cannot be used as a guide to the interpretation of the Act
which is the subject of the guidance, Home Office Circular No 206/1977, which
Mr Keith showed us, provides a good indication of what was probably happening
in practice in relation to the exercise of these powers in the twenty years
before Parliament decided to make them available in all cases in 1998. That
circular, issued before the 1976 Act came into force in April 1978 (see (1978)
Justice of the Peace Vol 142 at pp 221-2) refers in the following terms (see
para 8) to the new provisions relating to the taking of security:
"Security for surrender to custody may be required only from a person who appears unlikely to remain in Great Britain until the time appointed for his surrender. A court or police officer granting bail to such a person may require him to give security before release. This provision will give magistrates' courts and the police a power previously available only to the Crown Court and High Court. Courts (or police in the case of bail granted by them) have an unfettered discretion as to the form of the security, since this term is not defined in the Act. It may take the form of cash, travellers' cheques or any other article of value. In exercising their discretion in a particular case, courts or the police should have regard to the ease with which the security could be held and converted into pounds sterling in the event of forfeiture. For example it would be unwise to accept as security any perishable article or any article which could create problems of storage or valuation. Security may be given by the person granted bail or on his behalf (s 3(5)) and, in the event of his failing to surrender without reasonable cause, a court may order forfeiture (s 5(7))."
32. For the benefit of practitioners, I would add that similar guidance was given in the Home Office Circular 34/98 when the availability of this power was extended to all cases with effect from 30th September 1998. On that occasion the guidance was given (see para 7) in the following terms:
"The new power to take securities is likely to prove particularly useful in cases where the person to be bailed might not be able to provide a surety with the means to enter into a recognisance for a substantial amount. The means of the defendant, or of the person giving the security on his behalf, should continue to be a primary consideration. The courts and the police retain their existing discretion to decide as to the form of the security; although it is suggested that the security should usually be in the form of cash or a banker's draft to avoid problems of valuation, storage or conversion."
I would endorse the general wisdom of this advice, although the words I have italicised may not be a necessary consideration in cases involving security as opposed to sureties.
33. This is not to say, as the authors of this guidance recognised, that the courts have no power to require the defendant to give security in a less simple form if the justice of the case demands it, and if the security is given in a form in which it may be readily forfeited on his non-appearance without complicated disputes as to third party rights, or the risk of a charge of conversion. The present case presents an object lesson on the pitfalls that may lie in the path of a court seeking to follow a more complicated route. We have been shown an internal note by a member of the staff of the Truro court, who was aware of the existence of section 140 of the Magistrates' Courts Act 1980, which includes this passage:
"If the court does not agree with Mrs Stevens recovering her share of the property then the court keeps all the proceeds of sale. Quite how we enforce the sale of the property in these circumstances is beyond me. The court does not have good title to the property: we simply have the title deeds. We may need to take further advice on this."
34. I have a good deal of sympathy with the writer, although no doubt if the
security had been properly defined in the orders the court had previously made,
chancery counsel might have shown the writer a way through the thicket.
Attention would have to be paid in this context to the effect of section 2 of
the Law of Property (Miscellaneous Provisions) Act 1989 which has been
interpreted to mean that a deposit of title deeds by way of security does not
create a valid mortgage or charge (see United Bank of Kuwait plc v Sahib
[1997] Ch 107, per Peter Gibson LJ at pp 135E - 141E).
35. Because there were issues still unresolved at the end of the second
hearing, we permitted counsel to send us further written representations within
ten days after the hearing. We received some powerful further submissions from
Mr Ailes, who appeared for Mrs Stevens. They included the following
observations, which appear to me to be soundly based, even though we did not
hear any argument on them:
"Giving security under the Bail Act 1976 is not apt to cover interests in land.
It is preferable to require the accused to raise money by obtaining a secured
loan against the land and depositing money with the court. Even if in theory
land may be security for the specialised purposes of the Bail Act, it ought not
to be attempted by criminal courts, at least not without precisely analysing
and specifying what interest and in what sum is to be given as security, and
how the security is to be effectually provided.
If the Act does extend to providing security in land, the effective way of
requiring such security is to make it a term that the security shall be given
by way of the execution of a mortgage, charge or conditional transfer by the
person seeking bail over that person's interest in the land, in such terms as
may be approved by the court.
In September 1989, the Law of Property (Miscellaneous Provisions) Act 1989
abolished the deposit of deeds as an effectual method of creating an equitable
mortgage or charge.
Any accused's interest in land which might be provided as Bail Act security is
his interest in the land, and not the interest of a mortgagee,
co-owner, person with a right of occupation, person with a right of easement,
reversioner, superior landlord or sub-lessee, or a person with an equitable
right or interest in the property.
The security works through the accused and he cannot give as security what he
does not possess. For an accused to give security inclusive of others' estates
or interests, those rights must be given up to the accused in a manner
recognised by land law, otherwise the security given will be subject to such
third party interests.
In the case of a mortgagee, the three ways of achieving its inclusion in an
accused's security would be (a) a signed receipt for the totality of the moneys
secured, (b) a deed of assignment or release from the mortgage (c) a deed of
postponement, permitting any charge registered by the court to take priority
over the existing charge."
36. I can understand why it may have seemed a good idea to the justices sitting
on 11th January 1999 to be willing to accept the security offered to them that
day. Pewsey House was being sold, there was no other third party interest in
the property other than that of the defendant's mother who wished to secure her
son's release from prison, and they may not have contemplated a son failing to
surrender to custody if his non-surrender would involve his mother losing so
much of her money which was tied up in the property.
37. I would not go so far as to say that a scheme could not have been devised
which gave effect to the justices' wishes, perhaps along one of the lines
suggested by Mr Ailes. But the order they made unquestionably did not, and the
parties' rights and liabilities must be identified by the terms of the court's
order (subject to any amendment properly made to reflect the court's true
intention at the time) and not from the type of reconstruction of events to
which the Crown Prosecution Service have had to have recourse in these
proceedings in order to try and save the situation.
38. In the first place the loose reference to "title deeds" in respect of
registered land was likely to cause difficulties. History does not record who
held the land certificate, or whether the land certificate was deposited at the
Land Registry (see Land Registration Act 1925 s 63(1)). Mrs Stevens's
solicitors held their client's charge certificate, and it was this document
which was lodged and accepted at the Lyndhurst Magistrates' Court in
satisfaction of the requirement that her son "deposit the title deeds to Pewsey
House" at that court. The court did not require Mrs Stevens to assign any part
of her beneficial interest in Pewsey House to her son (subject to any agreement
she might care to make with him for its recovery which did not create a further
charge on the property) before it was willing to accept the suggested security.
Nor did it originally identify the reasonable sum the security was required to
represent. The whole question of her interest in the property and what was to
happen to it (without any notice to her) if the "security" was forfeited was a
matter on which the court order was completely silent.
39. In my judgment, in the absence of appropriate clarity, the orders of 11th
January and 8th February should be interpreted only to refer to those "title
deeds" that evidenced Mr Stevens's legal title to the property and such
beneficial interest in the property as he possessed. They cannot be
interpreted as having any reference to any beneficial interest possessed by Mrs
Stevens. The order made on 5th June 2000 should be quashed, and the matter
remitted to Truro magistrates' court for further consideration, in the light of
this judgment, as to the order it should make, such as will recognise that Mrs
Stevens is still entitled to enforce her charge over the property. It is to be
hoped that all relevant parties can agree the value of that charge, if
necessary with the help of a mediator, without the necessity for further
expensive litigation.
40. I have reached this conclusion with no enthusiasm, since it seems to me
that Mrs Stevens (or at any rate her solicitors) was well aware of the likely
consequences to her interest in the property if her son should abscond. But
the court's orders did not achieve the result the court desired, and it would
be quite wrong in those circumstances not to recognise and give effect to the
validity of her charge.
41. I have had the opportunity of reading in draft the judgment of Stanley
Burnton J. I have made it clear in this judgment that I regard it as
permissible for a third party to make available an asset to the defendant in
order to enable him to give it as security for his release on bail. The court
will then not be concerned with the arrangements made between the defendant and
the third party in the event that the security is forfeited: section 5 creates
no obligation for the third party to be notified. It appears that Stanley
Burnton J agrees with me, so far as money is concerned: see paragraph 54 of his
judgment.
42. It follows that if £100,000 had been made available out of the recent
sale of Pewsey House, then subject to any question about the reasonableness of
security being required in that amount, we are agreed that this sum could have
been given as security, and that the court need not have been concerned that
part of it represented the recent realisation of his mother's equitable
interest in the house.
43. Where we appear to differ is that I see no reason why any other regime
should apply where an asset such as a diamond ring (perhaps owned by a
defendant's mother) is given in security, or where some other arrangement is
made whereby it is crystal clear that the asset transferred to the defendant
for the purpose of giving security is being provided by the defendant with the
assent of the person who has made it available (or lent it, to use Stanley
Burnton J's phrase) for this purpose. I have no reason to suppose that courts
had not been making security requirements along the lines suggested by the Home
Office in its guidance for twenty years (which included references to the
lodging of articles of value) before Parliament reconsidered this legislative
scheme in 1998 and made it much more widely available.
44. It may be that it may prove difficult in a complex case to create
satisfactory arrangements for making use of assets provided by a third party as
security, even with the assistance of skilled practitioners. If that is the
case, the defendant will simply have to remain in custody, if no suitable
surety within the jurisdiction can be found. This is the logic of Stanley
Burnton J's conclusion in any event. I for my part am unwilling to accept that
Parliament intended to introduce such rigidity into the arrangements where it
might be possible to give a defendant his liberty if satisfactory security
arrangements can be devised. The present case provides a good example of the
type of case in which the giving of security may be the preferred course, since
both Mr Stevens's parents lived outside the jurisdiction, and there is no
evidence that he could offer any surety living within the jurisdiction who
would be willing to bind himself in a recognisance of any amount the
magistrates would have regarded as satisfactory. Mr Stevens's parents would
therefore have had to allow their son to stay in prison if Stanley Burnton J's
interpretation of the law is correct.
45. Since Mrs Stevens has had to bring these proceedings, which have achieved
the result she sought, she should have her costs out of central funds both in
this court and in the court below. This order should not be drawn up for seven
days in case either party, whose attendance has been excused when judgment is
handed down, wishes to make submissions to the court on the subject of
costs.
MR JUSTICE MORISON:
46. I agree, reluctantly, with the conclusion reached by Brooke LJ. Had I been
sitting alone I would have dismissed the application, but I defer to my
colleagues' view that the Truro Magistrates' Court failed, through no real
fault of their own, to make the position clear as to Mrs Stevens's interest in
the property.
47. However, I am of the view that granting bail on provision of security will
often be an appropriate order to make to secure the defendant's future
attendance at court. It seems to me quite clear, as a matter of construction
of the Bail Act, that the court may accept security from the defendant whether
he, personally, has provided it or a third party has done so on his behalf.
Security and surety are two quite different "regimes", and both may have their
part to play in enabling a court to fix bail.
48. For my part, I do not share the doubts and difficulties expressed in the
judgment of Stanley Burnton J, a copy of which I have seen in draft. I
respectfully think that he confuses the two regimes.
MR JUSTICE STANLEY BURNTON:
49. I agree with the conclusion reached by Brooke LJ and Morison J in this
case. However, regrettably and with respect to them I disagree with their
conclusion that under the Bail Act 1976 the Court may accept as security an
asset belonging to someone other than the defendant. My principal reasons are
the following:
i) Section 3(3) refers only to security taken from the defendant. If
Parliament had provided for a requirement of security to be taken from a third
party, that would have been expressly mentioned in that subsection and in
subsection (4), and not in subsection (5). In this connection, it is to be
borne in mind that a person who provides security for the performance of an
obligation of another is normally regarded as a surety: cf In re Conley
[1938] 2 All ER 127.
ii) The words "on his behalf" in section 3(5) of the Act are ambiguous. They
may mean "for", as Brooke LJ and Morison J have held; or they may have the
narrower meaning of "as agent for" the defendant. Their meaning is made clear
by other provisions of the Act. An example of security being given "on behalf
of" a defendant, using that expression in the narrow sense, would be the
deposit by a stockbroker of shares or other securities belonging to the
defendant, or a deposit by a bank or other third party of money from the
defendant's bank account or money lent to him. In these circumstances, the
asset given as security belongs to the defendant, not a third party. In my
judgment, the words "on behalf of" in section 3(5) have the narrower
meaning.
iii) Section 8, dealing with bail with sureties, contains no provision for or
reference to the taking of security from or belonging to a surety.
iv) The only power to forfeit a security is that in section 5(7), and that is
limited to a security given by a defendant.
v) If the Act permitted the taking of property belonging to third party as
security, provision would need to be made for giving notice, on the failure of
a defendant to surrender to custody, to persons who have given security that
their property may be forfeited, and provision for avoidance of forfeiture or
limitation on the amount taken from the security if the person who provided the
security could show that the non-appearance of the defendant occurred without
fault on his part, or for other good reason. In the case of a surety who has
entered into a recognizance, the court takes into account his or her means in
deciding whether to estreat the entire amount of the recognizance: see R v
Leicestershire Stipendiary Magistrate ex p Kaur (1999) 164 JPR 127. It
would also be sensible to make provision for the court to fix the amount of
security, so that someone providing property of considerable value could know
in advance that not the whole of it was liable to forfeiture in the event of
the defendant not surrendering to bail, in the same way that the amount of a
recognizance may be fixed under section 8. But it would be essential to
provide for the case where, say, a parent was willing to give as security the
deeds of his or her home, where the offence with which the defendant was
charged was minor, and the value of the security both absolutely and relative
to the total assets of the person giving the security greatly exceeded what
would have been required by way of recognizance in the same circumstances. It
would be grossly unjust in such a case for the parent to lose his or her home.
Parliament would not have provided for such a result.
vi) The only provisions of the Act of the kind mentioned in the previous
sub-paragraph relate to sureties who have entered into a recognizance pursuant
to section 8, which as mentioned above does not provide for the taking of
security from them.
vii) Similarly, section 120 of the Magistrates' Courts Act 1980 does not apply
to persons who are not defendants who give security for the purposes of bail,
and there is no equivalent provision in relation to such persons.
viii) Parliament would not have provided for the possible forfeiture of
security belonging to a third party without making express provision for the
matters referred to above. It would not have deemed a third party security to
be the defendant's, thereby denying that third party his property rights. Far
clearer words than the words "on his behalf" in section 3(5) would be required
to have such a far-reaching result.
50. While these considerations were compelling before 2 October 2000, they are
now in my judgment even stronger. An order of a Court to forfeit an asset
belonging to a third party that has been provided as security is an order
determining the civil rights of that third party within the meaning of Article
6 of the European Convention on Human Rights. Article 6 requires that such an
order can only be made after a fair and public hearing of the claim to forfeit,
and the owner of the property in question must be a party to that hearing.
There is no provision in the Bail Act or elsewhere for such a hearing. Section
3(1) of the Human Rights Act 1998 requires the Court to interpret the Bail Act
1976 in a way that is compatible with the Convention Rights, and that should be
done by interpreting section 3(5) of the 1976 Act in the manner indicated
above.
51. I also point out that in R v Kent Crown Court, ex parte Jodka (1997)
161 JPR 638, referred to in paragraph [25] of the judgment of Brooke LJ, no
argument was addressed to the Court as to the power to require security from
someone other than a defendant.
52. If I am wrong as to the effect of section 3 of the 1976 Act, and the Court
has power to accept security consisting of an asset belonging to a person other
than a defendant, that person is a surety to whom sections 8 and 9 of the Act
apply. The requirements of those provisions were not complied with in relation
to Mrs Stevens.
53. For the above reasons, the magistrates had no power to take security from
Mrs Stevens or to forfeit it on her son's failure to surrender to custody.
54. None of the above should be taken as casting doubt on the power of the
Court to accept as security money provided by a third party on behalf of a
defendant, by way of a loan to the defendant. Indeed, the normal inference to
be drawn from a deposit of money by a third party pursuant to a requirement
under section 3(5) of the 1976 Act that a defendant give money as security is
that the third party has lent that money to the defendant.