CO/116/2003 
Neutral Citation Number: [2003] EWHC 1726 Admin
IN THE HIGH COURT OF JUSTICE 
QUEEN'S BENCH DIVISION  
DIVISIONAL COURT 
Royal Courts of Justice 
Strand
London WC2 

Thursday, 26th June 2003
 
B E F O R E:

LORD JUSTICE ROSE
(Vice President of the Court of Appeal, Criminal Division) 

MR JUSTICE DOUGLAS BROWN 
 
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ANDREW PETER KURY
(CLAIMANT)

-v- 

MAIDSTONE MAGISTRATES' COURT
(DEFENDANT) 
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Computer-Aided Transcript of the Stenograph Notes of 
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MR J HALL appeared on behalf of the CLAIMANT
The DEFENDANT did not appear and was not represented
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J U D G M E N T 
(As Approved by the Court) 
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Crown copyright©
Thursday 26th June 2003 
1.	LORD JUSTICE ROSE:  There is before the court, with permission of the Single Judge, an application for judicial review of a decision of the Maidstone Magistrates ordering the claimant to pay £1,200 prosecution costs.  That order was made on 5th December 2002 under section 18(1) of the Prosecution of Offences Act 1985.  
2.	The submission which is made on behalf of the claimant by Mr Hall, as set out in the grounds of application, and supported by the terms of his skeleton argument before this court, is that the Justices, in exercising the discretion which they undoubtedly have under section 18, failed adequately to take into consideration the claimant's means as disclosed to them; secondly, took into consideration something which was irrelevant, namely, that the claimant could pay the costs from monies that ordinarily went towards voluntary maintenance payments to his children; thirdly, took into account the irrelevant consideration that he could get financial help from his father in paying the costs; and fourthly, made an order which was wrong in principle, bearing in mind that the claimant was and is an undischarged bankrupt, whose outgoings exceed his income.
3.	There was a fifth criticism that the sum ordered was disproportionate, having regard to the nature of the offences.  For my part, I am wholly unpersuaded by that and I do not propose to spend any time upon it.  It suffices to say that the offences which were alleged against the claimant under the Insolvency Act of 1986 involved the obtaining of very substantial sums of credit without disclosing that he was an undischarged bankrupt, and that is why I say there is nothing in the proportion ground which is advanced.
4.	The facts are these.  The claimant is now 42 years old.  He is divorced, with two children aged 8 and 11 from a previous marriage, and one child aged 5 from a previous relationship.  He was first made bankrupt in July 1996, having incurred debts of £60,000, following the breakup of his second marriage.  
5.	He was made bankrupt again in late 2000, having accumulated some £30,000 worth of debts.  He is currently due to be discharged from that bankruptcy in 2005.  Prior to the matters giving rise to the present proceedings before the Justices, he had no previous convictions or cautions.
6.	The offences which I have sufficiently identified were committed, in the case of the first, between December 1998 and July 1999 at the tail end of his first period of bankruptcy, and the second in May 1999, also towards the tail end of the first period of bankruptcy.
7.	The informations in relation to obtaining credit when a bankrupt were laid in July 2002.  The claimant appeared before the Justices for the first time on 27th August, and the matter was adjourned for advance disclosure.  On 26th September, the claimant pleaded guilty to both offences, and, on 17th October, the court imposed, in relation to both offences, a two-year conditional discharge, and made an order for costs of, at that time, £1,800.  
8.	On the application of the defence, the question of costs was re-opened under section 142 of the Magistrates' Courts Act 1980 and, on 5th December 2002, the Justices revised the order downwards to the sum of £1,200, as I have already indicated.
9.	The material before the Justices on 17th October included a pre-sentence report of the previous day, which indicated that the claimant's basic salary was £1,200 per month net, although capable of increase with commission.  He had a company car, but had to commute to London daily.  He paid £600 per month in rent and £450 per month in maintenance for the children.  
10.	Having regard to general household bills, the author of the report expressed the view that it was evident that, unless significant commission was earned each month, the claimant's finances, at best, would be very tight.   
11.	The report recommended a conditional discharge and, as I have said, that was ordered by the Justices.  Initially, they ordered that he should also pay the whole sum of £3,204 which had been sought by the prosecution.  But it was then submitted that the Justices should have regard to the claimant's means and financial circumstances and it was in the light of those submissions that they, on that occasion, reduced the order to one of £1,800, payable at £150 per month.  
12.	Thereafter, as I have said, the matter was re-opened, and the bench on 5th December contained two of the Justices who had sat on 17th October.  It was submitted that, under section 18 of the 1985 Act, costs could be awarded against the defendant which were "just and reasonable".  In that respect, it was necessary to have regard to the defendant's means, and his outgoings exceeded his income.  True, his father paid his rent from time to time, and the defendant had also got into an arrears in respect of child maintenance.  It was accepted that the child maintenance was not the consequence of enforcement proceedings by the Child Support Agency and was, to that extent, voluntary.  
13.	The defendant's means, the break-down in relation to which was not challenged either by the court or by the prosecution, demonstrated monthly outgoings of £1,827, as against average net income over the previous six months of £1,244.  The defendant identified that he could make a saving of £37 a month, which he paid for a satellite television subscription, but, even taking that into account, a shortfall, as between income and outgoings, of £545 was identified.
14.	The Justices' attention was properly drawn to the decision of the Divisional Court in R v Northallerton Magistrates' Court ex parte Dove [2000] 1 Cr App R (S), 136, where observations were made by Lord Bingham Chief Justice as to the principles to be observed when making orders requiring the defendant to pay the costs of the prosecution.
15.	Lord Bingham, having referred to the relevant authorities, identified five pertinent propositions.  First, an order to pay such costs should never exceed the sum which, having regard to the defendant's means, he was able to pay, and which it was reasonable to order him to pay.  Secondly, the order should never exceed the sum which the prosecutor had actually and reasonably incurred.  Thirdly, the purpose of such an order was to compensate the prosecutor, not punish the defendant.  Fourthly, although there is no requirement that a sum ordered to be paid should stand in any arithmetical relationship to any fine imposed, the costs ordered should not, ordinarily, be grossly disproportionate to the fine.  Fifthly, it is for a defendant facing a financial penalty to disclose relevant data in relation to his financial position to the Justices in order to enable them to assess what he can reasonably afford to pay.  The sixth principle identified by Lord Bingham is not relevant for present purposes
16.	The Justices, having reduced their previous order of £1,800 to £1,200, ordered that that sum be paid at £100 per month, the first payment on 31st December 2002.  
17.	In the reasons which they have given for their decision, the Justices said that they had had regard to the representations made and to ex parte Dove, had considered the defendant's statement of means and took into account that an economy could be made in relation to the Sky subscription.  They noted that the defendant had received assistance with his rent from his father and therefore, said the Justices, he could continue to get help from that source.  
18.	They also said there was scope to reduce the maintenance payments in favour of the children because they were purely voluntary.  They took note of the fact that there were already arrears in relation to those payments and commented that further arrears could be allowed to accrue. 
19.	The submission is made, as I have already indicated, that the Justices failed to have regard to the unchallenged material about the claimant's means and the shortfall which that information demonstrated.  It was wrong to take into account the payments of rent by the defendant's father from time to time, and it was wrong to take into account that the maintenance payments for the children were voluntary and could be permitted to fall further into arrear.  
20.	In the light of those considerations, Mr Hall submits that a decision to order any costs was wrong in principle, bearing in mind that the claimant was an undischarged bankrupt, whose outgoings excluded his income.  There was no basis for making a proper assumption that he would be able to make savings and, furthermore, the Justices at the outset never applied their mind to whether the sum asked for by the prosecution was appropriate and reasonable in the circumstances of this case and its chronology, which, at an earlier stage, I set out.
21.	For my part, I accept all of Mr Hall's submissions.  The first step which the Justices ought to have taken was to consider the proprietary, or otherwise, of the claim for costs made by the prosecution.  Having decided what figure it was reasonable for the prosecution to claim, they should then have proceeded to consider, in accordance with the terms of section 18 of the Act, what sum was just and reasonable for the defendant to be ordered to pay.
22.	In the light of the material which was before them, as to the claimant's status as an undischarged bankrupt, as to his means, and as to the demonstrated and unchallenged shortfall between income and outgoings, as it seems to me, the Justices, if properly taking into account ex parte Dove, could not possibly have reached the conclusion that they did, that it was appropriate for an order for costs to be made against the claimant, still less appropriate for an order in the sum of £1,200.  
23.	Therefore, for my part, I would allow this application and quash the decision of the Justices in relation to payment of prosecution costs.
24.	I add this.  This case has been listed before a two judge Divisional Court because it appears that there is no power in a Single Judge of the Administrative Court, who otherwise might have heard this application, to make an award of costs out of central funds in favour of a successful applicant, who is privately funded.  The present applicant, for reasons which are understandable, was refused public funding on the basis that, having regard to the amount of order challenged, it would not be cost effective for him to be represented at public expense.  The consequence is that his appearance today is privately funded, presumably by his father.
25.	The circumstances in which a successful appellant, who is privately funded, can have an order made in his favour for costs out of central funds was considered by the House of Lords in Holden v Crown Prosecution Service No. 2 [1994] 1 App C 22, and, in the course of his speech in that case, Lord Bridge, with whose speech the other members of the House of Lords agreed, concluded that the power to award costs from central funds is narrowly and precisely defined: there was, in that case, no jurisdiction to award costs in the absence of clear, express words in the statute conferring the power.  In that case, it was held that the Civil Division of the Court of Appeal had no power to award costs out of central funds, even when it was just to do so, and in consequence, the successful applicants were left out of pocket.
26.	Quite recently, the Court of Appeal Criminal Division in the case of Moore [2003] EWCA Crim 1574, Court of Appeal Criminal Division transcript dated 12th May 2003, held in a judgment of the court which I gave, following the decision in Holden, that there was no power in the Court of Appeal Criminal Division to award costs out of central funds in favour of a privately-funded successful appellant, who had challenged a finding in the Crown Court that he was in contempt of court.
27.	As it seems to me, although the circumstances in which costs out of central funds can properly be awarded are susceptible to restriction in whatever manner Parliament sees fit, there is an obvious lacuna which arises in relation to the Administrative Court.  A Single Judge, unlike the Divisional Court, does not have power to make an award of costs from central funds in a criminal cause or matter.
28.	That is a consequence of the provisions of section 16(5) of the Prosecution of Offences Act 1985.  This confers a power to make a defendant's costs order in favour of the accused.  But a costs order, by virtue of subsection (6), may only be made from central funds following a determination by a Divisional Court of the Queen's Bench Division.  This court, being a Divisional Court, therefore has the power to award costs.  But a Single Judge of the Administrative Court does not have that power.  The changes effected by the new CPR52 and 54 do not carry forward the provisions of the old rules of Supreme Court Orders 53 and 56, whereby applications for judicial review and appeals by way of case stated in a criminal cause or matter had to be heard by a Divisional Court.  Because of that change in the rules, Single Judges of the High Court now routinely hear criminal cases.  But, because of the provisions of section 16(5) and (6), they do not have the power which the Divisional Court has to order costs in favour of a successful claimant.
29.	That is a matter which, as it seems to me, might very well merit the attention of the legislature.
30.	MR JUSTICE DOUGLAS BROWN:  I agree.
31.	MR HALL:  My Lord, having got to the Divisional Court, may I make the application for costs?
32.	I am in a position to give you a sum because I have a break down from my solicitor and I know what my costs are.  Alternatively, they can be submitted to the Taxing Master.
33.	LORD JUSTICE ROSE:  Bearing in mind we have not seen it, it might be better if it is submitted to the Taxing Master, but we shall certainly make an order for the payment of the claimant's costs out of central funds.
34.	MR HALL:  Thank you.
35.	LORD JUSTICE ROSE:  Thank you.