England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2A 2LL
		27 April 2012

1. LORD JUSTICE MOSES: This is an application to move by way of judicial review to quash a decision of the North Somerset Magistrates' Court, sitting at Weston-super-Mare, on 3 February 2012. On that day, they committed the claimant, Louise Evans, to prison for a period of 12 months in respect of non-payment in respect of an outstanding compensation order. Although Louise Evans, the claimant, was represented, the magistrates were not represented before this court, nor was the prosecution. For reasons that will become apparent it is, in my view, unfortunate that the court did not take what would have been an exceptional course, but sensible in this case, of being represented. What went on leading up to that committal seems to me a matter of considerable concern.
2. The history of the matter is that this claimant was convicted on a plea of guilty at Bristol Crown Court on 13 March 2009 of offences of theft and false accounting. She had been working for a local rugby club in an administrative capacity and over £50,000 had been stolen. She was sentenced to a term of 8 months' imprisonment. She had either paid herself or arranged for payment of £10,000 to be paid back to the rugby club but there were considerable amounts outstanding. Accordingly, confiscation proceedings were commenced, pursuant to the Proceeds of Crime Act 2002 (POCA), and on 7 April 2010, Bristol Crown Court made a Confiscation Order pursuant to section 6 of POCA, assessing the criminal benefit as £56,039 and that the available amount, the subject matter of the Confiscation Order, was £27,771.29. It is of relevance to this application to move to observe the form of the confiscation order. The order stated, as is conventional, the value of the benefit and the available amount. The schedule of available assets was identified and annexed to the order. After hearing his evidence, HHJ Tabor, QC, as the schedule records, took the view that the defendant had 100 per cent interest in the equity of a dwelling house in Bristol, valued at £25,771.29, and a Daewoo motor car, valued at £2,000. That led to the available amount I have recorded.
3. It is also of relevance to this application to record that on the face of the confiscation order, under the amount of £27,700 odd the defendant was ordered to pay, it is said that the total of that sum is to be paid as compensation according to the compensation order that is sent to the regional confiscation unit with this order. The payment was to be made within 6 months. In other words, the rugby club was ordered to be the beneficiary of the confiscation order.
4. On 6 May 2010, in pursuance of enforcement of that order, a restraint order was made. On 18 November 2010, the property, not having been sold by consent, timed for payment which had previously been limited to 6 months, was extended. On 12 August 2011, the property and the vehicle was sold. Unfortunately there had been a miscalculation of the amount of the value of the equity in the premises in which this claimant had a beneficial interest and only £9,097.67 was applied towards the confiscation order leaving a shortfall of £18,600 odd. Accordingly, this claimant applied to Bristol Crown Court pursuant to section 23 of POCA, seeking a variation of the order due to the inadequacy of the available amount. On 1 September 2011, an order was made pursuant to section 23 reducing the amount of the confiscation order to nil. The court, by the order pursuant to section 23, thus acceded to the submission that went by consent that there were no other available assets. On 14 September 2011, the restraint order was discharged.
5. The claimant, however, still had to deal with the question of compensation. It is important to emphasise that the compensation issue was distinct from the confiscation order, notwithstanding that the order on its face designed the order to be deployed in satisfaction of compensation. That it was a different statutory regime is exemplified by the provisions of section 133 of the Powers of Criminal Courts (Sentencing) Act 2000. Pursuant to section 133(1), 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."

6. By (3) of section 133 of the 2000 Act, power is conferred on the Magistrates' Court to make an order reducing or discharging the compensation order, amongst other grounds, on the grounds that the means of the person against whom the compensation order was made are insufficient to satisfy the compensation and the confiscation order made in the same proceedings (see section 133(3)(c)). That power may also be exercised where the person against whom the confiscation order was made has suffered a substantial reduction in his means unexpected at the time the order was made and that the means seem unlikely to increase for a considerable period (see section 133(3)(d)).
7. The magistrates' court has no power to make such an order unless, if the crown court has made a compensation order, the consent of the crown court has been obtained. In those circumstances, an application was made for consent to the Bristol Crown Court on 21 September 2011 and consent was granted. The matters then returned to the North Somerset Magistrates' Court. On 7 October 2011, this claimant appeared before the Magistrates' Court, but she was, unfortunately, unrepresented. There was therefore no one to explain to the magistrates, other than their legal adviser, the significance of the form of the confiscation order, linked as it was to compensation, or the consequences of the factual conclusion of the crown court that there were no assets to meet any order made. The claimant appears to have had a note to that effect drafted by her solicitors, in particular Mr Cameron who has done a great deal of hard work on her behalf, but do not appear to have taken the contents of those notes on board. The notes made it clear that there were insufficient means to satisfy the compensation order and that there were no assets to meet the confiscation order.
8. The magistrates made no order on 7 October 2011, although gave no reason for it. 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 this 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.
9. There is, besides what the claimant says through her solicitor, a document described as a statement of facts from a Stefan Sims, a solicitor and legal adviser to the relevant court. He makes a large number of statements and conclusions and records impressions of the claimant in justifying the approach of the magistrates. It is conventional for a legal advisor to make such a statement rather than the holders of judicial office but it is unfortunate that the statement contains a mixture of a record of the view of some of the magistrates involved, apparently his own views and his version of the facts obtained from the notes. The distinction, reading through the lengthy document, is not always clear and since the magistrates are unrepresented we were unable to obtain clarification.
10. In any event, on that hearing on 2 December, he 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."

11. 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".
12. We have been furnished today -- although whether the magistrates know about this I do not know -- with a copy of a letter from the claimant, dated 19 December, in which she says that the money, the £3,000, was to come from her husband's business account, but if they paid it there would not be enough to pay household bills and business fees. She records that her husband needs to keep a float in his account to operate a business and she tells the court that she is suffering from severe depression and suicidal behaviour and has been signed off.
13. 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."

14. The justices, and this is prayed in aid in favour of their approach, took the view that that was "a little high" and ordered that the sum of £1,500 be paid that day with the balance of £1,500 within 14 days.
15. 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.
16. 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."
17. 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.
18. 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.
19. 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.
20. 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 [1984] 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.
21. 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.
22. MR JUSTICE EADY: I agree.
23. LORD JUSTICE MOSES: Now, Mr Watson, what are you asking for?
24. MR WATSON: My Lord, the decision having been quashed, the compensation order that exists will still be in existence. It seems that the preferred alternative in the circumstances would be to remit the matter to the --
25. LORD JUSTICE MOSES: You have got no power to discharge that compensation order, presumably.
26. MR WATSON: No, but a direction could be given.
27. LORD JUSTICE MOSES: One would have thought she had suffered enough, even the rugby club would think that. There's nothing I can say about that.
28. MR WATSON: No.
29. LORD JUSTICE MOSES: We will quash the order of committal and direct that the compensation order payments need to be reconsidered in the light of the current statement of means.
30. MR WATSON: Yes.
31. LORD JUSTICE MOSES: But the magistrates would be well advised to bear in mind what has happened in the last few months.
32. MR WATSON: Indeed.
33. LORD JUSTICE MOSES: I will say no more about that.
34. MR WATSON: I am very grateful.
35. LORD JUSTICE MOSES: Thank you both.