- This is an application
by Diana Mary Stevens (whom I shall call "Mrs Stevens") for judicial review
of a decision by the Truro Magistrates' Court on 5th June 2000. The record
of the Court of that date shows that it was adjudicated that her recognisance
of £100,000 should be estreated and that certain deeds, unspecified in the
order, might be released pending sale by undertaking (meaning "on an undertaking
being") given by UK solicitors only. It is common ground that an order in
this form was inappropriate, because Mrs Stevens had never given an recognisance,
but at most only given or participated in the giving of security. The order
was subsequently amended to show that security of £100,000 was estreated,
It appears to me that the inappropriate drafting of the order may have been
due to a more fundamental defect in the order.
- Mrs Stevens is the mother
of a man named Nicholas Stevens who was arrested by the police for various
offences of fraud towards the end of 1998. He owned a property called Pewsey
House (also known as Porth Kea Chapel), in Cornwall. Pewsey House is registered
land. It was subject to a registered mortgage in favour of his mother to secure
a loan of £56,000 she made to him in 1994 for the purchase of the property.
The loan was initially made without interest, but she contends that when she
and her husband went to live permanently in France in 1996, she exercised
her contractual right under the mortgage to give him three months' written
notice requiring him to pay interest on the amount of the loan at an annual
rate of 6% payable in arrears on the usual quarter days.
- After Nicholas Stevens
was arrested, he first appeared before the Truro Magistrates' Court on 7th
January 1999. The prosecuting solicitor objected to bail on the basis that
he was accused of an imprisonable offence and there were substantial grounds
for believing he would abscond from the jurisdiction of the court. He was
in the process of selling his home and he had no family in this country. His
parents lived abroad, and he had business interests abroad. Once his home
was sold, he would have no financial or family ties with this country.
- Mr Stevens's solicitor
told the justices that his client owned Pewsey House, which was valued at
£120,000, subject to his mother's charge. He said that his client's father
was in court and that his client's mother, who is the present applicant, was
prepared to stand surety for his client in the sum of £100,000. He said that
her charge was worth £56,000 and that she had £65,000 in investments. He produced
a letter from her investment brokers which evidenced the value of her investments
and her willingness to pledge them to the court. He also produced a letter
from her solicitors, Messrs Dixon & Templeton of Fordingbridge, confirming
the existence of her mortgage of £56,000 over Pewsey House. They said that
her charge was registered and that they were holding the charge certificate.
The justices refused to grant bail on the basis suggested, and Mr Stevens
was remanded in custody.
- When the matter came
back before the justices four days later the prosecution again opposed bail
on the same basis. On this occasion, Mr Stevens's solicitor said that his
client would deposit the title deeds of Pewsey House as surety for the sum
of £100,000 to secure his release from custody. He said that Mrs Stevens's
solicitors held the title deeds and that they would deposit them at a local
magistrates' court. The property was up for sale, and if it was sold the security
could then be cash. He went on to say that Mrs Stevens and her husband were
not from a wealthy background and that if their son absconded this would amount
to a considerable loss. He would also lose his inheritance and the respect
of his parents.
- On this occasion the
court's notice of bail conditions shows that Mr Stevens was granted bail subject
to three requirements: to surrender his passport to the court, to reside at
Pewsey House and to deposit the title deeds to Pewsey House at Lyndhurst Magistrates
Court. No reference was made to any sum being fixed as the value of his security.
It appears that Mrs Stevens's solicitor lodged his client's charge certificate
in relation to that property at the Lyndhurst court on the same day, and her
son was duly released on bail.
- On 8th February 1999
a new notice of bail conditions was issued. The relevant requirement now read:
"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".
- 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.
- 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. "
- 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."
- 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."
- 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.
- 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. "
- 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.
- On 3 March 2000 Mrs Stevens
presented a complaint to the Truro Magistrates' Court seeking orders:
- (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.
- 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..."
- 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.
- 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.
- 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.
- 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."
- 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.
- 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.
- 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).
- 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."
- 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.
- 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.
- 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)).
- 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.
- 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.
- 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.
- 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))."
- 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.
- 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."
- 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).
- 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."
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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:
- 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.
- 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.
- 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:
- 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:
- 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.
- 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.
- Section 8, dealing
with bail with sureties, contains no provision for or reference to the taking
of security from or belonging to a surety.
- The only power to forfeit
a security is that in section 5(7), and that is limited to a security given
by a defendant.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
