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A Fine Line

Sat 17 Nov 2012 03:15:38 Leave a comment Go to comments

A couple of weeks ago, regular SkepticLawyer commenter kvd noted the interesting story about Melbourne City Council suing over the magistrates court ordering payments to charities. The topic was related to the criminal law and administration law subjects I studied this semester and for whatever reason the issue stuck with me throughout my exams. I figured I would break my blogging drought and have a crack at the issue with my freshly minted understanding, however given I’ve studied in a different jurisdiction (Queensland) and I’m yet to find out if I even passed this post might just be the ramblings of a failed law student. Also, since I’ve just spent the first day of post-exam freedom researching and writing this post, I’m also beginning to question my sanity…

Update: Added reference to the statistics Magistrates’ Court Annual Report. Added the historical perspective section. Enhanced the discussion on principles and added a more substantive conclusion. I think I’ve now learnt more about criminal through writing this post than I did throughout the semester…

Council Motivation

Reading the headlines this story is receiving, one might wonder what motivated a council to sue for money that was otherwise going to charity. The most likely reason is fiscal stress, possibly caused by reduced revenue in the current economic climate or poor fiscal management. I’m not up to speed with Melbourne politics to know the details, but it’s clear they’re motivated enough to ignore the bad look that comes with trying to take money from charities.

Regular fines provide hundreds of millions of dollars of revenue to the state government each year. The sentencing statistics indicate the alternative sentence type used in this case are used about 20% as often as standard fines. The Magistrates’ Court Annual Report indicates the payments to charity add up to about nine hundred thousand dollars, and Melbourne City Council wants its cut.

To understand why the council thinks it’s entitled to the money we need to look at the legislation that defines the offence committed. The Food Act (1984) contains a number of offences that have fines attached. The article doesn’t state the offence committed, so I’ll pick an offence from the act as an example:

14. Sale of food not complying with purchaser’s demand

(1) A person must not, in the course of carrying on a food business, supply food by way of sale if the food is not of the nature or substance demanded by the purchaser.

Penalty: $40 000 in the case of an individual and $200 000 in the case of a corporation.

As the legislation is a state law it would ordinarily be up to the state government to prosecuting the offenders. However this law grants the power to councils to bring prosecutions under the act:

45AC. Power to bring proceedings

The Secretary, a council, an authorised officer or a member of the police force may bring proceedings for an offence under this Act.

Any fines collected as punishment for state offences would also ordinarily be paid to the state government consolidated revenue.  Again, this law provides an exception by rewarding the prosecuting council with the money collected through fines.

57. Payment of penalties

(1) Where an offence against this Act has been prosecuted by the council, all penalties recovered in relation to the offence shall be paid into the municipal fund of that council.

So the state government has essentially recruited the councils into assisting with the enforcement of the Food Act by providing a revenue incentive in the form of fines. The Melbourne City Council has presumably spent the time and money to investigate and prosecute the offender on the understanding that, if they were successful, they would be compensated with any fine applied. However, having successfully prosecuted the offender they are left with the magistrate determining the offender should not be made to pay a fine (i.e. the council), but rather pay money to a charity. Given this context, I can understand why the council might be feeling a bit aggrieved by the situation and hence why chose to appeal the sentence.

The Court’s Power

Given the council appears to have a potentially legitimate claim to the money, it’s important to consider whether the court has the power to decide that the money should be paid to someone else. While the offences and maximum possible penalties are specified in the Food Act, the process for determining the sentence for each individual offender is set out in the Sentencing Act (1991). The sentencing options in the act fit into four basic categories: imprisonment, community correction orders, fines and “slaps on the wrist”. The last category includes formally recording a conviction and undertakings (“good behaviour bonds”) where the judges threatens to impose an actual penalty if you behave badly or break any imposed conditions.

Special Conditions

The payments to charity seem to be based on the undertaking provisions and not on the fines provisions. Section 75 provides (my emphasis):

75. Release on adjournment without conviction

(1) A court, on being satisfied that a person is guilty of an offence, may (without recording a conviction) adjourn the proceeding for a period of up to 60 months and release the offender on the offender giving an  undertaking with conditions attached.

(2) An undertaking under subsection (1) must have as conditions-

(a) that the offender attends before the court if called on to do so during the period of the adjournment and, if the court so specifies, at the time to which the further hearing is adjourned; and
(b) that the offender is of good behaviour during the period of the adjournment; and
(c) that the offender observes any special conditions imposed by the court.

I cannot find anything within the Sentencing Act that details the scope or contents specifically for these “special conditions”, so it’s not clear exactly what the parliament intended them to cover. This means there is a definite question of whether the conditions can include a payment to the court fund (or otherwise) for charitable conditions. The only directly relevant case law I can find involves the Supreme Court imposing a condition of continuing mental health treatment, and no discussion of other possibilities or limits. In other jurisdictions and legal contexts such conditions are usually used to ensure rehabilitation and reduce risk of further offences with examples including drug treatment or avoiding certain people and places.

One important limit on the conditions is the section detailing their possible purposes (my emphasis):

5. Sentencing guidelines

(1) The only purposes for which sentences may be imposed are-

(a) to punish the offender to an extent and in a manner which is just in all of the circumstances; or
(b) to deter the offender or other persons from committing offences of the same or a similar character; or
(c) to establish conditions within which it is considered by the court that the rehabilitation of the offender may be facilitated; or
(d) to manifest the denunciation by the court of the type of conduct in which the offender engaged; or
(e) to protect the community from the offender; or
(f) a combination of two or more of those purposes.

Interestingly, there are no principles of restorative justice listed despite the inclusion of restitution and compensation provisions elsewhere in the act. It’s easy to see how a treatment condition fits within the purpose of rehabilitation, and an avoidance condition can fit within the protection purpose. These conditions also appear consistent with the range of conditions that the court has express powers to attach to community correction orders:

48C. Unpaid community work condition
48D. Treatment and rehabilitation condition
48E. Supervision condition
48F. Non-association condition
48G. Residence restriction or exclusion condition
48H. Place or area exclusion condition
48I. Curfew condition
48J. Alcohol exclusion condition
48K. Judicial monitoring condition

Fines

Charitable payments could arguably fulfil the same purpose as fines, both punishing the offender and denouncing their offence. However, their nature appears to be at odds with the provisions that cover fines. Most important is the issue of who the money is paid to:

59. Application of fines etc.

The whole or any part of a fine, penalty or sum of money which by or under any Act is authorised or directed to be imposed on a person forms part of, and must be paid into, the Consolidated Fund if no other way of appropriating or applying it is prescribed by law.

Fines can only be paid to the government unless otherwise specific, which in this case means the council. Thus, payments to charity can only be valid if they are not a classified as a fine. Conveniently the Sentencing Act provides a definition of what a fine is:

fine means the sum of money payable by an offender under an order of a court made on the offender being convicted or found guilty of an offence and includes costs but does not include money payable by way of restitution or compensation or any costs of or incidental to an application for restitution or compensation payable by an offender under an order of a court;

I think it’s going to be an uphill battle to argue the payments are not fines. Under the act, restitution is about stolen property and compensation is about personal injury, so these terms can’t be used to avoid such payments being defined as fines. The undertakings are in some respects voluntary as the offender must effectively consent (“make the undertaking to do something”). However, given it’s an offence to breach the conditions I think it is hard to argue that a payment condition on an undertaking isn’t payable “under an order of a court”. Curiously on the magistrates court page it lists three forms of other (not fines) monetary penalties: “court fund”, restitution and compensation. These latter two terms are clearly provided for in the legislation but I can’t find any reference to “Court Fund”.

Conceptual Difficulties

There are also other provisions in the act that suggest that such payments aren’t intended to be within the scope of special conditions (my emphasis):

5. Sentencing guidelines

(7) A court must not impose a fine unless it considers that the purpose or
purposes for which the sentence is imposed cannot be achieved by a dismissal,
discharge or adjournment.

It’s hard to see how in the majority of cases, payments to charity wouldn’t be comparable to fines in punitive capacity. If charitable payments are available as a condition of adjournments, the logical conclusion from the above provision is that they should be used in preference to fines. This conclusion is at odds with the detailed provisions covering fines relative to the complete lack of provisions covering charitable payments. It’s also at odds with current sentencing practices which show a clear preference for fines over undertakings.

A quick look at other jurisdictions shows New South Wales legislation now expressly excludes payments from forming part of such conditions, while Queensland legislation leaves it as vague as “any additional conditions that [the court] considers appropriate“. A strong authority against allowing the payments comes from a statement by Gleeson CJ sitting on the NSW Court of Appeal, made prior to the express exclusion (R v Ingrassia (1997) 41 NSWLR 447). The Crimes Act 1900 (NSW) contained the (now repealed) s556A(1A), which allowed for orders discharge an offender conditioned on “such terms and conditions as the court shall order”. The statement reads (actually quoted in the Victorian Sentencing Manual):

There was some argument before this Court as to whether the word ‘fine’ was strictly applicable to a payment of the kind now in contemplation. What was involved, counsel said, was more in the nature of a donation to the revenue. That suggestion underlines the conceptual difficulty. If donations to the State Treasury can be made the subject of conditions under s556A then so, presumably, can donations to other equally worthy objects of bounty, such as charities or victims.

If the law does not permit the imposition of a fine when an offender is dealt with under s556A, and if the imposition of a punishment would be inconsistent with the hypothesis that the court is not proceeding to convict the offender, then it would represent a triumph of words over ideas to avoid that consequence by describing the payment as a donation to the revenue. In any event, s556A is not a provision to be used for the purpose of soliciting gifts, whether to the revenue, to charities, or to anyone else.

While there is a technical difference in the nature of that case (the Sentencing Act does allow for fine with no conviction), it wouldn’t surprise me if the Victorian Supreme court echoed the same sentiment in response to this case. Thus as the law currently stands, I don’t think the magistrates’ court has the legal authority to make such payments.

Historical Perspective

To understand why the magistrates might have developed a practice of ordering payments to charity, it is necessary to consider the history of punishment in trivial cases and engage in a bit of speculation. Blackstone’s Commentaries provides details about the state of the common law in the mid 18th century. While the basic structure of the law at that time remains recognisable to modern law students, both major and minor changes have occur as the law developed over the years. Most notable is the abolishment of execution and corporal punishments such as (even then described by Blackstone as “shocking” and “disgusting”):

mutilation or dismembering, by cutting off the hand or ears; others fix a lasting stigma on the offender, by slitting the nostrils, or branding in the hand or cheek … whipping, hard labour in the house of correction or otherwise, the pillory, the stocks, and the ducking-stool.

Two important elements that Blackstone noted within the common law include firstly that a finding a guilt meant by definition the person was convicted, and secondly that a person could not be punished unless they were convicted:

[U]pon such his acquittal, or discharge for want of prosecution, he shall be immediately set at large without payment of any fee to the gaoler. But if the jury find him guilty, he is then said to be convicted of the crime whereof he stands indicted; which conviction may accrue two ways,—either by his confessing the offence and pleading guilty, or by his being found so by the verdict of his country.

Further to that, is was clear that while the judge had discretion over the length of imprisonment or amount of fine, they lacked the authority to discharge a convicted person without penalty:

[I]t is moreover one of the glories of our English law that the species, though not always the quantity or degree, of punishment is ascertained for every offence; and that it is not left in the breast of any judge, nor even of a jury, to alter that judgment, which the law has beforehand ordained for every subject alike, without respect of persons. For, if judgments were to be the private opinions of the judge, men would then be slaves to their magistrates, and would live in society without knowing exactly the conditions and obligations which it lays them under.

That said, there was still the capacity to appeal to the crown for a pardon, :

[I]f it be a small felony, or any favourable circumstances appear in the criminal’s character, in order to give room to apply to the crown for either an absolute or conditional pardon.

It appears that in Victoria the principle of mandatory punishment was overridden at least a early as 1915 and the courts in certain circumstances were granted the power to suspend the sentence and discharge a convicted offender on their own recognisance. This included the ability to attach conditions to be of good behaviour, report to police, avoid people or places and “generally for securing that the offender shall lead an honest and industrious life”. In 1949 the courts were granted the power to suspend proceedings before a conviction was recorded and release the person on a bond of good behaviour.

The distinction between these two changes is important. The mere conviction can significantly affect the future of an offender in both directly in legal matters and indirectly through impacts on employment opportunities. This means the mere conviction itself can potentially have a far more punitive effect than are justified by the circumstances of the offence. The change allowed for the courts to avoid such negative impacts in cases of trivial offences. The case law indicates that the granting of power to suspend proceedings prior to conviction did not override the  (R v Ingrassia (1997) 41 NSWLR 447, Gleeson CJ):

common law principle that a person who has not been convicted of an offence should be punished by order of a court.

This meant that at this stage it was not within the discretion of the court to impose a fine unless a conviction was recorded. This left a gap in the sentencing discretion available to judges in cases where recording a conviction would be excessive but an unconditional discharge would be inadequate.  Presumably at some stage some creative legal minds realised that while they couldn’t apply a fine, they could use the power to impose conditions to include payments to charity. The fact such conditions could only be imposed with consent and could be said to be encourage an “industrious life”; a method of proving one’s good character rather than a punishment. This means the court could have believed the condition was not substantively a punishment and therefore not contrary to the common law principle against punishment without conviction. This enabled the courts to impose what was effectively a modest financial penalty on the offender in cases where a conviction would be considered excessive.

When the power to use common law bonds was abolished by the current legislation and replaced with the undertaking provisions detailed above, it’s likely the magistrates court looked at the “special conditions” (discussed above) and assumed they could use this power to order payments to charity in the same way they had used the common law bonds. However, the modern legislation removes the common law barrier to punishment without convictions and the courts now have the power to impose a fine without recording a conviction:

7. Sentences

(1) If a court finds a person guilty of an offence, it may, subject to any specific provision relating to the offence and subject to this Part-

(f) with or without recording a conviction, order the offender to pay a fine;

This undermines the justification for imposing payments to charity as a legal mechanism for avoiding the barrier to punishment.

Given these types of sentences would be imposed as a relatively lenient outcome for an offender and entered into voluntarily, there would be little incentive for the offender to appeal any sentence involving such payments. Appeals against sentence by the prosecution are both rare and more restricted than appeals by the offender. The minor nature of the offences involved means there would be little incentive for an ordinary prosecutor to bother appealing the sentence. As a consequence, the practice of the lower courts in imposing payments to charity has likely avoided much scrutiny by the higher courts until now (at least in Victoria, the issue has clearly been tacked in New South Wales).

Underlying Principles

While it appears that the courts may currently lack the authority to require payments to charity it’s also interesting to consider whether they should have that power. The two substantive differences between these payments and fines are the requirement for the consent of the offender and the beneficiary of the payment.

The Case For

I say consent is a factor because the offender must be accept the undertaking in order for it to be imposed. If they refuse then the courts can resort to the other sentencing options which would likely mean a fine. Although this means the consent is far from being free and unencumbered, the willingness to pay and benefit someone could be said to demonstrate a sense of remorse. This could make it meaningful in the same way a guilty plea at the end of a trial in the face of overwhelming evidence is still meaningful. This could mean such payments have a role, however minor, in fulfilling the rehabilitation purpose of the sentence.

The power to determine the benefactor of such payments could also assist in fulfilling sentencing purposes. Many times an offences will be against a community more so then against particular individual(s). Payments to appropriately related charities could be part of the compensation purpose in sentencing where there isn’t a case for more direct compensation. Additionally, having the offender see their money applied to restoring the harm done could play a rehabilitation role as well.

Outside the purposes of criminal punishment, the charities themselves are worthy beneficiaries. Particular charities could be seen to be more directly associated with rectifying harm caused by offences than the government in general. There seems something inherently wrong with halting the funding charities through a mechanism that seems to have had a long standing acceptance of the community.

The Case Against

There is an important principle that stands against allowing courts to making such decisions. Separation of powers is a fundamental aspect of all Australian governments and it places the powers to collect and appropriate money rest with the democratically elected parliaments. Currently the Victorian Parliament has granted their courts the power to collect money from offenders in the form of fines. The power for the courts to appropriate these same funds however appears to still be quite limited.

At sentencing, the courts will have completed a detailed review of the nature and circumstances of the offence and the offender. This places them in a good position to assess the appropriate amount of financial hardship to place on the offender. However, they won’t necessarily have the knowledge or expertise to know where the money would best be spent, and lack the democratic authority to make arbitrary determinations on behalf of society. Further there is a lack of any meaningful accountability in regards to deciding where the funds go. The courts are intentionally insulated from external influence in order to ensure their impartiality on judicial matters. The only practical review mechanism available is the appeals process, and as discussed above this would likely not be sufficient to regulate decisions regarding the recipient of the payments. Thus it’s not appropriate for the judiciary to take it upon themselves to assign payments to third parties unrelated to the matter at hand, particularly against the express will of parliament found in the legislation, regardless of the noble intent of the judge or charitable nature of the recipient.

It is the elected legislature that is best placed to determine the principles of how the money should be spent, and the executive that has the resources (army of bureaucrats) to best deal with the details of implementation. In this particular case they have already made that determination, in that any fines are assigned to the council in order to fund the enforcement of the Food Act. Enforcement of the act protects the community from being exposed to harmful food, preventing a significant medical costs and associated loss of productivity. Having the funding of enforcement at least partially linked to successful prosecutions could help the funding remain in proportion to the level of offences and insulate it from other pressures on general revenue sources.

Finally, there is nothing in the current law to prevent defendants pre-emptively making charitable payments. The sentencing act provides that offender’s character and mitigating circumstances must be considered, and that significant contributions made to the community can play a part of that consideration. It would none the less be a bit of a gamble, as the court would be under no obligation to accept the payments as significant enough to impact any sentence.

Alternative Solutions

Alternatively legislation could be passed to grant such powers to the courts. Such legislation should suitably restrict the determination of the beneficiaries in such a way to ensure sentences remain consistent their intended purposes. There appears to be a functioning model in Canada that is one of the diversion programs structured as a complete alternative to prosecution. Importantly these alternatives require a three way agreement between the accused, the prosecutor and the court, and are structured programs developed by the executive government. The significant involvement of the government of establishing and administrating the programs ensures any payments remain within political accountability. The requirement for the approval of the courts helps protect individuals from the imposition of unjust burdens by the prosecutors. Perhaps the only criticism I could make of this system, is that it is the prosecution and not the court that has the role of assessing the evidence which could leave that assessment open to questions about its independence.  This was most likely done to expedite the process and reduce costs.

I found some interesting articles on the ability of ASIC to accept restorative undertakings in matters under their jurisdiction. One of them looked favourably on the theory behind the the flexibility of undertakings, however found that while undertakings focused on compensating victims had worked well, undertakings that focused on benefiting the community in general were very rarely entered into. This perhaps indicates the difficulty of contemplating how to best benefit the community while trying to resolve a specific offence. Although clearly there is a strong demand for such mechanisms in the magistrates’ court, so these difficulties may be limited to the nature of offences or offenders ASIC deals with.

Conclusions

The idea of a governmental institution, particularly one within the judicial branch, taking it upon themselves to go beyond specific legislated powers to order payment of money to third parties is something that sits very uncomfortably with the rule of law. It is judicial officers who ought to be most concerned with not exceeding the powers granted to them by parliament, over and above any noble motive to assist charitable causes they might favour. I think this principle overrides any sympathy that can be held for the charities or the people that ultimately benefit from their service, that will otherwise be denied a source of funds. In this case in particular, the enforcement of the Food act is sufficiently worthy to justify the payment being made to the charity. Beyond this particular case, the impact on the charities from losing close to a million dollars of funding has the potential to be quite significant. If the law does close of this source of funding I hope the state government takes swift action to ensure at least some continuity of funding.

In a more general sense, I think there is room for payments to charity to play a role in the justice system. I would have a preference for any such mechanisms to require a three way agreement as in the Canadian system, although think there may be a case to have the court, rather than the prosecution make the judgment about the weight of evidence. I think requiring at least the consent of the prosecution would be favourable to the practice currently in place. Of course any legislative action brings us to the matter of political will and consequentially to the issue of fiscal stress I raised at the start of this post. In the present economic and political environment, I can’t see any progressive sentencing changes being made in the short term, particularly where that change involves less money going into government coffers.

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Categories: law, university
  1. kvd
    Sat 17 Nov 2012 18:34:48 at 18:34

    Very much appreciate your picking up on this – even though it sounds as if you should have been taking a well deserved rest. So, thank you, and good luck.

    My reading of your summary is that you think that courts do not have the power presently being exercised? I agree, but I very much hope that Legal Eagle wanders by, because my immediate thought on reading the first article was that this was very much within the area she concerns herself with, and we could all benefit from reading her take on this.

  2. Sun 18 Nov 2012 17:09:35 at 17:09

    How very interesting. The things one learns!

  3. Sun 18 Nov 2012 18:10:10 at 18:10

    kvd, I think it was rather therapeutic to do a bit of research and writing without stressing about marks or word limits. I’ve updated the post to clarify my position on the matter, but I’m still interesting to see what LE (and of course the Supreme Court) thinks on the matter.

    Also, Blackstone’s commentaries which I’ve referenced in the update provides an interesting read along side the Old Bailey site you were reading. The get out of jail free card that the clergy had back then is especially interesting given the politics surrounding the new royal commission into sex abuse in the church.

  4. kvd
    Sun 18 Nov 2012 18:39:18 at 18:39

    Maybe it’s just the way my mind works, but I can tie this discussion quite easily back to Lorenzo’s comment about the pernicious effects of ‘discretion’. There was a (very minor) film about a scandal involving a US judge who had a consistent record of sentencing juveniles (for the most minor of crimes) to time in a federally funded correction centre run by (it turned out) his family. I accept that that is a long way from the point at hand, but it is interesting just where legislated discretion can lead.

    Anyway, you’ve done a great deal of work on something which interests me, and for that I thank you.

    • Sun 18 Nov 2012 19:09:34 at 19:09

      I’ve read about that case and its a great example of how judicial discretion can go wrong. Although I was under the impression that part of the problem was the judge was going well beyond the lawful discretion provided by the legislation. Regardless, it does highlight the importance of an open and accountable justice system (and government in general).

  5. Sun 18 Nov 2012 19:29:52 at 19:29

    Fabulous post, Desipis. Rest assured that I will write on it when the case is handed down!

    • Mon 19 Nov 2012 10:37:57 at 10:37

      Thanks, LE 🙂

  6. kvd
    Mon 19 Nov 2012 16:34:12 at 16:34
    • Mon 19 Nov 2012 18:51:44 at 18:51

      Thanks kvd, those are some interesting links. There does seem to be something about the story in that third link that makes it seem rather benign and acceptable in comparison to other cases.

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