COURT OF APPEAL FOR ONTARIO
LASKIN, FELDMAN and O'CONNOR JJ.A.
B E T W E E N :
HER MAJESTY THE QUEEN
Respondent
-and-
PATRICIA MARIE DODSON and HILMA MARIE RUBY
Appellants
Clayton Ruby and Lesli Bisgould
for the appellants
Gregory Tweney
for the respondent
Heard: November 15, 1999
On appeal from the sentence imposed by Desotti J. dated February
22, 1999
O’CONNOR J.A.:
[1] The appellants pleaded guilty to a charge of breaking and
entering and theft arising from the unlawful release of 1500 mink
from a mink farming operation in Blenheim, Ontario. Desotti J.
sentenced the appellants to 90 days in jail and ordered that they
each make restitution to the mink farm in the amount of
$34,298.06. In addition, he ordered that each appellant forfeit
“any monies held by this court by virtue of a cash bail in
partial satisfaction of the restitution order.”
[2] On this appeal, the Crown concedes that the sentencing judge
did not have the authority to make the forfeiture orders. I
agree. The Criminal Code does not authorize an order forfeiting
bail money to satisfy a restitution order. Once the appellants
had satisfied the conditions in their recognizances, including
appearing for their trial, the court had no further interest in
the money that had been deposited to secure those obligations. I
would therefore quash the forfeiture orders.
[3] In addition to seeking to quash the orders forfeiting the
bail money, the appellants request this court to order that:
(a) the court holding the bail money pay it directly to the
individuals who provided the money to enable the appellants
to be released from custody rather than to the appellants;
(b) the Crown pay the costs of this appeal; and
(c) the Crown pay interest on the bail money from the date
of the forfeiture orders to the present.
[4] For the reasons set out below I would not make any of the
three additional orders requested by the appellants.
Payment of Bail Money
[5] The background for this request is set out in an agreed
statement of facts filed on this appeal. The relevant parts
provide as follows:
After a bail hearing in March and April
1997, the appellants (along with the other three
accused) were released on several conditions,
one of which was a requirement that $10,000
be deposited with the court on behalf of each
of them. Those funds were provided by friends
and family members on the appellants’ behalf
with the understanding that at the conclusion
of the trial, subject to an application for
estreat of bail, the money would be returned
to each of them. The appellants complied
with all terms of their interim release.The issue of ownership of the bail
funds was raised at the sentencing hearing in
response to the respondent’s request that
those funds be forfeited to Ebert Fur Farms
Inc. The appellants’ evidence, given by the
appellant Dodson, at the hearing, was that
the funds deposited on their behalf were not
their own, and had been provided on their
behalf by others.In fact, on behalf of the
appellant, Ruby, $7800 was deposited by her
friend, Jan Cejka, and $2200 was deposited by
her daughter and son-in-law, Mirian and Jim
Corcoran. On behalf of the appellant,
Dodson, $10,000 was deposited by her brother
and sister-in-law, Richard and Denise Doral.
The funds were deposited by Cejka, the
Corcorans and the Dorals on the appellants’
assurance to each of them that they would
fully comply with all of the conditions of
their bail and attend court as required, and
on the understanding that the bail funds
would be returned to Cejka, the Corcorans and
the Dorals once the criminal proceedings were
completed.
[6] The first question is who in fact deposited the bail money
with the court, the appellants or their relatives and friend.
The language of the agreed statement of facts is somewhat
equivocal. However, both the orders releasing the appellants and
s. 515(2) (e) of the Criminal Code under which those orders were
made make it clear that it was the appellants who deposited the
money with the court.
7Section 515(2)(e) provides:
- (2) Where the justice does not make an
order under subsection (1), he shall, unless
the prosecutor shows cause why the detention
of the accused is justified, order that the
accused be released
…
(e) if the accused is not ordinarily
resident in the province in which the accused
is in custody or does not ordinarily reside
within two hundred kilometres of the place in
which he is in custody, on his entering into
a recognizance before the justice with or
without sureties in such amount and with such
conditions, if any, as the justice directs,
and upon his depositing with the justice such
sum of money or other valuable securities as
the justice directs. [Emphasis added.]
[8] The appellants, who resided in Michigan, were ordered to be
released upon entering into recognizances in the amount of
$10,000.00, with money deposits. There was no order requiring
sureties for these recognizances.
[9] A recognizance is a personal acknowledgment by which an
accused admits indebtedness to the Crown for a specified sum of
money unless the accused satisfies the conditions in the
recognizance. If the conditions are satisfied, the matter is at
an end; if they are not, the accused becomes a debtor to the
Crown for the amount specified in the recognizance.1 Although
there may be a number of different conditions in a recognizance,
the central condition is always that the accused attend in court
as required.
[10] A justice may order that a recognizance be with one or more
sureties. Sureties are guarantors who agree to be personally
responsible to pay the amount specified in the recognizance if
the accused fails to satisfactorily perform the conditions set
out in the recognizance. As a matter of practice, sureties are
required to attend before the justice and execute the
recognizance as an acknowledgment to the court of the obligations
they have assumed.2
[11] Under s. 515(2)(e) a justice has authority to order that
security be deposited with the court either by the accused or if
the recognizance is ordered to be with a surety, then by the
surety. There is no provision for the deposit of security by a
person other than the accused or a surety.
[12] The appellants’ relatives and friend were not sureties.
They did not sign the appellants’ recognizances. It seems clear
that the appellants’ relatives and friend provided the money to
the appellants, not to the court, and that the appellants then
deposited the money as security in accordance with the terms of
the release orders.
[13] It also appears that the arrangements relating to the
provision of the money and for its return were strictly a private
matter between those who provided the money and the appellants.
The court was not a party to these arrangements. The appellants
did not file an assignment of the bail money. The court’s
relationship is with the appellants, and with no one else.
[14] Against this background we are asked to order that the bail
money be paid by the court directly to the appellants’ relatives
and friend.
[15] There is no provision in the Criminal Code dealing with the
release of money deposited as security under a recognizance nor
is there any indication in the recognizances signed by the
appellants as to whom the bail money should be paid when the
conditions in them have been satisfied. However, it seems obvious
that in the normal course money deposited for bail will be
returned to the accused or to the surety who deposited it or in
those cases where a proper assignment has been filed with the
court, to the assignee. The appellants ask this court to make an
order that departs from this normal practice.
[16] Mr. Ruby, on behalf of the appellants, was candid as to why
the appellants seek this order. They are concerned that the mink
farm, which was the victim of their offences, either has or will
take legal action to seize the bail money before it can be
returned to those who provided it to them. Although Mr. Ruby
asserts that the mink farm and presumably any other creditors of
the appellants do not have a valid claim to the bail money, he
seeks the order so that his clients can avoid the additional
legal expenses that may be involved in resisting any such claims.
[17] Because I am not prepared to make the order, I do not find
it necessary to decide if this court has the jurisdiction to do
so. However, I have a serious concern whether a sentencing court,
or this court when hearing a sentencing appeal, is the
appropriate forum for making orders directing to whom bail money
should be paid. Presumably, someone who deposits bail money with
a court would not seek an order of this kind unless there were
competing claims to the money.
[18] When there are competing claims, the criminal court is
unlikely to have all of the potentially interested parties before
it, nor is there a recognized mechanism for bringing those
parties to that forum. The rules of practice and procedure in
the criminal court are not designed to resolve disputes between
competing claimants. There are no provisions for pleadings,
discoveries, production of documents, etc. Moreover, criminal
courts could become involved in time-consuming inquiries as to
the true ownership of the funds used to post bail. Although the
present case is said to be unusual because of the order
originally sought by the Crown, if this court were to make the
order now requested, it may be difficult for criminal courts to
decline to consider such orders if requested.
[19] When there are competing claims served on the court holding
bail money the best course will generally be to resolve those
claims by way of an inter-pleader order under Rule 43 of the
Rules of Civil Procedure. This was the procedure followed in a
case that was recently before this court. In Ontario (Attorney
General) v. Petit,3 the accused had been released on $50,000 cash
bail. Two creditors of the accused, the Minister of National
Revenue and an insurance company with a compensation order, filed
writs of seizure with the court where the bail money was being
held. After his conviction and sentencing, the accused wrote to
the Crown Law Office asking for his bail money back. As a result
of the competing claims, the Attorney General brought an
application for, and was granted, an order by which the bail
money was paid by way of inter-pleader into the Ontario Court
(General Division). The issue of the validity of the competing
claims was determined at a separate hearing after the affected
parties had a full opportunity to develop a proper record and to
be heard. Although the accused in that case consented to the
interpleader order, there is no reason why this procedure should
not be followed in cases where the person who deposits the bail
money is not consenting.
[20] In any event, I am not prepared to make the order sought
because we have no information about whether there are creditors
of the appellant who have taken proceedings to seize the bail
money.
[21] The appellants argue that it does not matter that there may
be competing claims because those claims are bound to fail. The
bail money, they say, belongs and has always belonged to those
who provided it to them. It was provided solely for the purpose
of being deposited as bail on the understanding that it would be
returned to them after the appellants’ trial. The bail money,
they contend, is immune from the claims of any other creditors.
[22] This is an interesting argument. The effect of the argument
is that those who provide money solely for the purposes of bail
to a third party have a superior claim to all creditors of that
third party for the return of the money; this is in absence of
any security agreement in favour of the persons who provided the
money. There appears to be some limited support for this argument
in Morris v. Kline4 although, in Morris, it is worth noting that
both the individual who supplied the bail money and the
individual who sought to seize it were part of the proceedings.
[23] However, whether or not this argument is one that will
eventually prevail, in my view, is not the question. Assuming
that there are creditors asserting claims to the bail money they
have a right to be heard and to oppose the order that would
eliminate their claims. They have a right to inquire into and
challenge the factual basis upon which the order is sought. The
creditors, other than possibly the mink farm, have not had notice
of this appeal.5 The Latin maxim audi alteram partem is one of
the fundamental components of natural justice and provides that
individuals who are party to a controversy be given sufficient
notice of a hearing and an opportunity to be heard: T.W.U. v.
C.R.T.C.6
[24] I recognize that the appellants and perhaps their relatives
and friend may be required to incur additional legal expense in
persuading another court of the correctness of their argument.
This difficulty would only arise if there are in fact competing
claims to the money. This prospect, however, does not justify an
order preempting the opportunity of those who also claim an
interest in the bail money to be heard. A court hearing the
proceeding in which the issue is eventually decided will have the
authority to make the appropriate cost order.
[25] The appellants also argue that the delay in returning the
bail money that has resulted from the forfeiture orders and this
appeal provides an additional reason for making the order they
now request. They say that if the forfeiture orders had not been
made, there would have been no opportunity for the creditors to
bring proceedings to attempt to seize the bail money. The
suggestion of prejudice in this regard is speculative. In any
event, if the alleged unfairness to the appellants arising from
the delay constitutes a reason for denying an otherwise valid
claim by the appellants’ creditors to the bail money, that issue
should be addressed in a proceeding in which the competing claims
are considered. The court hearing those claims will have the
same authority as this court to make the appropriate order and
will have the advantage of being in possession of all of the
relevant facts.
[26] Finally, the appellants argue that if this court does not
grant the order requested we will be establishing a precedent
that may jeopardize the rights of accused persons to secure bail.
They argue that friends and relatives of accused persons will be
reluctant to provide money for bail if there is a risk that the
money will be exposed to the creditors of the accused. This, it
is argued, may make it difficult for an accused to obtain a pre-
trial release and may have implications under the Charter. This
concern, it seems to me, is largely unfounded. Persons who are
prepared to provide bail for an accused and are concerned about
avoiding the accused’s creditors can either make the appropriate
security arrangements in order that they have a first claim to
the bail money or have the accused propose to the justice that
they be named as sureties and that they deposit the security
directly with the court rather than providing it to the accused.
It is difficult to envision circumstances in which a justice
would reasonably refuse a proposal of this nature.
[27] For the above reasons, I would dismiss the request for the
order directing the bail money be paid to the appellants’
relatives and friend.
Costs and Interest
[28] The appellants seek an order that the costs of this appeal
be paid by the Crown on a solicitor and client basis. This
request is based solely on the argument that the forfeiture order
constituted a violation of the appellants’ rights under ss. 7 and
11(e) of the Charter and that an award for costs for the expense
of rectifying that breach is an appropriate remedy under s. 24(1)
of the Charter.
[29] The appellants argue that the right to “reasonable” bail
must include a guarantee that if one posts bail funds and
complies with the conditions of the bail order, the money will be
returned. The forfeiture order, they say, violated this
guarantee.
[30] I do not find it necessary to decide whether ss. 7 and 11(e)
of the Charter include the right asserted by the appellants nor
whether their rights have been violated. In my view, this is not
a case in which an order for costs against the Crown is
appropriate. I note that the appellants were released from
custody pending their trial. There is no suggestion that the
anticipation of the forfeiture order created difficulties for the
appellants in arranging their pre-trial release. The forfeiture
order was stayed pending this appeal and will now be quashed.
Although the Crown mistakenly sought and obtained an order to
which it was not entitled, there has been no reprehensible
conduct on the part of the Crown, no affront to the authority of
the court, nor any interference with the administration of
justice. I would, therefore, deny the order for costs.
[31] Finally, the appellants ask this court to make an order
directing the Crown to pay interest at the rate prescribed in the
Courts of Justice Act on the bail money for the period from the
date of the forfeiture order, February 22, 1999, until the date
the money is released by the court. Interest is not ordinarily
paid on money deposited as bail. For the same reasons that I
would deny the order for costs, I also deny the appellants’
request for the payment of interest.
Disposition
[32] I would allow the appeal and quash the order of Desotti J.
directing that the money deposited as security for the
appellants’ recognizances be forfeited. I would dismiss the
appellants’ requests for the three additional orders.
Released: January 12, 2000
LASKIN J.A. (dissenting):
[33] I have read the reasons of my colleague O’Connor J.A. I
agree that no costs should be ordered against the Crown and I
agree that no interest should be paid on the bail money. I
disagree with my colleague, however, on the main issue, whether
this court should order that the bail money be repaid to the
individuals who provided it so that the appellants could obtain
their release from custody pending trial. In my view, this court
has the jurisdiction to order that the bail money be returned to
these individuals and it should exercise that jurisdiction in
this unusual case.
[34] The Crown on appeal acknowledges that the trial judge had no
jurisdiction to order the forfeiture of the bail money to satisfy
the restitution order. Once the forfeiture order is set aside,
the question is what is to be done with the money. Although the
individuals who provided the bail money for the appellants were
not sureties and are not parties to this appeal, this court has
jurisdiction to make an order returning the money to them.
[35] Mr. Ruby, counsel for the appellants, submits that this
jurisdiction resides either in the combined operation of s.683(3)
of the Criminal Code7 and s.134(1)(c) of the Courts of Justice
Act8 or under the principle of ex debito justitiae, that is in
accordance with the requirements of justice. I prefer to rely on
the ex debito justitiae principle. Although
s.683(3) provides, broadly, that: “A court of appeal may
exercise, in relation to proceedings in the court, any powers not
mentioned in subsection (1) that may be exercised by the court on
appeals in civil matters.…”, this subsection should be read in
its context. It likely allows the court to exercise powers
incidental to those matters set out in s.683. This, however, is
a sentence appeal, governed by s.687 of the Criminal Code, which
in contrast to s.686(8), does not by its express terms give the
court authority to make “any order, in addition, that justice
requires.” On the other hand, this court does have authority to
order a remedy to which a person is rightfully entitled, ex
debito justitiae. See R. v. Jacobs (1971), 1970 143 (SCC), 2 C.C.C. (2d) 26
(S.C.C.). The Crown on appeal fairly concedes as much.
[36] Moreover, I think that the order sought by the appellants
should be made. The agreed statement of facts shows that the
bail money did not belong to either appellant. Instead, the
money belonged to the appellants’ family and friends. For
convenience, I reproduce the relevant paragraphs of the agreed
statement:
After a bail hearing in March and
April 1997, the Appellants (along with the
other three accused) were released on several
conditions, one of which was a requirement that
$10,000 be deposited with the court on behalf
of each of them. Those funds were provided by
friends and family members on the Appellants’
behalf with the understanding that at the conclusion
of the trial, subject to an application for
estreat of bail, the money would be returned
to each of them. The Appellants complied
with all terms of their interim release.The issue of ownership of the bail
funds was raised at the sentencing hearing in
response to the Respondent’s request that
those funds be forfeited to Eberts Fur Farms
Inc. The Appellants’ evidence, given by the
Appellant, Dodson, at the hearing, was that
the funds deposited on their behalf were not
their own, and had been provided on their
behalf by others.In fact, on behalf of the
Appellant, Ruby, $7800 was deposited by her
friend, Jan Cejka, and $2200 was deposited by
her daughter and son-in-law, Miriam and Jim
Corcoran. On behalf of the Appellant,
Dodson, $10,000 was deposited by her brother
and sister-in-law, Richard and Denise Doral.
The funds were deposited by Cejka, the
Corcorans and the Dorals on the Appellants’
assurance to each of them that they would
fully comply with all of the conditions of
their bail and attend court as required, and
on the understanding that the bail funds
would be returned to Cejka, the Corcorans and
the Dorals once the criminal proceedings were
completed.
[37] Miriam and Jim Corcoran, Jan Cejka, and Richard and Denise
Doral provided the appellants’ bail money for one purpose and on
one condition. The purpose was to secure the appellants’ release
from custody. The condition was that the money would be returned
to these individuals at the end of the criminal proceedings,
provided the appellants satisfied the terms of their bail, which
they did. Why then should the bail money not be returned to its
rightful owners?
[38] I acknowledge that the money was deposited with the court
under s.515(2)(e) of the Criminal Code and that ordinarily bail
money deposited under this paragraph would be returned to the
accused. But this is not an ordinary case. The question of who
should receive the bail money arises before us only because the
Crown requested and the trial judge made an order that the court
had no jurisdiction to make. I have little doubt that but for
this order, the bail money would have been received by the
appellants after the criminal proceedings ended and would have
been returned to their family and friends. I think that in the
interests of justice the court should effect the same result.
[39] My colleague declines to make the order requested by Mr.
Ruby because of his concern that the mink farm, Eberts Fur Farms
Inc. (the beneficiary of the restitution order) or other possible
creditors of the appellants may be prejudiced by being denied an
opportunity to assert a claim to the money. I do not share this
concern. In oral argument, counsel acknowledged that the mink
farm was given notice of this appeal and of the Crown’s position
that the trial judge had no jurisdiction to order the forfeiture
of the bail money in partial satisfaction of the restitution
order. Knowing of the appeal and of the Crown’s position, the
mink farm apparently chose not to participate in these
proceedings or to claim the money. The suggestion that there may
be other creditors of the appellants with a claim to the bail
money is speculative, and indeed, entirely unsupported by the
record. There was no evidence before the trial judge and no
indication by the Crown either at trial or on appeal that any
person, other than the mink farm, was making any claim to the
bail money. Thus, I am not persuaded that repaying the bail
money to those individuals who provided it raises any natural
justice concern.
[40] Moreover, I doubt that Eberts Fur Farms could legitimately
lay claim to this money, which by agreement of the Crown did not
belong to the appellants. I draw comfort from Morris v. Kline
(1922), 1922 579 (QC CS), 68 D.L.R. 222, a decision of the Quebec Superior Court,
cited in Houlden and Morawetz, Bankruptcy and Insolvency Law of
Canada, 3rd ed., (1993) vol. 2, s. J-13. In that case, an
insolvent debtor, who was arrested for defrauding his creditors,
borrowed money which he then deposited with the court as bail to
obtain his release from custody. His trustee seized the money to
satisfy his creditors. Panneton J. held that the seizure was
invalid because the money never belonged to the debtor, the
accused. He wrote at p.223:
the money which the cheque represents never
was the property of the insolvent, and as
the trustee is invested under a voluntary
assignment only with the property of the
assignor at the date of the assignment, it
would [be] a grave injustice to make the
creditors benefit of money which never belonged
to their debtor.
There was no ground for the seizure made and
the action and seizure are dismissed with
costs.
[41] The present case parallels Morris v. Kline, though no one
suggested that the appellants are insolvent. The bail money,
however, does not belong to them, and should be exempt from
potential garnishment at the hands of their creditors.
[42] O’Connor J.A. relies on this court’s recent decision in
Ontario (Attorney General) v. Petit9 for the proposition that the
best way to resolve competing claims to bail money is by an
interpleader order and a subsequent hearing to determine
priority. But Petit was a different case. In Petit, the bail
money belonged to the accused. He had raised it mainly by
selling one of his expensive cars. In the face of competing
claims by two of his creditors, interpleader proceedings were
appropriate. Indeed, the accused consented to the interpleader
order. In the case before us, the bail money does not belong to
the appellants and no competing claims have been asserted.
[43] Further, refusing to make the order sought raises a larger
concern. The bail provisions of the Criminal Code are intended
to ensure that accused will be released pending trial if it is
safe to do so and it is likely that they will appear for their
trial. To further this objective, the amount required for bail
should not be set beyond the means of accused or their sureties.
Gary Trotter – in his valuable text, The Law of Bail in Canada –
calls this a “constitutional imperative”,10 no doubt in reference
to s.11(e) of the Canadian Charter of Rights and Freedoms and the
Supreme Court of Canada’s judgment in R. v. Pearson (1992), 17
C.R. (4th) 1. In practice, as Mr. Trotter recognizes and as the
present case demonstrates, accused persons who are incarcerated
will have difficulty raising money for bail without the
assistance of family and friends.11 Yet, putting bail money
provided by family and friends at risk from claims by an
accused’s creditors creates an impediment to bail. I do not find
persuasive the suggestion that family and friends can avoid this
risk by becoming sureties. They may not want the
responsibilities of a surety or they may be unacceptable to the
court. Nor do I think that their entitlement to bail money that
they have provided should turn on whether they have made
appropriate security arrangements.
[44] Thus, the larger concern is that refusing the order sought
seems inconsistent with the underlying objective of the bail
provisions of the Code. This concern is an added reason for
making the order requested in this case. How this concern
affects the ordinary situation when conditions of bail have been
satisfied and the money deposited by an accused is to be returned
by the trial court, I leave for a case when it arises directly.
[45] I would grant leave to appeal sentence and I would allow the
sentence appeal by setting aside the forfeiture order and
ordering the release of the bail funds being held by the Ontario
Court in Chatham as follows:
Funds being held on behalf of the appellant, Hilma Ruby, be
released:
to Miriam and Jim Corcoran: $ 2,200
to Jan Cejka: $ 7,800
Funds being held on behalf of the appellant, Patricia
Dodson, be released:
to Edward and Denise Doral: $10,000.
Signed: “John Laskin J.A.”
1 Gary Trotter, The Law of Bail in Canada, 2nd Ed. (Carswell,
1999), at p. 246.
2 Trotter, The Law of Bail in Canada, supra, p. 283.
3 (1999), 1999 3245 (ON CA), 43 O.R. (3d) 645.
4 (1922), 1922 579 (QC CS), 68 D.L.R. 222 (Que. S.C.).
5 The mink farm was provided with a notice of appeal but not
notice of the date of the hearing of the argument.
6 1995 102 (SCC), [1995] 2 S.C.R. 781.
7 R.S.C. 1985, c. C-46.
9 (1999), 1999 3245 (ON CA), 43 O.R. (3d) 645 (C.A.).
10 Trotter, The Law of Bail in Canada, 2nd ed. (1999), at p. 252.
11 supra, at pp. 248-49.
