ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 155/2014
DATE: 2014 12 09
B E T W E E N:
HER MAJESTY THE QUEEN
ANDREA ESSON, for the Applicant/Crown
Applicant
- and -
SHAWN OLSEN (accused) and SCOTT MCKAY (surety)
No one appears for Shawn Olsen
Scott McKay on his own behalf
Respondents
REASONS FOR JUDGMENT
DURNO J.
[1] On October 3, 2013, Shawn Olsen was released from custody on an assault charge after he entered a recognizance in the amount of $5,000 including a $2500 cash deposit with one surety, Scott McKay. While the receipt was issued in the name of Shawn Olsen, Scott McKay deposited his own money to secure Olsen’s release.
[2] Olsen was ordered to attend court on October 25, 2013.
[3] On October 21, 2013, Scott McKay applied to be relieved as the surety.
[4] On October 25, 2013, his first appearance out of custody, Olsen failed to appear and the bail was noted for estreat.
[5] At the estreat hearing, the Crown sought estreatment in the full amount, $2500 cash and $2500 no deposit in relation to Shawn Olsen who had not been arrested. Mr. McKay as the surety received a registered letter to attend and sought the return of his $2500 cash deposit.
[6] The Crown agrees that Mr. McKay has shown cause why he should not be required to forfeit any amount of his $2500 no-deposit obligation under the recognizance. However, while the Crown is sympathetic to Mr. McKay’s position, Ms. Esson submits that given the wording of the recognizance, the wording of the receipt Mr. McKay received when he deposited the money and the reasons of the justice of the peace, the $2500 cash deposit cannot be returned to Mr. McKay and must be ordered forfeited.
[7] For the following reasons, I agree with the Crown.
The Bail Hearing
[8] At the bail hearing, after he testified that Olsen was ordinarily resident in New Brunswick, Mr. McKay was asked by the Crown in cross-examination:
Q. … Now if in fact that’s the case and there was a cash bail, are you prepared to put that $2500 down as cash?
A. If I need to.
[9] In his Reasons for releasing Shawn Olsen the Justice of the Peace said:
So because you are a non-resident or a very recent new resident, perhaps, there will be a cash component to the bail. The full amount of the bail will be $5000 but $2500 will be no deposit and that is what Mr. McKay is going to be responsible for, no deposit, that is his pledge or promise. Twenty-five hundred dollars is going to be cash, a cash component that will have to be filed with the court and held in the court’s custody until this matter is completed. (emphasis added)
… And, sir, if you do not listen to these conditions, you will be rearrested, sir, and the money that is being pledged for you will be kept by the court and the money that is particularly pledged by Mr. McKay will be requested of him for payment, all right? (emphasis added)
[10] Since Mr. McKay knew how much to get from the bank and had testified, I infer he was present in court when the above noted comments were made.
The Application to be Relieved as Surety
[11] Olsen was required to live with the surety and be subject to a 9:00 p.m. curfew pursuant to the release order. He did not return to Mr. McKay’s home on Saturday, October 19, 2013 and at roughly 9:10 p.m., Mr. McKay contacted police to tell them of the breach. He was told to come to the Davis Courthouse on Monday, October 21, 2013 to apply to be relieved as a surety. Mr. McKay came to the courthouse and met with a staff member after waiting for three hours in an attempt to withdraw as a surety. As a result of documentation obtained after the arguments, it has been confirmed that Mr. McKay did complete his application to be relieved as a surety.
[12] Mr. McKay states that the $2500 cash bail was his money. When the bail order was set, he went to a bank machine, withdrew the funds from his account and deposited the money himself before Mr. Olsen was released. The receipt he received notes:
Received from Shawn Olsen 13-12255, a payment made by cash for the sum of $2500.
[13] It is not disputed that Mr. McKay believed the money would be returned to him if Olsen complied with the release terms, that he did not know the money was deposited in Olsen’s name and that he was never told that he should have obtained a direction signed by Olsen with regards to the money. He believes Olsen is now in New Brunswick.
The Wording of the Recognizance
[14] The recognizance that Mr. Olsen and Mr. McKay signed states as follows:
BE IT REMEMBERED that on this day the persons named in the following schedule personally came before me and severally acknowledged themselves to owe to Her Majesty the Queen the several amounts set opposite their respective names, namely:
Accused: Shawn Olsen ….. $5,000 total, $2500 cash
Surety: Scott McKay ….. $2500, no deposit
To be made and levied of their several goods and chattels, lands and tenements, respectively, to the use of Her Majesty the Queen, if the said accused fails in any of the conditions hereunder written.
[15] Sections 763 and 764 of the Criminal Code are set out on the back of the recognizance above where Shawn Olsen and Scott McKay signed. Section 763 clarifies that the release orders continue to apply if the case is adjourned or the location of the proceedings is changed. Section 764 clarifies that the recognizance continues in effect after a finding of guilt and conviction where the offender remains on bail between the verdict and sentence.
The Legislation
[16] The following Criminal Code provisions address cash deposits on judicial interim release orders:
[17] Section 515(2)(d) and (e) states:
(d) with the consent of the prosecutor, on his entering into a recognizance before the justice, without sureties, in such amount and with such conditions, if any, as the justice directs and on his depositing with the justice such sum of money or other valuable security as the justice directs; or
(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 on his depositing with the justice such sum of money or other valuable security as the justice directs. (emphasis added)
[18] Section 770 states:
(1) Where, in proceedings to which this Act applies, a person who is bound by recognizance does not comply with a condition of the recognizance, a court, justice or provincial court judge having knowledge of the facts shall endorse or cause to be endorsed on the recognizance a certificate in Form 33 setting out
(a) the nature of the default;
(b) the reason for the default, if it is known;
(c) whether the ends of justice have been defeated or delayed by reason of the default; and
(d) the names and addresses of the principal and sureties.
Transmission to clerk of court
(2) A recognizance that has been endorsed pursuant to subsection (1) shall be sent to the clerk of the court and shall be kept by him with the records of the court.
Certificate is evidence
(3) A certificate that has been endorsed on a recognizance pursuant to subsection (1) is evidence of the default to which it relates.
Transmission of deposit
(4) Where, in proceedings to which this section applies, the principal or surety has deposited money as security for the performance of a condition of a recognizance, that money shall be sent to the clerk of the court with the defaulted recognizance, to be dealt with in accordance with this Part. (emphasis added)
[19] Section 771(4) states:
(4) Where a deposit has been made by a person against whom an order for forfeiture of a recognizance has been made, no writ of fieri facias shall issue, but the amount of the deposit shall be transferred by the person who has custody of it to the person who is entitled by law to receive it.
Analysis
The Order in Relation to Shawn Olsen
[20] Forfeiture is ordered against Shawn Olsen in the amount of the $2500, the no deposit segment of his recognizance. He has never been arrested on the outstanding warrant. He was required to live with his surety and notice of the estreat hearing was sent by registered mail to that address. He has never appeared on the estreat application and has never been arrested on the bench warrant.
The Order in Relation to Scott McKay's no-deposit $2500
[21] The Crown does not seek an order in relation to the surety's no-deposit $2500 pledge and no order is made.
Can an order be made directing all or part of the $2500 cash deposit be returned to Scott McKay?
[22] Whether to grant forfeiture is a matter in the discretion of the presiding judge. The options regarding the $2500 cash deposit are to order it all forfeited, make no order in which case it presumably remains forever in the provincial government account where it is now kept or to order all or part of it back to Mr. McKay. In making that determination, the following questions arise:
Does Scott McKay have standing to seek the return of the cash deposit?
[23] Where persons who are not sureties have provided cash for accused persons to be released pending their trial, or where another person held an assignment of the cash bail, the issue of their standing to appear at the estreat hearing arises. The argument against their having standing is that section 771(1)(b) provides that notice of the estreat hearing be sent by registered mail or be served on each accused and surety named in the recognizance. Section 771(2) allows the judge, after notice has been given, and giving the parties an opportunity to be heard, in his discretion to grant or refuse the application and make any order with respect to the forfeiture that he considers proper. Accordingly, anyone not named in the recognizance has no standing. R. v. Cochrane (1981), 1981 3341 (SK QB), 60 C.C.C. (2d) 329 (Sask. Dist. Ct.), and R. v. Frenette (1982), 1982 5528 (BC SC), 30 C.R. (3d) 123 (B.C. Co. Ct.) Trotter; The Law of Bail in Canada, Third Edition, Carswell, Toronto, at 13-12.2. Contra Green v. R. (1999), 1972 1343 (ON SC), 9 C.C.C. (2d) 13 (Ont. H.C.), R. v. Boughner, [1999] O.J. No. 3769 (S.C.J.)
[24] While I agree with those cases, here, Scott McKay is in a different position because he is a surety with standing. He has standing to show cause why the forfeiture should not be ordered in relation to the cash bail.
Must a Cash Deposit always be held in the name of the Accused Person?
[25] Section 515(2) states that “… and on his depositing with the justice such sum of money or other valuable security as the justice directs." Read in isolation, that subsection supports the conclusion that all money deposited by way of a cash deposit is held in the name of the accused person and not that of the party who owned, personally deposited and/or provided the money. Absent a signed direction from the accused person filed with the court directing the funds be paid to another person the funds are regarded as those of the accused.
[26] Section 515(2) however should not be interpreted in isolation without considering other sections of the Criminal Code, caselaw and the practicalities of how cash bails regularly come to be deposited. First, section 770(4) provides that where the "principal or surety has deposited money as security for the performance of a condition of a recognizance, the money shall be sent to the clerk of the court with the defaulted recognizance" after a Certificate of Default has been signed. (emphasis added) Accordingly, the Criminal Code contemplates cash being deposited by a surety.
[27] Second, in R. v. Dodson (2000), 2000 5623 (ON CA), 142 C.C.C. (3d) 134, the majority found that either the accused or the surety can be ordered to deposit the money and that there was no provision for a deposit of money by anyone other than the accused or the surety. At para. 11.
[28] In Dodson, non-surety family members lent the bail money to the accused. The Court of Appeal held that the lenders should have had the accused propose to the justice that the lenders be named as sureties and that they deposit the money directly with the court rather than providing it to the accused. The Court held it would be difficult to envision circumstances in which a justice would reasonably refuse such a request. at para. 26.
[29] Finally, in Dodson, the Court noted that there were no provisions in the Criminal Code dealing with the release of deposited money or any indication "to whom bail money should be paid when the conditions in them have been satisfied." However, it seemed obvious that in the normal course the money would be returned to either the accused, to the surety who deposited it or to a person to whom the funds had been assigned.
[30] In R. v. Huneault, [2000] O.J. No. 3417 (S.C.J.), Pardu J. granted standing to make a claim for the return of a cash deposit to a surety who had personally deposited the cash bail. Huneault had failed to appear. His counsel had an assignment of the funds from the accused. The recognizance named the accused with a $2500 cash deposit noted and the surety to be approved. The surety's name was added to the recognizance without an amount of money noted, cash or no deposit. In those circumstances, Pardu J. held that adding the surety's name resulted in him being responsible as "security for compliance with the recognizance and he risked losing the funds if there was a breach." A surety without any financial obligation could hardly be considered as being under an obligation. At the very least the funds were deposited jointly by the accused and the surety.
[31] Ultimately, Her Honour found the surety had been less than diligent in supervising the accused and did not order the funds returned to the surety. Defence counsel could be in no better position than the accused and the funds were forfeited.
[32] Considering neither Dodson nor Huneault have ever been disagreed with on this issue and section 770(4), a surety can be ordered to deposit money and the funds remain the property of the surety in his or her name. That is what should have occurred here.
[33] In addition, from a practical perspective, unless the accused person was arrested with the required amount of cash lawfully in his or her possession, the funds have to be deposited by someone else before their release. What occurred in this case, I would strongly suspect is the far more frequent event - the surety or someone other than the accused actually deposits the money before the accused is released. It may be the accused person’s money the other person could access or it may be someone else’s money.
[34] It has also been suggested that those who deposit funds should not be able to recoup their money on a default because it comes "perilously close to offending section 139 of the Criminal Code" by indemnifying a surety. (Trotter, Gary T., The Law of Bail in Canada, looseleaf, 3rd ed. Toronto, Carswell, 2012)
[35] Section 139 (1) makes it an offence to:
…willfully attempts in any manner to obstruct, pervert or defeat the course of justice in a judicial proceeding,
(a) by indemnifying or agreeing to indemnify a surety, in any way and either in whole or in part, or
(b) where he is a surety, by accepting or agreeing to accept a fee or any form of indemnity whether in whole or in part from or in respect of a person who is released or is to be released from custody…
[36] I agree if the person depositing the money was not a surety or if there was a presumption that the total cash deposit was to be returned to the person who deposited the money if there was a default. However, where that person is the surety or if a non-surety depositor of the money was given standing on the estreat hearing, the concerns for conduct similar to that prohibited in section 139 do not occur. In both situations, whether all or part of the funds should be returned after a default would be determined at the estreat hearing. There is no “right” to the return of all the funds upon a default. As Rosenberg J.A. noted in Horvath, “the surety’s due diligence is merely one factor to take into account and in many cases will have no impact on the decision.”
[37] There are also valid concerns about permitting lenders and creditors to seek relief because it would distort the purposes of a cash bail being required. (Trotter, p. 13-13) No doubt, if the lender or creditor were able to recover their money even when the offender defaults, knowledge of that fact by the accused would undermine the incentive to comply with release orders since lenders would be reimbursed in any event.
[38] However, the cases that have found a lawyer with a direction regarding the funds being returned to counsel or a person who lent money to the accused where the funds were deposited in the accused’s name, assuming they were granted standing, address this issue. The distinction is in whose name the money is pledged. If it is the accused, the other person stands in no better position than the defaulting accused. If the funds are in the name of a surety or a non-surety lender who is granted standing, whether the cash bail is forfeited is determined by examining a series of factors, including, but no limited to the surety’s conduct. Horvath, at para. 51. Even with sureties, simply because he or she did everything they could have done does not guarantee all of the funds will be returned to them.
[39] Accordingly, I find that where funds are ordered deposited as part of a recognizance, the money can be deposited by or on behalf of the accused in his or her name or by or on behalf of a surety in the surety’s name. Where the funds are deposited in the name of a surety, if there is no default the funds must be returned to the surety and not the accused unless there is a signed direction to that effect.
Can the Cash Deposit be Returned to Mr. McKay?
[40] The last question is the most problematic and challenging; can Mr. McKay get his $2500 back? He personally went to a bank machine after the bail was set and deposited the funds with the court. Unlike some reported cases, he is not suggesting that the money was a gift or loan to Olsen. Mr. McKay always believed it was his money on deposit in his name. It is not disputed that when he deposited the money, he was never told that the money would be held in Shawn Olsen's name. The question he was asked in cross-examination at the bail hearing supports that conclusion.
[41] Mr. McKay did everything that was required as a surety, including closely monitoring Shawn Olsen, contacting police when he was ten minutes late arriving home, and attending court well before the next court date to apply to be relieved as a surety.
[42] However, there are other considerations that precluded me from ordering the funds returned to him. First, as the Court of Appeal noted in Horvath, at paragraph 50, sureties rarely receive independent legal advice and may have a very limited understanding of the extent of their obligations. While portions of the recognizance are unintelligible without legal advice, the recognizance is the basis upon which the Crown’s application is based. It clearly states the cash bail is in relation to Olsen and not the surety.
[43] Second, in the reasons for releasing Olsen the justice of the peace made it clear that Mr. McKay’s only liability was a no deposit $2500. The cash bail was Olsen’s responsibility. The recognizance accurately reflects what the justice of the peace ordered. It cannot be re-worded to what it might or should have been.
[44] Finally, the receipt shows the money was in Shawn Olsen’s name, not Mr. McKay’s.
[45] This is a most unfortunate result for Mr. McKay. Regrettably, the Court of Appeal judgment in Dodson was not addressed at the bail hearing. Had it been raised, the order could have directed the funds be deposited by the surety and in the surety’s name.
[46] However, the fact a surety acted properly and in accordance with his or her obligations is but one factor to consider as the Court of Appeal noted in Horvath. The Court of Appeal provided a non-exhaustive list of factors including the amount of the recognizance, the circumstances under which the surety entered the recognizance, especially whether there was duress or coercion, the surety’s diligence, the surety’s means, any significant change in the surety’s financial position after the recognizance was entered, especially after the breach and the surety’s post-breach conduct, especially attempts to assist authorities in locating the accused, and the relationship between the surety and the accused. At para. 51. I would add the Crown’s position on the show cause hearing is also a relevant consideration. Had the recognizance been ordered as permitted by the Court of Appeal, all of the factors noted and perhaps others would have to be considered as well as the surety’s and the Crown’s submissions.
[47] While regrettably of no assistance to Mr. McKay, two recommendations emerge from this application to assist sureties going forward. First, if a non-surety is depositing money as cash bail, he or she should be told on the record in court that the money is not being deposited in their name and absent a clear written direction filed with the court, the money will be returned to the accused when the case is completed or a new order entered, and not to the person who deposits the money, unless there is a breach and the bail noted for estreat.
[48] Second, where someone other than the accused person is going to provide the cash bail, the first option should be that they are a surety with the cash funds deposited in their name, not the accused. This issue should be raised by counsel appearing on the bail hearing and/or the justice of the peace of judge on the record in court.
Conclusion
[49] Order against Shawn Olsen for $2500 and the $2500 cash deposit is forfeited. No order in relation to Scott McKay.
DURNO J.
Released: December 9, 2014
COURT FILE NO.: 155/2014
DATE: 2014 12 09
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN
Applicant
- and -
SHAWN OLSEN (accused) and SCOTT MCKAY (surety)
Respondents
REASONS FOR JUDGMENT
DURNO J.
Released: December 9, 2014