Estate agents –– Trade Descriptions Act 1968 –– “Fly boarding” –– Penalty –– Whether fine of £22,500 plus costs appropriate penalty for illegal “fly boarding” –– Whether fines of £100 per offence generally imposed by magistrates too low
The appellant was a company engaged in estate agency. It was convicted of three offences contrary to section 13 of the Trade Descriptions Act 1968. The prosecution’s case was that the defendant had been engaged in “fly boarding”, that is erecting “sold” signs on properties for which it had received no instructions or authority from the owners of the properties. Following a trial in the crown court, the appellant company was fined £7,500 on each of the three offences. It appealed against the decision, contending that fines are usually about £100 per offence, and rarely above £1,000.
Held: The appeal was allowed in part. The fines were reduced to £2,000 per offence. The penalties that magistrates are imposing for this class of offence are too low and should be increased.
No cases were referred to in this report.
This was an appeal by Docklands Estates Ltd from sentence in Southwark Crown Court on offences under the Trade Descriptions Act 1968.
John McLinden and Andrew Bodnar (instructed by Forbes & Co, of Hornchurch) appeared for the appellant; Andrew Bird (instructed by the solicitor to Tower Hamlets London Borough Council) represented the Crown.
Giving the judgment of the court, Lord Woolf LCJ said: On 3 August 1999, in Southwark Crown Court, the appellant company was convicted of three offences of giving a false indication that services were supplied, contrary to section 13 of the Trade Descriptions Act 1968. It was fined £7,500 on each count to be paid within 28 days, and ordered to pay £5,203 towards the costs of the prosecution, also to be paid within 28 days. The total fine was £22,500, plus costs. The prosecution offered no evidence on a fourth count, and a not guilty verdict was entered. Fifty-two days after the time for appealing had expired, counsel acting on behalf of the appellant company reconsidered the question of whether there should be an appeal against conviction. Having regard to an issue that had arisen in the course of the proceedings, he considered that there would be a prospect of leave to appeal against conviction being given. The single judge did not grant an extension of time or leave to appeal against conviction. Counsel has this morning renewed that application.
The time limits within which to appeal are set down with the object that they should be observed. It is very important that any appeal against conviction is conducted with due expedition. This court tries very hard to ensure that the time that elapses before an appeal is heard is kept to a minimum. If an application has to be heard for an extension of time, that is another task that the court has to perform, and, thus, there is a consequential prejudicial effect upon other appellants who wish to pursue their appeal. It is important that time limits are not disregarded. It is equally important that justice is done in each individual case. In considering whether time should be extended, the court will take into account whether injustice may be done if time is not extended. For that reason, we heard counsel shortly this morning. However, we have also read the papers, and we consider that there is no question of any meritorious appeal against conviction being able to be advanced in this case. In any event, having regard to the delay that has occurred and the explanation that has been put forward, it would not be right to extend time. Therefore, we are concerned this morning only with the question of the appropriateness of the fines.
The hearing was very extensive in the court below. That is illustrated by the fact that there are four volumes of transcripts of evidence. But the facts are extremely simple. The appellant company was carrying on business as an estate agent. It was incorporated on 29 August 1993 and had been established for about six years. It was very much a family business. Pauline Davey was its shareholder and director. Her children were involved with the company.
The prosecution’s case was that the company had been improperly engaging in “fly boarding”, that is erecting “Sold” signs on properties in Docklands for which it had received no instructions and for which it did not have authority from the owners of the properties to erect the signs. At first sight, this may not seem to be one of the most serious offences. Certainly, in comparison with the offences that come before this court that is true. But the improper erection of such signs is a nuisance of significant dimensions. As the material placed before this court shows, local authorities do not always prosecute when they detect these offences. Some local authorities regard it as not being sufficiently important to do so. It is unsightly, but there is a second aspect that is more serious. The erection of “fly boards” implies that a business has successfully sold the property. That can create a false impression, giving the public confidence in that company, which is not justified by its business. Furthermore, other companies that carry on their business honestly are placed at a disadvantage.
In this case, there was no justification for the signs being erected. The company’s case was that it had not erected the signs; someone else had done it (presumably to damage its reputation). The jury rejected that account.
One of the witnesses who gave evidence on behalf of the appellant was Mr Magnus Davey. He indicated that the company dealt only with residential properties in the Docklands area. We have been told by counsel this morning that the sort of values of the properties with which it is concerned are in the region of about £150,000, for which it would charge commission of 2%. It can readily be seen the sort of profit that is made by obtaining instructions that otherwise would not be obtained, and then selling a property as a result of advertising its business in a way that was not justified. The appellant company is in a modest way of business. It is solvent. According to the latest accounts, which were produced in the court below, it has £77,000 unincumbered assets. The profits of the company have been, for previous years, in the region of
Counsel relied upon the guidance provided by the provisions of the Criminal Justice Act 1991. He correctly submits that this applies to companies as well as to individuals. Section 18(3) indicates that, in fixing the amount of any fine to be imposed upon an offender, whether an individual or a corporate body, the court shall take into account the circumstances of the case, including, among other things, the financial circumstances of the offender so far as they are known or appear to the court.
In addition to relying upon the means of the appellant, counsel has gone to very considerable trouble to ascertain, in so far as this is possible, the range of penalties that are imposed for these offences and for similar offences under the Town and Country Planning Act. From the material that is placed before this court, it appears that frequently in the magistrates’ courts fines of £100 are imposed in relation to each offence. It is difficult to find any case where a penalty in excess of £1,000 was imposed. Upon the basis of that material, counsel submits that the penalties imposed by the judge in this case are wholly out of line. Certainly, they appear to be out of line with the penalties imposed in the cases of which we have been given information, but it will be appreciated that cases of this nature rarely come before this court. There is very little guidance available as to the appropriate penalty. Some assistance is given by the statute that creates the offence setting out the penalty for the offences that we are considering here. If the case had been dealt with summarily before the magistrates’ court, the maximum penalty under section 18 of the Trade Descriptions Act 1968 would be £5,000. However, the appellant company elected to go to the Crown Court. The powers of the Crown Court are without restriction; they include imprisonment as well as a fine. No one could suggest in this case that imprisonment would be in any way appropriate, even if the defendant were an individual. The appellant company has no previous convictions. However, the sort of fines of which we have been told seem to us to be wholly inappropriate for a commercial crime. The offences were committed because it was thought by the dishonest appellant estate agent that it would benefit from it and would obtain extra business. We have indicated the sort of commissions that the company could earn.
If fines are to be effective, they must be realistic. The levels we have heard about are not realistic. It seems to us that what is appropriate for this offence in these circumstances, where the matter was contested and guilt was not accepted, was a fine of £2,000 for each of the three offences. That will reduce the total fine to £6,000. Counsel persuaded us to reduce the fine below the sum that we originally had in mind. To that extent, his advocacy was successful. However, in seeking to suggest that we should reduce it to the sort of level imposed by the magistrates upon the information that he provided, he was wholly unsuccessful. We hope that a loud and clear message will go out to magistrates’ courts that the penalties that they are imposing for this class of offence are too low and should be increased to the extent that has been indicated.
To that extent this appeal is allowed.
Appeal allowed in part.
