What Exactly is ‘Released by Court Order’?
‘Released by court order’ refers to a situation where the court agrees to temporarily suspend a driver’s license suspension pending an appeal. The general idea is the equivalent of an automatic stay, which means that something has been put on hold by the court pending a final ruling on the case. This wording is often seen in traffic cases where the driver’s license has been suspended and they want to drive (usually for work) while their case is being resolved. If the court orders a suspension, this means that driving privileges are suspended and you cannot drive legally until the suspension is over or is stayed by the court.
Generally , you would only see this type of phrase on a legal aid for a traffic offense and it would be one of the duties and responsibilities of the driver: to report any convictions to the division of motor vehicles. This allows the driver to maintain their license to drive while they wait for their driving record to change due to a conviction. Some people think that "released by court order" means that they have been let off the hook entirely for the situation. However, this is not the case. Instead, it simply means that the matter is not immediately enforced. Over time, you will get new letters from the DMV notifying you of your status and whether or not you are back on the roads legally. Anyone with a suspended license would do well to seek the advice of an attorney specializing in their area so that they can fend off future situations when possible.
Issuance of a Release Order by Courts
Courts possess inherent authority to release property from a security interest or mortgage despite terms in a security agreement preventing the post-petition use of the property. The authority to enter an order releasing property is rooted in 11 U.S.C. § 105(a), which vests bankruptcy courts with very broad power to effectuate the provisions of the Bankruptcy Code. Because this Order might be inconsistent with the terms of a secured debt instrument, it is wise to provide notice to the secured creditor and any other party to the agreement. Moreover, some bankruptcy courts would require a hearing for any release order.
Though a release order can only be issued to the extent the request is necessary in the "exercise of the court’s equitable powers," there are a number of factors a court will consider in deciding whether to issue such an order. Generally, courts will consider the following:
- The creditor received adequate notice of the relevant hearing;
- The potential consequences if the order is not entered;
- The extent to which the debtor enrolled in the transaction, rather than the creditor or third party engaging in the transaction;
- The extent to which the creditor’s position was secure prior to the current transactions;
- The extent to which the creditor was disadvantaged in negotiations;
- Whether an order has been entered in a similar situation and the outcome of that proceeding;
- The length of time the creditor is to be disadvantaged by the requested release and the consequences to the debtor if the order is denied;
- The extent of the prejudice the creditor engages in by permitting the debtor to consummate the transaction; and
- Whether the creditor objected, how long it waited to object, and what evidence was available at the time it did object.
Different Types of Releases Court Can Issue
Most commonly, when one speaks of a release by order of the court, the topic is the release following an arrest and subsequent bail hearings. Since police officers are given the authority to arrest and charge individuals, as provided by statute, they can only hold the accused to the extent of the applicable bail schedule or an actual hearing in front of a judge. Therefore, an accused who has been brought to jail (even in egregious situations involving a warrant for prior criminal acts) is released after payment of the bail amount (or whatever conditions of probation have been ordered by the court). This is referred to as a "bail" release.
There are other types of releases by order of the court, which are not as commonly discussed. If, as the reader has probably surmised, the facts complicate the legal analysis, it is due to those complications that the typical situation is so ubiquitous. Thus, if one is simply charged with a non-violent crime (and not a violent felony) that is not punishable by death or life imprisonment, the accused will be released from custody by order of the court following a bail hearing. If the crime is punished less severely or not at all, the alleged defendant may be released on his or her own recognizance, and no further bail hearing is required.
When the charges against an individual are punishable by death or life imprisonment (Misdemeanor, Felony, Wobbler, Sexual Offender), for example, the court may require a higher degree of bonding (i.e., bail) or may impose additional or differing conditions of release. This is referred to as a "parole" release.
Finally, where court rules or procedures have not been followed, and the prosecution has been denied a hearing on the issues (for example, in a Motion to Withdraw or Suppress) or where the prosecution fails to provide adequate proof on its case, such that a jury must be instructed to enter a verdict of not guilty, the accused is released, by order of the court. This is typically referred to as a "release due to procedural error," or "release due to lack of proof."
Effect of Court-Ordered Release on Individuals
Individuals granted a release by court order can benefit from a less-stigmatizing decision than their counterparts released by a police service. However, this does not change the reality of the fact that the issues that led to an arrest or charge and thus this application are still the same, and may be even more present or likely due to the charges being disclosed on their record.
Legal Effects
Depending on the nature of the activity, it may be a serious offense and result in a significant record which is difficult to obtain a pardon for. However, in many instances, a simple assault or theft charge could mean a significant record which will be disclosed to a potential employer or to the Canadian Police Information Centre. In fact, some employers – especially the Federal government require a clean record before offering employment. A travel visa may also become difficult to obtain with a record of any type.
Social Effects
The stigma of a record means that anyone who is ‘outed’ as having a contact with the criminal justice system may become the subject of ridicule or scorn. This social stigma can be particularly damaging to youth and young adults , who may continue to suffer from the effects of this ridicule for years to come.
Personal Effects
Although the ability to apply for an expungement or a pardon may allow a person to clear their record, the events which have led to that record often remain with that individual for life. The scars of the experience can follow an individual indefinitely, forcing them to live under a cloud of concern that is difficult to shake. For some people, the experience is very freeing, and allows them the opportunity to highlight a problem area and to address it. For others, the experience is traumatic and shifts their view of themselves and their own worth. In both cases, the scars can remain for a lifetime and impact their lives well into the future.
In all cases, although a court-ordered release can provide an individual with much needed closure and hope for the future, the record itself and experience may well be with them for life.
Legal Implications of Breaking a Court Release Order
When an individual received a mandatory release from a lengthy prison sentence pursuant to a court-mandated order, that order becomes the law of the case as his or her term of confinement. A violation of the mandatory release conditions may subject the individual to further confinement.
Mandatory release occurs under G.S. 15A-1371 and G.S. 15A-1373. Under G.S. 15A-1371, the individual must be granted a review by the Post-Release Supervision and Parole Commission after serving the period of confinement except for those convicted under the Fair Sentencing Act, G.S. 15A-1340.13 and G.S. 15A-1354. Subsequent reviews of the non-committed individuals’ conditions are conducted by the Commission pursuant to G.S. 15A-1371(f) every two years based on the original review. G.S. 15A-1373 applies to those convicted under the Fair Sentencing Act who are reviewed and allowed a mandatory release under G.S. 15A-1371 as the committed individuals’ review is done every 9 months. The Commission notifies the individual of his or her mandatory release date. The Commission also notifies the individual of any conditions that he or she will need to comply with as part of the mandatory release. Any breach of the conditions provided by the Commission could potentially result in reincarceration and further confinement under G.S. 15A-1371(g) and G.S. 15A-1373.
G.S. 15A-1371(g) states that the maximum term of additional incarceration is 90 days (120 days for 2nd degree murder) and is based on the severity of the non-compliance violation. A subsequent review by the Commission is to be scheduled thereafter, at which time a determination to sanction further incarceration is made by the Commission. G.S. 15A-1373 states that if the individual violates the conditions of the release, a warrant may be issued for their arrest upon showing of probable cause. An arrest for non-compliance will result in the individual’s bonding into a secure facility until the subsequent review hearing by the Commission. Upon a finding that the individual has willfully violated a reasoned condition of pre-release supervision, the Commission may continue the hearing to determine if the revocation of the original term of incarceration with an additional confinement of a period of six months is appropriate or whether a more severe sanction is warranted. If the Commission finds that further confinement is warranted, the Commission will also determine and announce the total sentence credit earned for pre-release and may grant a limited credit for time spent in post-release confinement for those individuals who otherwise would have been eligible for parole release under the law in effect at the time of their sentence. A violation of a special condition of the pre-release supervision may result a revocation of up to 90 days (120 days for those serving life sentences for 2nd degree murder).
Case Law and Recent Examples
Several recent precedents exist in which a corporation has been released by court order from a competition clause. The following are four examples.
- Saghian v Architectural Construction Ltd [2019] NSWSC 1280. Saghian was the managing director of Barossa Holdings in addition to being a substantial shareholder and the biggest creditor of Architectural Construction ("AC"). He signed a three-year restraint clause in favour of AC when resigning his position in AC. Paragraph 4(d) of the decision held that "the Court made orders releasing Mr Saghian from the restraint (although not without cost). In particular, the Court held that it was appropriate for the Court to release Mr Saghian from the restraint despite its finding that AC’s legitimate business interests were deserving of protection".
- Genesis Resources Limited v Masefield SC [2018] NSWSC 342. This case involved an individual, Masefield, who had an 18 month restraint and was the general manager of both Genesis Resources Limited and Cape Coal. Masefield resigned from Cape Coal but not from Genesis Resources and was obliged to comply with the restraint provisions whilst remaining under contract . Part 12 of the judgement states "The Court found that the restraint was enforceable against Mr Masefield, but that it should be released on terms because he would suffer a significant detriment from its enforcement and no compensation was payable".
- Thomas v 0179 Realty Investment [2017] NSWSC 1428. In this case, Thomas was released from a three-year restraint. Paragraph 86 of the decision states "In any event, the Court considered that the restraint should be enforced for the balance of the restraint period, but allowed the plaintiff to identify a job which it considered was not competitive to the defendant and to work in that role".
- Fonsha v Myrealestate International [2017] NSWSC 1446. Fonsha was released from a 2 ½ year restraint clause. Paragraphs 60-64 of the decision outline the findings. The High Court decision of R v Nelson [1988] HCA 43 also indicated that "a contractual restraint should be read as subject to an implied term that it will not be enforced if, despite its apparent scope, it will operate against the public interest because to do so would result in hardship and injustice not compensable by damages to the party in whose favour it was given".