Breach of Planning Enforcement notice Town and Country Planning Act 1990

Breach of Planning Enforcement notice Town and Country Planning Act 1990

Many Defendants are unaware that an order under the Proceeds of Crime Act 2002 may be made if they are convicted of ‘regulatory’ offences such as those under s179 of the Town and Country Planning Act 2002. They should be.

Local government lawyers are not so unaware. The Proceed of Crime Act 2002 (POCA) can be used as a method of raising funds for their departments. In fact, under the Crime Incentivisation Scheme a Local Authority may receive up to 37.5% of the total amount confiscated under the Proceeds of Crime Act. It has also been specified that the monies received should be used to reinvest into departments that deal with criminal breaches and not into the overall local government fund. In practice this means that a successful POCA case can lead to a large increase in the budgets of the very people who make decisions on whether prosecutions and POCA proceedings should be instituted. Many see this as a clear conflict of interest for prosecutors and in recent times commentators have seen a marked increase in prosecutions of those with ‘deep pockets’ or those who have a clear POCA case behind them in circumstances where other, poorer, defendants may not be prosecuted or may to face enforcement action.

POCA orders can dwarf financial penalties. For example, in a recent case I am involved in the London Borough of Newham is seeking a confiscation order of £4,3000,000 for breaches of planning regulations where the rental income gained in breach of the notice was only £22,000. Another case I am aware of although did not act in involved the illegal use of a number of properties as flats; Waltham Forest Council commenced a prosecution. The fine ordered by the Court was £74,000 however the POCA order was £217,000 nearly triple the level of the fine. Potentially 37.5% of this would be a very handy £81,000+ straight into the coiffeurs of the prosecuting body.

This article addresses the application of POCA to planning offences and presumes a basic knowledge of confiscation and planning law. For the lay reader other posts in this blog explain the basics of POCA and criminal planning enforcement.

Planning offences that are most likely to have a POCA element fall under both the Planning (Listed Buildings and Conservation Areas) Act 1990 and the Town and Country Planning Act 1990.

The relevant provisions which could give rise to POCA proceedings under the Planning (Listed Buildings and Conservation Areas) Act 1990 would most likely be section 9, the carrying out of works to a listed building without consent and section 43(1), non-compliance with a Listed Buildings Enforcement Notice. Similarly the provisions of the Town and Country Planning Act 1990 that most commonly give rise to POCA proceedings are section 179- failure to comply with an enforcement notice, section 194- the making of false or misleading statements on a CLUED application, section 210 – TPO non-compliance and section 224 – non-compliance with the Town and Country Planning Control of Advertisement (England) Regulations 2007 

In determining whether the prosecution and the POCA proceedings have been properly brought in the first place those defending should have a close eye on the policy angle. Has the decision to prosecute been legitimately taken and have the council followed the national and their own policy? Failure to do so can lead to a challenge to the prosecution either by way of a Judicial Review of the decision to prosecute or in respect of an abuse of process argument during any prosecution.

Consideration should be had of National policy relating to the appropriateness of prosecution. For example, section 207 of the National Planning Policy Framework states that-

“Effective enforcement is important as a means of maintaining public confidence in the planning system. Enforcement action is discretionary, and local planning authorities should act proportionately in responding to suspected breaches of planning control. Local planning authorities should consider publishing a local enforcement plan to manage enforcement proactively, in a way that is appropriate to their area. This should set out how they will monitor the implementation of planning permissions, investigate alleged cases of unauthorised development and take action where it is appropriate to do so.”

Has the discretion been properly exercised in the case which is under consideration and has a local plan been implemented and has it been followed? All these are important considerations. If it can be shown that policy has not been followed in pursuit of a potential POCA pot the prosecution may be fatally undermined. 

The local policy should also be examined, have the council followed their own guidance? This will be freely available and capable of scrutiny. For example, Lambeth Council gives clear guidance on their policy on enforcement on their website-

“The council will investigate reported breaches of planning control in accordance with its planning enforcement protocol. Cases will be prioritised according to the harm to amenity caused and resources available. Investigations will be carried out proportionately in relation to the breach of planning control identified.

Where informal negotiations fail to resolve the identified breach of planning control, and where it is considered appropriate and expedient to do so having regard to the provisions of the development plan and any other material considerations, formal action will be taken.”

Many councils also publish a points based criteria for the commencement of enforcement action and prosecution, these should be carefully considered in the light of the underlying facts.

If the prosecution or the institution of POCA proceeds cannot be challenged then the defence will have to deal with the question of POCA which is a draconian and harsh piece of legislation. Originally designed to deprive ‘proper’ criminals such as drug dealers and fraudsters of their ill gotten gains the use of POCA has spread into the regulatory sphere meaning that even those who inadvertently fall foul of a quasi strict liability offences such as s179 TCPA can find themselves staring down the barrel of a large POCA order. 

This approach has been approved by the Courts and can be seen in the comments of LJ Baker in R v Del Basso where it was stated:

“the law is plain. Those who choose to run operations in disregard of planning enforcement requirements are at risks of having the gross receipts of their illegal business confiscated. This may greatly exceed their personal profits. In this respect they are in the same position as thieves, fraudsters and drug dealers”

Following a vein of authority starting with R v May the Court of Appeal has consistently stated the principle that where a business is illegal the amount that falls due to be confiscated will be the gross turnover of the business, not the profits. This can be seen applied in the case of R v Beazley [2013] EWCA Crim 567:

“There is nothing remotely disproportionate about removing from this unlawful business the proceeds which it has generated” and “The judgment in Waya specifically endorses the longstanding approval to the difference for confiscation purposes between gross proceeds on the one hand, which are the measure of benefit, and profit on the other, which is not.”

This was taken even further in the surprising rationale of the Court of Appeal in R v Harvey where the Court found that the turnover figure to be used should be the total gross sales including even VAT, despite VAT being an amount that was merely a tax collected on behalf of the government and given directly to the government. In this case there was no allegation that the business in question despite being illegal had in any way illegitimately handled its VAT affairs. The Court stated that:

“The total monies which those customers paid to JHL constituted property which JHL obtained as a result of criminal conduct. JHL then expended those monies in a variety of ways, including payments in respect of VAT, income tax and national insurance…. Those monies belonged to JHL until such times as JHL paid them over. JHL did not hold any of those monies on trust for the intended payees… It would be wrong in principle to carry out an accounting exercise in respect of VAT which JHL collected through the use of stolen property.”

What is clear is that where a business is entirely legitimate then the gross receipts of the business fall due to be confiscated including any VAT. An example of this would be a car parking operation that was operating against a planning enforcement notice to the contrary such as in the case of Del Basso.  

The situation is not however as clear where a business is legitimate but has been involved in an area of associated criminal activity which does not go to its core revenue raising area.

The position in respect of this was considered in detail in R v King. Having undertaken a detailed review of the relevant authorities the Court concluded that:

“The authorities reveal there is a clear distinction to be drawn between cases in which the goods or services are provided by way of a lawful contract (or when payment is properly paid for legitimate services) but the transaction is tainted by associated illegality, and cases in which the entire undertaking is unlawful (e.g. a business conducted illegally, as in Beazley). When making a confiscation order, the court will need to consider, amongst other things, the difference between these two types of cases.”

Therefore, it appears that there is a clear distinction between a wholly illegitimate business (a criminal enterprise) and one where the core area of the business is lawful. This will have repercussions in planning enforcement cases where, for example, a non essential, geographically discrete part of a business operates in an area which is subject to an enforcement notice.

The Courts have analysed this principle further in considering cases where a form of permission is required for the operation of a business but the absence of that permission that does not render the trading itself illegal. In such cases POCA has been found to be inappropriate.

Therefore in Sumal & Sons (Properties) Ltd v London Borough of Newham the defendant company the owner of a rented property which had been operated without a licence contrary to s95(1) Housing Act 2004. In the case the Court analysed the Housing Act and found that the Act itself did not stop the rental of the unlicensed property, therefore the rent was entitled to be recovered from the tenants despite the fact that a licence was not in place. So the rent was not obtained or received ‘as a result of or in connection with the offence’ and therefore was not ‘benefit’ under POCA.

The Court of Appeal came to a similar decision in McDowell & Singh v The Queen where the defendant was operating without a licence under s1(1) Scrap Metal Dealer’s Act 1964, whilst operating a business as a scrap metal dealer. The Court found that the core business activity was not prohibited due to a licence not being in place and that for the purposes of POCA there was no ‘benefit’ and that a confiscation order was therefore inappropriate.

The key aspect of these authorities and the relevance to planning enforcement cases is to consider whether the underlying trading was itself an illegal activity, if it is not and the businesses’ profits do not result from the criminal conduct then a POCA order would seem to be inappropriate and could certainly be argued against.

It is therefore plain that POCA is a draconian piece of legislation that can be applied to planning enforcement cases. However, unlike in many other criminal cases there are a large number of avenues that can be explored to resist the making of such an order.

Those accused of a planning enforcement offence may wish to consider the effect of POCA upon their case from an early stage. The instruction of an experienced and tactically aware representative in such circumstances is vital.  

Quentin Hunt is well experienced in both POCA and planning enforcement matters and adopts a vigorous and thorough approach to such cases. You may contact Quentin if you are involved in such a case and wish to avail yourself of specialist legal advice and counsel.

 

 

POSTED: Wednesday, October 25, 2017

Categories:  FRAUD