Introduction

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

So said HHJ Baker QC in R. v Del Basso in the Crown Court at St. Albans in June 2009 when making a confiscation order of £760,000. In May 2010 the Court of Appeal (Criminal Division) dismissed an appeal [2010] EWCA Crim 1119 and, at para 46, “entirely agreed”.

This judgment may have come as an unpleasant surprise to the defendants in the case who, together with others subject to confiscation orders of £186,000 and £112,500 (reported in the Local Government Lawyer in 2010 and 2011 respectively) for unlawful residential user of land, would no doubt not regard themselves as “in the same position as thieves, fraudsters and drug dealers.”

Those who develop land or make a material change in the use of land without planning permission may well have been slower to appreciate the ramifications than hard pressed local planning authorities faced with finding budgetary savings and keen on any possible income generation. Because local planning authorities receive a percentage (37.5%) of any confiscation order which is made they have a financial incentive in adopting this mode of planning enforcement action. Additionally, through shared service arrangements, and formal and informal networking and information sharing, they are very likely to be live to the issues.

Planning offences

Leaving aside works executed without authorisation for the demolition of a listed building or for its alteration or extension in any manner which would affect its character as a building of special architectural or historic interest (ss. 7 and 9 of the Planning (Listed Buildings and Conservation Areas) Act 1990) or the demolition of a building in conservation area without conservation area consent (s. 74 of the Act), it is not a criminal offence to develop land as defined by s. 55(1) of the Town and Country Planning Act 1990 (“the 1990 Act”) without prior planning permission (s. 57(1) of the 1990 Act), but rather a breach of planning control (s. 171A of the 1990 Act).

The fact that the taking of planning enforcement action is discretionary and that immunity arises after the passage of sufficient time – four and ten years (s. 171B of the 1990 Act) may, perhaps, lull some developers into a false sense of security. Additionally, even assuming that the local planning authority discover the breach of planning control in time, and resolve to take enforcement action by the service of a planning enforcement notice because it is “expedient” so to do (s. 172(1) of the 1990 Act) there is always the right of appeal (s. 174(1) of the 1990 Act). Statistically speaking, there is a 25 per cent success rate in getting the notice quashed. Of the seven grounds of appeal (s. 174(2) of the 1990 Act) even if a merits based challenge (ground (a)) fails, as does a technical challenge (planning enforcement law is, of course, itself “challenging”), there is always the prospect of achieving an extended compliance period (in addition, of course, to the period of time secured during the pendancy of the appeal whilst the notice is suspended). Furthermore if they lose before an Inspector they may entertain the hope that a section 289 appeal on a point of law may assist them. Once again the steps required by the notice to be taken are held in abeyance pending the outcome of such further challenge (s. 175(4) of the 1990 Act).

Be that as it may, once the requirements of the notice “bite” if they have not taken the required steps, for example, “cease the use of the building for residential purposes” they may find the local planning authority more ready to commence a prosecution under s. 179 of 1990 Act than they anticipated. A further nuance may be that the developer, or its agent, is seeking to negotiate with the local planning authority about some alternative form of development which could be acceptable in the hope that the threat of a prosecution may cease. It may point to the shortfall of residential accommodation in the area and say that it is meeting a legitimate and important need.

In short, many of the typical breaches of planning control in the sphere of residential use of land without planning permission are far removed from theft, fraud and drug-dealing. Nonetheless the spectre of confiscation cannot be ignored.

The Proceeds of Crime Act 2002 (POCA)

The clearest and most succinct exposition is, I think, to be found in the speech of the late, and much lamented, Lord Bingham of Cornhill in R. v May 2008 1 AC at para 48, Endnote:

“Recognition of the importance and difficulty of this jurisdiction prompts the committee to emphasise the broad principles to be followed by those called upon to exercise it in future. (1) The legislation is intended to deprive defendants of the benefit they have gained from relevant criminal conduct, whether or not they have retained such benefit, within the limits of their available means. It does not provide for confiscation in the sense understood by school children and others, nor does it operate by way of fine. The benefit gained is the total value of the property or advantage obtained not the defendant’s net profit after deduction of expenses. (2) The court should proceed by asking the three questions posed above: (i) Has the defendant (D) benefited from relevant criminal conduct? (ii) If so, what is the value of the benefit D has so obtained? (iii) What sum is recoverable from D? …”

It should be noted that the time line in Del Basso was: plea of guilty June 2007 – thereafter “substantial hearings”, and “two lengthy judgments” in July 2008 and July 2009. Hence if there is a pot of gold at the end of the rainbow it may be some while before the local planning authority secure their percentage of it.

Recent cases

On 8 August 2012 the Court of Appeal (Criminal Division) gave judgment in R. v Sumal & Sons (Properties) Limited [2012] EWCA Crim 3109 allowing an appeal from a confiscation order made in the Crown Court at Inner London in respect of an offence under section 95(1) of the Housing Act 2004 – owner of rented property without the requisite licence. At para 40 Del Basso was expressly distinguished from the situation of rental income being received from an unlicensed premises. Perhaps because Newham has designated its entire borough as a Selective Licensing Area it was keen to try and take the case further. However on 7 May 2013 the appeal committee of the Supreme Court refused permission to appeal.

In R. v Rance [2012] EWCA Crim 2023 – a case involving the demolition of a building in a conservation area without conservation area consent - the substantial fine (£120,000) and costs order (£100,000) were both reduced on appeal to £50,000 and £40,000 respectively. In allowing the appeal at para 8 Moses LJ said:

“the course the proceedings took was be-devilled by the desire of the prosecuting planning authority to obtain a confiscation order.”

In the event, Hammersmith and Fulham LBC was unable to avail itself of any pot of gold at the end of that particular rainbow.

Conclusion

Anyone who fails to comply with a planning enforcement notice once the time for compliance has arrived would be well-advised to take the required steps at the very earliest opportunity, failing which they may find themselves being prosecuted by a local planning authority which then, pursuant to s. 6 of POCA, requires the Crown Court to engage in the mandatory, complicated, prescriptive and draconian regime set out in the 2002 Act. Such an application could, depending upon the particular facts, lead to a substantial confiscation order being made with a term of imprisonment in default of payment.

Whilst such a person, guilty of a strict liability regulatory offence, would not regard themselves as in an analogous position to that of a thief, fraudster or drug-dealer, the law may well.