Local Authorities are increasingly relying on planning enforcement notices not only to prosecute individuals who have undertaken development without planning permission, but to also recover the cash made from such development.
It is big business; Councils receive 37.5% of the money recovered by a confiscation order. In the case of R v Kohali the Council prosecuted a man who had built 6 residential units in his rear garden. He was fined £24,000 (reduced from £190,000 by the Court of Appeal) and made subject of a confiscation order of over £76,000. In other recent cases confiscation orders made against individuals have been well into six figures.
Notices
Planning enforcement notices are a tool for Local Authorities to ensure compliance with the local planning regime. The bite is that failure to comply with the notice is a criminal offence. The maximum sentence in the Magistrates’ Court is £20,000 and in the Crown Court there is no limit on the fine that can be imposed.
There are statutory defences; the first is for the defendant to show they in did everything that they could be expected to do to secure compliance with the notice. The second is for the defendant to show they had not been served with a copy of the enforcement notice and the notice has been placed on the planning register. Both limbs are required for this defence and it is rare for the Local Authority to fail to place a notice on the register.
It is not unusual for Local Authorities to leave long periods between the service of an enforcement notice and compliance inspections. Equally, it is not uncommon for notices which have been satisfied to have follow up inspections years later. Many individuals served with these notices are unaware that compliance does not discharge the notice.
The effect of this is that if a notice required a unit to cease being used as a residential dwelling (or similar terms) and rent has been paid on that unit over a period, the owner is at risk of receiving a criminal conviction and a fine. They may also find themselves falling foul of draconian confiscation legislation where by the Council seek to deprive the landlord of years worth of rent.
Confiscation
The confiscation regime was brought in to deprive criminals of their ill-gotten gains. Local Authorities have increasingly been using the regime to claw back an individual’s financial benefit obtained when operating in breach of a planning enforcement notice. In cases of rented outbuildings this can mean confiscation of the rent paid to the landlord, while in cases where a business has been run in breach of a notice the turnover of the business during the relevant period is at risk of being confiscated.
Confiscation orders cannot be made in the Magistrates’ Court, so if a Local Authority wishes to pursue confiscation the Magistrates’ Court must send the case to the Crown Court to be dealt with.
Confiscation orders are made up of two calculations. First, how much has an individual benefited from the relevant conduct? The answer to this question provides the “benefit figure”. Second, how much does the individual have available to them, either in cash or in equity in property or other assets. The answer to this will give the “available amount” – in other words the amount to be paid.
It is vital that the benefit figure is robustly challenged at an early stage. However, the case law makes this a difficult task. The case of Del Basso concerned two individuals who ran a carpark in breach of planning enforcement notice; in that case the Court of Appeal held that “benefit” ought to be interpreted as the business’ turnover. This was confirmed in the case of Reynolds which suggests that where a court is concerned with a criminal enterprise turnover (gross proceeds) would be the appropriate benefit figure. Where legitimate goods or services were supplied but the transaction was otherwise tainted it may be more appropriate for the benefit to be calculated as the profits (net proceeds). The difference between these two figures can be significant – whether or not these arguments can be advanced turns entirely on the facts of the case.
Since the case of Waya it is accepted that while the confiscation regime is intended to be severe, it should not be disproportionate. Every case is fact specific and should be reviewed by experienced lawyers to see if any arguments can be made to limit excessive confiscation orders being made. Preparation is key and should include the provision of documents to prove both the benefit figure and the amount available.
Conclusion
Aside from the financial impact of a confiscation order it is important to remember that orders are always made with a default sentence; if an individual does not satisfy the order within the required time then they risk a custodial sentence. Individuals facing charges of failing to comply with a planning enforcement notice should seek legal advice at an early stage.
John is a barrister practising in criminal law and all related areas. John accepts instructions in confiscation matters. He defends in confiscation hearings in the Crown Court and enforcement proceedings in the Magistrates’ Court. John is experienced in dealing with criminal matters brought by Local Authorities. He draws on his experience of prosecuting on behalf of Local Authorities and the time spent seconded to a Local Authority criminal department. John is direct access qualified allowing members of the public to instruct him directly.
