When enforcement isn’t enough

A recent case in the Criminal Division of the Court of Appeal has highlighted the potential use of the Proceeds of Crime Act 2002 in dealing with breaches of planning control. Rebecca Carriage and Dominique Wilton look at the ruling.

Your Enforcement Officer is at her wits’ end. A high-profile breach of planning control has been the subject of enforcement action but it has still not ceased. Third parties are threatening to go to the Ombudsman. But the activity in breach of planning control is lucrative.

Other than seek an injunction from the High Court (this is of course always a discretionary remedy – nobody is “entitled” to an injunction), is there any other route that might have the desired effect?  What about trying to hit the operator in the pocket? Can the Proceeds of Crime Act (“PoCA”) be called into use?

The case of Luigi Del Basso and Bradley Goodwin, which came before the Criminal Court of Appeal in mid-May this year, is the first planning case to have involved such a large PoCA confiscation order.

Earlier this year, the Criminal Court of Appeal heard an appeal from the St Alban’s Crown Court where breaches of an enforcement notice were prosecuted and, in addition to fines, the Court was asked to make confiscation orders under Section 6 PoCA. This section requires Crown Courts, in certain circumstances, to proceed with confiscation proceedings not only if the prosecutor asks the Court to do so but also if the Court believes that “…it is appropriate for it to do so..” - section 6(3)(b).

In this particular case the Court had specifically been asked to make an order. (The confiscation hearings were conducted first by the Asset Recovery Agency and later on by the Serious Organised Crime Agency; names one does not often see in the context of breaches of planning control.) A nominal confiscation order was made in respect of Mr Goodwin (who had by then become bankrupt) but £760,000 was ordered against Mr Del Basso -- backed up by 18 months in prison if payment was not made.

This figure seems very high when compared with the fines imposed. Mr Del Basso had been fined £3,000 on each of 5 counts of failing to comply with an enforcement notice. Why was the confiscation order so high? The Court held that about £1.88 million had been earned by the continued use of the park and ride facility in breach of the enforcement notice. £760,000 had been identified as “available” to Mr Del Basso and thus was the subject of the confiscation order.

To see how this all came about, the background is as follows:

Background to the case

This was a long-running matter. A planning application had been made back in 1999 for use of land in Bishop’s Stortford as a paid parking facility. This land was owned by Mr Del Basso and Mr Goodwin, local businessmen who were keen to find ways to raise money for the local Football Club.

Although a limited planning permission was subsequently issued, linking use of the car park with home matches at Bishop’s Stortford Football Club, the land was later used as a “park & ride” facility.  It is relatively close to Stansted Airport. The net proceeds of the enterprise were ploughed back into the Football Club.

Enforcement action followed and an appeal against the enforcement notice was unsuccessful.The local planning authority warned Mr Del Basso and Mr Goodwin that prosecution would follow if the park & ride use did not cease. It continued, and prosecutions were begun in the Autumn of 2004.

Mr Del Basso and Mr Goodwin were convicted of breach of the enforcement notice in November 2005 and were each fined £20,000. The park & ride activities continued despite the prosecution. A further prosecution was mounted by the Council and in 2007 Mr Del Basso and Mr Goodwin faced the PoCA proceedings described above.

The Crown Court held that Mr Del Basso should, in addition to fines, face a confiscation order of £760,000. This apparently was made up of the value of Mr Del Basso’s company shares and a motor boat. Mr Goodwin was the subject of a nominal order as he was by then bankrupt. Both appealed.

The Criminal Court of Appeal upheld the decision of the Crown Court. It had been argued very strongly for both Mr Del Basso and Mr Goodwin that neither had personally profited from the enterprise; all of the money had been made available to the Football Club.

The Court of Appeal rejected this approach, holding that what is relevant is that a benefit is obtained through the breach of the law. The Court found that the two men had received some benefit from their offending. Mr Del Basso and Mr Goodwin argued that there was an abuse of process, which was dismissed by the Court as the two men had been given ample warning by the local planning authority about what would happen if they did not stop the illegal use. The Court appreciated that the impact of the proceedings on both men was “devastating” but it held that the proceedings had properly been brought.

Lord Justice Leveson in the Criminal Court of Appeal quoted with approval the comments of His Honour Judge Michael Baker in the St Alban’s Crown Court when he said that the appellants: “…have treated the illegality of the operation as a routine business risk with financial implications in the form of potential fines or, at worst, injunctive proceedings.  This may reflect a more general public impression among those confronted by enforcement notices with the decision whether to comply with the law or to flout it.  The law, however, is plain.  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.  …In this respect they are in the same position as thieves, fraudsters and drug dealers…”

Is this a viable “enforcement” route for local planning authorities?

We are quite used to seeing confiscation orders in the context of breaches of environmental control. A breach of condition in an environmental permit is a criminal offence and there are many more opportunities for attracting criminal proceedings for breach of environmental, as opposed to planning, regulations. However, times seem to be changing. PoCA clearly also applies to planning.

Section 6 PoCA gives a prosecutor power to ask a Crown Court to make a confiscation order (subject to fulfilling the criteria set out in PoCA). PoCA does not specify who the prosecutor is so a Local Planning Authority (“LPA”) could use this power. In practice it may be that an LPA will need assistance with the process from the Serious Organised Crime Agency (currently subject to a Government consultation as to its future). The Crown Prosecution Service has produced a guidance note on the instigation of confiscation proceedings which can be found here.

In certain cases one can see the merit for an LPA in considering the PoCA route. It will not always be appropriate, but must be a useful potential weapon in the authority’s armoury against those who deliberately and determinedly breach enforcement notices.

Rebecca Carriage is an associate and Dominique Wilton is a paralegal at Mills & Reeve (www.mills-reeve.com).