Playing POCA

Confiscation orders under the Proceeds of Crime Act 2002 could prove a very useful tool for planning enforcement officers. Stuart Andrews, Neill Blundell and Ruth Lane explain what’s involved.

A pioneering new tool in the armoury of the planning enforcement officer has resulted in a confiscation order of over £186,000 against a landlord who converted two dwellings into seven flats and failed to comply with enforcement notices issued by the London Borough of Hounslow. The sum recovered will be divided, with 50% going to the Treasury, and the remainder being split between the collection agency and the council's investigation team.

Background

A Hounslow resident had, without planning permission, converted two adjacent properties, numbers 379 and 377, into four and three self contained flats respectively. He built an unauthorised rear extension to 379 and an unauthorised front extension to 377.

Planning permission to continue to use the properties as seven flats was first refused by the council in February 2005. Following this the council issued four enforcement notices in relation to:

• the change of use of the premises at 377 from a single-family dwelling house into three separate self-contained flats
• the change of use of the premises at 379 from a single-family dwelling house into four separate self-contained flats
• the erection of a single story front extension at 377
• the erection of a single story rear extension at 379.

The enforcement notices required the owner to stop using the properties as separate flats and remove the unauthorised extensions. The enforcement notices were not complied with and the offence was finally admitted at Kingston Magistrates' Court on 10 November 2008.

Following this the council requested the court to proceed to confiscation proceedings under the Proceeds of Crime Act 2002 in the Crown Court. On 21 January 2010 the case came before Judge Barnes at Kingston Crown Court.

It was found that the landlord had benefited from his offences in the sum of £186,680; a confiscation order was made for the full amount. He was given six months to pay and could face a prison term of two and a half years if he fails to do so.

The law

The law relating to planning enforcement is reasonably well known. Where a breach of planning control is identified the local planning authority can serve an "enforcement notice" on the landowner and those allegedly causing the breach of planning control which requires them to either cease the activities or otherwise take such steps as may be specified in the notice to restrain or ameliorate the breach. It is a peculiarity of planning law that a breach of planning control is generally not, in itself, a criminal offence. Such activities only become criminal where they continue to occur in breach of a valid effective enforcement notice.

If the notice is not complied with, then the local planning authority has a number of statutory remedies it can rely on, including prosecution or carrying out the works specified in the notice themselves and recovering the cost of doing so from the landowner.

The Proceeds of Crime Act 2002 ("the Act") provides that, following conviction of a criminal offence, under certain circumstances, a confiscation order may be made in order that the authorities may recover any proceeds of crime. Significantly, a local authority may claim up to a third of any money recovered under a confiscation order by an application to the magistrates' court. In respect of private prosecutions, such as those undertaken by planning authorities, it is open to the local authority bringing the prosecution to apply for a confiscation order pursuant to the Act.

If the prosecution is underway in the Magistrate's Court, a request must be made prior to sentencing for the matter to be committed to the Crown Court. The Crown Court must then decide whether the defendant has a criminal lifestyle from which he has benefited financially or whether he has benefited from his particular criminal conduct. In either case the benefit obtained must be not less than £5000. If the court makes a confiscation order the recoverable amount is equal to the defendant's benefit from the conduct concerned.

To assist the court the prosecution makes a statement of information relating to the defendant's criminal lifestyle and any benefit allegedly obtained. In addition, the court has a wide power to order the defendant to provide any information it requires to assist in making the decision. If the defendant fails to supply this information without reasonable cause, the court may draw adverse inferences.

In the context of planning enforcement, failure to comply with validly served enforcement notices is a criminal offence. Accordingly, a local authority can consider whether, on the facts known to them, the individual is likely to have benefited from his or her criminal conduct. If the perpetrator is and has been making money as a result of his or her planning breaches, and he continues in breach of the planning enforcement notices, a confiscation order may well be appropriate.

Comment

Commencing enforcement action by service of appropriate notices is the local authority's last resort, often following a long history of correspondence, invitations to submit appropriate planning applications, negotiations, and in some cases every known tactic to delay the local authority in its attempt to achieve compliance with the planning regulations.

Where, in these circumstances, enforcement notices are still not complied with, criminal prosecution is the only sanction remaining.

Further, there is limited satisfaction for the planning authority in pursuing such prosecutions. The costs are not insubstantial, and the fines handed down on conviction are often insignificant compared with the profits available (either potential or actually realised) as a result of the activities related to those planning breaches.

Notwithstanding any prosecution, there is still the necessity of remedying the planning breach. In the absence of action by the offender, the local authority may find themselves taking their own remedial measures, and in the absence of the offender having funds to satisfy the costs of the remedial action, registering a charge against the property to cover those costs. The local authority will carry these costs until such time as the property is sold, and subject to funds being available after discharge of any prior charges, only then will the local authority be reimbursed.

Here lies the key advantage to obtaining a confiscation order under the Act. Not only is the offender punished by forfeiting the profits attributable to the planning breaches, but the local authority receives a share of those profits. With careful judgement and investigation the local authority could use this tool to attack known repeat offenders in their jurisdiction, creating a real deterrent against future and ongoing breaches of planning law, while recovering sums to cover costs of any necessary remedial action. This avoids the need to expend valuable council funds against the uncertainty of future recovery.

In summary, the use of the Proceeds of Crime Act 2002 to obtain confiscation orders against repeat offenders provides a real commercial incentive to progress criminal prosecution, will build a significant deterrent against future planning breaches, and offers the possibility of income to the local authority.

Stuart Andrews and Neill Blundell are partners and Ruth Lane a solicitor at Eversheds. Stuart can be contacted via 0845 497 1272 or This email address is being protected from spambots. You need JavaScript enabled to view it., while Neill can be reached at 0845 497 9797 and This email address is being protected from spambots. You need JavaScript enabled to view it.