Knockdown price

The demolition of a 19th century house in a conservation area in Twickenham without consent has led to the largest recorded fine being imposed by a Crown Court for this criminal offence. Gary Grant, who prosecuted the case on behalf of the London Borough of Richmond, considers the issues involved.

The facts[1]

In July 2007 Mr Johnson and his wife bought a semi-detached house at 6 Trafalgar Road in Twickenham for just over a million pounds. The house was an old but elegant late Regency/early Victorian villa in the heart of the Trafalgar Road Conservation Area. It was believed to be at least 165 years old and had been designated as a “Building of Townscape Merit” (sometimes referred to as “locally listed”). Its smaller scale detailing enjoyed the protection of an “Article 4 (1) Direction” removing permitted development rights. The twelve pairs of houses on Trafalgar Road represented one of the earliest examples of the erection of an estate of semi-detached buildings in the country.

The planning authority considered the house to be of significance to the history, character and appearance of the environment. Such buildings are important. The Government’s Planning Policy “Planning and the Historic Environment” states that the overarching objective is that heritage assets should be conserved and enjoyed for the quality of life that they bring to this and future generations.

In 1979 the London Borough of Richmond’s “Conservation Study for the Trafalgar Road Conservation Area” noted: “Any demolition of original buildings in this area would represent a great loss in the history and uniqueness of this area and would permanently damage its appearance”.

However in January 2011 Mr Johnson ordered its complete demolition. Although he had previously obtained planning permissions for some partial demolitions in order to refurbish and extend the house, he had never applied for the necessary Conservation Area Consent to demolish the entire building. Had he done so it is likely that planning officers would have recommended refusal.

The demolition led to anger and consternation among Mr Johnson’s neighbours who were rightly proud of their rather beautiful conservation area.

Legal Proceedings

Following a formal PACE interview, the London Borough of Richmond summonsed Mr Johnson to the magistrates’ court for the following offence: "On or before 7th January 2011, Mr John Johnson, did execute or cause to be executed works for the demolition of a building within a conservation area at 6 Trafalgar Road, Twickenham, TW2 5EJ without the required authorisation, contrary to section 7(1), as modified by section 74(3), and section 9 of the Planning (Listed Buildings and Conservation Areas) Act 1990."

Mr Johnson pleaded guilty at his first appearance in the magistrates’ court. He asked to be sentenced there and then. However since the maximum fine available in the magistrates’ court was only £20,000 (and/or 6 months imprisonment) the prosecution argued that the case was too serious to justify the limited penalties available in the magistrates’ court. The magistrates agreed and committed Mr Johnson for sentence to Kingston Crown Court where the fine is unlimited (and two years imprisonment is available, although a prison sentence was never considered appropriate in this case)[2].

Sentencing issues

Although Mr Johnson had pleaded guilty, on what factual basis did he fall to be sentenced by the Crown Court? In R v Duckworth[3], the Court of Appeal suggested the following three factors should be considered in assessing the proper level of sentence:

1. The degree of damage that has been done
2. The defendant’s state of mind or culpability
3. The degree of financial gain to the defendant

Damage

In this case the immediate damage was total – the whole house had been demolished – but once it was rebuilt (and the service of a conservation area enforcement notice ensured it would be) what damage, if any, would result? The defence argued that following a rebuild any damage would be minimal. The prosecution disagreed and the issue was decided at a “Newton-trial” (which is a mini-trial before a Judge-alone to decide issues that may impact significantly on the level of sentence).

Conservation and heritage experts were called by both the Prosecution and Defence. One prosecution expert memorably opined: "There is a fundamental cultural difference between an original artefact of historical and aesthetic interest, which has survived from history, and a modern replica. If not, then there would be no reason why, for instance, the National Gallery should not replace all its original paintings with photographic replicas”.

The Judge agreed with this view.

Culpability

Since the offence is a “strict liability” offence, no mental element needs to be established for the crime to be committed. In other words the prosecution does not need to prove the defendant had a “guilty mind”. However a man who deliberately, cynically and dishonestly demolishes a building in full knowledge that he did not possess the necessary Conservation Area Consent is obviously more culpable than a naive innocent who has made a wholly honest and understandable mistake. In Mr Johnson’s case he was sentenced on an agreed basis that in failing to obtain Conservation Area Consent he had behaved “grossly negligently” – a state of mind more serious than mere mistake or carelessness, but less culpable than a deliberate and wilful contravention.

Financial gain

Significantly for the purposes of sentencing, the offence creating provision mandates a Crown Court to have regard to any financial benefit likely to accrue to the defendant in consequence of his offence:[4] "In determining the amount of any fine to be imposed on a person convicted on indictment of an offence under this section, the court shall in particular have regard to any financial benefit which has accrued or appears likely to accrue to him in consequence of the offence."

The purpose is obvious: to permit a defendant to profit from his offence in any way would amount to a serious injustice and risk undermining the public’s confidence in the efficacy of the planning framework. Why should I obey the rules if others can profit from disobeying them?

In Mr Johnson’s case the “financial gain” issue was not straightforward. At the time of the sentencing hearing the house was merely a plot shouldering a pile of rubble (and following the unlawful demolition it was without the benefit of the previous planning permissions). If anything, the value of the property was now considerably lower than before the demolition. However the law requires the Court to have regard to “likely” financially benefit, which the Court accepted could amount to likely future gain.[5] How was this future gain to be assessed? Building and Quantity Surveyors instructed by the Prosecution assessed the capital value of a completely rebuilt house as about the same as the refurbished and extended house that could have been lawfully developed (about £1.9 million[6]). So there was no future capital gain that could be proved by the prosecution.[7]

However the key to assessing the likely financial gain lay in the rebuild costs, and in particular the savings in Value Added Tax. Tax experts instructed by the prosecution assessed the VAT savings to be made on a new rebuild (which is zero-rated) to be about £97,000 when compared to the costs of the permitted development (which would have been subject to 20% VAT). A further modest saving (some £12,000) was likely to result from the cheaper costs involved in rebuilding a house from scratch compared to refurbishing and extending the existing structure. The total financial benefit was agreed to be approximately £109,000.

The sentence

Having heard two days of submissions and evidence, His Honour Judge Dodgson ruled that this was “one of the worst cases of its kind”. Mr Johnson was “highly culpable” and the effect on his closest neighbour (whose semi was now divorced from its partner) was characterised as “devastating”. “It may be” the Judge stated “that in a few years to a casual observer the visual impact [of the rebuild] will be unnoticeable, but nothing can alter the fact that it is a replica”.

The defendant was fined £80,000, which is believed to be the highest recorded fine for an offence of demolishing an unlisted house in Conservation Area[8]. In addition Mr Johnson was ordered to pay £42,500 prosecution costs (as well as his own substantial legal costs). In default of payment, the defendant would have to serve 21 months imprisonment.

Gary Grant practices from Ely Place Chambers in London: www.elyplace.com. He was instructed by Guy Bishop of Richmond Council's Legal Services Department.

[1] London Borough of Richmond –v- John Johnson, Kingston Crown Court, Case reference: S2011/204, 25-26 July 2011, His Honour Judge Dodgson

[2] The available penalties are set out in section 9(4) of the Planning (Listed Buildings and Conservations Areas) Act 1990

[3] See R v Duckworth [1995] 16 Cr App R (S) 529 (CA), This case related to a listed building but the principles can apply equally to a conservation area case.

[4] s9(5) of the Planning (Listed Buildings and Conservation Areas) Act 1990

[5] A confiscation order under the Proceeds of Crime Act 2002 could not be made at this stage since the benefit has not yet been realised.

[6] The likely premium on a new-build would be cancelled out by the loss of the heritage-value formerly possessed by the original, according to valuation experts.

[7] And the burden is on the prosecution to prove any aggravating features to the criminal standard of proof

[8] The previous highest fine for a conservation area offence (not being a listed building) was £56,000, according to a database of fines kept on behalf of the Institute of Historic Building Conservation National Council by Bob Kindred of Ipswich Borough Council. The highest recorded fine for demolishing a Grade II listed building is believed to be £200,000 in the case of R v McCarthy & Stone (Developments Ltd) [1998] CLY 4198.