Use of Proceeds of Crime Act in planning disputes

Think about the Proceeds of Crime Act (POCA) and it conjures images of drug dealers and criminal kingpins having their ill-gotten gains confiscated.

Many will not associate it with relatively mundane behaviour, such as chopping down a neighbour’s obstructive tree or operating a commercial premises in breach of its permitted use.

But POCA is increasingly being used to recover far greater sums of money from those breaching planning and environmental laws than the relatively nominal fines that these offences can often attract.

This much greater potential financial exposure can lead to business and personal financial consequences of the utmost severity, coupled with the criminal stigma associated with having assets confiscated by a criminal court.

For example, in a relatively recent case involving the use of land to operate a lucrative airport park and ride business, in breach of planning permission, the judge asserted that when considering and applying POCA, people who acted in breach of planning laws are “in the same position as thieves, fraudsters and drug dealers”.

Breaching planning enforcement notices

The case, Del Basso and Goodwin [2010] EWCA Crim 1119, concerned land in Bishop’s Stortford, owned by Del Basso’s company and rented out to Bishop’s Stortford Football Club. Conditional planning permission was obtained for the land to be used for ‘car parking during match days’ but the application for a ‘park and ride’ facility was rejected. However, part of the site came to be used as a park and ride site for Stansted Airport. The local authority served an enforcement notice with which Del Basso failed to comply.

Despite the local authority bringing successful legal proceedings against Del Basso’s company, the parking operation carried on as before. A second prosecution commenced against the original defendants and the owners of the parking association which included Del Basso himself. All defendants entered a guilty plea and were fined.

In addition to these fines, POCA proceedings were issued against Del Basso and his business partner because the income from the park and ride was paid into their bank accounts and was therefore deemed a financial benefit of their offending. Del Basso received a Confiscation Order in the amount of £760,000.

Since then, there has been a much greater appetite for regulators and local authorities to pursue POCA proceedings.

Breaching Tree Preservation Orders

The case of Davey [2013] EWCA Crim 1662 should serve as a warning to anyone thinking of having a bothersome tree felled. In this case, Davey arranged for another man to cut down a Maritime Pine in his neighbour’s garden and which obstructed his view of Poole Harbour. The pine was protected by a Tree Preservation Order.

Davey denied instructing the man to cut down the tree but was convicted and made the subject of a Confiscation Order for £50,000.

This figure was the agreed assessment of the increase in value of Davey’s property as a result of the removal of the tree. He was also fined £75,000. Davey appealed on the basis that the financial orders were too great, but was unsuccessful.

A warning for negligent landlords

POCA legislation has also been used in the prosecution of residential landlords operating properties in breach of housing and safety regulations.

In 2012 Norwich City Council became the first local authority in the country to use POCA in the successful prosecution of a landlord, Joseph Howman, in breach Houses in Multiple Occupation (England) Regulations 2006.

The court heard that the house in Unthank Road, Norwich, was let as ten bedsits with shared bathrooms. An inspection by council officers had found that rooms had no heating, the main bathroom had no hot water, communal bathrooms were dirty, the fire doors were in poor condition with many not working, and there were electrical hazards, including hanging wires and defective lighting.

Howman was fined £5,000 plus a £135 victim surcharge and £8,500 costs. He was also ordered to pay an additional £40,000 under POCA.

All of the above cases highlight the financial and reputational risks presented to business and property owners acting in breach of regulations, especially now POCA is being used as an additional deterrent. Having recently defended a large planning-related POCA action, over many months, before the criminal courts, I can testify as to the financial and reputational costs to defendants in such cases.

The use of POCA in regulatory matters such as these will only increase, given that the successful regulator will take a share of the POCA award, and will see POCA as a way to supplement their decreasing budgets.

As always, earliest advice should always be taken in relation to planning matters, and also legal issues in a whole host of other regulatory spheres.

For more information on this matter, or any other regulatory and compliance matter, contact David Edwards on 01772 258321