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Legal Minds

9 May 2019 / by / in

Important qualification on the application of the confiscation regime in prosecution for breach of planning regulations

The recent CA decision in R v Panayi (2019) EWC Crim 413 provides some succour to defendants who have found themselves at the wrong end of prosecutions by local authorities for breach of planning regulations where the successful prosecutor has been awarded a substantial confiscation order in the Crown Court. Such orders are based upon the financial benefit to a defendant while operating in breach of planning regulations. In the case of rented properties this can extend to confiscation of any rent paid to the landlord during the relevant period.

One of the key issues to arise in the previous cases is what the extent of a confiscation order should actually be. Specifically how to calculate the period of time to which it may lawfully be applied. In the leading case of Waya the CA determined that each case is fact specific and that the court should strive to make an order which is proportionate.

In Panayi the relevant facts were as follows:

  1. The appellant accepted that the property in question had been the subject of an enforcement notice since 22 August 2003;
  2. The appellant had appealed unsuccessfully against the notice and the council had extended the period for compliance to the 12 February 2005.
  3. The appellant did not comply with the notice and notwithstanding further communications alleging he was in breach by a letter dated 28 March 2007 the council stated that they did not consider it in the public interest to prosecute the defendant at that time.
  4. In view of the content of this letter the appellant took no steps to comply with the notice. Furthermore in 2014 he applied for a certificate of lawful use in relation to the property.
  5. The application was refused and appears to have prompted a reconsideration of the decision to prosecute. Some 11 years after the date of the effective breach a summons was issued on the 28 June 2016. It alleged specifically a failure to comply with the original enforcement notice “on or about the 18 February 2016

The defendant accepted that he remained in breach of the original enforcement notice. He sought to challenge the proceedings both by seeking a stay for abuse of process and judicial review of the decision to prosecute, Both these applications failed. The magistrates convicted him of the offence and committed him to the Crown Court for consideration of a confiscation order (the magistrates having no jurisdiction to impose one).

In the Crown Court the prosecution sought an order for £243,817.98 representing the rent received in respect of the property for the period 12 February 2005-26 September 2016. Applying the dicta from the case of R v Sangha (2008) EWCA 2562 the judge concluded that he was not (as argued by the defence) limited to the period between the date of the summons and conviction (equating to roughly £10,000). Equally he felt that following the proportionality principle laid down in Waya he should take into account the decision not to prosecute in 2007 and apply a significant discount to the figure to be confiscated. This approach resulted in an order for £95,920.

Appealing against this order the defence argued, inter alia, that the order was wrong in principle and manifestly excessive. However, it was the CA who raised a point of law not argued by either party at first instance or in the grounds of appeal namely the relationship between the wording of the offence and it’s impact on the period that could be covered by the confiscation order. The CA concluded that the words “on or about the 16 February 2016” referred to just one day and that it was not possible (as argued by the Crown) to interpret that wording for the purposes of confiscation as extending to a period between 2007 and the date of conviction. The court was restricted to considering the benefit from the specific criminal conduct for which the defendant was convicted or pleaded guilty. As LJ Hales stated:

There is no scope for the court to find that the defendant has committed other or more extensive offences and to go on to identify the benefit which he has received from such further offending.

The prosecution sought to argue that Sangha was authority for the proposition that in dealing with confiscation the sentencing court can make more extensive findings of fact than those upon which the verdict or plea of guilty was based. This thus allowed the judge to find that the relevant criminality extended over a period longer than that stated in the summons. However, this formulation was roundly rejected by LJ Hales who stated:

there is nothing there, in our judgment, which entitles a court to extend the meaning of particular criminal conduct beyond the conduct of which a defendant has been convicted or in respect of which he has pleaded guilty. The benefit obtained as a result of or in connection with such conduct must be referable to the offence with which the defendant is charged and of which he is convicted. It is not open to a court in confiscation proceedings to find that benefits obtained over an extended period were obtained in connection with the commission of an offence on a single day – at any rate on the facts of this case

In summary one can discern the following from this case:

  1. Prosecutors will have to be more precise in the wording of charges going forward. The failure in the present case to allege a continuing offence from the date of the enforcement notice to the date of the summons meant that the confiscation order could only apply to one day;
  2. The CA were clearly very reluctant to allow the council to effectively claim the “benefit” from offending that they had explicitly accepted back in 2007. Indeed they went further by limiting the confiscation order to one day by adopting a very restrictive interpretation of the charged offence. More restrictive even than the appellant himself.
  3. The peculiar facts of this case – a local authority deciding to prosecute a matter that it had explicitly acquiesced to some 9 years earlier – were clearly troubling to the CA. Whilst the High Court had rejected applications to stay the proceedings as an abuse of process and to judicially review the decision to prosecute one can discern in the judgement of LJ Hales a perhaps understandable disdain for the somewhat mercenary conduct of the local authority in seeking a windfall from what could be construed as their own inefficiency in not prosecuting the case in a more timely manner.
  4. In a broader context this case is indicative of the now established practice of certain local authorities (starved as they are of central funding) seeking an alternative form of revenue to resource the provision of adequate local services. Panayi demonstrates that the courts will not allow such applications to result in orders that stray beyond what is proportionate to the actual offending behaviour.

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Steve is a highly experienced criminal lawyer specialising in white collar and business crime for over 25 years. He has defended in cases brought by the Serious Fraud Office (SFO), HM Revenue and Customs, Department of Business Innovation and Skills (BIS), the Economic Crime Unit (ECU), NHS Counter-Fraud Service and the Crown Prosecution Service (CPS).