Eye-watering confiscation orders

I drew attention more than eight years ago in this blog (in June 2010) to the confiscation orders that can be made by the Crown Court under the Proceeds of Crime Act 2002 (‘POCA’). The Act was primarily intended to enable the confiscation of the proceeds of drug-dealing and similar organised crime, and it took LPAs some time to appreciate that the Act was not limited to that type of criminal activity, but could be used in any case where a criminal offence has continued for more than six months and where the offender has ‘benefitted’ from the conduct which constitutes the offence, to the tune of not less than £5,000, provided that they are either convicted in the Crown Court, or sent to the Crown Court for sentencing.

The case which originally prompted me to blog on this topic was Basso & anor v. R. [2010] EWCA Crim 1119, which established that the proceeds of crime in respect of which a confiscation order can be made are the gross proceeds, and not simply the ‘profit’ which the offender made (net of any overheads, expenses, etc.).

Despite this and other examples to which I drew attention in this blog in 2010 and 2011, it seemed to take LPAs a long time to make full use of confiscation orders under POCA in the Crown Court. However, when they began to do so more frequently, some spectacularly large confiscation orders began to be made. Noting this trend, I have been meaning to write the present blog post for some time, because anyone who is tempted to ignore an enforcement notice that has taken effect (either in the absence of an appeal or following the dismissal of an appeal) should be warned that non-compliance could become extremely expensive for them if they are deriving significant income from the unlawful development.

It is not unusual nowadays for confiscation orders in respect of failing to comply with an enforcement notice to run into hundreds of thousands of pounds. Orders of over a million pounds are not unknown, and the highest amount of an order of which I am currently aware totalled more than £4,330,000! (This confiscation order was backed by a threat of 8 years’ imprisonment if the sum was not paid.)

These cases are usually concerned with unauthorised residential conversions or extensions, which have then been let out, and the amount of the confiscation order simply reflects the gross receipts from that illegal activity, calculated from the date by which the enforcement notice should have been complied with. Airport parking is another activity which might well be vulnerable to a confiscation order, and there are no doubt other developments which yield a significant income and which could therefore be the subject of an application to the Crown Court under POCA.

I have no sympathy with the offenders who have been on the receiving end of these confiscation orders. They knew that what they were doing was a breach of planning control, they knew that once the enforcement notice took effect they had to comply with it, and they knew (or should have known) that from the date on which the compliance period expired they were committing a criminal offence for which they were likely to be prosecuted.

There is, however, one little word of warning for LPAs, in the form of the decision of the Court of Appeal in R. v Knightland Foundation and another [2018] EWCA Crim 1860. This was a case where planning permission had been granted for a 14-bed HMO, but an 18-bed HMO had been created. However, officers of the LPA (Islington LBC) indicated that an 18-bed hotel might be acceptable in planning terms, notwithstanding that an enforcement notice against the unauthorised development had taken effect by this time. The council’s enforcement team were nevertheless determined to press on with a prosecution in respect of non-compliance with the enforcement notice and to apply for a confiscation order under POCA, whatever the result of the planning application for the alternative development that had by now been awaiting determination for some considerable time.

When the application for a confiscation order came before the Crown Court, the judge found that the council’s enforcement team had not given material consideration to the pending 2016 planning application in their decision to prosecute and to press for a confiscation order. The judge accepted that the defendants may not have had a legitimate expectation that their planning application would be granted, but they did have a legitimate expectation that it would be determined on its merits measured against relevant criteria. The evidence indicated to him that, despite the enforcement officer’s efforts to influence members of the Planning Team against giving permission, the recommendation of the team would have been to grant permission.

It seems that the Planning Team were then persuaded to refuse permission, irrespective of its merits, solely or mainly due to the potential impact that a grant of planning permission might have on the prosecution and associated POCA proceedings. The judge concluded that the basis of the decision-making process was that nothing should hamper the prosecution or the POCA proceedings. The judge described the way in which the 2016 application had been handled as "improper". He found that it tainted the whole process, both as regards the planning decision and the initiation and continuation of the prosecution. The prosecution had as its focus maximising the returns to the authority from a POCA order.

It was this decision that the LPA sought to challenge in the Court of Appeal, but their appeal was dismissed and the judge’s refusal to entertain an application for a confiscation order under POCA in this case was upheld.

Offenders who have failed to comply with an enforcement notice can take little comfort from this case, which clearly turned very much on its own facts, but Knightland nevertheless serves as a warning to LPAs not to get carried away by their determination to obtain a confiscation order under POCA. They must maintain an objective approach, and deal with each matter on its merits, taking all material considerations into account, including any pending planning application if there is some likelihood that this might be granted.

© MARTIN H GOODALL

Article 50 – Final judgment of the ECJ

Because of its importance in constitutional law, it is appropriate to widen the scope of this blog (which is usually confined to issues of planning law) to take note of the Final Judgment of the Court of Justice of the European Union (the ECJ, or CJEU) in the case of Wightman and Others v Secretary of State for Exiting the European Union (Case C-621/18).

This was the case referred to the ECJ by the Scottish Court of Session in the teeth of strenuous legal opposition from the UK government (who took their resistance to it all the way to our own Supreme Court – and lost). The judgment of the Full Court was handed down this morning. It answers in clear terms the question that was put to the court as to whether a member country (in this case the UK), having started the process of leaving the EU by means of the procedure set out in Article 50 of the Lisbon Treaty, can withdraw from that process unilaterally, without requiring the consent of the EU itself or of other member states.

The Court has concluded that the United Kingdom is free to revoke unilaterally the notification of its intention to withdraw from the EU, and that such a revocation would have the effect that the United Kingdom remains in the EU under terms that are unchanged as regards its status as a Member State. This means that the UK could remain a member of the EU without losing the valuable rebates and various opt-outs that were negotiated under the premierships of Mrs Thatcher and of John Major respectively. Thus, if we decide to remain in the EU, we shall not have to join the Euro, we will not have to enter the Schengen Area, and will not have to comply with other EU rules from which we are currently exempt.

This possibility exists until a withdrawal agreement concluded between the EU and the Member State has entered into force, or (in the absence of such an agreement having been reached) until the expiry of the two-year period from the date of the notification of the intention to withdraw from the EU (starting from the date of the Article 50 letter written by Theresa May in March 2017, which is due to expire at 23.00 hrs GMT on Friday, 29 March 2019), plus any possible extension of that period that may be agreed, has then expired.

In giving its judgment, however, the Court made it clear that the Article 50 revocation must be decided following “a democratic process in accordance with national constitutional requirements” and that this unequivocal and unconditional decision must be communicated in writing to the European Council. This simply puts the requirements for withdrawal from the Article 50 process on the same legal footing as the requirements for initiating the Article 50 procedure. (As to this, see the judgment of the Supreme Court in R (Miller) v Secretary of State for Exiting the European Union [2017] UKSC 5.)

As the Miller case established, the government cannot rely solely on the Royal Prerogative in doing this, but must seek parliamentary approval. The section in the ‘Withdrawal Act’ specifying that the UK is to leave the EU on 29 March 2019 would also have to be repealed. The two could be conveniently dealt with in a single Act amending the previous Act. Parliamentary approval alone would suffice for the purpose of withdrawing from the Article 50 process, and in view of the shortness of time (barely three months), a decision to introduce a Bill to this effect will need to be made very soon, in the event of the House of Commons rejecting the draft withdrawal agreement that is currently before them.

This, followed by the delivery of a letter unequivocally notifying the Council of the EU of our withdrawal from the Article 50 process, would formally bring to an end the current Brexit process. However, I am not suggesting that this would bring an end to the internal political debate surrounding Brexit, and the government (of whatever complexion, and whoever is then Prime Minister) may well wish to take further steps to bring a final end to the long-running dispute over Brexit, possibly by means of a Referendum or a General Election (or both).

It is important to understand, however, that a Referendum is not a formal legal requirement, either before or after our bringing an end to the current Article 50 process. The Referendum in June 2016 was purely advisory and had no binding legal effect; it was purely a political choice of the Cameron government, and subsequently of Mrs May’s cabinet, to give effect to the outcome of that Referendum by initiating the process of leaving the EU by means of the Article 50 process. As the Supreme Court ruled, there was a legal requirement for parliamentary approval, but that is as far as the formal legal requirements go.

[I promise that my next post will be on a planning law topic!]

UPDATE (18 December 2018): I have taken the opportunity to re-read the ECJ’s judgment of 10 December. Contrary to a statement made recently by ministers, there is nothing to prevent the UK’s withdrawing its Article 50 notice, but then (at any time) submitting a fresh Article 50 letter, if the country subsequently decides that it wishes to resume the Brexit process. The objection to this course of action to which ministers referred was voiced by the European Commission in their submissions to the ECJ but was firmly rejected by the Court. Withdrawal of the UK’s Article 50 notification, thus bringing the current Brexit process to an end, would not prevent the country from reviving its intention to leave the EU, if (after further consideration) it were to decide to do so. Convinced Brexiteers need not therefore have any anxiety that withdrawal from the Article 50 process within the next three months would represent a final and irretrievable end to Brexit; it would not prevent or inhibit in any way a subsequent resumption of the Brexit process. It would, on the other hand, remove the threat of a ‘no-deal’ Brexit on 29 March and the catastrophic economic and logistical crisis that would ensue from such a ‘car-crash’ Brexit.

© MARTIN H GOODALL

Brexit – Where on earth do we go now?

I make no apology for returning to the subject of Brexit in a second successive blog post. At the moment “it’s the only show in town”, and the planning topics that are in my pending tray for future discussion are rather technical and, to me at least, somewhat tedious.

After three days of debate in the Commons, parliament is now taking a breather and has three days off over this weekend to take stock, and to try to work out what will happen when the Brexit debate is due to resume on Monday and Tuesday.

The full court of the ECJ (aka the CJEU) is due on Monday to deliver its judgment on the case referred by the Scottish courts as to whether the UK is legally able unilaterally to withdraw the Article 50 letter which formally initiated the current Brexit process, and so bring it to an end (at least for the time being). The Advocate General’s opinion is that we can, and whilst the Court is not bound to follow that opinion, there is a reasonable prospect that they will do so.

The importance of this decision (if the Court does share the view of the Advocate General) is that this will provide a clear alternative to ‘crashing out’ of the EU with no deal, if Theresa May’s flawed withdrawal agreement is thrown out by the Commons on Tuesday.

That said, it is clear from the speeches in the Commons over the past few days that, whilst there is a substantial majority of MPs in favour of avoiding a ‘no deal’ Brexit, there is no consensus as to what alternative course should be pursued. There remains, therefore, a distinct danger that the UK could crash out of the EU on 29 March simply by default.

Having thought about this over the past few days, I had reached the conclusion that the only safe course of action would be for the government (of whatever complexion, and whoever is Prime Minister) to withdraw the Article 50 letter in good time before 29 March, so as to give the country sufficient breathing space to review the whole issue of Brexit and all its ramifications, and to decide, without being under the pressure of a deadline, whether (and, if so, how) to proceed with Brexit.

I feared that I would be in a minority of one in putting this idea forward, but I was heartened yesterday to learn that the Mayor of London has reached precisely the same conclusion, and for the same reasons. The object of doing this would simply be to “stop the clock” and allow enough time to seek a resolution of what has turned into a major governmental and political crisis.

No doubt this will be met with shrieks of “Betrayal!” from the loony right of the Tory Party and from a ragbag of the other usual suspects (such as Nigel Farage and the Daily Excess), but what is being suggested is not a final end to Brexit, but simply a pause long enough for mature reflection on the way forward, which would otherwise be a practical impossibility in the present febrile atmosphere with the deadline of 29 March looming.

A General Election or a Referendum (maybe both) may be necessary in order finally to resolve the issue of Brexit, but these processes and procedures will require time, which we do not currently have with the fixed deadline of 29 March rapidly approaching. Simply extending the Article 50 deadline by two or three months, assuming this could be agreed with the EU, (and amending the ill-advised provision which enshrined that date in UK legislation) would not be enough to ensure that we could sort things out freed from the sort of time constraint which would inevitably skew decision-making.

I appreciate that only the government could take the step of withdrawing the Article 50 letter, and that Theresa May absolutely refuses (at least at present) to do anything other than steer the Titanic at full steam ahead straight at the iceberg, with the object of ramming it head-on. However, doubt and dissent about the course she is pursuing is no longer confined to the Tory back benches; it seems to have spread to most of her cabinet. Even members of her team inside No.10 seem now to be among the doubters. By one means or another, May must be stopped from pursuing her present suicidal course. This could take any one or a combination of steps – a cabinet revolt, a ‘no confidence’ motion among Tory MPs, and a large and decisive Commons vote not only against the ‘deal’ currently on offer but also against a ‘no deal’ Brexit.

We can only live in hope that we shall be delivered from the utter catastrophe that a ‘No Deal’ Brexit would cause. I believe that the course I have suggested above is the safest way of achieving that, whilst keeping future options open.

UPDATE (11 December 2018): I was interested to note today that Sir John Major has also joined those who are calling for the UK's Article 50 notice to be revoked. As I have explained, and as both the Mayor of London and Sir John have also observed, this is now essential in view of the very real risk of our running out of time, and 'crashing out' of the EU with no deal, purely by default. The problem has been greatly exacerbated by the crass decision of the PM to pull today's 'meaningful vote' and to jet off round Europe in a time-wasting and hopeless bid to save her political skin. It seems that the government has no intention of rescheduling the vote on the withdrawal agreement until mid-January (if then), which will leave the revocation of her Article 50 letter as the only practical alternative to a car-crash Brexit. This would not, of course, prevent a fresh Article 50 letter being sent in the future to re-start the Brexit process, if that is then the will of parliament (backed, if they think it necessary, by a confirmatory referendum).

UPDATE (18 December 2018): To coin a phrase, “Nothing has changed. Nothing-Has-Changed!” since my previous update. We are exactly where we were when I last wrote on this issue. Meanwhile, I have taken the opportunity to re-read the ECJ’s judgment of 10 December. Contrary to a statement made recently by ministers, there is nothing to prevent the UK’s withdrawing its Article 50 notice, but then (at any time) submitting a fresh Article 50 letter, if the country subsequently decides that it wishes to resume the Brexit process. The objection to this course of action to which ministers referred was voiced by the European Commission in their submissions to the ECJ but was firmly rejected by the Court. Withdrawal of the UK’s Article 50 notification, thus bringing the current Brexit process to an end, would not prevent the country from reviving its intention to leave the EU, if (after further consideration) it were to decide to do so. Convinced Brexiteers need not therefore have any anxiety that withdrawal from the Article 50 process within the next three months would represent a final and irretrievable end to Brexit; it would not prevent or inhibit in any way a subsequent resumption of the Brexit process. It would, on the other hand, remove the threat of a ‘no-deal’ Brexit on 29 March and the catastrophic economic and logistical crisis that would ensue from such a ‘car-crash’ Brexit.

For a considered and objective review of the whole Brexit process, I would strongly recommend readers to listen to (or read the transcript of) a lecture given by Sir Ivan Rogers last week. It can be found here : https://news.liverpool.ac.uk/2018/12/13/full-speech-sir-ivan-rogers-on-brexit/

© MARTIN H GOODALL