LPAs mustn’t ‘play’ POCA

In a post on 18 December last year on ‘Eye-watering confiscation orders’, I also drew attention, by contrast, to an example of an LPA failing to obtain a confiscation order under the Proceeds of Crime Act, when the Court of Appeal in R. v Knightland Foundation [2018] EWCA Crim 1860 dismissed an appeal by Islington LBC against the refusal of the Crown Court to make a confiscation order in that case. The Crown Court judge had concluded that the basis of the decision-making process, including the refusal of a retrospective planning application (which had been recommended by the development management team for approval) was the enforcement team’s determination to press on with a prosecution for non-compliance and to press for a confiscation order under POCA. The prosecution had as its focus maximising the returns to the authority from a POCA order. This amounted to an abuse of process.

Another case in which the LPA was clearly aiming at obtaining a confiscation order under POCA has recently come before the Court of Appeal. This was an application by the LPA for leave to appeal in Wokingham BC v Scott [2019] EWCA Crim 205, following an order of the Crown Court that a prosecution by the LPA for non-compliance with an enforcement notice should be stayed on the grounds that it amounted to an abuse of process. Leave was refused by the Court of Appeal on 16 January.

The history of the matter is somewhat complex, but to put it at its simplest, following the service of two enforcement notices (both of which were the subject of appeals under section174, which were due to be heard at a public inquiry), there were discussions between the developer and the LPA as to the possibility of resolving the matter with a CLEUD (under section 191). In the course of these negotiations, the developer was persuaded by the LPA to withdraw one of the appeals. However, the application for a CLEUD was refused, because the enforcement notice had now taken effect as a result of the withdrawal of the appeal against it, and this prevented the issue of a CLEUD. The LPA then demanded compliance with the enforcement notice.

Legal proceedings were then started by the LPA, both for an injunction (which was granted) and somewhat later a prosecution was launched for non-compliance with the enforcement notice. An application by the defence to stay this prosecution was granted by the Crown Court. Whilst the judge concluded that that the defendants could have a fair trial, she was nevertheless very critical of the conduct of the LPA, which had made the proceedings manifestly unfair, and for this reason she granted the stay sought by the defence.

To start with, the LPA had induced the defendant to act to his prejudice (by persuading him to withdraw his enforcement appeal). He had therefore been denied the opportunity to have the matter tested in the appropriate planning forum and, most importantly, the LPA had then sought to take advantage of the situation to prosecute him for alleged transgression of the enforcement notice without recourse to the appeal process. Second, there was what the judge called the “inordinate delay between the preparation of the original Prosecution Report in May 2015 and the Expediency Report for Prosecution dated 6 March 2017”. The delay was due in part, to the determination of the injunction proceedings in the High Court. But whatever the reason and despite the voluminous correspondence between the LPA and the defendant throughout, the judge found that at no time did the LPA notify him or any of the other defendants that they would put themselves at risk of prosecution from 18 May 2015 onwards. He was told that such prosecution would be put in abeyance provided he supplied a timetable for compliance with the notice. But the fact remained that the defendant had been left in ignorance for the best part of two years of the fact that he was not only at risk of prosecution but that a decision had, in fact, been made on 18 May 2015 to prosecute him. The judge found this “a most unsatisfactory state of affairs”, particularly where there were proceedings continuing elsewhere. In her view, the effect of the failure to tell the defendant of that decision denied him the opportunity properly to consider the implications of his actions.

A third and very significant area of the judge’s concern was the fact that the possibility of an order being made under POCA was one of the principal factors in the decision to prosecute. (This was made abundantly clear in the 2017 “Expediency Report”.) If the prosecution resulted in a conviction and a POCA order being made, the LPA would have received 37½% of the fruits of the order. In the judge’s view, this lent support to the defence submission that the LPA was seeking to prosecute the defendants in order to claw back public money already expended on the case. She observed that the POCA provisions apply only after conviction, and she made it clear that the possibility of an order should never form any part of the prosecutorial decision-making process, particularly where the prosecutor and the beneficiary are one and the same. To take into account the possibility of a financial benefit, in her view, ran contrary to an objective analysis of the merits of the case as required under the Code for Crown Prosecutors.

In reviewing the matter, the Court of Appeal referred to their decision in R v The Knightland Foundation (cited above) based on similar facts. Although the respondents in Knightland did not have a legitimate expectation that their planning application would be granted, they did have a legitimate expectation that it would be decided on its merits, but the authority’s decision was based on other considerations, including the prosecution of the respondents and associated POCA proceedings. The evidence in Knightland pointed directly to improper influence having been brought to bear on the planning team to refuse the application. The Court of Appeal endorsed and repeated their observations in Knightland.

The decision to prosecute is a serious step and one that must be taken with the utmost care. Where there is a potential conflict of interest, namely a financial interest in the outcome of the prosecution, set against the objectivity required of a prosecutor, the prosecutor must be scrupulous in avoiding any perception of bias. The possibility of a POCA order being made in the prosecutor’s favour should play no part in the determination of the evidential and public interest test within the Code for Crown Prosecutors. The Court expressed the hope that this message will be relayed to all those making charging recommendations and decisions as soon as possible.

Accordingly, the LPA’s application for leave to appeal the Crown Court’s decision was refused, and the Court of Appeal ordered that all the Respondents be acquitted of the offences which were the subject of these proceedings.

There are one or two obvious comments that may be made in light of this case, but in fact the Court of Appeal made these themselves at the end of their judgment, and I gratefully adopt them. First, the self-contained code in Part VII of the Town and Country Planning Act 1990 confers on local planning authorities a wide range of powers for the enforcement of planning control. It is left to their judgment which power or powers it is appropriate to use in the particular circumstances of the case in hand. But it should go without saying that in deciding which power or powers will best deal with a particular breach of planning control, having regard to the public interest, an authority should always act with fairness and realism.

The second point is that nothing in this judgment should be seen as casting doubt on the value of informal discussions between officers of an LPA and an applicant for planning permission or a landowner who appears to be responsible for a breach of planning control. It is (as the Court of Appeal observed) trite that discussions between planning officers and an applicant or landowner do not ultimately bind a local planning authority to a particular position or a particular course of action (as confirmed by the House of Lords in Reprotech). But such discussions have, and will always have, an important role to play in the planning system – so long as they are conducted in good faith and with good sense on either side. The need for fair dealing on the part of the planning authority, in particular, will always be of paramount importance.

© MARTIN H GOODALL