Confiscation orders – Panayi over-ruled

Back in April 2019, I reported on a decision of the Court of Appeal in R v Panayi [2019] EWCA Crim 413, which seemed to cut down the scope of a confiscation order that could be made under the Proceeds of Crime Act 2002 (‘POCA’). In that case, the defendant had been charged with being in breach of an Enforcement Notice "on or about 18 February 2016". The LPA had sought a confiscation order calculated on the basis of the gross rental income from two self-contained flats occupying an unauthorised enlargement of the property in question, from the date by which the Defendant should have complied with with the Enforcement Notice (12 February 2005) to the date of conviction (26 September 2016).

However, the Court of Appeal held in that case that the offence charged had to be interpreted as relating to a criminal offence committed on a single day in February 2016, on or about the 18th of that month. That was the only criminal conduct of which the appellant was convicted. It was up to the LPA, as the prosecuting authority, to decide the period over which the conduct charged should extend. As the Court of Appeal pointed out, section 179(6) of the 1990 Act gives the option to the prosecutor of charging by reference to any day or longer period of time, but it had chosen in this case to charge the offence in respect only of a single day, and so a confiscation order had to be limited to the same period.

I expressed considerable reservations about this decision at the time, because it had previously been my understanding that a confiscation order can be made in repect of “an offence committed over a period of at least six months and the defendant has benefited from the conduct which constitutes the offence", although this provision is not satisfied unless the defendant obtains relevant benefit of not less than £5,000. It was on this basis that the Court of Appeal had previously upheld a substantial compensation order in Basso & anor v. R. [2010] EWCA Crim 1119.

I ended by confessing my confusion at the apparent inconsistency between Basso (and other similar cases) and the decision that had been reached by the Court of Appeal in Panayi, and I suggested that this apparent discrepancy raised an issue that would have to be reviewed, either by a differently constituted Court of Appeal in a future case, or by the Supreme Court.

This finally occurred when R (Haringey LBC) v Roth [2020] EWCA Crim 967 reached the Court of Appeal in July 2020. I became aware of this case within a day or two of its being decided, but other priorities in the meantime have delayed my reporting on it. In this case, the matter was treated as one of benefit from particular criminal conduct. No reliance was sought to be placed on the criminal lifestyle provisions. The relevant provision was therefore section76 (4) of POCA, which provides that: “A person benefits from conduct if he obtains property as a result of or in connection with the conduct”, and Section 76 (7) provides that: “If a person benefits from conduct his benefit is the value of the property obtained.” As in Panayi, the offence was charged in respect of a single day (in this case, 18 May 2017), whereas the enforcement notice had required that the unlawful use should cease by 9 March 2013, and the Statement of Facts accompanying the summons stated that the defendant had been in breach of the Enforcement Notice for 53 months and had gained a financial benefit from non-compliance in the sum of approximately £508,800. In the confiscation proceedings before the Crown Court, the amount of benefit was agreed at £527,887.55, and this was the amount that the Defendant was accordingly ordered to pay.

In appealing against this order to the Court of Appeal, the Defendant sought to rely on the Court’s decision in Panayi, pointing out that the offence charged was of breaching the requirements of the Enforcement Notice on just one day, i.e. 18 May 2017. In consequence, it was argued, a confiscation order reflecting a period of criminality in excess of four years was not within the Crown Court’s powers. However, Davis LJ, in giving the decision of the Court observed that such an outcome, on so literalistic a reading of the charge, could scarcely appeal to a sense of the merits, and in any event the present case was, in the Court’s opinion, plainly distinguishable from Panayi.

In Panayi the only reference dates in the charge were the date when the Enforcement Notice was actually issued (which would not be the actual time by which compliance was required to take place) and the date of the rejection of a challenge to the refusal to issue an LDC. In the present case, however, the summons did identify the date from which the (criminal) non-compliance had started: i.e. 9 March 2013. The summons, though it was undoubtedly clumsily drafted, sufficiently identified the date when the criminal conduct started (9 March 2013).

Furthermore, the accompanying Statement of Facts, also made it clear that it was the entire period which had been identified that was the subject of the summons. The gross amount of the rent receipts for the relevant period was actually agreed for the purposes of calculating benefit, and the appellant had known the case he had to meet. So, even if there were technical deficiencies in the drafting of the summons, they were not fatal. The Court also noted that where a defendant has positively assented to the counts being treated as specimen counts, even though not specifically so charged, then there is no objection to them being so treated.

The Court also referred to the decision of the House of Lords in Hodgetts v Chiltern DC [1983] 2 AC 120 (a case not referred to in Panayi). That case decided that failure to comply with an Enforcement Notice by ceasing to use the land as required by the notice constituted a continuing offence, and not a succession of individual offences occurring on each day. It was held in that case that an information charging the offence as “on and since May 27, 1980” was validly drafted and was not bad for duplicity, although Lord Roskill (with whose speech the other members of the House agreed) had gone on to say that it might be preferable if such offences were charged as having been committed between two specified dates, starting with the date when compliance with the enforcement notice became due and ending with a date not later than the date of the summons (or the date when the enforcement notice had been complied with, if this had occurred). The Court of Appeal suggested that this guidance might usefully continue to be borne in mind by those drafting summonses under section 179 of the 1990 Act. However, although this undoubtedly represents best practice, it is clearly not a legal requirement.

The Court of Appeal also rejected the appellant’s other arguments, basing themselves both on both Del Basso [2010] EWCA Crim 1119 and Hussain [2014] EWCA Crim 2344. There was no basis or reason for departing from these authorities, and on the contrary the Court endorsed them. The Court also noted that a similar approach had been taken in Evangelou [2019] EWCA Crim 1414.

It is therefore clear that the Court of Appeal has decisively rejected the approach taken to confiscation orders by a differently constituted court in Panayi, and that (provided the period of the breach of an enforcement notice is made clear in the documentation before the Court) a confiscation order can be made by the Crown Court for the gross proceeds received by the defendant throughout the period of the unremedied breach of planning control, even if the summons itself is framed in terms only of a sample charge covering a shorter period or even a single day. It is nevertheless advisable that an LPA should frame the charge to embrace the longer period, thereby obviating any disputes of the type that arose in Roth.

© MARTIN H GOODALL