The recent headline “Court tells restaurant owners to pay out £2.5m confiscation order and seizes their passports over unlawful extractor fan”, is a timely reminder that a failure to comply with a planning enforcement notice can seriously damage your financial health.
What counts as “development” under planning law?
Most development of land in England requires planning permission (Town and Country Planning Act 1990, s. 57, (the Act)). ‘Development’ means “the carrying out of building, engineering, mining or other operations in, on, over or under land, or the making of any material change in the use of … the land” (Act, s. 55).
When can a local authority issue an enforcement notice?
Development carried out without the requisite planning permission or in breach of a planning condition (known as a ‘Breach of Planning’) is open to enforcement by the local planning authority. This commonly results in an ‘Enforcement Notice’, served by the local planning authority on the owner and occupier of the property, specifying the breach and the proposed corrective steps, as well as a period within which the corrective steps must be taken. The notice will also include a date (often 28 days from the date of the notice) on which the notice takes effect.
Appealing an enforcement notice: why timing matters
We would normally advise a person in receipt of an enforcement notice to appeal it within those 28 days. That has the effect of suspending the notice until a decision on the appeal is reached. Depending on the grounds of appeal, a successful appeal can even lead to the notice being quashed.
The criminal consequences of ignoring an enforcement notice
By itself, a Breach of Planning has no particular legal consequences. However, if an enforcement notice is issued and comes into effect, failing to comply with it is a criminal offence (Act s.179) with potentially severe consequences.
Why the Proceeds of Crime Act 2002 is now relevant in planning cases
Breaches of planning enforcement notices are typically sentenced by way of fine. Whilst the fines can be hefty, there may be a higher ongoing financial benefit to a business from the breach of the notice and some defendants may be tempted to delay compliance to maximise such benefit. Whilst the court should take into account any financial benefit at sentence, local authorities are typically without the powers, expertise or resources to undertake a detailed analysis of the defendant’s finances, so at the sentence for breach of the notice the court is without the information to make a fair assessment of the benefit obtained.
Cash strapped local authorities are however now increasingly exploiting the powers under the Proceeds of Crime Act 2002 to seek to recover the value of the benefit obtained as a consequence of the breach. The financial investigations required are typically outsourced to the police or National Crime Agency.
Businesses which previously ignored notices or delayed compliance in the expectation of a relatively modest fine, are now at risk of substantially greater financial losses in the event that the Local Authority seeks to recover the value of the benefit by way of a confiscation order. If a compensation order once made is not paid, then substantial periods of imprisonment can be imposed.
Case study: £2.5 million confiscation order for a planning breach
In the recently publicised case , brothers who run a Turkish restaurant face a confiscation order of £2.5 million, having installed an extractor fan without obtaining the necessary planning permission. The brothers were convicted in their absence, having failed to turn up at court. The £2.5 million has been calculated based on the profits of the business over the past six years – the period of time permitted to be considered by the legislation. Their passports have been seized whilst the matter is resolved.
The brothers have stated they are contesting the proceedings, and the case has sparked a wider debate about whether the use of POCA proceedings in planning proceedings is proportionate or motivated by the desire for cash strapped councils to raise funds – the council gains a substantial proportion on any of the money recovered.
Ignoring or failing to comply with an Enforcement Notice can therefore have extremely serious personal and financial consequences, and recipients of such notices should respond promptly and obtain legal advice.
Giving you the full picture
Here at Tees our planning expert Simon Kelly can provide advice on the merits of a notice and advise on appealing against the notice. Our crime and regulatory expert, Ruth Barber can provide advice and representation in the event of a criminal prosecution by the local authority and Proceeds of Crime Proceedings.
