A cautionary tale concerning the use of POCA in planning prosecutions

A growing trend in planning enforcement has been the use of the Proceeds of Crime Act 2002 (“POCA”) in order to obtain confiscation orders against those committing offences under the Town & Country Planning Act 1990.

However, the recent Court of Appeal in  R v The Knightland Foundation & Friedman should act as a cautionary warning in the use of POCA to local planning authorities.

The case concerned a property in the London Borough of Islington which the owners had converted to 18 self-contained residential units rather than the 14-bed HMO that they actually had planning permission for. The council served an enforcement notice requiring the unauthorised use to cease alongside physical alterations to the property. The notice was not complied with and the council sought to prosecute the owners accordingly.

So far so straight-forward. However, the owners had submitted a planning application to use the property as a hotel in order to regularise the position and officers of the council’s planning team indicated that they were likely to recommend approval of the same. This support even continued after the criminal proceedings had been issued.

Things took a turn for the worse when the council’s planning team suddenly changed its position following intervention of the council’s enforcement team. The enforcement team was was concerned about the potential impact of granting permission on the prosecution and any associated POCA order. Planning permission was refused and the Council continued the criminal proceedings.

At trial the prosecution was stayed as an abuse of process on the basis that the Judge considered that the prosecution had been tainted by the improper way that the application and prosecution had been handled, where in his view the focus had been on maximising the returns to the council under a POCA order. 

The council appealed this decision to the Court of Appeal but was refused leave for the appeal. In giving the leading judgment, Lady Justice Hallet held that the judge was entitled to find that the council did not exercise its discretion to prosecute appropriately and that to allow the prosecution to proceed amounted to an abuse of process.  In particular, in deciding to prosecute, the council had failed to take account of the possibility that the position at the property could be regularised by the grant of the application and, conversely, had improperly taken account of the possibility of obtaining a POCA order to the council’s financial advantage. This had also improperly influenced the determination of the planning application.

It may seem strange that the owners were effectively “let off” when there seems to have been no doubt that they were in breach of the enforcement notice and therefore guilty of the offences for which they were being prosecuted. However, it is fundamental that prosecuting authorities behave fairly and in the public interest; even more so where they are in the relatively unusual position of also having the power to regularise the offence using direct action.

The case serves as an important reminder that a POCA order is only a tool, not an end in itself, and certainly not something that should override or unduly influence other planning decisions.