Angelic: Public Benefits Of Unlawful Demolition In Conservation Area

There was an interesting piece this week by Sarah Townsend on the Planning Resource website: Why planning enforcement notices have dropped to their lowest-ever level (subscription only, 29 August 2019).

There was also an interesting ruling from the High Court, London Borough of Tower Hamlets v Secretary of State and Angelic Interiors Limited (in administration) (Kerr J, 27 August 2019), which will have made every enforcement officer, and indeed conservation officer, blink. Although perhaps the facts are unusual.

In June 2016, enforcement officers at the London Borough of Tower Hamlets were tipped off that the buildings comprising 2, 4 and 6 East Ferry Road London E14, within the Coldharbour conservation area, had been demolished without planning permission. It is of course a crime, as well as a breach of planning control, to cause or permit demolition of a building in a conservation area without planning permission.

The council wasn’t certain who had done it, although an individual has since admitted responsibility, and it did not prosecute.

As was reported at the time (BBC website, 27 September 2017), the council served various enforcement notices, requiring that within 18 months the owner was to “rebuild the building so as to recreate in facsimile the building as it stood immediately prior to its demolition on 26 June 2016 with reference to the photographs and plans (LBTH file reference PA/84/00512 & PA/81/00497 originals of which are available at the Tower Hamlets Council’s Town Hall)

In fact there had been a long-running dispute as to who owned the property, which was only resolved in October 2018, in favour of a company called, ironically, Angelic Interiors Limited, which had been in administration since July 2016. Angelic’s administrators appealed against the enforcement notices.

Enforcement appeal decision letter

The inspector, Simon Hand, allowed the appeals in a decision letter dated 17 December 2018.

In order to place Kerr J’s judgment this month into context, it is illuminating to read the decision letter.

Here are some key passages:

Nos 2-6 were the last surviving remnant of the once large area of Victorian workers housing in Cubitt Town which occupied the whole of the south-eastern side of the Isle of Dogs.”

There is […] no dispute the removal of the buildings causes less than substantial harm to the Coldharbour conservation area. The conservation area is a designated heritage asset and paragraph 193 of the NPPF makes it clear that great weight should be given to any less than substantial harm to the significance of a heritage asset. Paragraph 194 goes on to say that any loss of significance to a heritage asset should require clear and convincing justification (my emphases). Paragraph 196 explains that where there is less than substantial harm to a heritage asset is should be weighed against the likely public benefits arising from that harm.”

If they were to be rebuilt then they would undoubtedly be very nice, but the issue is what role do they play in the significance of the conservation area and the answer would seem to me to be very little.”

Had the demolished buildings been of historic interest in their own right they would have been worth preserving simply for that reason, but they would still have told us little or nothing about Cubitt Town, its development, or its morphology. The development of Cubitt Town does not seem to have been unusual in any way, nor any of its buildings particularly special, it is not until this Inquiry that anyone at the Council has made any mention of it at all. To my mind the dwellings were not the last fragment of a historically significant but now lost development. They were simply three remnant buildings in a sea of modern development. To suggest that this makes it all the more important to preserve them is to adopt a collector’s mentality, particularly as they seemed to have no great historic significance themselves due to the substantial modern changes they had undergone.”

Both parties accepted the loss of the buildings had caused less than substantial harm to the significance of the conservation area, and I would not like to suggest their loss causes no harm at all, but I consider that the harm is very much at the lowest end of that scale. It was argued that if the site is left vacant or redeveloped there would be no reason to retain it in the conservation area and this would seem to be true, but it does call into question the motivation for extending the conservation area in the first place. Had it been deliberately to protect this remnant of Cubitt Town, then I would have expected somewhere for this to have been explained. I accept the conservation area appraisal is lacking in detail, but if Cubitt Town was of such importance as Mr Froneman argued, then I find it hard to believe the reason for the extension to this allegedly key part of the Isle of Dogs is deliberately not mentioned as the appraisal explains only that the extension was in order to protect Glen Terrace. It seems to me more likely the Council just saw these Victorian looking buildings and took the opportunity to include them, as there was nothing else of any historic interest in the area. Whatever the truth of the matter whether or not the vacant site remains worthy of conservation area status is of little importance in this case.”

The inspector found this to be an area of high housing need and “there would appear to be no constraints that would prevent a housing scheme of significantly greater density than 3 units from being successful on the site.”

it would seem highly likely that a suitable development proposal could be found and there are no obvious reasons why the landowner would not want to realise the development potential of the site.”

Paragraph 196 of the NPPF requires that the harm should be weighed against any public benefits. In this case those benefits are the redevelopment of the site with a much larger number of dwellings than would be the case if the demolished houses were rebuilt, including much needed affordable housing, all of which would be in accord with the prevailing policy ethos for the area. I accept these benefits are speculative, but in my view there is a good chance they would be realised. It seems likely to me that even had the buildings still been in place, given their poor condition and lack of any historic significance, they would have been demolished to make way for a comprehensive redevelopment scheme. Consequently, I consider these benefits outweigh the harm identified. The demolition of the three dwellings is thus in accord with the NPPF and the development plan for the area and so I shall grant planning permission accordingly.

So he found that the potential for redevelopment for housing purposes of the unlawfully cleared site amounted to a sufficient public benefit to outweigh the “great weight” to be attached to the (very much) less than substantial harm that had been caused to the character or appearance of the conservation area.

High Court

The council challenged the decision letter.

Kerr J identified the main issue before him as “whether the “public benefits of the proposal” (in the words of NPPF paragraph 196) should extend to likely benefits of new development of a site, facilitated by demolition of buildings on the site, where there is no current application for planning permission to develop the site; or whether those words are restricted to the public benefits of demolishing the buildings, without considering any likely future development.

The judge did not find this to be an easy case:

It is counter-intuitive to propose that unlawful (and criminal) demolition of buildings forming part of a conservation area, harming the significance of that conservation area, can do more good than harm. No sensible planning application to demolish would be made on that basis and a planning consultant suggesting such an application would soon be short of clients.

Still, for the inspector’s decision to be lawful, and for the challenges to fail, it has to be a defensible conclusion that demolition without replacement, leaving the site razed to the ground and vacant, without any replacement development, and doing harm to the significance of the conservation area, is more good than bad. Baldly stated in that way, the proposition is remarkable.

My first thought on hearing argument was that the proposition cannot be correct. If only demolition is on the table, and demolition is harmful, how then can it do more good than harm? Can it be good and bad at the same time, and more good than bad?

The judge concluded that it was simply a matter for factual evaluation for the inspector.

I accept the respondents’ interpretation of the heritage provisions in the NPPF with a degree of hesitation. I am conscious that it is a liberal construction and not a strict pro-heritage construction such as the council is advocating. Nevertheless, on balance I think the respondents’ is the correct one, bearing in mind that the NPPF provisions are statements of policy not law and the language of the provisions is not restricted in the way the council contends.”

He considered whether the inspector’s decision could be said to have been irrational:

I reject the council’s free standing contention that, quite apart from the interpretation of the NPPF provisions, it was irrational to decide that the market would produce suitable and beneficial housing development soon. It is true that the inspector could not say what type of development that would be, nor that it would certainly occur; but those were points he was entitled to weigh when considering the public benefit side of the balance.

I do not see any want of rationality in reasoning that the site would soon attract developers like flies to a honeypot and that this would probably have led to demolition of the three houses soon anyway. The circumstantial evidence supporting that finding was not lacking: the prime location, the pressing need to build housing in the borough, the appetite shown by other housing developments nearby, the indicative Turner scheme and the intention to sell and strong likelihood of sale of the site for development.”

Lastly, he considered whether the inspector’s decision was adequately reasoned:

As for the reasons challenge, did the inspector properly set out his thinking? Manifestly, he did. The reasoning need not be discursive. It is commendably succinct but clear and full. He explained exactly why he was confident that delivery of the public benefit he anticipated could be left to the market. He made all the points I have just mentioned, in support of his conclusion. The council cannot complain that it does not know why it lost the appeals.

I did consider carefully whether the reasoning touches adequately on the possibility of a development scheme that would leave the three houses intact, whereby the developer would build round them and keep them in place. If the inspector had simply assumed, without considering the issue properly, that the public benefits derived from anticipated development would be lost unless the demolition were permitted, that could have been a flaw in the reasoning.

However, I have concluded that the inspector did adequately, though briefly, consider this point and that it was a matter for his planning judgment. His consideration of likely development proposals such as the one illustrated by the Turner scheme (involving 22 new dwellings) included the council’s 2005 discussions which would have involved demolition of the three houses.”

He dismissed the challenge, albeit with a final bit of judicial hand-wringing:

I do so without much enthusiasm, reminding myself that the enforcement system is remedial not punitive. I must put aside the affront to the rule of law and criminal activity seen in this case, as well as the loss of the three houses and their contribution to our historic environment, however limited some may consider it. My discomfort does not make the inspector’s decision unlawful and I must and do uphold it.”

Implications

Plainly, unlawful actions should in principle not go unpunished and it is disappointing that there have been no prosecutions.

Plainly also, Angelic’s administrators now have an unearned windfall by virtue of a cleared site for development with no obligation to reconstruct the buildings that others had unlawfully demolished on the site.

That is not to say that the enforcement notices should have stood and that replicas of these apparently unexceptional buildings should have been required, simply to discourage others from similar conduct, but what is there in this unfortunate chain of events to encourage appropriate behaviour on the part of future Angelics?

Simon Ricketts, 31 August 2019

Personal views, et cetera

POCA Face

If you are in a position where you may be criminally liable for breach of planning control (whether justified or not – I’ve heard all the stories), you really need to be aware of the implications of the Proceeds of Crime Act 2002 and its potential influence on the approach taken by local planning authority enforcement teams. This post only gives a general overview as in my day job I do not generally act on criminal planning law matters so please take appropriate advice. The focus of this post is more on that “potential influence” issue: the raised stakes now in seeking to negotiate a practical solution to avoid enforcement and/or prosecution.

The Act provides that if the Crown Court convicts a defendant, the Crown Court (if requested by the prosecutor or if it considers it appropriate):

1. must decide whether the defendant has a criminal lifestyle;

2. if it decides that he has a criminal lifestyle, must decide whether he has benefited from his general criminal conduct;

3. if it decides that he does not have a criminal lifestyle, must decide whether he has benefited from his particular criminal conduct.

If the defendant has benefited from his general or particular criminal conduct, the court arrives at a figure as to the extent of that benefit and how much of that is “available” – determined by considering “all the free property” held by the defendant deducted only by any fines due and any preferential debts within the meaning of the Insolvency Act 1986. That amount is then payable, with the time for payment only generally being capable of extension to six months. Failure to pay is likely to result in imprisonment.

Enforcement teams within local planning authorities are well aware of the potential for POCA confiscation orders and indeed authorities are incentivised to seek them. This is not just because of their deterrent effect as regards other potential miscreants but more directly because the authority is likely to receive 37.5% of the receipts (which can then be used by the authority on a non-hypothecated basis). This is because the Home Office’s Asset Recovery Incentivisation Scheme splits the proceeds from confiscation orders as follows:

– Home Office 50%

– Prosecuting authority 18.75%

– Investigating authority 18.75%

– HM Court Service 12.5%

The local planning authority will generally be both prosecuting and investigating authority.

The case that really opened people’s eyes to the potential financial scale of confiscation orders arising from breaches of planning control was R v Del Basso (Court of Appeal, 19 May 2010). Failures to comply with a enforcement notice relating to an unauthorised parking business led to a confiscation order of £760,000.

There have been various orders made for higher amounts – big money whether you are the defendant or the cash-strapped local planning authority.

Of course, the potential for a POCA confiscation order should not taken into account by an authority in deciding whether to enforce against a potential breach of planning control, whether to prosecute and/or in determining its approach to negotiations which might potentially resolve the underlying concerns. However, in the recent cases the Court of Appeal has expressed concern at particular authorities’ behaviour.

R v The Knightland Foundation (Court of Appeal, 26 July 2018) concerned the failure to comply with an enforcement notice served by the London Borough of Islington, relating to the unauthorised use as 18 self-contained dwellings of a development which had planning permission for HMO use. An appeal against the enforcement notice had been dismissed but the owners submitted a fresh application for planning permission for change of use of the building to a hotel.

“In September 2017, a planning officer, Mr Shaxted, indicated to the respondents that the principle of an 18 room hotel seemed acceptable to him. Email traffic between the enforcement officers and members of the Planning Team that month revealed that the Enforcement Team were determined to press ahead with the prosecution and to apply for a confiscation order under the Proceeds of Crime Act 2002 (“POCA”), whatever the result of the 2016 planning application.”

“We do not have any material from the legal department or from the person who took the decision to prosecute but we do know that their decision was based on a report from Mr Kettani and Mr Jarrett. The judge found that report to be flawed and that the decision to prosecute and to continue the prosecution based on it had an improper motive namely the financial advantage to the applicant of a POCA order. Those who advised the person who took the decision to prosecute failed to take into account a relevant factor, namely, the possibility that the respondents’ position could be regularised and allowed an irrelevant factor, namely, the possibility of their obtaining a POCA order to the authority’s financial advantage, to carry significant weight. On the judge’s findings, having taken the decision to prosecute, officers of the same authority then attempted, improperly, to influence the determination of the planning application so that it would not impact adversely upon the prosecution and/or the prospects of their obtaining a POCA order. In their eyes the grant of planning permission was intrinsically linked to the prosecution and possible penalty. The judge agreed and so do we. Had planning permission been granted and the respondents’ position regularised, this could have been a significant factor in mitigation and any attempt by the respondents to persuade the court that it would not be proportionate to make a sizeable POCA order.

Specialist planning enforcement lawyers Ivy Legal have written an interesting commentary on the judgment, querying the basis for the court’s conclusions and seeking to limit its implications for other cases.

However, by coincidence the judgment was in fact handed down at precisely the wrong moment for another local planning authority, Wokingham Borough Council, between the Crown Court hearing and handing down of judgment following an application to stay a set of criminal proceedings (within which a POCA confiscation order was contemplated) for abuse of process. These proceedings concerned non-compliance with an enforcement notice relating to unauthorised uses at the Hare Hatch Sheeplands garden centre in Berkshire.

In that case the defendants had been persuaded to withdraw an appeal against the enforcement order in order to submit an application for a certificate of lawfulness to seek to resolve the issues but then the authority determined that it could not lawfully issue the certificate and continued with its enforcement steps. The Crown Court judge set aside the proceedings for a number of reasons.

[One] “very significant area of her concern was fact that the possibility of an order being made under POCA was one of the principal factors in the decision to prosecute. She accepted that by the conclusion of the High Court proceedings a considerable amount of public money had been expended on the case and expressed sympathy for hard-pressed local authorities facing competing claims on ever-decreasing resources. WBC had the duty to police planning controls and do so in the public interest.

If the prosecution resulted in a conviction and a POCA order made, WBC would have received 37½% of the fruits of the order. In the judge’s view, this lent support to the defence submission that WBC was seeking to prosecute the Respondents to claw back public money already expended on the case. She observed that the POCA provisions apply only after conviction, and she stated 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.”

The authority appealed but the Court of Appeal, in Wokingham Borough Council v Scott (Court of Appeal, 17 January 2019), upheld the judge’s ruling:

We shall begin with what we consider to be one of the most important issues raised again in this application and addressed in Knightland, namely the role played by a POCA order in the decision to prosecute in the criminal courts.

It may come as a surprise to some that there are prosecuting authorities who may benefit financially from their decision to prosecute. It certainly came as a surprise to the members of the court in Knightland that a body given the power to prosecute should consider the possible financial advantage to itself as a relevant factor in the decision to prosecute. As the court held in Knightland, this flies in the face of the clear provisions of the Code for Crown Prosecutors, accepted by all prosecuting authorities as the applicable Code, that a prosecutor must be independent, fair and objective.

We endorse and repeat the observations of the court in Knightland. The decision to prosecute is a serious step and one that must be taken with the utmost care. We understand the argument that the making of a POCA order on conviction may act as a deterrent to offending and has the effect of extracting ill-gotten gains from offenders. This was no doubt Parliament’s intent in enacting the POCA. But 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. We hope that this message will be relayed to all those making charging recommendations and decisions as soon as possible.

On the facts of this case, given we have heard nothing to justify the decision to prosecute at least ten of the Respondents after the injunctive relief was granted and Mr Scott was made subject to a suspended sentence of imprisonment, it raises the distinct possibility that making of a POCA order in WBC’s favour was one of the grounds for the decision to prosecute them. If it was, it should not have been.”

“We also have concerns about the approach taken by WBC to selecting those to be prosecuted. The Code for Crown Prosecutors also provides that prosecutors must be satisfied that there is sufficient evidence to provide a realistic prospect of conviction of each suspect on each charge and that in every case there is a public interest in prosecuting.”

“Finally, we add two things. 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. 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.

Secondly, nothing we have said in this judgment should be seen as casting doubt on the value of informal discussions between officers of a local planning authority and an applicant for planning permission or a landowner who appears to be responsible for a breach of planning control. This judgment and Her Honour Judge Morris’s ruling were based entirely on the particular facts of this case. It is 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, in breach of the principles set out in Reprotech (see the speech of Lord Hoffmann, at paragraphs 27 to 38). 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.”

For an authoritative account of the case, do read the article by Scott Stemp (the barrister who acted for the successful respondents) POCA and improper planning prosecutions (9 March 2019).

No doubt POCA will continue to be highly relevant to authorities seeking to make ends meet. In researching this post I came across a flyer for a local authority training course asserting that receipts from confiscation orders can go a long way to funding the planning enforcement team within an authority. But these cases do sound a note of caution. Notwithstanding the Home Office’s “incentivisation“, the point of these orders should surely be to influence the behaviour of offenders and potential offenders, not the behaviour of local planning authorities!

Simon Ricketts, 27 April 2019

Personal views, et cetera