Panayi, R. v

On 26 September 2016 in the Highbury Corner Magistrates' Court, the appellant, Andrew Panayi, was convicted of breach of an Enforcement Notice, contrary to section 179 of the Town and Country Planning Act 1990. He was committed to the Crown Court for a confiscation order to be considered, pursuant to the Proceeds of Crime Act 2002, and for sentence. On 15 January 2018 in the Crown Court at Blackfriars, a confiscation order was made by His Honour Judge Peter Clarke QC in the sum of £95,920 under section 6(5)(b) of the Proceeds of Crime Act. He was also fined £25,000. The appellant now appeals

It is necessary to set out the background which goes back some years. The appellant is the freehold owner of 282-284 Caledonian Road, London N1 1BA, as well as being the owner of other properties. At all material times the property at 282-284 Caledonian Road was subject to an Enforcement Notice dated 22 August 2003. That Enforcement Notice was issued because the appellant had constructed a mansard roof extension on the property which materially exceeded the dimensions for which planning permission had been given by the local council as the planning authority. The extension was built taller and deeper and also nearer to the front wall of the building than had been approved. As a result it was visible from the street and was subsequently found, by reason of its poor design, to detract from the character of the conservation area in which the property was located. That was the basis for the Enforcement Notice, which was also contrary to the council's development

The appellant appealed against that Enforcement Notice but on 12 February 2004 the appeal was dismissed by a Planning Inspector who found that the roof extension was visible from

It appears from a later report made some years later in 2014 that it was considered by the council in 2007 not to be in the public interest to prosecute the appellant at that time, hence the letter dated 28 March.

In view of that letter, the appellant took no steps to comply with the Enforcement Notice. He continued to use the property with the roof extension as built which was let out as two flats on which he received rent. We understand that the permission as granted was for a roof extension to a hostel which would have involved the provision of one extra room, which may or may not have been a bedroom for accommodation and a kitchen.

It is accepted on the appellant's behalf that his conduct remained unlawful. There was no planning permission and the Enforcement Notice, although not to be the subject of a

In 2014 the appellant sought to regularise the position by applying for a Certificate of Lawfulness, that is to say for a certificate that the existing use of the roof extension as top floor flats was lawful. That application was rejected by the council and an appeal was unsuccessful. The Planning Inspector determined, in a decision dated 18 February 2016, that the council's refusal to grant a Certificate of Lawful Use in a case where there was an extant Enforcement Notice in being was well-founded. The Inspector recorded that it was common ground at that time that the extension had not been modified to comply with the Enforcement Notice and concluded that the entire unmodified extension remained

It appears that it was this application for a Certificate of Lawful Use and the failure of the application and the appeal which led the council to reconsider the question of prosecution.

The appellant challenged the commencement of that prosecution, contending that it was an abuse of process in view of the terms of the letter dated 28 March 2007. That application was rejected by the magistrates who declined to state a case for any question of law to be determined. That refusal to state a case was, we were told, upheld by the Divisional

The appellant's next move was to seek permission to bring judicial review proceedings. His

The appellant was then convicted in the Magistrates' Court and, as we have said, was

The confiscation order which the council sought was calculated on the basis of the gross rental income from two self-contained flats occupying the unauthorised enlargement of the mansard roof space. The council accepted the figures for rental income provided by the appellant in making its calculation, resulting in a benefit figure from the date of non-compliance with the Enforcement Notice, that is 12 February 2005, to the date of

The appellant's position was that it was wrong in principle, in view of the terms of the letter of 28 March 2007, for there to be confiscation proceedings, but alternatively that any benefit should be calculated limited to the period from 2016 onwards.

By the time of the hearing before the judge, it was common ground that this was not a case of general criminal conduct and therefore the lifestyle presumptions in the Proceeds of Crime Act 2002 were not applicable in this case and what needed to be assessed was the benefit from the appellant's particular criminal conduct.

The judge referred to the case of Sangha in the Court of Appeal [2008] EWCA Crim. 2562, [2009] 2 Cr.App.R (S) 17, to which we will return, and indicated that he was guided by what was said in that case. He rejected the submission made on behalf of the appellant that the only period of time which should be considered was the period between the issue of the summons and the conviction, saying that that did not reflect the criminality of this appellant's actions, but he also said that the letter sent by the local authority on

In that context, the judge considered that he needed to address the question of proportionality as required by section 6(5) of the Proceeds of Crime Act 2002 and he indicated that on the facts of this case he found that to be a difficult question. The course which he proposed to take, referring to what was said in Waya [2012] UKSC 51, [2013] 1 AC 294, about the need for resolution of such matters on a case by case basis, was that it would be appropriate to make no calculation of benefit by reference to the period from the date of compliance up until the date of the letter of 28 March 2007, to take 50 per cent of the rent obtained by the appellant thereafter and to attribute that 50 per cent sum to the appellant's criminal conduct, making no adjustment for changes in the value of money. Adopting that course, the judge assessed the benefit to be £95,920 and since there was no issue about recoverable amount, ordered that sum to be paid within the next three months, with one

The appellant's written grounds are, first, that the confiscation order was wrong in principle and manifestly excessive by reference to the planning history and in particular the terms of the letter dated 28 March 2007 to which we have referred, the effect of that letter, as it was submitted, being that the council would not prosecute for the then breaches of planning control. The second ground was that the confiscation order imposed was a breach of section 6(5) of the Proceeds of Crime Act 2002, in that it was disproportionate. Again, reference was made to the planning history, in particular the letter of 28 March 2007, and the fact that the council as the prosecuting and planning authority had decided at that time that it was not in the public interest to prosecute. The third ground related to sentence and submitted that that too was wrong in principle and manifestly excessive.In supplementary written submissions, and in oral submissions today however, counsel have focused in particular on the terms of the charge, which we have set out, as a result of a point raised by the court.

The appellant was charged with being in breach of the Enforcement Notice "on or about

Here the council chose to charge by reference to a single day.

The question arises therefore whether the calculation of benefit for the purpose of confiscation proceedings can extend over any greater period; specifically whether it can extend in respect of the whole period from 2007 onwards to the date of conviction. The prosecution says that it can. The appellant says that it is limited to the benefit obtained on

This point was not taken below. The case there on behalf of the appellant was that there should be no confiscation at all in view of the 2007 letter, or alternatively that the benefit should be calculated from the date of the summons in 2016 which would have resulted in a benefit of the order of about £10,000. There was reference in the course of argument to the fact that the charge covered a single day, but that was in the context of the appellant resisting the argument that this was a case of general criminal conduct so that the lifestyle assumptions should apply. That was, so far as we can see, the only context in which the point arose, which is rather different. By the time of the hearing before the judge, the prosecution had accepted that it was not a case of general criminal conduct and therefore the point was not pursued in submissions before him. Nevertheless, although the point was not taken, it is a point of law and we permit it to be taken in this court.

We therefore turn to the provisions of the Proceeds of Crime Act 2002. Section 6 sets out the conditions for proceeding to the making of a confiscation order. They include that a defendant is convicted of an offence or offences in proceedings before the Crown Court, or that he is committed to the Crown Court for sentence in respect of an offence or offences under various provisions of the Sentencing Act, or that he is committed in respect of an offence under section 70 with a view to confiscation being considered. The court then has to decide whether or not the defendant has a criminal lifestyle, as it is accepted in this case that he does not. Then it has to decide whether he has benefited from his particular criminal conduct and go on to decide the recoverable amount.

These provisions are developed further at section 76. Particular criminal conduct is defined

We need not set out (b) or (c). Subsection (4) provides:

It is clear that the benefit which the court needs to identify is the benefit obtained "as a result of or in connection with" the criminal conduct of which the defendant has been convicted, or in respect of which he has pleaded guilty. There is no scope for the court to find that the defendant has committed other or more extensive offences and to go on to identify the benefit which he has received from such further offending. This is apparent from the clear words of the statute but is in any event confirmed by the commentary in Blackstones Guide

The reference to offences which are admitted refers to admission by a guilty plea.

Mr Ranatunga for the council accepted this position in his clear and helpful submissions, but he submitted nevertheless that the words "in connection with" in section 76(4) were wide words which were capable of extending the scope of the relevant benefit, and did extend it in this case, with the effect that the benefit received by the appellant over the whole period since 2007 was obtained in connection with the conduct of which he was convicted, that is to say in connection with the offence committed on or about 18 February 2016. He pointed out that the offence of failing to comply with the Enforcement Notice was a continuing offence which occurred at any time after the end of the period for compliance: see the terms of section 179(1) and (2) of the 1990 Act. He pointed out also that there was no doubt, indeed it was agreed and was recorded as being agreed in the Planning Inspector's appeal decision dated 18 February 2016, that the roof extension had not been reduced in size, as required by the Enforcement Notice, and that no modification had taken place since the date of 18 February 2005, by which the appellant had been required to comply with the Enforcement Notice. It was therefore, he submitted, a case where there

In support of this submission as to the wide effect of the words "in connection with", he

Sangha was a case under the 1988 Act, but that makes no material difference for present

Thus, Richards LJ affirmed what he described as first principles, that an offender could only be sentenced in respect of matters alleged and proved. The passage on which

Mr Ranatunga derived three points from this passage. First he submitted that the case shows that the judge in the confiscation proceedings must not act inconsistently with the jury's verdict. He submitted that a finding that the appellant's benefit from criminal conduct covered the whole period from 2007 was not inconsistent with the commission of an offence on 18 February 2016. Second, he relied on the differences identified in this paragraph between the procedure, evidence and standard of proof which apply respectively in criminal and in confiscation proceedings. Third, he relied in particular on the concluding sentence, submitting that the judge in confiscation proceedings is entitled to make additional and more extensive findings of fact than those upon which the conviction is based and that the confiscation court is entitled to take into account all of the evidence it has heard in the confiscation proceedings, provided only that it acts consistently with the

Initially Mr Ranatunga was inclined to advance reliance on what was said in Sangha as an additional and alternative point to his submission as to the meaning of "in connection with", but on reflection he accepted that its relevance is essentially to support that

We cast no doubt on what Sangha decides or what was said by Richards LJ in paragraph 30. However, there is nothing there, in our judgment, which entitles a court to extend the meaning of particular criminal conduct beyond the conduct of which a defendant has been convicted or in respect of which he has pleaded guilty. The benefit obtained as a result of or in connection with such conduct must be referable to the offence with which the defendant is charged and of which he is convicted. It is not open to a court in confiscation proceedings to find that benefits obtained over an extended period were obtained in connection with the commission of an offence on a single day - at any rate on the facts of this case. The rent obtained by the appellant letting out the flats in question from 2005 or 2007 onwards cannot be regarded as having been obtained in connection with the criminal conduct of which he was convicted, which consisted only of being in breach of the

This conclusion means that the appeal against the confiscation order must be allowed. The benefit which the appellant obtained was limited to a single day's rent which we were told amounts to £58. Accordingly, we quash the confiscation order made by the judge and instead make an order in the sum of £58. It is therefore unnecessary to deal with the other grounds of challenge to the judge's order in the appellant's written grounds. We will briefly

The first ground, that it was wrong in principle to make a confiscation order at all, was dependent on the appellant's submission as to the effect of the 2007 letter. It was accepted however, in the light of the decision of Patterson J, that this letter did not prevent subsequent prosecution provided that reasonable notice was given. Once it is appreciated that the offence with which the appellant was charged and the benefit which can be confiscated from him is limited to a benefit obtained on a single day in 2016 this ground falls away. Similarly, ground 2 contended that it was disproportionate to make a confiscation order in respect of the period from 2007, when the council as the prosecuting authority had decided that it was not in the public interest to prosecute at that time. Again, therefore, in the light of our decision, this ground falls away and we need not

We turn to the appeal against sentence. The judge imposed a fine of £25,000, but it is fair to say did not give reasons for selecting a fine at this level. Mr Paget for the appellant submitted that the principal object of sentencing in planning cases was coercion, that is to say to coerce a defendant into compliance with an Enforcement Notice, and that this aspect did not arise here as by the time the appellant came to be sentenced the position had been regularised by the grant of planning permission for a different roof extension which has now been constructed. However, although coercion may be a factor, and sometimes an important factor in sentencing in such cases, we would not accept that it is the only or even that it is necessarily the principal object of sentencing in such cases.

This was a case where even though the conviction relates to conduct on a single day, it is accepted that the appellant had acted unlawfully from 2005 onwards by failing to comply with the Enforcement Notice. It is clear that he did so deliberately and with a view to financial gain. Moreover, as we have indicated, the extension as he built it was not only visible from the street, but was found by reason of its poor design to detract from the

The appellant has a number of material convictions for planning offences involving other properties he owned in the Council's administrative area. On 10 November 2007 he pleaded guilty to breaching an Enforcement Notice in respect of a property at 303-311

This history indicates a continuing willingness to disregard planning requirements, no doubt for financial gain, and the history in our view fully justified the level of fine imposed. The judge rightly considered that the letter dated 28 March 2007 acted as a warning and could not be relied upon indefinitely, but nevertheless the appellant chose to continue with what is accepted as being his unlawful conduct, albeit conduct which was not the subject of the prosecution. Nevertheless that is a matter which we are entitled to take into account

The sentence imposed by the judge, in our judgment, reasonably related to and reflected the defendant's criminality. It was neither wrong in principle nor manifestly excessive and the