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As restaurants and cafes look forward to maximising their business during some warmer weather, the High Court has considered the extent to which restaurateurs already using the space outside their premises for al fresco dining without having obtained planning permission might be able to benefit from the long user rules to establish lawful use and immunity from enforcement action.

Mr. Julian Cordani, the current owner of a restaurant and sandwich bar at Great Portland Street, London called Demartino has been permitted to station tables and chairs on the pavement outside his restaurant for al fresco diners after establishing use for such purposes over a period of more than ten years. Westminster City Council’s objections to a planning inspector’s grant of a certificate of lawful existing use or development (“CLEUD”) to the restaurateur were dismissed by the High Court.

Property owners can make an application for a CLEUD if it can be demonstrated that the necessary ten years of “continuous use” has accrued over the relevant area. Once granted, a CLEUD confirms that the existing use of the relevant land is lawful and it has the effect of providing immunity against enforcement action.

Following Mr. Cordani’s application for a CLEUD, the case officer from Westminster City Council visited the premises early one morning and discovered that there was no furniture outside, and as a result, refused the initial application.

Mr. Cordani then successfully appealed to the Secretary of State. The inspector reached his conclusions on the basis of clear, independently corroborated and unchallenged evidence collated by Mr. Cordani from eye witnesses that an area of pavement adjoining the restaurant had been used by its customers for outdoor dining since the early 1990s.

The local authority then issued an application to the High Court to quash the decision of the inspector. Westminster argued that, as the restaurant’s use of the pavement was restricted to the summer months and tables and chairs were taken indoors at night, the use could not be said to be “continuous”. It was also submitted that issuing the CLEUD granted went beyond what the evidence would support and its drafting was in excessively broad terms as the Secretary of State’s own policy on the drafting of CLEUDs was not followed.

However, dismissing Westminster’s appeal, Judge Anthony Thornton QC upheld the inspector’s decision that this temporary storage was a “short period of inactivity” and did not constitute a “significant interruption” in the requisite continuous use. The inspector had found that this practice of storage was a necessary and normal routine of most restaurants operating an al fresco on-site eating facility. Similar considerations would apply to holiday periods or other occasions of a temporary nature when the restaurant was closed to business, such as periods of enforced closing or lack of demand. Intermittent and overnight storage of pavement furniture does not therefore reset the CLEUD clock to zero.

The Court also held that the CLEUD correctly defined the use of the pavement area in the same terms as the use that had acquired immunity. The CLEUD did not need to specify the exact amount of pavement furniture or limit the hours of permitted use for the relevant area. The number of tables and chairs that can be used is limited to the maximum number that can safely and reasonably be placed on the pavement for customers’ use.

This case is a good example of the Court taking a pragmatic approach to the increasing popularity of al fresco dining, and will be welcomed by owners of restaurants and cafes as we all look forward to warmer, sunnier weather over the summer months.

It should also be noted that any application for a CLEUD relates to the particular circumstances of each matter and the prospects of success will depend on the quality of the evidence submitted in support of the application. In this particular case, the seating area was located on the public highway and there was no indication that Westminster sought to enforce its highway powers.

Anyone considering adding an outside seating area should consider whether planning permission might be needed. The status of the land will need to be checked as, if it is on the highway, a highway licence will be needed and, if it is on private land, the agreement of that owner.

Should you require any further information or guidance, please contact Pitmans Hospitality team or:

Nicola Kirk
Head of Hospitality team
T: 0118 957 0226
E: nkirk@pitmans.com

Sue Crowther
Head of Planning team
T: 0118 957 0222
E: scrowther@pitmans.com

As part of the Government’s Growth and Infrastructure Bill there is a proposal to delay the 2015 rating revaluation until 2017. The current rating assessments are based on values in 2008 since when there have been substantial falls in property rental levels. The 2015 revaluation would have been based on rental levels in April 2013 and it is very unlikely that there would be any recovery by that time.

The effect of postponing the revaluation to 2017 will mean that many businesses will continue to be burdened with inflated rates for another two years.

Evidence has been given by the property industry to the government committee hearing evidence regarding this proposal and calls have been made for the proposed postponement to be cancelled.

In addition an online petition has been set up by Colliers International in an attempt to defeat the government’s proposal. The petition requires 100,000 signatures to trigger a debate in the House of Commons.

It is considered that the hard pressed retail sector will suffer in particular if the government proposal succeeds.

To support the e-petition please click here.

For further information regarding property issues please contact Pitmans Real Estate, Planning and Environment teams.

Sally Sharp
Partner
T: 0118 957 0362
E: ssharp@pitmans.com

The final version of the National Planning Policy Framework, designed to consolidate an unwieldy multitude of complex policy statements, circulars and guidance notes into a single, simpler document, was published in a blaze of publicity on 27 March 2012.  Containing under 100 pages, it replaced over 1300 pages of former Planning Policy Statements (PPSs) and Planning Policy Guidance documents (PPGs).

The ministerial foreword asserts that, “The purpose of planning is to help achieve sustainable development”. “Development” is said to mean “growth” and “sustainable” to mean that “ensuring that better lives for ourselves does not mean worse lives for future generations”. Interestingly and controversially, the foreword continues, “Development that is sustainable should go ahead, without delay – a presumption in favour of sustainable development that is the basis for every plan, and every decision. This framework sets out clearly what could make a proposed plan or development unsustainable.”

The importance attached to promoting sustainable development is reflected in sections on protecting green belt land, meeting the challenge of climate change, flooding and coastal change, conserving and enhancing both the natural and historic environment and in the  encouragement of  effective use of brownfield sites and the maximisation of use of public transport, walking and cycling.

With the mansion tax, the 50p tax rate, the housing market and the search for economic growth continuing to dominate the news, the ink was barely dry on this new policy dispensation when on 6 September 2012 Local Government Secretary Eric Pickles in a housing and planning statement to MPs in the House of Commons outlined a range of new measures designed to boost the construction industry and provide more affordable homes. The Prime Minister and Deputy Prime Minister have now entered the fray and plans include:-

• Consulting on a three-year relaxation of planning rules on extending homes and business premises.
• Increasing from 3 to 6 metres the length of extensions householders are allowed to construct without planning permission.
• Removing requirements for developers to include affordable housing – if they prove they make a site “commercially unviable”.
• Making available an extra £280m for the FirstBuy scheme to help would-be homeowners with a deposit.
• Introducing a new bill to provide £40bn in government guarantees to underwrite major infrastructure projects and £10bn to underwrite the construction of new homes.
• Providing funding of £300m for the construction of 15,000 affordable homes and bringing 5,000 empty homes back into use.
• Introducing a new “major infrastructure fast-track” procedure for big projects.
• Putting poorly performing council planning departments into “special measures” and allowing developers to bypass them if they fail to improve.
• Funding of £300m to provide 15,000 affordable homes and bring 5,000 empty homes back into use.

Predictably these latest proposals have generated much party political controversy, in particular the proposal to relax section 106 agreements.

With this history it is bound to feature prominently in future exchanges regarding the economy and its future merits close attention.

Marcus McCluggage
Solicitor, Real Estate
T: 0118 957 0598
E: mmccluggage@pitmans.com

Despite a backlash from major UK housebuilders, Bristol City Council’s plans to introduce the government’s Community Infrastructure Levy (“CIL”) are now on course.  At a public inquiry on 21 June 2012, housebuilders opposed Bristol’s proposed charges, which they argued were not based on robust viability evidence. However, the examiner has now found in favour of the Council and if the full Council votes to adopt CIL in September, the levy is likely to be brought into force by 1 January 2013.

CIL is set locally according to the amount of infrastructure that councils consider is necessary to support development in their area. It is based on the net additional amount of floorspace which is created by the new development. According to government research, CIL has the potential to raise an estimated £1 billion a year of funding by 2016.

But CIL, like Planning Gain Supplement before it, is not without its critics. Leading housebuilders, including Barratt and Taylor Wimpey, have grouped together to  set up a “fighting fund,” managed by the Home Builders Federation, to tackle councils amid concerns that inflated charges in these difficult financial times will only serve to dampen development. Widespread disputes are expected to take place all over the country as councils introduce CIL, with critics complaining that councils are setting higher charges to counteract the squeeze on their budgets. The group is also challenging potential charges at the councils of Mid Sussex, Central Lancashire, Thurrock, Chelmsford, Exeter and South Somerset. Recently, Sainsbury’s successfully drove the Borough of Poole to pull its CIL on new superstores, and developers in London, already paying the London mayor’s CIL as a contribution towards Crossrail, are set to challenge boroughs introducing their own supplemental charges in the coming months.

To date, only five councils have brought CIL into force and only a further 50 have published their proposed CIL rates for consultation, despite the fast approaching April 2014 deadline.

Sue Crowther
Partner
T: 0118 957 0222
E: scrowther@pitmans.com

Summary – Squatting in residential buildings will be a criminal offence as from 1 September 2012 under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (the “Act”):

The Ministry of Justice consulted on the issue of squatting and possible options for dealing with it. The new law will mean that a person will have committed a criminal offence under section 144 of the Act where they:

• are in a residential building as a trespasser, having entered it as a trespasser
• have known or ought to have known that they were a trespasser; and
• are living in the building or are intending to live in there for any period.

The person will be liable on summary conviction to:

• imprisonment for a term not exceeding 51 weeks;
• a fine not exceeding level 5 on the standard scale; or
• both.

A constable may enter and search any premises for the purpose of arresting a person under this offence (section 17 of Police and Criminal Evidence Act 1984).

Impact

The criminalisation of squatting in residential premises should make the process of removing squatters easier, quicker and cheaper. It is in response to calls for greater protection for property owners from squatters. This step will act as a far greater deterrent; by dispelling any confusion as to what action can be taken by police.

Increased powers will likely speed up the sale of premises, which might otherwise have been delayed by the presence of squatters.

This offence does not, however, stretch to commercial premises for which the old regime remains. This position was affirmed in a recent case concerning the eviction of the Occupy London protesters from a vacant office building owned by Sun Street Property, a UBS subsidiary. UBS did eventually obtain possession; however, Sun Street Property Ltd v Persons Unknown [2011] EWHC 3432 exemplifies the potentially protracted process involved in evicting trespassers from commercial premises and the importance of closely following the possession procedure (Civil Procedure Rules Part 55). Delay tactics are often successfully pursued by squatters in commercial premises.

Under the current regime, applications for interim possession orders must be made within 28 days of becoming aware of a trespass. Squatters failing to vacate after 24 hours of service of the order are committing a criminal offence, however, these matters are generally considered to be civil matters and police are less ready to intervene than it appears will now be the case in a residential context. The law on commercial property is unlikely to be brought into that with the new law under the Act  for residential premises due to limited resources and practicability.

For further information on this article, please contact Pitmans Real Estate, Planning or Environment team.

Sally Sharp
Partner
T: 0118 957 0362
E: ssharp@pitmans.com

Before the “Green Deal” is implemented, energy efficient improvements to properties are an expense incurred by the occupier effecting the improvements but benefit all future occupiers. The new proposals for the Green Deal under the Energy Act 2011 (“the Act”) will allow property owners to adopt energy efficient improvements at no upfront cost to the occupier. The improvements will be financed by accredited providers, and the cost will be recouped in instalments through energy bills.  The aim of the Energy Act is to reduce carbon emissions cost effectively.

There will only be an incentive for the current occupier to adopt energy efficient improvements if any supplementary charge attached to the energy bills is smaller than the resultant saving on the bill with the improvements. The Act introduces the Green Deal which is based on the principle that energy efficient improvements to properties are paid for by the resulting savings on gas and electricity costs; this principle is known as “the Golden Rule”. It will mean that energy bills for all occupiers, present and future, will be reduced and the owner of the property will benefit from the increased value of the property. (Note that for certain expensive measures for residential property, an extra subsidy could be available via the Energy Company Obligation.)

The government is obliged to devise framework regulations to establish a scheme for the authorising of Green Deal assessors, Green Deal providers or installers and to regulate their conduct in a Code of Practice. On 23 November 2011, DECC launched a consultation on the details of the Green Deal and the Energy Company Obligation (ECO), with a view to drafting these regulations. A Memorandum of Understanding has very recently been signed between the government and 22 organisations to become the first Green Deal providers.

It is likely that the Green Deal will come into force in Autumn 2012 and initially will apply to England only. Some of the fundamental principles that the Act will lead to are:

1. Payments are recoverable as a debt against the bill payer. There will not be a charge against the property nor will future bill payers be liable for any arrears. Bill payers are liable only in respect of the period during which they are the bill payer.

2. From April 2016, private residential landlords will be unable to refuse a tenant’s reasonable request for consent to energy efficiency improvements, where a finance package, such as the Green Deal and/or the Energy Company Obligation (ECO), is available.

3. From April 2018, it will be unlawful to rent out residential or business premises that do not reach a minimum energy efficiency standard (the intention is for this to be set at EPC rating ‘E’). This might mean that Landlords will be forced to enter into or consent to the deal.

For further information please contact Pitmans’ Real Estate, Planning and Environment Teams.

Sally Sharp
Partner
T: 0118 957 0362
E: ssharp@pitmans.com

In the present economic climate, environmental compliance is unlikely to be top of the Boardroom agenda, but 2011 has seen a huge shift in approach by the regulatory authorities away from criminal prosecution towards self-reporting and self-regulation. Until now, enforcement has proven to be increasingly time consuming and costly.

Prosecutions

Some cases that have come to court this year demonstrate the scale of the problem:

• A leading retail business was prosecuted for illegally dumping and burning waste at two of its out-of-town shopping complexes. Instead of paying for skip hire, waste timber was burnt on a bonfire and other waste was burnt in a large pit.  The company was fined £200,000 and ordered to pay £14,558 costs, plus £500,000 clean-up costs.
• The operator of an illegal waste site was prosecuted for dumping construction and demolition waste over an area the size of five football pitches. He was sentenced to 4 years’ imprisonment for running the operation and laundering millions of pounds in profits. This is the longest prison sentence ever handed out for waste crime and the 3-year investigation was one of the biggest and most complex ever undertaken by the Environment Agency (the EA).
• The operator of an illegal waste company was prosecuted for running an illegal waste transfer station and scrap metal yard. He was given a 2-year community sentence and ordered to pay over £800,000 under the Proceeds of Crime Act (POCA) 2002, with a warning that if he did not pay within 6 months, he faced 5 years’ imprisonment. This is the largest POCA 2002 ruling secured by the EA to date.

But often, non-compliance may simply be down to poor record-keeping, lack of maintenance procedures or just plain ignorance:

• A retail distribution company was prosecuted for six offences under the waste packaging regulations. The company saved £5,430 by failing to register with the EA, or join a compliance scheme. It was fined £11,985 and ordered to pay £2,262 costs and £3,864 compensation.
• A food company was prosecuted for failing to comply with the waste packaging regulations. The company failed to register with the EA and failed to recover and recycle packaging waste. It was fined £8,000 and ordered to pay £3,096 compensation and £1,497 costs.
• A brewery was fined £2,300 and ordered to pay £8,225 costs for breaching its permit and failing to notify the EA of the breach, without delay. Faults at the plant had led to large quantities of cider being diverted to an effluent treatment plant and there were no staff training procedures in place to deal with the correct operation of the system.

There will always be serious offences that justify prosecution, but regulatory enforcement is beginning to take a new form and businesses should take note.

Environmental reporting

In May 2011, the EA reported that environmental disclosure among FTSE All-Share companies has improved considerably since the 2006 assessment. But whilst 99% of FTSE listed companies made qualitative disclosures, the standard of reporting is often very basic. The study revealed that only 28% of the companies surveyed followed government guidance based on key performance indicators (KPIs).  This guidance is voluntary, but the government and the EA are now urging all UK businesses (not just big companies) to report their environmental disclosures based on KPIs, to include: emissions and discharges to air, land and water, their energy and water use, and  environmental fines.

In addition, as part of its Better Regulation agenda, the EA is about to trial Annual Environmental Compliance Statements, which will need to be signed off at Board level. The trials will start shortly and focus on 28 sites across 6 sectors. The message is clear:  by measuring environmental impacts and risks, businesses will be better able to manage and reduce them.

Civil Sanctions

2011 also saw the introduction of civil sanctions, which were brought into force on 4 January under the Regulatory Enforcement and Sanctions Act (RESA) 2008. These sanctions were introduced to provide the EA with new ways to enforce the protection of the environment, as an alternative to criminal prosecution. They are not aimed at serious offenders, but at “legitimate businesses that are trying to do the right thing.”

There are six types of civil sanctions: compliance notice, restoration notice, fixed monetary penalty (£300 for organisations and £100 for individuals), enforcement undertaking, variable monetary penalty (up to £250,000) and stop notices.  These sanctions can be used for offences committed after 6 April 2010 in England and they are now in operation, with the ‘enforcement undertaking’ being the frontrunner.

Enforcement undertakings are offers, formally accepted by the regulator, to take steps that would make amends for non-compliance and its effects. To date, there have been 50 offers. Twenty-one offers have been formally accepted and donations in excess of £154,000 have been paid towards charitable and community causes, including wildlife and woodland trusts and a recycling campaign. The largest donation to date is £25,000 towards a canal towpath and environmental improvement project by a company who had failed to register with a waste packaging compliance scheme.

At present, the EA is the only enforcement body to use the new civil sanctions, but Natural England is expected to follow in the New Year.  Civil sanctions for environmental permitting offences are expected in April 2012 and The First-tier Tribunal (Environment), created in May 2011, awaits its first appeal against the new civil sanctions regime.

The Way Ahead

The Board therefore has two options: ignore environmental compliance and risk prosecution or one of the new civil sanctions, or embrace the shift in approach by the regulatory authorities by making voluntary disclosure using environmental KPIs and, in the event of non-compliance, consider entering into an enforcement undertaking. This more flexible and proportionate approach towards compliance is welcome news for business.

For more information please contact Pitmans Environment Team.

Sue Crowther
Partner
T: 0118 957 0222
E: scrowther@pitmans.com

The penalties for failure to comply with planning enforcement notices have never been tougher – now, not only a fine, but the risk of financial ruin and even prison. Flouting planning laws does not come cheap and the repercussions can be devastating.

Section 179 of the Town and Country Planning Act 1990 enables courts to fine defendants for not complying with enforcement notices – up to £20,000 in the Magistrates’ Court or an unlimited sum in the Crown Court. However, the stakes have recently been raised by the Proceeds of Crime Act 2002 (“POCA”), which allows a Crown Court to confiscate any benefit obtained by a defendant as a result of or in connection with the commission of a criminal offence and to impose a prison term in default.

Any possible doubt that POCA could apply to Section 179 offences, where no one is physically hurt or defrauded, was recently dispelled by the Court of Appeal (Criminal Division) in the case of Luigi Del Basso and Bradley Goodwin v Regina [2010] EWCA Crim 1119.

The defendants operated a park and ride business at Bishop’s Stortford Football Club, taking passengers to Stansted Airport. This use was in excess of its permitted use for parking restricted to match days. In due course, East Herts District Council brought enforcement proceedings, but in the period during which the enforcement notice was appealed (and dismissed), far from ceasing, the parking operation expanded.  A successful Section 179 prosecution still did not cause the business to cease operating and a second prosecution followed.  On conviction, Mr Del Basso was fined a total of £15,000 for five offences and ordered to pay £20,000 costs. It would appear that this was all that Mr Del Basso was expecting and, as such, he regarded it as a necessary business expense. The confiscation order that followed must therefore have come as a real shock.  The Crown Court held that the operation of the park and ride business became “criminally unlawful” from the moment the enforcement notice became effective and the defendants were to be treated as having a criminal lifestyle from then onwards, within the meaning of POCA.

It was adjudged that the benefit obtained from the illegal activity was £1,881,221.19. The amount that Mr Del Basso was able to pay was £760,000, which was the total value of all his assets, and he was ordered to pay that sum with 18 months imprisonment in default. A nominal order was made against Mr Goodwin, since he was by then bankrupt.

The benefit figure was calculated by adding up the gross receipts of the defendants’ criminal conduct namely, the operation of the car park during the relevant period. The Court cannot deduct the expenses incurred by a defendant in obtaining a benefit. The defendant’s perfectly legitimate costs in running the business, such as staff wages and tax could not be used to reduce the benefit figure. This figure is therefore going to be much higher than the defendant’s actual profit.  Much of the “benefit” obtained by Mr Del Basso was given by him to the football club. However, the use to which the benefit is put is irrelevant to the confiscation proceedings, as is “the current poverty” of the defendant. A drug trafficker cannot therefore avoid confiscation proceedings by giving all his ill gotten gains to charity. Accordingly, on 19 May 2010, the Court of Appeal dismissed the appeal against the confiscation order.

Two further points should be noted:

(1) serving the default prison sentence does not extinguish the confiscation order and civil proceedings can be used to seize the defendant’s assets; and

(2) should a defendant come into possession of further assets, the proceedings can be reopened in order for these to be seized to satisfy the remainder of the benefit figure, which in the above case, would be just over £1million.

Also, do not think a local planning authority will not institute confiscation proceedings, because being a recipient of some of the confiscated benefit, it clearly has an incentive to do so.  In the Del Basso case, the Council was set to receive one-sixth of any recovered funds. In these parlous times, such sums may assist in replenishing depleted local authority coffers. Practitioners should therefore be alert to the provisions of the Regulatory Enforcement and Sanctions Act (RESA) 2008, which are meant to encourage non-criminal sanctions. Local planning authorities must follow RESA 2008 criteria to prosecute, failing which, the court may stay a prosecution as an abuse of process. In Del Basso, the Council sought confiscation in the sum of over £5 million, but failed, because the additional benefit was received by the company and the judge refused to pierce the corporate veil. Therefore, even if you are on the receiving end of confiscation proceedings, all is not lost and in the Del Basso case, the benefit was reduced by over £3 million as a result of legal submissions.

The last word rests with the trial Judge in the Del Basso case:

“They [the appellants] have treated the illegality of the operation as a routine business risk with financial implications in the form of potential fines or, at worst, injunctive proceedings. This may reflect a more general public impression among those confronted by enforcement notices with the decision whether to comply with the law or flout it. The law, however, is plain. Those who choose to run operations in disregard of planning enforcement requirements are at risk of having the gross receipts of their illegal businesses confiscated. This may greatly exceed their personal profits. In this respect they are in the same position as thieves, fraudsters and drug dealers …”

Written by Sue Crowther (Parnter – Pitmans Solicitors) and Edward Jenkins QC.

For further information relating to Planning or Environmental Law, please visit Pitmans Planning team or Pitmans Environmental team where greater details can be found.

Sue Crowther
Head of Planning & Environment
T: 0118 957 0222
E: scrowther@pitmans.com

Edward Jenkins QC
5 Paper Buildings
T: 0207 583 6117
E: edjeqc@yahoo.co.uk

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