Under wraps: enforcing concealed planning breaches after the Localism Act

Section 124 of the Localism Act 2011, introduced amid strong criticism from many quarters in the planning sector, has been in force for little under a year. The rule set out new time limits for enforcing concealed breaches of planning control, in response to the two high profile cases of R (on the application of Fidler) v Secretary of State for Communities and Local Government [2010] EWHC 143 Admin, and Welwyn Hatfield Borough Council v (1) Secretary of State for Communities and Local Government and (2) Beesley [2011] UKSC 15.

In the first case the court found that when building his house, Robert Fidler intended to deceive local planners by using "a shield of straw bales around it and tarpaulins or plastic sheeting over the top in order to hide its presence during construction" so that he could get around his expectation that the council "would not grant planning permission for its construction". The second case concerned an application for planning permission to build a hay barn, which was in fact going to be used as a dwelling. The Supreme Court found that the applicant intended to deceive the council from the outset and could not be awarded a change of use certificate. The question now is: who has benefited from the change in legislation and was it actually necessary?

New procedure

Section 124 enables local planning authorities (LPAs) to apply to the magistrates court for consent to take planning enforcement action outside of the normal four and ten year time limits in situations where individuals may have breached planning control by concealment. This change in law applies only to breaches after 6 April 2012 where the requisite four/ten year period had not been reached before this date.

The application must be made within six months of the date of knowledge of evidence of the apparent breach. The authority must satisfy the court, on the balance of probabilities, that the apparent breach has been deliberately concealed. The magistrates courts' power is discretionary and any order granted is on the basis that it is just to do so having regard to all the circumstances. If successful, the authority is issued a planning enforcement order, allowing it one year from the date of the order to take enforcement action.

Three main issues have arisen from the introduction of section 124. First, it has effectively eliminated immunity from enforcement action and the ability to obtain a certificate for lawful status under the Town and Country Planning Act 1990 for a number of individuals. While Lord Taylor of Holbeach gave assurances to the House of Lords at the time that section 124 was "aimed only at the worst cases of concealment" and that the government "had no appetite to abolish the limitation for enforcement action", others raised concerns. The Law Society, for example, strongly opposed section 124 believing it removed the definitive cut-off point whereby property owners cease to be liable from enforcement action by the local planning authority. Such clarity is important not only for the planning system but also for the conveyancing process.

Compounded pressure

Before the introduction of section 124, solicitors relied on and worked within the parameters of the four- and ten-year time limits. Requisitions and investigations relating to works and changes of use were tailored to potential breaches within these time periods, creating a clear process, not unduly burdensome on the solicitor. Since April 2012, solicitors must thoroughly investigate every change of use and building works for a property, obtaining supporting evidence to demonstrate no breaches of planning law, as well as no concealment of breach.

Such a rigorous approach is now required to ensure solicitors fulfil their duty of care and are not negligent, though this still must be achieved within the tight deadlines now demanded by clients. The involvement of buyers' mortgage lenders in transactions compounds this pressure. Section 124 now makes it difficult for solicitors to clearly advise on the risk of enforcement action and satisfy the requirements under the Council of Mortgage Lenders Handbook. So solicitors become more cautious in advising lenders, which in turn affects mortgage providers' confidence to lend.

If solicitors are unable to provide the definitive answer that lenders require in relation to planning liability, there is a fear they will again turn to defective title indemnity insurance to satisfy their CML Handbook requirements and protect their lender client from future risk.

It is not the first time that insurance has been seen as a solution. Solicitors were faced with a similar situation following the decision in Cottingham v Attey Bower & Jones [2000] PNLR 557. Drawing parallels with Cottingham, there is a risk that some sectors of conveyancing will purchase indemnity insurance as their default response rather than thoroughly investigate planning issues. While quick and easy, this automatic reaction is not helpful. It does not benefit the client and ultimately turns the planning liability issue simply into a box ticking exercise, where obtaining insurance allows a client to simply "pass go" and complete their transaction quickly. Care must be taken to ensure that such policies actually provide the necessary protection to purchasers and lenders alike and do not cause unnecessary expense to clients. Insurance does not give back the certainty that section 124 takes away nor does it provide a satisfactory solution to the problem for clients. It is just a sticking plaster over the uncertainty.

Deliberate concealment

The second difficulty is that the legislation does not provide a clear definition of what constitutes "deliberate concealment". There is no guidance as to what constitutes concealment or whom the test applies to. This is surprising given the impact on immunity from enforcement action.

The only clear point is that it is the concealment of the breach rather than the breach itself that is relevant. Commonsense would suggests that the term "deliberate concealment" should amount to a concerted effort to prevent the local planning authority from finding out about the breach that is required to trigger liability, though to what extent commonsense will prevail is questionable. The legislation was conceived with Fidler and Beesley in mind. Mr Fidler having constructed a mock tudor castle without planning permission and concealing it for more than four years behind a 40-foot high straw bale wall covered in blue plastic sheeting. Mr Beesley, meanwhile, obtained planning permission to erect a hay barn, erected a construction that externally looked like a barn but internally comprised a residential property.

Unfortunately, with no definition or guidance, section 124 may not effectively deal with those deliberately exploiting the rules on immunity the government intended it to. Just four weeks before section 124 came into force, the media reported the case of Mr and Mrs Brown who had constructed and occupied a wood clad building in Surrey without planning permission. Unlike Fidler and Beesley, this property was not deliberately camouflaged nor had there been any clandestine or nighttime construction of the property as in Mr Fidler's case. Mr and Mrs Brown simply constructed the property in a dip within wooded land which was naturally shielded, not physically concealing the structure in the way Fidler and Beesley had. Though like the others, the property was built in a designated greenbelt area where planning permission would have almost certainly been refused if legitimately applied for. The Browns, as with Fidler and Beesley, were under the radar of the local authority by failing to notify them for the purposes of Council Tax, Electoral Roll and Building Regulation Consent.

Although not in force at the time of the Brown decision, section 124 and the issue of concealment were considered. Following legal advice, Mole Valley District Council's local planning authority took the view that this did not amount to deliberate concealment and as such they would not successfully obtain a planning enforcement order (PEO) outside of the four year period. In this case the authority issued Mr and Mrs Brown with a certificate of lawful use.

It is possible that the LPA, being fully aware of the time and expense involved in the Fidler and Beesley cases, did not have the stomach to test its position, particularly given the current finances of local authorities. It is ironic however that in its first test section 124 failed to deliver and does not appear any more serviceable than what it replaced. Though it is clear that more cases are required before we are in a position to ascertain exactly what deliberate concealment entails and what triggers liability.

Confidence dented

It is clear that planning enforcement has been a continual thorn in the side of the planning system. It is also true that Fidler and Beesley dented public confidence in this system and exposed weaknesses in the existing legislation. In wanting to be seen to do the right thing however the government jumped in with both feet. Had it waited until the Beesley case had reached fruition in the Supreme Court it would have seen the courts perfectly capable of finding its own solution.

In Beesley, the Supreme Court adopted what is now known as the "Connor principle." They considered and accepted that law should serve the public interest, with no one being allowed to profit from his own wrongs. It agreed that the principle of importing statutory interpretation into planning law was permissible provided it could be established that it served the public interest.

Having approved the importation of public policy the next issue was if "no one should be allowed to profit from his own wrongs" what wrongs were relevant? Lord Mance could not see any reason why Denning's maxim "fraud unravels everything" could not be extended, on the basis of public policy, from criminal offences to situations such as Beesley and Fidler. Especially as it was clear that Beesley had made deliberately misleading and false statements to obtain planning permission and then relied on these to take advantage of an unqualified statutory provision.

The Supreme Court was clear that this was something the statutory provision could never have been intended to support or reward.

Lord Brown held that "only truly egregious cases [such as Beesley] should be regarded as subject to the Connor principle." Being successful only where the two public policy arguments can be established and where there is deliberate or positive conduct of which the purpose was to deliberately deceive the local planning authority in order to benefit from immunity. With its strict safeguards, stringent guidelines and robust tests the Supreme Court, unlike section 124, has ensured certainty and protected the definitive time limits for immunity from enforcement action.

Interestingly, in September 2012 the case of Carol Jones was heard. Mrs Jones, like Beesley had applied for planning permission for a garage but then constructed and hid a two-bedroom property behind the external faade of the garage, concealing it from Malvern Hills District Council for a period of four years before applying for a Certificate of Lawful Use. Here the planning inspector in reaching its decision relied on the Connor principle to justify the LPA's decision to take enforcement action outside of the normal four-year time limit rather than section 124. The planning inspector was in "no doubt that, as a matter of public policy, people are expected to behave lawfully and that a person should not benefit from their own wrongs", concluding that Mrs Jones actions fell squarely within those laid out in the Beesley case.

Certainty eroded

One year on it does seem that section 124 has not been the success it was intended to be. If anything it appears to have created uncertainty and eroded the definitive tests and well established principles of immunity from enforcement action laid down by the 1990 Act, affecting the public and legal profession alike.

This uncertainty has permeated through to the conveyancing process causing ambiguity, potential delays and additional expense in transactions at a time when a precarious property market needs anything but.