Hussain v R. (London Borough of Brent)

For confiscation under Proceeds of Crime Act 2002, a defendant obtains rental income where it comes within his ownership, disposition or control. This remains so where a company collects the rents solely as his agent. The benefit is ordinarily the gross property obtained, not net profit after expenditure.

A confiscation order must nevertheless be proportionate. That assessment is fact-sensitive and does not permit automatic deductions for operating costs, accommodation expenditure or rent-collection commissions. Money never received by the landlord is not obtained and may be deducted where it can properly be quantified. Continued deliberate breach of a planning enforcement notice may also justify a severe maximum fine.

The appellant was convicted by magistrates of breaching a planning enforcement notice concerning the use of a property as multiple flats. He and his wife had acquired the property in 2007. A family company, Tusculum Investments NV, continued to collect the rents after that acquisition.

At Harrow Crown Court, HHJ Mole QC imposed a £20,000 fine, ordered prosecution costs, and made a confiscation order of £494,314.30 under Proceeds of Crime Act 2002. The appellant appealed, with leave, against both sentence and confiscation.

The central issues were whether he had obtained the rents through criminal conduct although they were collected by the company, whether the required causal connection and proportionality existed, and whether the fine was manifestly excessive.

1. Both appeals were dismissed. The confiscation order and sentence imposed at Harrow Crown Court were upheld.

2. Under section 76(4) of the Proceeds of Crime Act 2002, the appellant obtained the rents. Tusculum was not the owner of the land and had no entitlement to retain or dispose of the money. It acted as the appellant’s agent in collecting rents which remained at all times under his disposition and control. No piercing of the corporate veil was required.

3. There was also the necessary causal connection between the rents and the offence. But for the appellant’s continued breach of the enforcement notice, the multiple lettings would not have continued and the relevant rents would not have come into his hands. Sumal and Sons (Properties) Ltd v The Crown (London Borough of Newham) [2012] ECWA Crim 1840 was distinguishable because of its statutory setting and facts. The court followed R v Luigi Del Basso [2010] EWCA Crim 1119: benefit concerns property obtained as owner, including control or disposition, rather than subsequent use of it or net profit.

4. The order was proportionate in light of R v Waya [2013] 1 AC 294. Proportionality requires a careful, fact-specific review, but it does not allow a general set-off of expenditure. The unlawful conduct consisted of providing the accommodation at all in breach of planning control; the quality of the accommodation, expenditure on it, and collection commissions did not require deductions. The judge correctly deducted £20,000 for housing benefit received by tenants but not passed to the landlord, since that money had not been obtained by the appellant.

5. The maximum £20,000 fine was severe but justified. The appellant had repeated notice of the enforcement requirements and continued the breach for years. In those circumstances, previous good character carried substantially reduced mitigating weight.

• Court of Appeal (Criminal Division): dismissed the appellant’s appeals against sentence and confiscation by judgment [2014] EWCA Crim 2344 .
• Harrow Crown Court: HHJ Mole QC imposed a £20,000 fine and prosecution costs for breach of the planning enforcement notice, and made a confiscation order of £494,314.30.
• Magistrates’ Court: convicted the appellant on 16 December 2011 and committed him to the Crown Court for sentence and confiscation proceedings.